During the first day of the Western Balkans Energy Week 2024, held on October 9 and 10 in Montenegro, a panel titled “Navigating Market Challenges: From Securing Land to Balancing Conditions” was organized.
Panel participants discussed the challenges investors in the region face and the necessary legislative changes that could lead to more favorable conditions for the development of the renewable energy sector.
When it comes to the functioning of the electricity market, Miloš Mladenović, CEO of the Serbian electricity exchange SEEPEX, emphasized that for a market reform that ensures the efficient implementation of renewable energy projects, decentralization and democratization of the economy are necessary.
Franciska Hedrick, senior project manager at NOTUS energy, stated that the company remains persistent in developing renewable energy projects in the Balkans. However, many projects were of lower quality than expected, with one of the reasons being the problems caused by the permitting process.
“If you take a closer look at these projects, they have been in development for decades. In the meantime, permits have expired, and the technology has become outdated. The permitting process is extremely demanding, and there is no centralized point for us, the developers. It is not easy to find a clear structure for the permitting process, which leads to delays. The exchange of information between the relevant authorities is poor,” Hedrick explained.
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Aside from this problem, Neda Lazendić, senior advisor at Hyundai Engineering, highlighted another complication hindering the region’s energy transition. According to her, the 2021 Renewable Energy Law attracted a large number of investors as it was seen as favorable for project realization. However, the law attracted too many investors, leading the Serbian transmission system operator to receive an overwhelming number of requests between 2021 and 2023, threatening the stability of the country’s electricity system.
“As a solution to this issue, new rules for connecting to the transmission system were adopted. Now, in addition to the request for a connection study, the investor is required to provide financial guarantees of 25,000 euros per megawatt,” Lazendić said, adding that this ensures that only financially capable investors can realize projects in the shortest possible time.
Miloš Kostić, CEO of MT-KOMEX, stated that his company has mainly worked on projects connected to the distribution system and expressed hope that the new grid rules would further clarify which investors are serious to reduce delays in the development of renewable energy projects.
“As a company, we started developing solar power plants back in 2009. At that time, we managed to develop the first project in Serbia that was in line with the 2009 laws. Only five megawatts were built on land back then, and we managed to build two megawatts, which were part of the feed-in tariff at the time. Later, there was a standstill in all these investments because the price of electricity in our country was about 55 euros per MWh, which did not cover investments in such demanding technologies at the time. The turning point came in 2019 when anyone could invest in renewable energy,” Kostić said.
MT-KOMEX’s commitment to realizing renewable energy projects is also reflected in the fact that requests for permits were only submitted for land where it was certain that urban and technical documentation would be in order.
“We purchased 74 hectares in Lapovo and then began implementing two projects. We only submitted requests for land for which we knew we could resolve the urban and technical documentation so that our projects could come to life as soon as possible. We proved this last year with three projects – we obtained auction prices for two, and both projects were built,” Kostić noted.
In addition to this panel, the first day of the conference also addressed topics such as the coal transition in the Western Balkans, investments in grid resilience and energy storage technologies, and strategies for regional integration. Participants on the second day of the conference will address equally important topics such as policy shaping in the renewable energy sector, unlocking project financing sources, and promoting investor confidence.
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