Investors submit bank guarantees for 4 GW of new power plants in Serbia

Bank guarantees for solar, wind and hydropower projects and substations, within the transmission system in Serbia, were provided for 28 facilities with an overall capacity of 4,000 MW. Developers of 51 investments in total, divided into two groups, had a deadline to submit them by June 24 or July 1.

Obligatory bank guarantees of EUR 25,000 per MW of capacity are from a regulation introduced in October 2023. The intention was to unclog the grid connection approval process which, according to investors, has been hold for about two years. It is one of the main steps for solar park and wind farm projects.

After the adoption of the Law on the Use of Renewable Energy Sources in 2021, Serbia’s transmission system operator (TSO) Elektromreža Srbije (EMS) received requests to connect almost 20 GW of new power plants. It was much more than the network could integrate – a combined 5,800 MW in capacity as of September of last year.

EMS told Balkan Green Energy News that by July 1, it received guarantees for 28 facilities with a total capacity of 4,000 MW, not including projects being reviewed in line with the law.

The company said it would publish the list on its website by the end of the week. Balkan Green Energy News learned there is only one substation on the list and that the rest are all power plants.

After providing bank guarantees, investors have two months to sign a connection agreement with EMS

Of note, 51 facilities met the conditions for the conclusion of the agreement on the preparation of the connection study, defined in the directive on the conditions of electricity delivery and supply. In total, there were 24 solar projects of an overall 3,278.5 MW, 18 wind power plants with a combined 3,239.4 MW, and one hybrid power plant of 150 MW in capacity.

Pumped-storage hydropower project Bistrica, with a proposed capacity of 656 MW, was also on the wider list together with four other hydropower plants and three substations.

The condition for starting the procedure for concluding the agreement on the connection of the facility to the transmission system is the submission of a bank guarantee within 60 days from the submission of the connection study.

“In line with the regulation on the conditions of delivery and supply of electricity, if the bank guarantee is not submitted within two months from the delivery of the connection study, the study ceases to be valid and it is considered that the applicant has abandoned the connection process,” EMS said.

After bank guarantees are provided, investors have two months to sign the connection agreement with Serbia’s TSO.

New opportunity from September 1

If an investor doesn’t sign the connection agreement within the deadline, the connection study is annulled so they have to replace it.

Investors will have the opportunity for that in the next interval, which begins on September 1, EMS explained. By August 1 they have to submit a complete application for signing the contract on the development of the connection study, the TSO added.

By submitting a bank guarantee, the investor accepts the obligation to meet the deadlines throughout the project. Otherwise, the new regulation defines the situations in which EMS can collect the guarantee.