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Amendments to the Law on the Use of Renewable Energy Sources

During the application of the Law on RES, which entered into force in 2021, certain problems were identified, and it was determined that they could only be overcome by amending the Law.

One of the biggest issues was the balancing responsibility of the energy producers from renewable sources (now defined under the amendment as the “Variable Renewable Energy Sources”), which was transferred to the guaranteed supplier (i.e. Elektroprivreda Srbije, “EPS”), regardless of whether the energy producers were in the incentive system or not. This solution created a huge risk for the guaranteed supplier, that needed to be rectified.

Therefore, one of the most important novelties of the Law is that the balancing liability on the part of the guaranteed supplier will now be retained only for producers of energy from renewable sources which are in the incentive system, while projects that are developed in the commercial system base must solve the issue of balancing responsibility on their own. Moreover, all producers of energy from renewable energy sources, regardless of whether they are in the incentive system or not, will be obliged to arrange the balance responsibility themselves either at the end of the 6 month period from the date of the merger of the domestic organized intraday market with the European intraday market, or after the expiration of 30 months from the date of establishment of the domestic organized intraday market, whichever expires earlier.

Also, the privileged producer in the market premium system is obliged to provide good prediction of the quantity of the energy it is planning to produce and to pay to the guaranteed supplier: (i) fixed fee which shall be determined as a percentage of the auction price, and (ii) the positive difference between the reported quantity of the produced energy and actual quantity of the produced energy, depending on the direction of the imbalance that privileged producers create (if privileged producers produce less electricity than planned, then they will have to pay EPS; if they produce more than planned, then EPS will have to pay them).

In addition, under the amendments, the installed power of the buyer-producer is now limited to 6.9 kW for households, i.e. up to 150 kW for consumer-producers which are not in the household category.

Under the amendment, the transmission system operator is obliged to keep electronic, centralized and publicly available register of all power plants that use renewable energy sources that are connected to the transmission system. Further, transmission system operator is now required to analyze the adequacy of electricity production and transmission system, and in case the analysis shows that there are risks for the energy system due to the lack of system balancing reserve, the connection to the transmission system of power plants that use variable renewable energy sources will be delayed, with the possibility that producers from variable renewable sources energy provide, either by themselves or through other market participants, auxiliary services to the transmission system operator which include frequency regulation and power exchange, if the transmission system operator does not want to be subject to the measure of delaying the connection until there are available reserves in the system. This measure is introduced to protect the system from the risk of excessive usage of variable renewable energy sources.

As regards the distribution system, the amendment have introduced the limitation that the total installed power of all power plants using renewable energy sources connected to the distribution system cannot be higher than 80% of the installed power of the transformer station through which the delivery of electricity from the distribution to the transmission system is carried out, i.e., the value of delivery from the distribution system to the transmission system cannot be greater than 16 MW per one transformer station.

The aim of the amendments is to create favorable conditions for conducting the first auctions and to regulate balancing responsibility in a way to be favorable for investors but also to protect guaranteed supplier and final consumers from risks of integration of the energy produced from renewable sources into the system.

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Ana Čalić Turudija

Danica Gligorijević