Feed-in tariff
Updated: 24.01.2019
Author: Stefan Ćetković
In the Republic of Serbia, the main support scheme for the production of electricity from renewable energy sources is a feed-in tariff, regulated by the Energy Law and special Decrees.
The plant operators need to obtain the status of a „privileged power producer“ („povlašćeni proizvođač električne energije“) in order to acquire the right to a price support for the generated electricity under the legal requirements. After having concluded a power purchase agreement with the plant operator, the guaranteed supplier Elektroprivreda Srbije is legally obliged to buy the specified amount of electric energy from privileged producers at an incentive price (Art. 23 Nr. 2 Regulation on Incentive Measures).
The amount of the feed-in tariff is determined in the Decree on Incentive Measures for Electricity Generation from Renewable Energy Sources and High-Efficiency Cogeneration of Electricity and Heat and it mainly depends on the type of RES technology.
Eligible technologies
In general, all technologies are eligible; however, some limitations with regards to the installed power apply.
| Wind energy | Eligible (Art. 4 Regulation on Incentive Measures). |
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| Solar energy | Eligible (Art. 4 Regulation on Incentive Measures). |
| Geothermal energy | Eligible (Art. 4 Regulation on Incentive Measures). |
| Biogas | Eligible (Art. 4 Regulation on Incentive Measures). |
| Hydro-power | Eligible for plants with an installed power of up to 30 MW (Art. 4 Incentive Decree). |
| Biomass | Eligible (Art. 4 Regulation on Incentive Measures). |
Amount
The amount of the feed-in tariff is determined in Art. 4 of the Regulation on Incentive Measures and it depends on the technology, the total installed capacity as well as the maximum operation time. The maximum annual operation time is established for each technology as the number of operating hours in the year, except for wind technology where the maximum annual operation time refers to the quarter of the incentive period. For each additional period of power production which exceeds the defined maximum operation, the guaranteed supplier pays the producer 35% of the valid feed-in tariff (Art. 4 Incentive Decree). The temporary privileged producer has the right to be paid 50% of the feed-in tariff for electricity produced before the start of the incentive period (Art. 4 Incentive Decree). Due to the inflation in the Eurozone, the feed-in tariffs are annually adjusted for inflation based on the formula laid down in Art. 6. of the Regulation on Incentive Measures.
| Wind energy | €ct 9.20 per kWh. The maximum operation time for the quarter of the incentive period for wind energy is 9,000 hours (Art. 4 Nr. 5 Regulation on Incentive Measures). This implies that in a three-year period, the wind energy plant can receive the full FiT only for maximum operation time which does not exceed 9.000 hours. |
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| Solar energy |
“P” stands for the value in MW of the installed power of the power plant. The maximum operation time for one year of the incentive period for solar energy is 1,400 hours. |
| Geothermal energy | €ct 8.2 per kWh (Art. 4 Nr. 7 Regulation on Incentive Measures).
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| Biogas |
For landfill and sewage gas power plants, the feed-in tariff amounts to €ct 8.44 per kWh (Art. 4 Item No. 4 Regulation on Incentive Measures). For waste-based power plants, the feed-in tariff amounts to €ct 8.57 per kWh (Art. 4 Nr. 9 Regulation on Incentive Measures). “P” stands for the value in MW of the installed power of the power plant. The maximum operation time for one year of the incentive period for biogas is 8,600 hours. |
| Hydro-power |
If the hydro power plant is using an existing infrastructure, the tariff amounts to €ct 6.00 per kWh up to a capacity of 30 MW (Art. 4 Nr. 1.6 Regulation on Incentive Measures). “P” stands for the value in MW of the installed power of the power plant. The maximum operation time for one year of the incentive period for hydro power is 5,000 hours. |
| Biomass |
“P” stands for the value in MW of the installed power of the power plant. The maximum operation time for one year of the incentive period for biomas is 8,600 hours. |
Addressees
Privileged power producers (legal or natural persons), who conclude the Purchase Agreement on the total amount of generated electricity, are entitled to the incentive price. The guaranteed supplier is the obliged party.
