Southeastern Europe has major role in Masdar’s 100 GW target

Serbia, Masdar’s entry point to the Balkans, remains its strategic market, Business Development and Investment Director Ahmed Al Awadi told Balkan Green Energy News. The entire region plays a big role in the company’s 2030 renewables target of 100 GW, he pointed out. In addition, the acquisition of Greece-based Terna Energy will facilitate Masdar’s growth in Central and Eastern Europe and beyond, the company’s official said.

Abu Dhabi Future Energy Co. – Masdar is one of the pioneers in wind energy in the Western Balkans with its wind facility Čibuk 1 of 158 MW, the biggest in Serbia, and the 72 MW Krnovo wind farm in Montenegro. The company, based in the United Arab Emirates, and its partner Taaleri Energia recently reached the financial close of Čibuk 2, a 154 MW wind project in Serbia. At the signing ceremony, Balkan Green Energy News spoke to Masdar’s Business Development and Investment Director Ahmed Al Awadi, who is responsible for Europe and the Middle East.

The event was an opportunity to reflect on the evolution of Serbia’s legal and investment framework in the past decade, as Al Awadi also participated in developing the Čibuk 1 project.

Masdar and its partner Taaleri Energia recently reached the financial close of Čibuk 2, a 154 MW wind project in Serbia

“Such investments add value to the overall economy, and not only to renewables. We’ve gone far from the early days, when we saw bankability challenges,” Al Awadi said in the interview. Serbia was Masdar’s entry point to the Balkans and remains a strategic market, he stressed.

On the sidelines of the RES Serbia 2024 conference, loan contracts with UniCredit Bank and Erste Bank were signed, as well as the power purchase agreement (PPA), contract for difference (CfD) and balancing agreement with Serbia’s state-owned power utility Elektroprivreda Srbije – EPS. The Čibuk 2 project secured the market premium last year at Serbia’s first wind power auction.

Partnerships and collaboration for ambitious 2030 targets

Southeastern Europe has a big role in Masdar’s ambitions, Al Awadi revealed. The company has set its global capacity targets for 2030 at 100 GW in renewable energy and one million tons of green hydrogen per year.

Plans to accelerate the expansion largely lean on partnerships and collaboration, he explained.

Earlier this year, Masdar agreed to acquire Greece-based Terna Energy. It is slated to become one of the biggest transactions in Europe’s renewable energy sector in the past few years. “We see Terna Energy as a platform for Masdar’s investment in Central and Eastern Europe and beyond,” Al Awadi underscored.

Additionally, the clean energy giant is progressing in the establishment of a joint venture partnership with Romania’s Hidroelectrica.

Evolution from reliance on development banks to fully commercial endeavors

Al Awadi pointed out that when he first came to Serbia, in 2013, there was essentially no bankable regulatory energy framework and PPA precedent.

“With our partners and the government, we worked together to enhance the energy regulation and make the laws and regulations bankable. Through our participation in the RES Serbia association, we also worked with the European Bank for Reconstruction and Development – EBRD on the Serbian CfD and how to develop the renewable energy market. And now projects can stand on their own,” he said.

Serbia has a CfD support scheme for wind and solar power but there are also projects securing commercial PPAs

There is a CfD scheme but there are also projects securing commercial PPAs and there is willingness in the market to provide those commercial PPAs, Al Awadi explained.

“The first projects relied heavily on the government-backed feed-in tariff scheme and on development banks. Today, projects are being financed by commercial banks, and this is a sign that there is confidence in the country and its energy sector,” he added.

Renewables investment essential for competitiveness, fostering local expertise

Asked about the effect of investments in wind power and other kinds of renewable energy on Serbia’s competitiveness relative to the other countries in Southeastern Europe, Al Awadi pointed to the ongoing transformation toward net zero emissions.

“Serbia heavily relies on local coal. To decarbonize, it needs investments in renewables and grid infrastructure. We would like to create quasi-baseload solutions through the deployment of battery storage and hybrid renewable energy power plants, which includes grouping wind and solar together; these are the next steps that we are exploring,” he said.

The next name of the game in the region is interconnectivity and cross-border capacities

In the early days, there was no expertise in the country in the renewables sector, according to Al Awadi. Now Masdar is hiring Serbian talent in all its teams and working with Serbian developers and contractors, he said, adding that it proves that a renewable energy industry and sector has been created.

“And today I believe Serbia is very much advanced in regards to renewables within the region. It is leading the way in certain aspects when compared to its neighbors,” Al Awadi asserted.

He stressed that the next name of the game in the region is interconnectivity and cross-border capacities. It is key for enhancing the region’s competitiveness, according to Al Awadi. The renewable energy resources exist and there is potential for projects with a lot of capacity in some places, but there is either a lack of local demand in those same places or insufficient grid capacity and interconnectivity, he added.

More wind, photovoltaics in Masdar’s project pipeline in Serbia

Masdar’s portfolio includes additional wind and solar power projects under development in Serbia, Al Awadi said.

“We’re looking also into battery storage, as we are required to provide it as part of the grid connection requirements. But at the moment, to be honest, we don’t have clarity how to allocate the cost of battery storage to these projects. Are they standalone battery storage projects? What is the battery storage commercial structure and revenue stream? But we understand that the government is working on it and trust that in time it will introduce a bankable and commercially viable scheme,” he clarified.

As for the rest of the Western Balkans, the company is evaluating a couple of projects, Al Awadi said.

“There is a lot of demand for energy in Europe, especially green energ,y driven by the energy transition process that all these countries are going through,” he underscored.

Perspectives of green hydrogen, pumped storage

Turning to other technologies, Al Awadi expressed the opinion that hydrogen could become an important component. “The green hydrogen story – overall safety, transportation, utilization, it’s not mature and needs to become commercially viable,” he pointed out.

With the agreed purchase of Terna Energy, the company is adding the Amfilochia pumped hydro project in Greece, currently under construction, to its portfolio. It would be Masdar’s first pumped storage hydropower plant. Masdar also signed an agreement in March this year to explore the potential for pumped hydro storage projects in Uzbekistan.

“At the end of the day, pumped storage plays an important role in supporting the further deployment of renewables and their integration within the power grid, ensuring grid stability and balancing. Masdar will capitalize on the expertise gained from the Amfilochia project to explore projects in the region,” Al Awadi said.