Construction of wind farm in Kovin to start by spring 2015 - Continental Wind Serbia awaits new Power Purchase Agreement

It is still uncertain when the first windmills will start spinning in Kovin. Although the plan was to start the construction of EUR 280 million worth of Cibuk 1 wind farm in October 2014, the commencement of works has been postponed, investors told eKapija.

- The plan was to start the construction of wind farm on October 14 provided that the Power Purchase Agreement and the new Energy Law are adopted by the end of June. Due to whole this situation caused by floods, it does not seem now that these documents will be adopted within the given deadlines. The commencement of construction is still uncertain, that is, it will be postponed until the year`s end if the weather allows, or early March 2015 – Ana Brnabic, the director of Continental Wind Serbia, said in a talk with eKapija.

Our collocutor mentions that they finished the project development and signed a letter with banks which will fund the wind park of 150 MW.

- We agreed on funding with three biggest international institutions - EBRD, IFC i OPIC. We stepped into the last stage of negotiations when it comes to turnkey contract with General Electric. GE is a wind turbine deliverer which will be produced in Germany. A large portion of the investment totaling EUR 280 mil EUR is set aside for the turbines. GE is very interested in our market and this project is the first step to motivate them continue business here - Brnabic.

She points out that the investment in wind park Cibuk 1, in the next 25 days, the country will get EUR 259 mil, the largest portion of which, some EUR 90 mil will go to budget.

- Cost for citizens is EUR 165. It speaks enough about the benefit of the investment for the state, even if I leave out energy stability which wind parks bring.

(Photo: danas.rs)

The international tender was assigned to the consortium of the Austrian Porr and Elnos which will have subcontractors for almost all elements of construction and electrical works.

- Firstly, we are doing the road reconstruction because of equipment, then we will build a power transformer station of 400 KV. At the end, installation of turbines follows. Construction, electrical and transport sectors in Serbia will be paid EUR 55 mil which will, in a way, start economy in Serbia – director of Continental Wind Serbia says.

As of the moment when the construction starts, the first windmills should start working in 18 months time.

Contract on electricity purchase for everybody

Ana Brnabic, on behalf of the Serbian Association for wind energy (SEWEA), says that 3-4 investors already have construction permits and contracts with banks but that they are waiting for a reply on electricity purchase from renewable sources. In July last year, the Ministry of Energy adopted the model of the Contract which was not acceptable for banks so investors cannot close funding of their projects.

- The contract on electricity price is our problem and the problem of the state. We should sit and finally agree. It is a complex contract. The Ministry of Energy has never written that kind of contract and it is obviously complicated for them. EBRD suggested paying technical assistance for the Ministry for Energy, to send and international company which has experience to negotiate it with bank lawyers. Thus, the interest of the state would be protected and a compromise would be achieved. That kind of the contract exists in all countries worldwide. We should as soon as possible adopt that kind of document so the energy sector does not rely on the coal only - Brnabic explains.

Energy sector problems

Ana Brnabic points out that in Euroep they are closing thermal power plants and nuclear plants and that they are more focusing on renewable energy sources.

- The priority of EU is to strengthen its energy independence, they want to decrease huge dependence from gas and to make environment cleaner because we what kind of consequences climate changes have. The entire situation with floods ruins the energy sector in Serbia and shows its vulnerability. The only way to have a sustainable development is to change energy sources and to finally turn to wind parks by 2020 which would imply increase in electricity price for final consumer for 0,2 cents per KWh. It is really in a range of statistical error and we are using our energy which would substitute 90% of electricity import in the winter.

Brnabic says investors had meeting with Aleksandar Antic a new minister of energy.

- The meeting was very positive. He said we have obligatory objectives which are to produce 27% of energy from renewable energy sources by 2020. If we do not provide it from our capacities, we will have to import but the figure will have to be achieved. The Minister then pointed out that we should turn to our sources.

Suzana Obradovic