Procedure
Process flow | The electricity producers from renewable energy sources can benefit from the financial incentive (FiT) once they acquire the status of a privileged power producer. The privileged power producer status is granted once the renewable energy facility is constructed and connected to the grid. However, in order to enhance the investment security, the regulatory framework offers the possibility to obtain the temporary status of a privileged producer. This status is valid for three years during which the renewable energy facility must be completed. If the temporary privileged producer completes the project within 3 years, it obtains the status of a privileged power producer and has the right to the feed-in tariff rate which was valid when the temporary privileged producer status was granted (Art 27 Art. 3 § 1 Regulation on Incentive Measures). Status of a privileged power producer: In order to benefit from the support scheme, the plant operator needs to obtain the status of a “privileged power producer”. This status can be acquired through a Ministry’s decision within 30 days after the receipt of the request by legal or natural persons, who fulfil the conditions set out in Art. 70 Energy Law and Art. 3 Regulation on Privileged Producer Status:
It is important to note that the energy permit must be acquired for hydropower plants and all other renewable energy plants larger than than 1 MW installed capacity (Rulebook on energy permit). Status of a temporary privileged power producer: Prior to obtaining the status of a privileged power producer, pursuant to Art. 71 Energy Law, the plant operator may acquire the temporary status of a privileged power producer for a period of 3 years, if special (technical and financial) requirements are met. The status can be revoked in the circumstances outlined in Art. 73 Energy Law. According to the Regulation on Privileged Producer Status, to obtain the status of a temporary privileged power producer for renewable power plants of more than 100 kW of the total capacity, it is necessary to submit the financial deposit as a guarantee that the plant will obtain the status of the privileged power producer within the legal time period (Art. 6 Regulation on Privileged Producer Status). The financial deposit amounts to EUR 60 per kW of the total capacity of the plant (Art. 7 Regulation on Privileged Producer Status). The following conditions have to be met to obtain the status of a temporary privileged producer (Art. 6 Regulation on Privileged Producer Status):
The Decree on Conditions of and Procedure for Obtaining of the Status of a Privileged Power Producer, Preliminary Privileged Producer and Power Producer from Renewable Energy Sources (“Uredba o uslovima i postupku sticanja statusa povlašćenog proizvođača električne energije, privremenog povlašćenog proizvođača i proizvođača električne energije iz obnovljivih izvora energije”) enjoins the Ministry to maintain the Register of privileged power producers (Art. 75 Energy Law) and otherwise offers a more detailed regulation of the procedure for acquiring the status of privileged producer. |
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Competent authority | The guaranteed power supplier Elektroprivreda Srbije) collects the funds and purchases the electricity from the privileged power producers. |
Cap
Wind energy: The maximum total installed power of wind energy, which can benefit from the support scheme is limited to 500 MW (Art. 10 Regulation on Privileged Producer Status).
Solar energy: Pursuant to Art. 10 Regulation on Privileged Producer Status, the maximum total installed power of solar power plant operators, who can acquire the status of privileged power producer, is altogether limited to 10 MW:
- For roof-mounted power plants with an individual capacity of 30 kW, the limit amounts to 2 MW,
- for roof-mounted power plants with an individual capacity of 30 kW to 500 kW, the limit also amounts to 2 MW,
- for ground-mounted solar power plants of individual capacity of up to 500 kW, the limit amounts to 6 MW.
Eligibility period
Principally, the tariff is granted from the conclusion of the Power Purchase agreement for a duration of 12 years, unless otherwise regulated by the Power Purchase Agreement (Art. 3 § 1 Nr. 1 Regulation on Incentive Measures). In the case of delays in the operation of the power plant caused by natural or political force majeure, the incentive period is extended for the respective time period.
Distribution of costs
| Consumers | The feed-in tariff is funded by the incentive fee, which is funded by the final consumer (Art. 2 Nr. 4 Fee Regulation). The fee currently (2018) amounts to 0.093 din/kWh (0.00078 ct/KWh) (Art. 2 Regulation on Fee Amount 2018). The costs of different renewable energy sources are clearly indicated by the energy suppliers on final electricity bills (Rulebook on calculation and presentation of energy sources on electricity bills). |
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| Distribution mechanism | The distribution mechanism is described in the Fee Regulation: Depending on the type of the power purchase agreement, the entity responsible for charging the fee is:
Then the grid operator or private supplier is obliged to transfer the collected funds to the guaranteed supplier (Art. 12 § 1 Fee Regulation). These funds are finally used to purchase the electricity from privileged power producers at the feed-in tariff (Art. 15 Nr. 1 Fee Regulation) and cover the costs from overtaking the balancing responsibility (Art. 15 Nr 2 Fee Regulation). |
