Incentives Development and Impact on the Sustainable Growth of Biogas Sector in Serbia

An expert meeting organised at the Falkensteiner Hotel in Belgrade by the Serbian Biogas Association, Serbian Ministry of Mining and Energy, and the German and Serbian Development Cooperation Program implemented by the German International Cooperation Organization (GIZ) brought together representatives of biogas associations from Serbia and Germany, but also other reputable experts in this field.

The purpose of the meeting was to exchange experience, deepen cooperation and explore possibilities for improving the concept of how heat generated by biogas plants can be used, and the biogas upgrading system and its application in Serbia. Particular interest was taken in the experiences with measures for and methods of subsidising the development of small-capacity biogas plants.

“Since its founding, the SBA has been advocating for improving the business environment for investors who seek to invest in biogas plants. Electricity purchase price, the so-called feed-in tariff, is essential, but not the only incentive that impacts the development of biogas sector. The 2016 Regulation that increased the feed-in tariff to 17.22 euro cents per kWh for 1 MW biogas plants is financially attractive for investors, as testified by the number of new projects that have been launched since the adoption of the Regulation. However, the SBA continues to intensively work with the line ministry and relevant institutions to further develop the biogas sector and attract new investments,“ said Danko Vukovic, Chairman of the Board.

“Noticeable developments have taken place in the biogas sector in Serbia and the 2016 incentives considerably improved the sector. The Renewable Energy Sources National Action Plan envisages that biogas plants with the total capacity of 30 MW be constructed by 2020. Twelve plants with the capacity of about 13.5 MW have been constructed so far, gaining the status of preferential producers. Currently seven plants with the capacity of 5.7 MW have the status of preliminary preferential producers. They total to about 20 MW. This is indicative of the fact that construction in this sector is steadily advancing,“ said Rastislav Kragic, a representative of the Serbian Ministry of Mining and Energy, adding that “the Ministry believes it most important that the system of RES promotion and incentives creates positive environment for the development of this segment of the energy sector; therefore, the intention is to keep in place the feed-in tariff system as long as possible, as the tariffs have proven to be a reliable incentive for the development of biogas sector in Serbia. The Incentives Regulation will expire at the end of 2018, and then a new one should be adopted. An initiative has been launched for Serbia to act on the recommendations of the Energy Community and put in place a new incentive system that will be based on market principles rather than on feed-in tariffs; producers would compete on the market and feed-in premiums would serve as an additional incentive. Although work has been undertaken to develop a new package of support measures, it is still early to say what measures it will contain.  We will definitely make an effort to reconcile the two initiatives “.

“With the use of electricity from RES, Serbia is moving towards meeting the EU environmental standards and with decentralised energy production, it is making a positive impact on the local economic development. Also, should holdings opt for biogas production, they will become autonomous when it comes to energy and will be able to manage animal waste in an environmentally acceptable manner and stabilize incomes from their farms. Domestic farmers are expressing great interest in new technologies promoted by our organization and we hope to continue discussions with the Serbian farmers about possibilities of sustainable biogas production in the coming years,“ said Milica Vukadinovic of GIZ’s Development of Sustainable Bioenergy Market in Serbia Programme.