Serbia's government is in talks with the US engineering company Bechtel about the construction of the 2,400 MW Djerdap 3 reversible hydro plant and a large wind farm, said the country's energy minister on Wednesday.

During an interview with a local TV station, Serbian energy minister Zorana Mihajlovic said that the wind farm could be “one of the largest in Europe” and that the combined value of both projects was EUR 2bn, adding that Bechtel was also interested in making other renewables investments in Serbia.

In a bid to boost the uptake of renewables, Mihajlovic’s ministry prepared the new law on renewables, which was enacted in April. The country also adopted an energy efficiency law and passed amendments to the law governing the energy sector.

Serbia will need to add 8-10 GW of renewables if it wants to replace 4.4 GW of coal power production capacity by 2050. According to Mihajlovic, the new laws can only be considered a step in the right direction, and all related subordinate legislation will be ready by the end of the year. Strategic documents, including the integrated climate and energy plan and an energy development strategy until 2030, with a view to 2050, should also be ready by then.

“Our vision and the path we are taking is for Serbia to be a decarbonised country by 2050. At the same time, we need an action plan for the use of coal (and) lignite,” said Mihajlovic during an energy transition conference in Belgrade on Thursday. Although the country currently has no plans to phase out coal before 2050, the minister still acknowledged that lignite was no longer Serbia's “gold, as it was 30 years ago.” The reason for this also rests in the fact that the quality of this lignite is declining.

In addition to laws and strategic documents, the Serbian government's new energy policy also foresees a new investment plan with projects worth close to EUR 18bn. Over EUR 10bn of this amount will be invested in new power capacity, such as the construction of large hydro plants and solar and wind farms, said Mihajlovic.

Serbia plans to hold its first auctions for premiums for electricity generated by wind and solar power plants in December. Furthermore, the Serbian government recently adopted a regulation on power prosumers, aimed at reducing the amount of red tape needed to install solar panels on rooftops.