Online Newsletter
Sign up for our newsletter to receive the latest news and information from publics.bg

News

World news

07.03.2011 16:19

Serbia Needs to Allow Grid Connections Guarantee, Wind Farm Developers Say

According to developers Serbia’s proposed new energy law won’t be enough to unlock the country’s potential for wind power

AUTHOR: publics.bg

© FaceMePLS @ flickr.com

Developers and the Serbian wind energy association expressed criticism against the draft version of Serbia’s proposed energy law, according to a Bloomberg publication. The draft was unveiled last month for public debate and possible amendments before a parliamentary vote later this year. The government said the law aims to stimulate clean energy development and liberalize the market dominated by state-run Elektroprivreda Srbije. The association said the proposed legislation may fall short of providing the required guarantees.

“You can’t arrange to sell electricity from wind farms before you actually build them and banks won’t lend if you don’t have a power purchase agreement first,” said Mark Crandall, Chairman of Continental Wind Partners LLC and a founder of the association.

To meet conditions for joining the European Union, Serbia needs to get at least 20 percent of its electricity consumption from renewable sources by 2020. The country’s existing 8,000 megawatt capacity is dominated by coal-fired plants, Crandall said. Serbia’s newest thermal plant is 30 years old and 50 percent of the existing facilities may have to be decommissioned by 2020, said Jacopo Moccia, regulatory affairs adviser at the European Wind Energy Association. “Something has to replace it.”

Estimates by the country’s Energy and Mining Ministry and the Serbian Wind Energy Association that wind speeds in dozens of locations allow for wind farms of least 1,300 megawatts of installed capacity haven’t led to development because the government doesn’t provide assurances they will be connected to the grid, said Crandall, a founder of the association. “Precise conditions for connecting to the grid may be defined only later, with bylaws, and that’s not good enough for those who would provide financing,” Crandall said in an interview at a business forum last week.

Members of the association, which include local units of Italy’s Fintel Energia Group (FTL) andAustria’s Kelag, are working on a pipeline of projects for Serbia valued at 1.5 billion euros ($2.1 billion) with a combined capacity of 1,000 megawatts, she said.

A special government decree allows Serbia to buy locally generated electricity from new, non-polluting sources at 9.5 euro cents per kilowatt, twice the current retail rate. There are “hardly any beneficiaries of this” because the broader framework is lagging, said Maja Turkovic, the association’s representative. Though that may be less of an obstacle for building small wind farms “there is no way to develop substantial capacity without guaranteed rates for the electricity produced and for connecting to the grid,” Turkovic said .