Following the successful completion of the largest wind farm in Serbia, UAE-based Masdar and Finnish company Taaleri Energia founded the joint company Masdar Taaleri Generation (MTG) in order to develop renewable energy projects in Central and Southeast Europe
Here we discuss with MTG Director Vladimir Milanović plans for the company’s further development and the construction of additional capacities, two wind farms and one solar power plant, and the possibility of achieving half a gigawatt of installed power from renewable energy sources, as well as good examples that we can and should learn from.
The Čibuk 1 project to develop the largest wind farm in Serbia has contributed massively to the development of renewable energy sources in the country. Čibuk 1 has changed everything…
— Čibuk 1 is the largest wind farm to be built in the country to date and represents Serbia’s largest power plant that’s powered by a renewable energy source, but we are also working massively on the construction of Čibuk 2 and expect to maintain our status as the largest investor in this field in Serbia thanks to this project.
Many rules and regulations were created during the development of Čibuk 1 that formed the basis on which the country’s other wind farms were later developed, and in this sense we are truly proud to have been the first and to have broken the ice in the country.
Čibuk 1, together with some other projects that Masdar and Taaleri have collaborated on around the world, was practically the initial catalyst to create a joint venture in Serbia and for Masdar, a company that hails from the United Arab Emirates, and Finnish company Taaleri to create Masdar Taaleri Generation. The aim was to continue developing projects in both Serbia and Montenegro. We are proud of the fact that we are the administrative centre for all projects in which these two companies invest everywhere from Poland to Greece, with the exception of Hungary.
Construction of Čibuk 2 is expected to be launched in January next year. Could you tell us more about this project?
— Čibuk 2 is an extension of Čibuk 1. Čibuk 1 has an installed capacity of 158 MW, while Čibuk 2 will have 150 MW, creating a combined total of 308 MW of installed power, but we don’t intend to stop there, as we are already planning a third Čibuk 3 project, which we call Cubic and which will have a capacity of approximately 100 MW of wind power. We don’t expect to start work on its construction prior to 2026.
Those are three projects when it comes to wind, but we’ve also decided to develop a solar power plant. It is currently at roughly the same stage of development as Cubic, with the same capacity, but also the same development timeline. If we were to succeed in realising all these projects, we would have around half a GW of installed power sourced from Renewables. These projects are all located in the district of South Banat, in the municipality of Kovin, with which we have fantastic cooperation due to the fact that we really invest a lot in good relations with the local community.
Do you think that, with additional government incentives, renewable energy sources could become competitive with conventional sources?
— When it comes to incentives, we are more than satisfied. That is a textbook example of how to encourage new technology for it to become competitive with older technology that has been developed massively and was initially much more efficient. These auctions are actually less of an incentive for us as a producer, on the one hand, but they are a much better step for the state to take, as the costs are much less for the state that provides the incentive. The fact that the technology needs less of an incentive means that it is becoming more efficient and more market-oriented, which is also the end goal of all those incentives.
The intention is for conventional technology and the technology used to generate electricity from renewables to one day become competitive, and then for some other parameters to form the basis on which we decide whether to build a solar power plant or a coal-fired thermal power plant. We shouldn’t overlook the fact that wind and solar aren’t constant sources of energy, as they are dependent on weather conditions, so no country can completely abandon conventional sources that provided for more stable production.
What do you expect from future auctions? Does a need exist to further improve the auction system?
— My expectations are that we soon won’t need auctions any longer, and that projects will compete on the market on the basis of which is more economically viable and those that are will be implemented. I hope those will be “green” projects, and not those based on old and dirty technologies.
It is envisaged that auctions will be repeated for both wind and solar over the next two years, and I expect them to be equally successful. The auctions for wind power proved very successful, because there was competition among companies wanting to secure th government incentive. As a result of that competition, the prices offered were far below the maximum price. The state prescribed 105 euros per MWh, while the highest offer that received incentive measures amounted to 73.7 euros.
We are proud of the fact that we are the administrative centre for all projects in which these two companies invest everywhere from Poland to Greece, with the exception of Hungary
Unfortunately, when it came to solar energy there weren’t enough mature projects and the prices reached were thus very close to the maximum prices set by the state. I therefore hope that the competition will remain the same at the wind level, and that competition will increase in the area of solar and that we will receive projects that can compete mutually.
The hyperproduction of projects and sheer volume of requests causes bottlenecks when it comes to approving connections to the system for solar and wind farms. How can that be resolved?
— It has to date been relatively easy to request access to the grid, which has led to us having many requests, viewed in terms of gigawatts, to connect to a power grid that has limited capacities. The rules of Elektromreža Srbije [the national energy transmission system operator], i.e., the “first come, first served” principle, mean that if someone gains the right to a certain capacity prior to the appearance of another investor, the later arrival cannot access the grid and build until the first one has been built or until the investor relinquishes their claim. The problem is that if that developer isn’t in a position to develop the project or sell it later, that capacity will remain occupied.
Given that a regulation was adopted in September that should govern this issue and eliminate the congestion that currently occurs when it comes to grid access, we sincerely hope that the next wave of projects that have a chance to be built and developed will be able to quickly access the power grid and that this will lead to an increase in the installed capacity of projects that run on renewables.
Whose experiences could we turn to as positive examples when it comes to developing renewables?
— The fact that Serbia is lagging behind developed countries in this field provides us with an opportunity to avoid mistakes made by others and utilise the best positive experiences. From our cooperation with colleagues from Finland, for example, we have gained insight into just how much more efficiently the entire industry works there than it does in our country. We should definitely look to them because that could make it easier for all of us here who deal with this work, but it would ultimately also be of great benefit to society if those positive practices were to be implemented here and if we could more quickly end up with constructed power plants.