Why is Serbia interesting for wind farm investors, which three elements are important for the development of projects, how banks decide who to finance, why, in addition to auctions, it is important to develop other financial mechanisms, such as corporate PPAs – were some of the topics discussed at the panel discussion dedicated to wind farms at the RES SERBIA 2024 conference in Vrdnik.
Panelist during the discussion about ‘Prospects for the development of construction and financing of wind farms’ were Marko Lipošćak, General Manager Enlight EU, Christophe Billot, Head of Sales Mediterranean Region at Nordex Group, Andries Teerlynck, Director Sales, HR, IT & PR in Elicio i Nikola Vuletić, Chairman of the Managment Board at UniCredit Bank Serbia.
Moderator on this panel was Viktoriya Kerelska, Director of Advocacy and Messaging in WindEurope, who said that in the first half of this year, Europe gained 6.4 GW of new wind capacity. However, as she warned, it is not yet being built as much as it should be to achieve the decarbonization of the continent.
Viktoriya Kerelska, Director of Advocacy and Messaging in WindEurope
The most risk is during the phase of development of wind farms
Marko Lipošćak, General Manager of Enlight EU, explained that Serbia is attractive for investors due to the continuous support for renewable sources at the state level.According to him, the environment is relatively predictable, which is very important for investors, and there are also international financial institutions that have provided technical assistance to the government.
– Now we are also seeing the flourishing of solar panels. The numbers are relatively small compared to other European countries, but the business is there, it is developing – notes Lipošćak.
As he says, the challenges in the construction of wind farms exist in all phases, but he singles out development as the phase with the most risk. Since it takes time to develop a project, it is important that the rules are clearly set and that the process is efficient, he notes.
– There is one challenge that is common to the whole of Europe, and it refers to the rules that are changing, which is a problem for investors when they find themselves trapped by uncoordinated actions of different institutions – emphasizes Lipošćak, adding that the new time also brings new challenges, such as investing in battery systems.
Marko Lipošćak, General Manager of Enlight EU
He noted that in addition to auctions, other financial mechanisms should be developed.
– Last year we celebrated the success of the first auctions, the prices were good for investors, EPS and buyers. Serbia has a good basis to continue with auctions, but we need alternatives, such as long-term PPA contracts, as well as cross-border ones. We do not want to be an industry that is highly subsidized – Lipošćak pointed out, adding that we need to develop the electricity market, if we want further development of this area.
Three key elements for wind farm development in Serbia
Andries Teerlynck, Director Sales, HR, IT & PR in Elicio, has noted that they plan to expand in Serbia, where, as he says, they have a very positive experience. According to him, Serbia has three key elements important for the development of projects: plenty of wind, space and a stable investment climate.
– We are also very pleased with the feed-in tariff system. Also, when there is no wind in France and Belgium, there is wind in Serbia – he points out.
Andries Teerlynck, Director Sales, HR, IT & PR in Elicio
He explained that, when it comes to challenges, there is still a problem with the extensive documentation that must be submitted, and that there are many small things that can speed up the process.
He also believes that corporate PPAs, which are concluded directly between producers of electricity from renewable sources and consumers, should be further developed.
– In France, there is an interesting system of contracts for difference. Over time, we have come to the point that today the standard contracts are for 20 years, because wind farms have proven to be a good and solid technology that can work for 20 years if it is well maintained – he concludes.
Nordex – From Krivača to Čibuk 2
Christophe Billot, Head of Sales Mediterranean Region at Nordex Group, pointed out that for the last two years, Nordex has been the leader in Europe in the production of wind turbines. The company operates in 40 countries and is present on several projects in Serbia.
Christophe Billot, Head of Sales Mediterranean Region at Nordex Group
– We started with Krivača and finished it ahead of time, so we immediately started working with Pupin wind farm, where we delivered all the components. We are working on one project after another, without interruption, the next one is Čibuk 2 – he announced, adding that for the development of wind farms it is important that auctions are held on a regular basis.
How banks decide which project to finance
Who, and how, is responsible for the construction of wind farms in our country? Nikola Vuletić, Chairman of the Management Board at UniCredit Bank Serbia, pointed out that the bank currently finances 5 out of 8 wind farms in Serbia. As he explained, there are no shortcuts for banks in the decision to finance projects, because security is important.
– It’s not easy to make a project bankable. We decide on a case-by-case basis, we have no compromises when it comes to the company’s results, we choose those with proven successes – he explained.
Nikola Vuletić, Chairman of the Management Board at UniCredit Bank Serbia
He estimated that there are very successful auctions behind us, but that there is a lack of commercial PPA contracts.
– We hope that there will be more of them, as well as CFD contracts, we see them as complementary mechanisms, and we are looking forward to the new outcome of the auctions – he said.
