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Limited wind energy development in Serbia raises concerns and opportunities

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Despite Serbia’s significant potential for wind energy production, the country currently operates only ten wind farms, all of which are privately owned. This situation may soon change, as President Aleksandar Vučić hinted at plans to reacquire portions of the wind energy sector following the recent signing of contracts for large-scale solar power plants.

Vučić stated, “We will ensure that we reclaim the wind energy sector that has been privatized, allowing us to manage production better rather than exporting it freely to European and global markets.”

Former Minister Zorana Mihajlović supports this initiative, emphasizing the need for state ownership in the wind sector. She remarked, “We have committed to reducing emissions by 40% by 2030 and increasing renewable energy sources in our electricity production by 49%.” Mihajlović highlighted the urgency of these goals, noting that time is running short.

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According to her, existing wind projects that are already operational offer a profitable opportunity for the state. Currently, private wind farm owners benefit from favorable feed-in tariffs for the first twelve years of operation, raising questions about whether new wind farms should be constructed or existing ones acquired, given their prior subsidies.

Mihajlović argues that both strategies are essential. “Building a wind farm involves more than just erecting turbines; it requires substantial investments in the transmission and high-voltage grids,” she explained. The existing wind farms have been integrated into the grid, and further development is crucial to meet Serbia’s energy demands.

The Freedom and Justice Party contends that building new wind farms is a better approach than purchasing existing ones. Dušan Nikezić, former president of the EPS Supervisory Board, pointed out that the three largest wind farms generated €95 million last year, with a profit of €54 million. He criticized the government for providing significant benefits to investors while potentially using taxpayer money to buy back these assets.

Nikezić stressed that EPS should lead the development of renewable energy, investing in wind and solar power plants, as well as harnessing Serbia’s hydro potential.

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Currently, Serbia has only ten wind farms with a total capacity of 512 megawatts, which covers a small fraction of the country’s energy needs. Danijela Isailović, manager of the Renewable Energy Sources Association, noted that private capital has largely driven wind energy development in Serbia over the past 10-15 years.

She pointed out that state-owned projects, such as the Kostolac wind power plant, are underway, with expectations for operational status next year. Isailović views the idea of transitioning private wind farms to state ownership positively, suggesting it reflects a national commitment to increasing green energy production.

However, she acknowledged the complexities involved, particularly regarding financing and existing loan agreements with international banks. The state might find it easier to take over developing projects than those already built, which could be encumbered by loans.

Isailović emphasized the importance of acting swiftly to meet Serbia’s climate and energy commitments, as stipulated in national plans and international agreements like the Paris Climate Accord.

As for the wind industry’s future in Serbia, Isailović identified regions in South Banat, Eastern Serbia, and parts of Central Serbia as having high potential for wind development. She noted that the efficiency of the electricity transmission system is crucial for accommodating new wind farms.

With new auctions for 300 megawatts of wind energy set to be announced soon, Serbia aims to enhance its wind energy capacity. If these projects are successfully completed, they could significantly contribute to the national energy mix by 2030.

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