Serbia has adopted the Bill on Amendments to the Law on the use of Renewable Energy Sources that enables implementation of auctions to bring in new capacities into operation, following a €300 million loan from the European Bank for Reconstruction and Development (EBRD) for national utility Elektropriveda Srbije (EPS) to devise a regulatory framework for renewable energy auctions.
"Amendments to the law will enable the implementation of auctions in a way that will integrate investors more quickly into the market and provide them with much-needed predictability in terms of costs and incentives, with minimal costs for citizens and the state, but also encourage private investments in RES, with greater availability of production capacities for our citizens and the economy from green, clean sources," said the country's Minister of Mining and Energy, Dubravka Đedović.
Currently coal accounts for about 1/3rd of the country's electricity supply. The bill will enable greater integration of renewables in Serbia's energy system and ensure safe operation of its power system which has become the priority of practically every European nation in the aftermath of the Russian aggression in Ukraine.
It will also help resolve the 'issue of a large number of requests' for connection of wind and solar power plants.
Đedović shared that the law also deals with the limitation of installed power of buyers and producers, aligning it with practices being followed in the rest of European Union (EU).
Proposals are aimed at making the existing buyer-producer model function within clearly defined capacity limits for the safety of the power system, while enabling
greater participation of citizens and small businesses in the energy transition, she added. The bill will now need to be cleared by the Parliament to become a law.
News of the government adopting the amendments follows EBRD's approval of a €300 million financing package for EPS to help it devise a regulatory framework for renewable energy auctions.
With its liquidity position improved with fresh funds coming in, EPS will be able to incentivize the roll out of auctions and contribute to Serbia's sustainability of energy supply, according to the bank.
Focus will be on accelerating wind and solar power with the bank providing project-related technical cooperation to the utility. It includes support for a decarbonization strategy and an action plan. The bank specified that no part of this loan will be used for existing coal assets of the EPS.
Of Serbia's total operational renewable energy capacity 2.96 GW at the end of 2021, solar accounted for only 52 MW, according to the International Renewable Energy Agency (IRENA). While its annual solar installations are yet to hit even 100 MW, there is some positive movement already happening with utility scale projects being planned.
Zajecar city was seeking public input for plans to develop 150 MW solar plant in February 2022, following which China's PowerChina joined hands with Fintel Energija and MK Group for a 660 MW agrivoltaic project in Serbia in May 2022, calling it the largest European agrivoltaic facility (see Serbia's Agrivoltaic Project To Support 660 MW Capacity).