For consumers in Serbia, the auction purchase of electricity from RES is a fairer option

26.Oct 2020.

According to available data, in 2016, EPS collected 2.5 billion dinars from consumers for electricity obtained from renewable energy sources. So far, about 130 small hydroelectric power plants, five wind farms and two large solar power plants have been built in Serbia, among other places.

The professional public believes that the auction procedure is more favorable for consumers. Instead of feed-in tariffs whose amount is high and fixed in the case of the auction procedure, the most favorable bidder is selected and the maximum amount of subsidy, which the investor still receives, is prescribed to be lower than the previous ones formed according to feed-in tariffs. This specifically means that the fee for renewables on electricity bills will be lower than it is now the case.

The decree on incentive measures for the production of electricity ceased to be valid on January 1. Accordingly, those producers who received the envisaged status before that deadline or submitted a request for obtaining it during that period are entitled to preferential prices when buying electricity. All those who submitted a request during this year have the right to acquire the status of a privileged producer, ie they have the right to incentive measures, but they cannot exercise them until the adoption of a new regulation. Whether it will be extended this year as well, or whether auctions for the purchase of electricity from renewable energy sources will be started, will be found out after the new government is formed.

– The current Government is working in a technical mandate and it cannot make decisions such as the one on the extension or definitive repeal of the regulation on incentive measures for electricity producers from RES. The newly elected ministers will make a decision on that topic at one of their sessions, and as things stand now, they will most likely opt for actions, which the expert public insists on – says the interlocutor, a good connoisseur of opportunities in the Serbian energy sector who wished to remain anonymous. By the way, the transition from the system of feed-in tariffs to auctions in Serbia was recommended by the Energy Community.

Feed-in tariffs for electricity obtained from renewable energy sources were introduced in 2013 and imply that Elektroprivreda Srbije pays more than regular electricity to its owners for a period of 12 years in order to pay off their investment. The cost of the feed-in tariff is borne by consumers through a fixed fee on the electricity bill, which amounts to 0.093 dinars per kilowatt hour.

In practice, this means that the household as an example spends 350 kilowatt-hours to pay an additional 32.55 dinars. Those who spend 500 kilowatt-hours additionally set aside 46.5 dinars, and consumers who heat with electricity and consume, say, 700 kilowatt-hours in the winter period set aside 65.1 dinars for that fee. Given the low income and the high amount to be set aside for the consumer basket, most citizens consider it an unjustified expense.

Feed-in tariffs in Serbia depend on the source from which the electricity was obtained as well as on the power of the plant. The price for hydroelectric power plants is from 6 to 12.6 eurocents per kilowatt-hour. For biomass from 8.22 to 13.26. For biogas from 15 to 18.33 eurocents per kilowatt-hour. Electricity from waste costs 8.44 to 9.2 euro cents per kilowatt-hour.

The purchase price for wind power plants is 9.2, and for solar power plants from 12.4 to 14.6. From geothermal power plants, electricity was obtained, which EPS pays 8.2, and from waste power plants 8.57 euro cents per kilowatt-hour. For power plants that combine electricity and heat, the price is 7.45 to 8.2 eurocents per kilowatt-hour.

Energy expert Vojislav Vuletic told Danas that it is much fairer for consumers to introduce the auction purchase of electricity from renewable energy sources instead of feed-in tariffs.

– In that way, the price at which EPS buys electricity from producers from renewable sources would be lower, which would be reflected in the amount of the price of electricity for consumers. Namely, it would be lower than it is now when there are feed-in tariffs. I think that the authorities in Serbia should listen to the recommendation of the Energy Community on this issue. Simply put, Europe entered this process before us, they have more experience on this issue and the solutions they propose should be accepted. Therefore, from this year, EPS should buy electricity from renewable sources at auctions – our interlocutor concludes.