Photo: AmCham
The drafted changes to the Law on Energy would provide tools, such as the active buyer status and power purchase agreements, for businesses in Serbia to decarbonize. It would help them prepare for the European Union’s Carbon Border Adjustment Mechanism and taxation of CO2 emissions in general.
The novelties of the draft law were introduced by the representatives of the Ministry of Mining and Energy, state-owned power utility Elektroprivreda Srbije – EPS, distribution system operator (DSO) Elektrodistribucija Srbije – EDS, transmission system operator (TSO) Elektromreža Srbije – EMS and consulting firm KPMG Serbia. They presented the changes at the conference Businesses on the Road to Green Transition, organized by the American Chamber of Commerce in Serbia (AmCham).
Maja Turković, Executive Vice President of CWP Europe and co-founder of the WISE Serbia women’s network, and Petar Karanović, partner at the Karanović & Partners law office, moderated the discussion.
Rade Mrdak, the renewables advisor from the ministry, said the active buyer status is designed for end consumers other than households: primarily firms and commercial consumers that have power plants for self-consumption with an individual capacity greater than 150 kW.
The model provides various opportunities for businesses to participate in the electricity market. An active buyer is eligible, for example, to install a photovoltaic plant and produce power for its own consumption. It has an option to deliver surplus electricity to the grid.
Active buyers enter the market by using services of aggregators or suppliers
It is the same as with prosumers, and the difference is that the surplus cannot be commercialized by using net metering, but through various contracts.
Unlike a prosumer, an active buyer would be able to participate in the markets for auxiliary services and flexibility. Firms with flexible electricity consumption could offer it as a service by using intermediaries such as an aggregator or supplier, and earn money, Mrdak noted.
He stressed that a firm without a power plant, but with flexible consumption, would also be able to obtain the status of an active buyer.
Compared to a prosumer, an active buyer has additional obligations. One is the balance responsibility for the imbalance it creates in the electricity system. An active buyer would be able to transfer its balance responsibility to a third party through a contract.
It also has the obligation to provide additional storage capacity, if its facility has a capacity greater than 5 MW.
The essence of an active buyer is the sale of services on the market
Nenad Šijaković, advisor to EMS’s general manager responsible for international and regulatory affairs, warned that if firms intend only to produce electricity for self-consumption and not to participate in the market, it would mean they only get obligations and give up their rights. If they don’t want to sell surplus electricity, they will be able to participate in the flexibility and auxiliary services markets, he explained.
Nikolić: EDS is introducing software to speed up the connection procedure
Rade Mrdak expressed the belief that the right of an active buyer to install a power plant for self-consumption is the first measure that would be implemented. Participation in the auxiliary services market will be possible a little later, because it is necessary to adopt bylaws, he added.
It would take the most time to activate the flexibility market, according to Mrdak. Mass installation of smart meters and the development of smart grids are needed to make it operational, he said.
According to Dalibor Nikolić, head of the electricity distribution system operation in EDS, the essence of being an active buyer isn’t to produce electricity only for self-consumption. Its active participation in the market could bring it greater savings, he added.
EDS’s obligations toward active buyers would be defined in bylaws. The company began integrating software that would speed up their connection to the grid, Nikolić said.
The installation should be completed within a year and a half to two years.
Pupovac: EPS will be ready for active buyers
The processing of connection studies will be significantly accelerated, shortening the time necessary to analyze more complicated connections from 10-15 days to one day, he claimed.
Davor Pupovac, head of market analysis and risk management in EPS, said the power utility is taking note of the changes and that it would be ready for active buyers. The company is preparing supply and balance responsibility contracts for them, he added.
The participants of the conference also pointed out that third parties would be allowed to own active buyers’ power plants.
PPA contracts are also a solution for CBAM
The start of the gradual implementation of the EU’s cross-border tax on CO2 or CBAM is scheduled for the beginning of 2026. Jovan Šljivić, senior manager at KPMG, said guarantees of origin aren’t the solution for Serbian businesses to align with CBAM requirements. Instead he pointed to photovoltaic facilities and power purchase agreements (PPAs).
However, he warned that, regarding PPAs, the CBAM framework isn’t clear. Final CBAM rules are gong to be set in 2025, Šljivić said.
The ministry is convinced that the changes to the Law on Energy wouldn’t hamper making PPAs. The amendments resolved the dilemma of whether it is possible to combine such a deal with a full supply contract, according to Mrdak.
Mrdak: Discussions on carbon pricing are underway
Mrdak added that the design of a carbon pricing system in Serbia would be determined in the dialogue between the Energy Community and the European Union. The members of the Energy Community in the Western Balkans, in his words, aren’t comfortable with hasty decarbonization. Discussions are underway, including on the emission factor for CBAM set by the EU for Serbia, which considers it unfair, he stressed.
Along with the talks, the government wants to give businesses the tools, such as the active buyer and PPAs, to decarbonize independently of the state, according to Mrdak.
EPS is ready to be a sleever and is preparing for the role, Damir Pupovac from EPS underscored.
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