The Law on Utilization of Renewables Adopted

The Law on Utilization of Renewables Adopted

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On April 21, 2021 The Law on Utilization of Renewables (the „Law“) was adopted by The National Assembly of the Republic of Serbia, after recently held  public discussion in which the new regulations that refer to producers and consumers of electricity were presented.

The Law stipulates that the usage of renewables is in the public interest of special importance for the Republic of Serbia, where this is a first time a special law on renewable energy sources is being adopted.

Most importantly, the Law defines the auctions for the allocation of the market premiums and fid-in tariff, adoption of a national energy and climate plan, legal regulation of prosumer status and the establishment of energy communities, as well as privileged producers and temporary privileged electricity producers and producers from renewables.

For the first time, the Law guarantees the stability of incentive measures and introduces market premiums that will expose renewables producers to market influence and competition. Therefore, the costs for citizens and the economy will be significantly reduced in regard to the costs of the existing incentive system.

Market premiums and fid-in tariffs are anticipated as the incentive measures. Incentive measures could be obtained for a power plant that uses renewable sources of energy (wind, sun, hydro, biomass, biogas, geothermal, biodegradable waste, etc).

The market premium is an addition to the market price of electricity delivered to the market by premium users and determined in eurocents per kWh in the auction process and it is calculated and paid on a monthly basis. By a public call, the Ministry initiates the auction procedure which is separated into 3 parts – qualification, bids and selection of the best offer. It then forms a committee for conducting the auction, enacts a decision on the most favourable offers and based on it, a decision on granting / rejecting the right to market premium.

Fid-in tariff is a kind of operational national aid that is granted in the form of incentive purchase price guaranteed per kWh for electricity delivered to the electricity system during the incentive period. Fid-in tariff system is provided for small plants and demonstration projects. The Ministry allocates the right to the fid-in tariff in the auction procedure on the basis of available quotas prescribed by the Government. 

The status of a customer – producer, i.e. prosumer as a person who is simultaneously a producer and a user of electricity presents a significant novelty. The Law prescribes that the prosumers will be able to install renewable energy sources on their facilities and use it to supply their consumption, as well as to deliver (sell) surplus energy to the network or storage it for future use.

By Boris Baklaja, Partner, and Milos Nikolic, Lawyer, Baklaja Igric Tintor