One reason for the lack of development so far is expense - one megawatt of installed wind power costs up to EUR2 million to construct. Interest rates from Serbian banks are much higher than those in Western Europe. Potential investors say they are further hampered by the very complicated procedures for obtaining permits - a total of 26 steps are required. There are also barriers in the existing legislation, or more precisely, the vagueness of certain laws.
The Serbian Wind Energy Association was created in November to assess the hurdles and find a way to overcome them with the help of local and central government. Members include MK-Fintel Wind, Continental Wind Partners, Energowind, Indjija Wind Park and Kelag.
Serbia is set to get its first wind plant in October if everything goes according to plan. MK Fintel Wind says it will begin construction of the 5MW La Piccolina project in July, with connection to the power grid due to take place three months later. The Italian-Serbian company, which is investing more than EUR150 million, hopes to complete work on three other wind projects by early 2013.
Potential investors are advised to follow MK Fintel Wind's example, as Serbia has adopted the first-past-the-post system. A government feed-in tariff (FIT) introduced in 2009 pays EUR0.95/kWh to the developers that connect the first 450MW of wind energy to the grid.
Serbia's deputy minister of mining and energy, Dejan Stojadinovic, believes it is unlikely all of the 1.4GW of potential wind capacity will end up being built. Wind farms that do not benefit from the FIT will probably not be profitable, he says.
Stojadinovic also rejects claims that the procedure for obtaining the energy permit is complicated, adding that it takes one month at most. He adds that nine have been issued so far. A bigger obstacle, he says, is the lack of spatial planning in Serbian municipalities, as wind energy developers also require a location and building permit.
The most promising locations for wind power plants in Serbia are in northern and eastern areas, including the Midzor Mountain, Suva Planina, Vrsac Hill, Stara Planina and Deli Jovan.
WAITING IN THE WINGS
Licensed wind projects in Serbia
Project Location Developer Capacity Date of Valid until
Vracev Gaj Bela Crkva VPBC Vetar 188 30.12.2008 09.01.2011
Bavanistansko Kovin Wellbury Wind 188 24.04.2009 14.05.2011
Polje Energy Beograd
Susara Vrsac Windteam Beograd 60 03.08.2009 19.08.2011
Vrsac- Vrsac, Energowind Vrsac 400 07.10.2009 16.10.2011
Cibuk Kovin Vetroelektrane 300 16.10.2010 30.10.2011
Kosava Vrsac MK-Fintel Wind 117 15.04.2010 24.04.2012
La Piccolina Vrsac MK-Fintel Wind 5 02.06.2010 02.06.2012
Krivaca Golubac, Ivicom Energy 113 25.06.2010 25.06.2012
Indjija Vojvodina Vetropark Indjija 20 06.07.2010 06.07.2012
Source: Serbian Ministry of Mining and Energy