Investors provide bank guarantees for 4 GW of new power plants in Serbia

Bank guarantees for solar, wind and hydropower projects and substations within the transmission system in Serbia were issued for 28 facilities with a total capacity of 4,000 MW. Developers of 51 investments, divided into two groups, had a deadline of 24 June or 1 July to submit them.

The mandatory bank guarantees of EUR 25,000 per MW of capacity come from a regulation introduced in October 2023. The aim was to unblock the process of approving grid connections, which according to investors has been on hold for about two years. This is one of the main steps in solar park and wind farm projects.

Following the adoption of the Law on the Use of Renewable Energy Sources in 2021, the Transmission System Operator of Serbia (TSO) Elektromreža Srbije (EMS) received applications to connect almost 20 GW of new power plants. This was significantly more than the grid could integrate – a total capacity of 5,800 MW as of September last year.

EMS told Balkan Green Energy News that as of July 1, it had received guarantees for 28 facilities with a total capacity of 4,000 MW, excluding projects assessed for compliance with the law.

The company said it would publish the list on its website by the end of the week. Balkan Green Energy News has learned that only one substation is on the list, with the rest being power plants.

After issuing bank guarantees, investors have two months to sign a connection agreement with EMS

It is worth noting that 51 facilities met the conditions for concluding an agreement on the preparation of a connection study, specified in the directive on the conditions for the supply and delivery of electricity. In total, there were 24 solar projects with a total capacity of 3278.5 MW, 18 wind farms with a total capacity of 3239.4 MW and one hybrid power plant with a capacity of 150 MW.

The broader list also includes the Bistrica pumped-storage power plant project with a proposed capacity of 656 MW, alongside four other hydropower plants and three substations.

The condition for initiating the procedure for concluding an agreement to connect the facility to the transmission system is to submit a bank guarantee within 60 days from the date of submission of the connection study.

“In accordance with the regulation on the conditions for the supply and delivery of electricity, if the bank guarantee is not submitted within two months from the date of delivery of the connection study, the study loses its validity and the applicant is deemed to have abandoned the connection process,” EMS informed.

After providing bank guarantees, investors have two months to sign a connection agreement with the Serbian transmission system operator.

New opportunity from September 1st

If the investor does not sign the connection agreement within the specified deadline, the connection study loses its validity and must be replaced with a new one.

Investors will have the opportunity to do so in the next period, which begins on September 1, EMS explained. They must submit a complete application for signing a contract for the development of a study on the connection by August 1, TSO added.

By submitting a bank guarantee, the investor assumes the obligation to meet the deadlines throughout the project. Otherwise, the new regulation defines situations in which the EMS may withdraw the guarantee.

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