London, 10 October (Argus) — The lack of available grid capacity for the connection of new projects as well as administrative issues are key challenges that renewable developers face in the western Balkan region, panelists at the Energy Week Western Balkans conference in Montenegro said.
Availability of land near grid connection points is key for developers, managing director at Abu Dhabi’s state-owned renewables firm, Masdar, Amalia Giannakikou said. The company aims to add 3GW of renewable capacity in Albania, with much of the production of this portfolio expected to be sold in Italy, after the interconnection project between the two countries is completed. And Ugur Ipek, strategic director at Turkish renewables firm Calik Renewables, also highlighted the lack of grid availability as a key issue for the entire region. This requires investments both from the private sector but also from the regional governments, Ipek added.
The Montenegrin power system is subject to operational challenges in regards to the integration of renewables. Renewable capacity installations have increased sharply across the region in recent years, causing significant changes both in the direction and the amount of cross-border flows almost on an hourly basis, president of the board of directors of Montenegrin grid operator CGES Aleksandar Mijuskovic said. The TSO highlighted that investments in energy infrastructure and regional cooperation are necessary to ensure the stability of the electricity system while accelerating the grid transition. CGES aims to complete works at the 400kV Cevo–Pljevlja power line — one of the key projects for strengthening Montenegrin energy system’s stability — by the end of the year.
The problem is bigger in Croatia, where grid development requires investments of up to €2.7bn, French renewable producer Solveo Energies country manager in Croatia, Mateo Zokalj said. In order to finance this, transmission system operator (TSO) Hops decided to introduce a grid connection fee. But the country’s energy regulator Hera has not yet determined the fee, leading to delays in the implementation of projects and increasing hesitance by investors, which increasingly defers decision making, Zokalj said. Croatia should learn from other countries and become more transparent with its grid development plan, Zokalj added, praising the Serbian government’s decision to introduce financial guarantees for investors in renewable projects.
And the regulatory framework is also hampering investments in renewables in the region, participants said. The region has made a lot of steps forward, but permitting for renewables remains a challenge, according to Ipek. Developers need to complete several processes through separate governmental authorities to complete a project. If there was a “one-stop shop” for each administrative procedure then that would accelerate the implementation, French renewables Voltalia country manager in Albania Kelly Clutterbuck said.
By Apostolos Tsarikas
