The recently adopted Law on Renewable Energy Sources has brought many positive changes and drew the attention of foreign and domestic investors. Citizens and businesses were given the opportunity to become prosumers or self-consumption generators, establish energy communities, and auctions were introduced to grant subsidies to investors. This Law creates conditions for Serbia to use its great potential of solar energy, thereby attracting new investments and contributing to the reduction of environmental pollution. We discussed current developments and challenges with Dragoljub Cibulić, senior partner in the BDK Advokati, that has over 17 years of experience advising clients on some of the most important renewable energy projects in Serbia, Bosnia and Herzegovina, and Montenegro.
EP: What is your take on the current delay in the final phase of the preparation of regulations that would enable the implementation of the Renewable Energy Sources Act (RESA) and the organization of the first auctions?
Dragoljub Cibulić: Unfortunately, the events in the last few months have sent a negative signal to all participants in the renewable energy sector. After a strong positive momentum in the first half of 2021, which resulted in the adoption of the RESA and the first set of by-laws, and the preparations for the first auction for market premiums, the delays in the drafting of the remaining by-laws, and the disagreement of the major players on the remaining outstanding issues in the regulatory framework have put a big question mark on the new investment cycle in the renewable energy projects in Serbia.
The remarks made by EPS and EMS are not ungrounded but are based on the assumption that, in the next few years, Serbia will develop a huge capacity of renewable energy sources and ignore the fact that EMS, Elektrodistribucija Srbije, the Ministry of Mining and Energy and the Energy Agency of the Republic of Serbia still have important levers at their disposal to control the renewable energy investment cycle, e.g. through procedures for the issuance of energy permits, connection approvals, setting the market premium quotas, and determining the maximum purchase price.
EP: Bearing in mind that EPS and EMS are asking for RESA amendments, while the Ministry and international institutions hold that implementation must not be delayed further, what do you think is the solution to overcome this problem?
Dragoljub Cibulić: The solution, as always, lies in achieving a compromise solution that would, on the one hand, enable further smooth development of the renewable energy sector and commencement of a new investment cycle in 2022, and which, on the other hand, would not jeopardize the stability of the energy system and the operation of the transmission and distribution system.
Technological development and maturity of the renewable energy sector shift the focus from the incentives to the consequences that the sector’s rapid development has on the transmission and distribution system and the stability of the entire energy system. The transmission and distribution system must undergo a strong transformation to respond to the inevitable changes. The operators of these systems should not shy away from that process since those will be essential parts of the new energy system.
To fully include RES in the energy system, developing new production and storage capacities is crucial to enable adequate balancing of RES production. It is vital that the Government and the Ministry select adequate project development structures and independent and experienced teams for the implementation of these projects without delay, which should enable these capacities to be online as soon as possible.
EP: If we exclude the problems, what are the advantages of the legislative framework consisting of 4 laws that were adopted in early 2021?
Dragoljub Cibulić: The very fact that these acts have been adopted is a big step forward. In addition to laying the foundations for the further development of RES production capacities, it seems to me that the greatest advantage and achievement of the new regulatory framework is enabling end consumers to be active participants in the electricity market, through the concept of prosumers, more flexible electricity supply through direct contracting with producers, aggregation of consumption, and the establishment of mechanisms for the promotion and financing of energy efficiency projects.
Interviewed by: Danijela Isailović
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