FACTS AND FAIRYTALES:THE STORY OF WIND IN SERBIA

Fairytale 1

Fairytale: Electricity prices can always be cheap in Serbia.

Fact: Electricity prices are going up, whether EPS builds new power plants or not – Whether the power in 2017 is made by EPS or imported, it will be based on clean coal plants, and the price of power from these plants is 7.5 € cents or more not including transmission.

Fairytale 1Fairytale: Electricity prices can always be cheap in Serbia.

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Fairytale 2

Fairytale: Wind energy is expensive.

Fact: Implementing the government’s current 450 MW quota of wind power would add between 2.0% and 2.5% to electricity bills, very gradually from 2015 to 2017, and by 2017 the price of electricity will be much higher anyway because of the Europe-wide shutdown of cheap polluting coal plants and their replacement with modern clean coal plants. The ‘extra’ cost of wind could easily be very close to zero on consumer electricity prices.

Fairytale 3

Fairytale: Other renewable energy sources are cheaper than wind.

Fact: Solar costs 142% more than wind, biomass costs between 20% and 46% more than wind.

Fairytale 4Fairytale: Serbia has enormous biomass potential, at low cost.

Fact: Installing enough biomass to generate the same power as envisioned 450 MW of wind would cost the country €50 million per year more than the cost of the same energy provided by wind.

As for potential: “Our potentials for RES production are often subject of fairytales. The most common misconception is about biomass. Serbia actually does not have biomass, but only the potential for its production, but that would require huge infrastructural projects”, former CEO of EPS quoted in the weekly magazine NIN.

Fairytale 5

Fairytale: Serbia doesn’t really need this renewable energy, so for Serbia it is just paying extra for what it already has.

Fact: Serbia imported 1,800 GWh last year from other countries. The only people making money from this are energy traders. The Serbian government subsidizes to EPS the cost of these incredibly high-priced imports so that EPS does not need to raise electricity prices to the consumers. But wind energy would be cheaper than the imports.

Fairytale 6

Fairytale: Serbia can build renewable power but export the power to EU countries, saving the Serbian consumer the cost of buying it.

Fact: Serbia is not allowed to export renewable power to EU until it has already achieved its own 2020 target approved by the EU, which will not happen before 2020 unless the current government massively expands the 450 MW cap on wind. Until the cap is expanded, and all plants under the new higher cap are built, it is illegal under EU law for Serbia to export renewable power.

Fairytale 7

Fairytale: The Serbian government passed a renewable-friendly law in 2011, and Serbia is now just waiting for wind farms to be built, but foreign investors have not responded.

Fact: The Law required the government to establish a new feed in tariff (FIT), and a contract form between EPS and renewable producers according to which they could sell their power at the FIT price to EPS. The deadline for that in the Law was December 2011. Almost a year later, neither has been done. IF the Serbian government passed a decree with an economic feed-in tariff, and a real contract with EPS, the full 450 MW of the current government cap would commence construction in 2013, with a total foreign direct investment of €700 million. CWS project would commence construction (if the government acted) in September 2013, with a total investment of €300 million.

Fairytale 8

Fairytale: This doesn’t really matter, the investors can wait, we are poor, and the EU can’t make us do anything.

Fact: Serbia has a treaty obligation as member of the European Energy Community to meet it’s 2020 renewable targets. A flagrant violation of these obligations, as is happening now, can only delay Serbia’s EU path.