February 4, 2023
February 4, 2023
One of the biggest novelties within the proposed changes to the Law on the Use of Renewable Energy Sources of Serbia is the possibility for network operator Elektromreža Srbije (EMS) to demand from investors, as a requirement for grid connection, to ensure additional capacity including batteries for providing grid stability services. We spoke with Professor Nikola Rajaković of the Faculty of Electrical Engineering at Belgrade University.
The Ministry of Mining and Energy recently published draft changes to the Law on the Use of Renewable Energy Sources with new rules for balancing, priority grid access, and grid connection for green power plants. Public consultations are underway until February 9.
Seen as a solution for the intermittency of renewable energy sources, batteries are slowly conquering the region, primarily Greece and Turkey, where the projects in the pipeline are measured in tens of gigawatts. The draft law is opening the possibility for their development in Serbia.
Transmission system operator EMS would need to assess the effect of connecting every power plant using variable sources, the document reads. If it sees a threat to the stability of the system, it would be authorized to demand from the investor, as a requirement for grid connection, to ensure an additional capacity in Serbia for providing frequency regulation and other system services.
Such capacities can be conventional sources, but also energy storage capacities or dispatchable energy sources, according to the draft.
Rajaković: Serbia has reached a point where issues are not being solved but are piling up
Professor Nikola Rajaković says that changes in the law were necessary because of bad cooperation between key players at a time when synergy was needed. As a result, issues are not being solved but are piling up.
It is important to point out that the proposition implies market-based management of balance responsibility because the burden cannot be placed only on state-owned electricity utility Elektroprivreda Srbije (EPS), he added.
Rajaković praised the proposition to enable EMS the possibility to demand additional capacity from investors.
Introducing a deposit for every megawatt of installed power is one of the options to bring order to the large number of grid connection requests
Unofficially, the authorities are thinking of introducing a deposit obligation of EUR 20,000 per MW of installed wind and solar power, he revealed. Such a rule would be used to select the projects that are serious among the list of requests for grid connection. Developers of a combined capacity of 15 GW have so far submitted applications for the connection, and the entire system is based on power plants in operation with 8 GW in total.
A filter for identifying serious investors is needed in one form or another, Rajaković is convinced.
He points out there are some other options that need to be examined by the authorities. Investors in large solar or wind power plants can be assigned certain shares of capacity utilization with penalties for deviations, in his words.
Batteries are one of the solutions alongside pumped storage hydropower plants and hydrogen
Investors fulfill such an obligation by building storage and reducing variability in its production. Rajaković said. Batteries are one of the solutions alongside pumped storage hydropower plants and, later, hydrogen from electrolysis.
He proposes integration with sectors of electrified transport and heating as well as with demand response.
It would speed up network digitalization and enable the optimization of balancing variable production from renewable power plants, Rajaković said.
Greece and Turkey lead the way in investments in batteries
The region is witnessing a boom in investments in batteries, primarily in Greece and Turkey.
In Greece, investors have requested permits for the construction of more than 25 GW of batteries, and projects for the construction of solar power plants and wind farms are being expanded with batteries in order to receive priority status when applying for grid connection. So far, projects for power plants with a capacity of 1.38 GW have been modified to include batteries.
Turkey has allowed investors developing energy storage systems to build a matching wind and solar power capacity. It received applications for renewable energy facilities with storage with a stunning 67.3 GW in total capacity in the first two weeks after introducing the rule.
A wind or solar power plant needs a battery equivalent to 25% of its capacity
Rajaković said that similar trends are present in all parts of the world where the development of renewable energy is booming. Lithium ion batteries are mostly the option, but the development of other battery technologies is advancing, and the competition is fierce.
He emphasized that for a solar or wind power plant sufficient storage capacity at its location depends on the characteristics of the grid connection, but it is usually enough for the storage capacity to be up to 25% of the capacity of the power plant.
The price of a solar power plant per MW is already under EUR 1 million, and with the additional price of the storage or battery of less than EUR 2 million per MW, it is still an attractive investment, Rajaković stressed.
It is very important, in his words, that in addition to lithium-ion technologies, commercial solutions with lithium-iron-phosphate and nickel-manganese-cobalt technologies are increasingly encountered.
Auctions should be modified because they do not hit the target precisely
The changes to the law also apply to auctions, so Rajaković says that this is an opportunity to introduce one new modification.
One of the benchmarks for evaluating applicants at the auctions could be the percentage of energy that a private investor sells to a guaranteed supplier at a non-market price in order to secure supply for the households and businesses from our domestic resources at affordable prices.
Preemptive right also makes sense
With the energy crisis, and high prices of electricity this would not jeopardize the profitability of private investment, but also the well-being of citizens, Rajaković proposed.
As another option, there is a preemptive right to purchase electricity in these projects, and he believes it also makes sense. The current set-up of auctions don’t seem to be hitting the target precisely, he said.
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