Some 16.2 GW of renewables on Serbian grid unlikely – association

Some 16.2 GW of renewables on Serbian grid unlikely – association

Date: November 24th 2022

Author: Maja Žuvela

Category: En.vision

Topic: Electricity , Renewables , Energy policy , CO2 emissions , Economy , Ecology , En.vision

Although connections for around 16.2 GW of new renewables capacity to Serbia’s grid are being sought, it is unlikely that many of these projects will be implemented, according to the Serbian renewables association Res Serbia.

The Serbian grid operator EMS is currently considering grid connection requests for 4.2 GW of wind and 350 MW of solar capacity that were submitted before Serbia enacted its first renewable energy law in April 2021, while interest in connecting a further 11.6 GW of new capacity – 7.35 GW of solar and 4.25 GW of wind – has been expressed since the new law introduced renewables auctions.

However, EMS told Montel in a written statement that “The capacity that can be connected depends on the location, the date of the planned commissioning and the state of the grid [at that time]. Also, the existence of a necessary regulatory balancing reserve must be considered.”

Res Serbia manager Danijela Isailovic believes that Serbia must find a way of filtering projects, as grid capacity limits, insufficient banking sector potential, higher borrowing costs and much stricter lending criteria will cause many to fail.

“We need to do some sort of selection and filter projects so we can build 2-3 GW of badly needed capacity as soon as possible,” she said during a panel discussion about the energy crisis and transition in Belgrade on Wednesday.

She reminded the panel that Res Serbia had already proposed that every expression of interest in a grid connection should provide a bank guarantee, although this prompted some market participants to voice concern that this might be discriminatory against smaller-scale renewables developers.

Wind auction delay

Isailovic also told the panel that the delay in holding long-awaited wind auctions in Serbia makes it difficult for investors to lock in the necessary financing for their projects, as most banks seek power purchase agreements (PPAs) as collateral.

“We have a situation where the auctions, which should have provided a 15-year PPA, have not taken place,” she said.

“There is noticeable apprehension among investors who can no longer wait for auctions and project financing. I would not be surprised if, over the next two to three years, individual investors finance their own projects without banks and auctions. They just don't want to waste time or money anymore,” she added.

Balancing responsibility

According to Res Serbia, another issue Serbia needs to address is how to regulate the cost of balancing responsibility.

Gligo Vukovic, the project manager of Serbia’s EU delegation, told the panel that EU representatives would insist that all regulations related to balancing responsibility be completed and auctions begin next year.



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