Danijela Isailović, manager of RES Serbia - We connect key players in the RES sector in Serbia and the world

Danijela Isailović, manager of the Association of Renewable Energy Serbia, reveals what the biggest challenges are that investors are currently facing in Serbia. As she says, auctions are currently the safest model for implementing projects, and in the future he expects a discussion regarding the obligation to store electricity, since according to the current legal solution, most projects that intend to be implemented outside of auctions will not be profitable.

We also talked about phantom projects, which burdened the work of transmission and distribution system operators, about the interest of citizens and business in the status of prosumer, as well as about the conference "RES Serbia 2024", which will gather the most important regional and European players in the green industry in Vrdnik on September 23 and 24.

Since the Association of RES Serbia has been in existence for more than three years, the RES sector has progressed significantly - so much so that a new goal has been set for Serbia to receive 45% of electricity from renewable sources by 2030. Are you satisfied with what has been achieved? How do you assess the current situation in the RES industry in Serbia?

- The Association RES SERBIA has successfully existed for more than three years and during that time it has achieved impressive results. We started with three founders, and today we have more than 40 members and continuous stable support from the European Bank for Reconstruction and Development. We have become the voice of the industry, a constructive partner for discussions and support to state institutions, which contributes to the creation of a positive regulatory framework and a favorable investment environment. We have gained an exceptional reputation, and we are the only Association in Europe that has the EBRD, the European Investment Bank and the IFC Group of the World Bank in its membership. Our member is also Elektroprivreda Srbije, then the largest producers of electricity from wind and sun, contractors and equipment sellers, regional and global giants.

As an Association, we have significantly contributed to the improvement of the regulatory framework, holding the first, very successful auctions, so we are satisfied with the significant progress. We initiated a change in the decision on the maximum price, and we got an attractive high price that enabled competition and a low purchase price.

The Association has the continuous support of the EBRD (Photo: OIE Srbija)

Apart from large projects that are related to large companies and powerful banks, we are extremely glad that green energy has entered many houses, schools, churches, factories and that through the prosumer concept. We are glad that more than 3,000 prosumers have recognized the solar potential on their roofs and secured themselves a safe supply of clean electricity. It is also very important for the economy to recognize how important, reliable and cheap energy from renewable sources is.

Finally, to answer your question about the assessment of the situation in the RES sector in Serbia: significant progress has been achieved, a positive investment climate and a very correct regulatory framework. So, quite well. Of course, we expect that order will finally be made in the connection sector and that the phantom projects that burdened the work of operators of the electricity transmission and distribution system will disappear from the energy map. Also, I expect a discussion about the obligation to store electricity, since the projections of our members say that, if the current legal solution remains in force, the majority of projects that intend to be implemented outside of auctions will not be profitable, and therefore will not be implemented. We are waiting for detailed analysis and legal initiatives, so that we can initiate a dialogue that will lead to a solution that is good for everyone.

What currently hinders the development and construction of RES projects the most - legal obstacles, deficiencies in the transmission and distribution network, inflation, equipment price increases...?

- Quality projects are being developed and built, so we cannot say that there is any brake. An aggravating circumstance is the issue of connection for projects that applied after the adoption of the Law on the Use of Renewable Energy Sources, but they will also be able to be realized if the transmission system operator`s studies are favorable for them. Of course, the issue of storing electricity remains and this can be a brake for many projects, as they become unprofitable. As for the regulation, it is quite positive, but there is certainly a possibility of additional improvement in terms of introducing the obtaining of documentation related to environmental protection, as well as planning documentation, into an electronic procedure. This would improve the transparency and efficiency of the proceedings.

Equipment price hikes and supply chain issues are global issues. The delivery of the transformer has been waiting for more than a year, and other equipment is not easily available either. As for the network, it`s also a general problem. Almost all of Europe has the problem of integrating renewable energy sources into their system, so everyone has to work on building capacity. I think that the system in Serbia can withstand and accept good projects from investors who are really ready to build in the next few years.

Members of the association were among the winners of last year`s auctions for the allocation of market premiums for renewable energy sources. Have they announced their participation in the auctions expected to be announced this year? Do you expect lower offered prices and more competition?

- Our members achieved fantastic results at auctions and filled three out of four places at auctions for wind energy, and also for solar. Internally, we joke "that only those who didn`t participate didn`t win." We are extremely glad that, regardless of the tempting market offers, our members opt for EPS (our member too) as a buyer of electricity that will provide a balancing service, then that the projects are financed by our member EBRD and the banks that sponsor our conferences, that the most purchased wind generators and equipment from our members, that designers and contractors are our members, as well as consultants, brokers, lawyers. Almost everything stays in-house and that is a special networking dimension and value of the Association.

Europe will receive 27 new GW of electricity from the auctions held last year alone (Photo: OIE Srbija)

As for the second round of auctions, I believe that our members, if they have projects ready in terms of project-technical documentation and necessary permits, will be very happy to participate in the auctions, because it is currently the safest model for project implementation.

