Serbia issues guidelines for draft law on renewable energy

The new law on renewable energy sources in Serbia will regulate premiums for new renewable energy capacities, the introduction of auctions, subsidies for small hydropower plants and the status of prosumers and energy cooperatives.

The Ministry of Mining and Energy has published the guidelines for the upcoming draft law on renewable energy sources and invited the public to submit suggestions.

The deadline for written proposals is January 12, it said on its website.

The target share of renewable energy sources should be defined in the national energy and climate plan

Guidelines have been elaborated for different areas of the energy sector and they are only a starting point for discussion for the drafting process, according to the ministry.

It proposed to determine the binding share of renewable energy in gross final consumption and transport in the national energy and climate plan (NECP).

Incentives: premiums and feed-in tariffs

The following incentives will be considered in the law drafting process:

1. a premium that can be fixed or floating,
2. a feed-in tariff for small facilities (power plants under 500 kW and wind power plants below 3 MW).

The ministry proposed incentives to be given to new or reconstructed power plants using renewable sources, and especially small hydropower plants, biomass power plants, biogas power plants, wind farms, solar parks, geothermal facilities, biodegradable waste facilities. According to the guidelines, small facilities could be exempted from the allocation of premiums, as well as from auctions.

The premiums should be allocated at auctions, under the quotas determined by the Government of Serbia. The Energy Agency of the Republic of Serbia would be in charge of defining the methodology for calculating premiums and the starting price. The ministry suggested auction winners should obtain the status of a temporary privileged producer for three years, or just one year in the case of solar power plants.

The premiums would be granted via a premium contract, which can be physical or financial (Contract for Differences – CfD) while feed-in tariffs would be granted through a power purchase agreement (PPA).

The universal supplier would still be in charge of balancing responsibility for small power plants, while facilities that won premiums through auctions would not bear a full balancing responsibility until an organized intraday market is established.

Lawmakers will consider ways to regulate the status of renewable power plants that are not part of incentive measures, and especially the issue of commercial or corporate power purchase agreements between green electricity producers and other market participants, the guidelines revealed.

Enabling production from renewable sources for self-consumption

According to the ministry, the new concept should enable consumers which install facilities for self-consumption to obtain the right to sell surplus electricity in the market. The law will define the method of determining the price of surplus energy, and the tax treatment issue of prosumers will also be discussed.

It is also necessary to find an adequate domestic legal term for a prosumer, the guidelines showed.

Introduction of the concept of energy cooperatives

The ministry intends to define the concept of energy cooperatives and find a way to simplify the procedures for connecting and building energy units.

Citizens to get support for joining energy cooperatives

The basic idea is to grant them the status of energy entities while the provisions of the law on cooperatives would be applied to their general activities.

The legal solutions will be defined in a way to motivate (by incentives or otherwise) households and small producers to form energy communities.

Possible introduction of the obligation to install chargers for electric vehicles

As for the transport sector, the suggestion is to increase the use of renewable energy by obligating fuel suppliers to use green fuels.

One of the proposals is for the Government of Serbia to determine obligations and incentives for the installation of chargers for electric vehicles at gas stations and for the procurement of electric vehicles in the public sector; local municipalities should get a target share of electric vehicles in urban and suburban transport.

The ministry said the use of hydrogen and biogas in traffic should also be included.