Serbia: Wind developers on hold, Continental Wind Serbia is waiting for a new Power Purchase Agreement

Published on 9. June 2014., News Serbia Energy

No one can say with certainty when the first wind turbines will start to operate in Kovin. Despite the fact that the works on the construction of Cibuk 1, a wind farm worth EUR 280 million, are projected to start in October this year.

− The beginning of the construction of the wind farm is scheduled on October 14, provided that the new Power Purchase Agreement and the new Energy Law have been passed by the end of June. However, it does not seem realistic to expect that these documents will be adopted according to plans because of the whole situation in the country caused by the floods. We cannot say with certainty when the start of the construction will take place; it will be either delayed to the end of the year if the weather conditions permit or to the beginning of March 2015 – explained Ana Brnabic, CEO of Continental Wind Serbia.

She points out that the project development has been completed and that the company has signed financial agreements with the banks which will fund a 150 MW wind farm.

− We agreed on financing terms with three major international institutions − EBRD, IFC and OPIC. The final stage of the negotiation on the turnkey contract with General Electric is currently underway. GE will be supplier of wind turbines, which will be manufactured in Germany. A substantial amount of the investment, with a total value of EUR 280 million, will be mainly in turbines. GE is very interested in our market and this project is the first step to motivate this company to continue to do business here − said Brnabic.

She stresses that in the next 25 years the state will get a profit of EUR 259 million from the investment in Cibuk 1 wind farm, of which the largest portion or about EUR 90 million will go to the budget.

− The cost to the citizens is EUR 165 million. It speaks volumes about the benefits of this investment for the state, not to mention the energy stability brought by wind farms.

A consortium of Austrian Porr and company Elnos that won international tender to build the wind farm will engage sub-contractors for almost all elements of civil and electrical works.

− We will start with the reconstruction of roads to enable smooth transportation of equipment, and then we will build a substation of 400 KV. The installation of wind turbines comes at the end. Construction, electrical and transportation sectors in Serbia will be paid EUR 55 million, which will contribute to the recovery of the Serbian economy – says CEO of Continental Wind Serbia.

The first wind turbines will start turning within 18 months after the start of the construction.
The problems of the energy sector
Ana Brnabic points out that countries in Europe are closing thermal and nuclear power plants, increasingly shifting towards renewable energy sources.
− The priority of the EU is to strengthen its energy independence, reduce its huge dependence on gas imports, and create a cleaner environment because we have already witnessed terrible economic consequences of climate change. The situation with recent floods has revealed the true state of Serbia’s energy sector and, unfortunately, its vulnerability. The only way to ensure sustainable development is to change energy sources and finally turn to renewables, thereby demystifying the belief that they are too expensive. If we managed to get 500 MW from find farms by 2020, the electricity price for end consumers would increase by only 0.2 cents per kWh. It is really in the domain of statistical error. We would be able to use energy from our own sources that would become a substitute for 90% of electricity imports in the winter.

Brnabic says that investors have met with Aleksandar Antic, the new minister of Energy.
− The meeting was very positive. He said that we have mandatory targets to reach, and that is to produce 27% of energy from renewable energy sources by 2020. These targets are set having in mind possible consequences. If our own capacities were not enough to produce this target, we would have to import renewable energy to fulfill the required share. Finally, the minister emphasized the importance of turning to our national energy sources.