We are happy to know that last year, according to WindEurope data, we were seventh in Europe in terms of the capacity of successfully held auctions. Europe, by the way, will get 27 new GW of electricity from the auctions held last year alone. We expect the price to remain attractive, but the decision will certainly be made by the Government of Serbia. As for the competition, I think it will be weaker, i.e. the most prepared and the best have tried in the first round.

EMS recently made a decision to postpone the procedures for connecting new RES power plants due to the established risk to the safe operation of the electric power system due to the lack of reserve for balancing the system. Who will be negatively affected by this decision, and who will benefit?

- The elements of the Transmission System Development Plan recently adopted by the Energy Agency, which concern the delay in the connection of new renewable energy capacities due to the threat of the system, are nothing new or sensational for us. We are familiar with it, it simply had to happen due to the hyperproduction of projects and the besieging of known and unknown investors with requests for connection to the electricity transmission and distribution system.

However, in order to realistically assess the situation, prevent negative comments and spread panic,

the Law on the Use of Renewable Energy Sources should be reviewed and interpreted, Article 67b of which states that the postponement of connection to the transmission system does not apply to RES power plants if the applicant for the preparation of the Connection Study provides new capacity for providing auxiliary services of secondary reserve, which will be offered to EMS, from the existing own production capacities, separate the capacity for providing an auxiliary service or find a market participant who will do it instead.

Of course, there is a Rulebook that regulates the fulfillment of conditions. To put it simply, any investor who anticipates, provides battery storage, can develop and build projects. Therefore, there is no new stoppage, this was clear to everyone after the amendments to the Law on the Use of Renewable Energy Sources and, accordingly, market players are applying for Connection Studies. Of course, the issue of profitability of such projects will be subject to special analysis and discussion. But, formally, there is no legal brake.

There is no energy transition without EPS (Photo: OIE Srbija)

How do you see the green transformation of EPS, which is also your member? Is it happening fast enough?

- Elektroprivreda Srbije is the largest producer of electricity, and thanks to the green portfolio of EPS, which lies in large hydroelectric power plants, we are a country with a very high share of renewable energy in the energy balance, and that at the European level. We are happy that EPS is building the Kostolac hydropower plant, the Petka solar power plant, then a large solar power plant and many other projects. Of particular importance is the RHE Bistrica, which will significantly facilitate the integration of renewable energy sources, and Đerdap 3 is being discussed. Also, efforts are being made to make active thermal capacities environmentally acceptable. Without EPS, as the bearer of the process, there is no energy transition, that`s what we`ve been saying since the foundation. I have to remind you that last year on the Day of the Electric Industry of Serbia, as an Association, we received the "Đorđe Stanojević" award from EPS, precisely for the contribution to the energy transition. All this indicates that EPS is being transformed in accordance with plans and opportunities. I see this as a positive process.

You have published an extensive research on prosumers in Serbia, of which there are now 3,000. Who is the most interested in the status of electricity buyers-producers?

- Our research has shown that the majority of consumers are households that are increasingly realizing the benefits of producing electricity from their own capacities. We expect that number to grow even more as the positive experiences of pioneers in this area spread. It did not surprise us that in the convincing first place in terms of installed power - 30.5 MW - are legal entities, among which telecommunication and industrial facilities dominate. It is interesting that among the prosumers are also monasteries, kindergartens, and schools, which is symbolically significant because this is how awareness of solar energy spreads from the earliest days. We still have very few prosumer residential communities, only three, so we see that as a field that could be worked on, both in terms of informing citizens, but also facilitating the entire process, which is currently complicated for buildings.

We are glad that the research, which required a lot of footwork and analytical work, is cited by everyone - from the Ministry of Energy to various portals, which indicates that we have interested the widest public. That is the goal - that everyone who meets the requirements should consider the possibility of producing electricity on their roof.

The RES Serbia Conference is an event not to be missed (Photo: OIE Srbija)

The conference "RES Serbia 2024" will be held on September 23 and 24 in Vrdnik. What topics will be the focus of the conference, which now traditionally gathers the most important regional and European players in the green industry?

- You are right, the RES Serbia conference is an event not to be missed in our community. For three years now, we have been initiating topics that will be discussed later, gathering investors, state representatives, bankers, equipment manufacturers, who exchange opinions, make new acquaintances and deals, and spread good energy. This year will be the same, 500 participants from 20 countries are coming and we will have as many as 40 speakers. The fact that we have decided that this year`s conference will last for two days, during which we will organize a large number of panel discussions, speaks volumes about the interest. It will be an opportunity to hear how far the winners of the first auctions have reached in the construction of projects, what happens to other auctions if they are announced by then, we will discuss prosumers, trends in Europe, the issue of connection, balancing, storage of electricity, the electricity market on which there is lots of news. This time, at the request of the audience and partners from the automotive industry, we are introducing the topic of electromobility, ESG standards and much more. See you in Vrdnik!

Mirko Radonjić