Renewable Energy in Serbia

The potential for renewable energy remains largely untapped in Serbia, but officials say that is about to change. Speaking at a recent press conference, Energy Ministry State Secretary Nikola Rajakovic pledged investments of between 300m and 500m euros over the next two years.

That number, he added, could rise significantly over the next decade.

"The potential for investing in renewable energy sources in Serbia is big and amounts to at least two billion euros in the next five to seven years. Over the next ten years, the level of investment could reach between four and five billion euros," Rajakovic said, adding that wind power plants hold the greatest investment potential.

A Serbian company, MK Group, has already partnered with the Italian firm Fintel Wind to build the country's first 5 MW small wind power plant by October 2011.

"Launching of other wind power plants is expected for late 2012 and early 2013. MK Fintel Wind is currently developing four projects in three different locations in Serbia, with a total investment estimated at 150m euros," spokesperson Maja Banjalic told Belgrade media.

But complicated administrative procedures pose a barrier, company representatives say, urging officials to clean up the red tape.

US Ambassador Mary Warlick, meanwhile, said American investors are interested in the sector, but that going forward will require amendments to certain regulations -- mostly involving electricity purchasing and connections to the power grid. "USAID is working with several investors who can together bring more than 1.5 billion euros of investment in wind energy," Warlick confirmed.

Currently, renewable sources provide only a fraction of the country's energy needs, even though such sources could generate the equivalent of 4.3 million tonnes of oil per year.

Finding enough money is a key hurdle. The country does not have a large enough budget to meet the government's stated goal -- 20% of energy from renewable sources by 2020, compared to the current 12% -- on its own. That means external funding sources are crucial.

In late November, the government issued an investment guide for renewable energy sources, hoping to spur interest.

Fifteen existing hydroelectric plants yield 10,000 GWh, or one-third of all electricity production. Serbia has not built a large hydroelectric plant since 1988, but the country has about 900 locations that could be used for smaller facilities, a Mining and Energy Ministry representative told SETimes.

The country's biggest hydroelectric plant, Djerdap 1, is built on the Danube, bordering Romania. It produces around 5,500GWh of electricity annually.

Energy ministry officials say that biomass represents the largest percentage (63%) of potential renewable energy. Hydropower and solar energy are next (14% each), followed by wind (5%) and geothermal wells (4%).

This content was commissioned for SETimes.com.