Serbia adopts law aimed at opening up energy investment

The Serbian government is aiming to diversify its energy mix through adopting new legislation based on EU guidelines.

The country has suffered substantially from flooding, which severely impacted its coal-fired power capacity this year. It is also a net electricity importer.

Belgrade’s action is motivated by the need to unblock investment in renewable energy after adopting legislation that opens gas and power markets in line with the rest of the continent.
Aleksandar Antic
The law sees the implementing of the EU’s Third Energy Package that fosters competition and helps regional integration of energy markets. The law, prepared in cooperation with Energy Community, a policy group for aspiring EU members, improves terms for investment in Serbian projects, energy minister Aleksandar Antic said.

“It opens the door for energy investment, one of the most promising sectors that attract huge interest,” he added.

Serbia is struggling to bring energy consumption from renewables to 27 per cent of the total by 2020 from 21 per cent recorded two years ago when it made the pledge to the EU, even as it offers feed-in tariffs as an incentive.

Legislative changes include streamlined power purchasing agreements for wind farms and other renewables to make such projects profitable, according to Antic.

Local analysts say more is needed to make a proliferation of renewables realistic, with additional laws required to set deadlines for grid repairs and other disruptions when plant operators are unable to sell electricity to the state-run utility Elektroprivreda Srbije.

Referring to the incident in May when flooding knocked out the main lignite mine supplying the country’s largest thermal plant, Ana Brnabic, a project director at Continental Wind Partners told Bloomberg, “The floods exposed vulnerability of the whole system. It’s finally understood that there’s a need to diversify.”

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