Serbia holds public consultations on draft laws on renewable energy, energy efficiency

Who will draw up and sign, on behalf of the state, the market premium contract? How will electricity from renewable energy sources be balanced? Will there be longer extensions of the status of a temporary privileged producer? And how will energy communities, or cooperatives, be defined? These were the main issues discussed at the public consultation event on Serbia’s draft law on renewable energy sources and a draft law on energy efficiency and the rational use of energy.

The public consultation event on the draft law on renewable energy sources and the draft law on energy efficiency and the rational use of energy of the Republic of Serbia was held at the Serbian Chamber of Commerce, and participants were also able to follow the discussion online. The public consultation process closes on February 9.

Jovanka Atanacković, a state secretary at the Ministry of Mining and Energy, noted that the shares of renewable energy in final consumption have so far been determined through a national action plan, but that under the new law this will be done through a National Climate and Energy Plan (NECP). This, according to her, is one of a number of changes that will be introduced with this law.

Atanacković: Serbia plans to adopt NECP this year

“Adoption of NECP will require a broader public consultation given the importance of the document. The ministry’s ambition is for the plan to take effect this year,” said Atanacković, who is in charge of green energy, international cooperation, and European integration.

Ministry representatives announced that secondary legislation will be adopted swiftly, within 30 days of the passage of the law

Energy efficiency can enable savings equal to the combined annual output of Kostolac A and Kostolac B thermal power plants

Zoran Lakićević, the state secretary in charge of energy efficiency and heating plants, said that the law on energy efficiency and the rational use of energy should enable savings of 1.3 million tons of oil equivalent by 2030, which is equal to the combined annual electricity output of thermal power plants Kostolac A and Kostolac B.

As the most important change, he highlighted the proposal to set up an energy efficiency financing and promotion administration, which will be in charge of approving incentives. Also, according to him, incentives will now be available to private citizens as well.

“We are working on models of the operation of this administration together with the European Bank for Reconstruction and Development (EBRD) and KfW, and we hope we will be able to announce what it will look like in the next few months,” said Lakićević.

The discussion was also attended by Zorana Mihajlović, Serbia’s deputy prime minister and minister of mining and energy.

Agreements, balancing, temporary privileged producers, energy communities

The key issues that representatives of investors, citizens, businesses, and law firms were interested in were the design of the market premium agreement, the balancing of production from green energy power plants, the status of a temporary privileged producer, and the definition of energy communities, or cooperatives.

The market premium agreement will not be drawn up by EPS after all

The draft law envisages that the universal supplier – currently state power utility Elektroprivreda Srbije (EPS) – shall prepare and sign, on behalf of the state, the market premium agreement, whereas participants in the discussion believe it would be better if the agreement is drawn up by the government or an independent body. They also suggested that it should be made sure that the party to the agreement acting on behalf of the state must guarantee the payment, and be creditworthy.

Atanacković said that the suggestion had been accepted and that the agreement will be drawn up by an independent party. She said that it is being considered whether the party to the agreement should be EPS, Elektromreža Srbije (EMS) or some new agency. She added, however, that setting up new institutions is currently not popular, and that the state will come up with some transitional solution.

Corporate power purchase agreements should be defined

Participants were also interested in the regulation of the balancing responsibility of power plants that do not get state subsidies in auctions, as well as the introduction of corporate power purchase agreements. Atanacković said that there is room for discussion on details regarding balancing responsibility.

Some suggested that more options should be made available for extending the status of a temporary privileged producer since the maximum allowed extension at the moment is one year. This, according to some of the participants, would be beneficial for investors and banks financing their projects.

Longer extensions of the temporary privileged producer status would be expensive for the state

Allowing longer extensions of the temporary privileged producer status, according to Atanacković, would result in postponed investments, and, consequently, delays in achieving the goals regarding the share of renewable energy sources, as well as less time for Serbia to prepare for the introduction of the EU’s carbon border tax, which is being drafted by the European Commission.

This means that delays would be expensive for the state, she added.

Jovanka Atanacković, državni sekretar u Ministarstvu rudarstva i energetike

The ministry has left some room to additionally define the status of renewable energy communities, which should be the equivalent of the EU’s energy cooperatives or energy communities.

According to the proposal in the draft law, energy communities would not be allowed to make profit because they would be registered under the law on associations, not the law on cooperatives. If they were to be registered under the law on cooperatives, then legal entities would not be allowed to be founders, whereas the idea is for communities to be established by both individuals and legal entities, according to Atanacković.