Wind energy projects in Serbia: Ministry and developers found compromise for feed in tariffs, wind developers satisfied

18. February 2013. / News Serbia Energy

Renewable sources investors were very concerned last year because state announced decrease of feed in tariffs, and certain wind parks’ investors has even talked about quitting investments in Serbia. Orders for privileged electricity manufacturers were finally adopted at the end of January. Positive innovation is that stimulating amounts will be adjusted to amount of inflation rate in euro zone once a year. Investors like that the 12 years’ stimulating period is kept. However, buyout prices are decreased and new quotas were not approved by investors.

Although, new order decreased electricity buyout price of wind from 9,5 to 9,2 Euro cent, Serbian Association for Wind Energy (SEWEA) is satisfied because Ministry of Energy accepted the proposal from investor to introduce indexation with inflation rate in euro zone to decreased tariff.

-This move was significant to investors, because they wouldn’t be able to construct otherwise. Feed in tariff is acceptable with inflation rate indexation. Ministry found appropriate compromise in this situation and it is the excellent example of cooperation between Government and Investors’ Association. Tariff that won’t be effectively decreased each year is being insured this way. In other words, if certain price is not guaranteed in next 12 years and indexed with the inflation rate, it would literally mean that the tariff decreases each year- it was said in Association.

“Continental Wind Partners” Company announced possible quitting of Wind Park in Kovin construction, if feed in tariffs are not decreased. However, Company won’t give up 450 million EUR worth investment.

-If tariff stayed on 9,2 Euro cent without indexation with inflation rate, we would probably have to terminate our project. The return of investment would be too small for banks’ support in this case. The great news is that Ministry agreed to include indexation with inflation rate and we can continue with investment- said Ana Brnabic, Director of project in “Continental Wind Partners” .

Electricity buyout from wind power plants, 300 MW strong, will be subsidized until the end of 2015, and the amount will be increased for additional 200 MW from wind power plants built until 2020.

-We think that buyout quota is too low. That will disable construction of some plants and discourage new investments. Bulgaria has 800 MW of installed wind power at the moment, Croatia 200 MW, Hungary 550 MW, Romania 2.300 MW, and Greece 1.700 MW. We hope that Ministry of Energy will remain opened for dialogue about buyout quota after 2015, because we think that Serbia can have large benefit of these investments and that 200 MW of installed power is not enough for country with meaningful wind potentials in period 2016-2021 when the rest of the world will be focused on renewable energy sources- Brnabic explained.

SEWEA indicated that quota decrease will negatively influence investors’ arrival.

-Unfortunately, we didn’t managed to make a compromise with the Ministry for wind energy buyout quota that is 500 MW and it is spitted so 300 MW is allowed until the end of 2015, what means that some investors who work on the project for several years won’t be able to build and new investors won’t come to Serbia. If buyout quota does not increase, Serbia will probably not be able to accomplish its goal for 27% of total electricity consumption from renewable sources until 2020. We hope that Ministry will remain opened for further discussions about this, so we can find the most acceptable solution for quota increase after 2015- it was emphasized in SEWEA.

The agreement for renewable sources electricity buyout is very important next to feed in tariff. This agreement should be adopted in two months.

SEWEA gathers 5 companies and represent investors from Serbia, Russia, USA, Belgium, Italy and Holland. The start of construction of the first wind park in Serbia was announced in this association for 2013.

Source Serbia Energy Magazine

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