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Serbia, Country is lagging behind in the development of RES

03.Oct 2022.

Europe is facing a winter that will bring many challenges in the energy sector – less Russian gas, continued growth in energy prices, savings, restrictions, and a return to fossil fuels. Therefore, a winter full of pollution is expected.

One alternative that can ensure energy security, independence from energy imports and cleaner air has been around for decades. However, investment in renewable energy sources is quite slow, as it is difficult for many countries to give up coal and gas.

On the other hand, there is a fear that this type of energy cannot replace the power of fossil fuels. However, things are changing, as the Russian-Ukrainian war encouraged European countries to invest in RES.

The International Energy Agency (IEA) expects global renewable capacity to increase by an additional eight percent this year, to 320GW, which is almost equal to Germany’s entire electricity demand. This corresponds to the total production of electricity in the EU from natural gas.

WWF: RES key for the energy security of the Balkans

The World Wide Fund for Nature (WWF) recently indicated that RES are key to the energy security of the Balkans, and that less progress has been observed in this area in the Balkans.

Namely, WWF stated in a statement that the report of the United Nations Economic Commission for Europe (UNECE) on the state of RES 2017-2021. seventeen countries of South-Eastern and Eastern Europe, the Caucasus and Central Asia recorded an unprecedented growth in the production capacity of electricity from renewable sources.

The report provides the latest information on the state of RES and energy efficiency in Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Georgia, Kazakhstan, the self-proclaimed Kosovo, the Kyrgyz Republic, Moldova, Montenegro, North Macedonia, Russia, Serbia, Tajikistan, Turkmenistan, Ukraine and Uzbekistan.

“For the first time, solar (58 percent) and wind energy (25 percent) accounted for the largest share. The capacity factor for the production of electricity from wind in the region increased by seven percent, while the capacity factor for the production of solar energy increased by more than 10 percent in the period 2017-2021,” says the WWF press release.

In terms of sustainability growth, Ukraine leads the way, with an increase in RES capacity of 8.3 gigawatts (GW), followed by Kazakhstan (3.7 GW) and Russia (3.5 GW). Serbia shares the fourth place with Georgia, however, their capacity increase shows a decline compared to the first three countries – only 0.5 GW added in the period 2017-2021.

Bosnia and Herzegovina, Albania, Macedonia, Montenegro and self-proclaimed Kosovo recorded an increase of less than 0.5 GW, and are still largely dependent on fossil fuels and rely on a limited number of energy exporters, primarily Russia.

According to the report, as many as 13 countries in the region are largely dependent on electricity imports. It was pointed out that RES could help these countries increase the diversity of electricity supply and protect themselves from large fluctuations in natural gas and oil prices.

Has Serbia caught the OIE train?

Estimates are that Serbia will spend 3.5 billion euros this winter for the import of gas, coal and electricity. In the RES field, Serbia has started to work, but not enough for this sector to contribute more generously to the budget this winter.

Last year, the first Law on RES was adopted in Serbia and a number of other laws were regulated, paving the way for the development of that area. The state eased the procedure for entering the electricity buyer-producer (prosumer) system, which motivated households and companies to install solar panels.

According to the State Secretary in the Ministry of Mining and Energy , Zoran Lakićević, panels have been installed in 230 households in Serbia so far, which produce energy from the sun and return the surplus to the network. Currently, about one and a half megawatts are installed on the roofs of households and the same amount on the roofs of small and medium-sized enterprises.

The buyer-producer project has been designated as one of the most important state projects that will enable energy efficiency and safety. However, he ran into obstacles right from the start.

Namely, the first invoices that arrived at the addresses of those who installed solar panels and started producing electricity, showed that the promises regarding cost reduction were not fulfilled. Instead of their costs being 50 percent lower, they turned out to be 30 percent lower. The reason is the different calculation of VAT, because the Ministry of Energy has foreseen one method of collection, but the Ministry of Finance has decided to calculate it in another way. Bloomberg Adria already reported on the zom problem of the prosumer.

The Ministry of Energy sent an initiative to the Ministry of Finance that the basis for VAT calculation be taken as the net, not the received energy. Lakićević told Bloomberg Adria that he expects that problem to be resolved before the end of the year and that prosumers will have lower bills as they were promised.

Another problem is that so far no auction has been held for the purchase of electricity from RES. The auction is foreseen by the Law on RES, however, due to the absence of supplementary regulations, it did not take off, and also because of the low purchase price from RES, which currently amounts to 56 euros per megawatt-hour.

Thirdly, due to the lack of adoption of accompanying regulations, the state has not chosen any strategic partner with which to invest in green energy.

National plan for climate and energy by the end of the year

By the end of the month, the Ministry of Mining and Energy will finalize the National Climate and Energy Plan, which will be on public discussion until October 1st, and is expected to be adopted by the end of the year. According to the words of State Secretary Lakićević, that plan foresees that by 2030, 41 percent of the total energy will be obtained from renewable sources. The goal is to reduce greenhouse gas emissions by 40 percent.

And EPS is working on RES capacities

After more than three decades of non-investment in the hydropower sector, Elektroprivreda Srbije (EPS) pulled the “Bistrica” ​​Hydroelectric Power Plant project out of the drawer and began drafting its technical documentation. Also, works on the construction of the first EPS wind power plant near Kostolac, with a capacity of 73 megawatts, have recently started. It is planned to be built in two years.

Dragan Vlaisavljević, executive director for electricity trading in EPS, said at the RES conference in Belgrade that by 2025, EPS plans to revitalize the existing hydroelectric power plants, to start building additional capacities from wind energy, and that from 2025, more invest in solar, Bloomberg Adria writes.