INTERVIEW – CWP expects to get building permit for 171 MW wind capacity in Serbia in Q1 2013

The company’s Cibuk wind park, to be located in Kovin, in Serbia’s northern province of Vojvodina, should ultimately have a capacity of 300 MW. The total investment cost of the project is estimated at around 450 million euro ($576 million).

CWP is currently in talks to secure funding for the Cibuk project with international financial institutions, including the European Bank for Reconstruction and Development and the Overseas Private Investment Corporation (OPIC), Continental Wind Bulgaria general manager Dimitar Enchev told SeeNews on the sidelines of the Wind Energy in Bulgaria: Getting Back on Track workshop held in Sofia on Tuesday.

The industry event was organized by European Wind Energy Association in cooperation with the Varna-based Association of Producers of Ecological Energy and the Bulgarian Wind Energy Association. SeeNews was a media partner of the workshop.

OPIC is the U.S. government’s development finance institution.

CWP recently picked Serbia as the location for its European headquarters.

In addition to the fact that CWP has a major project in development there, the decision to base the company’s European operations out of Serbia was also swayed by factors such as the availability of a skilled and comparatively cheap labour force, Enchev said.

He described as positive the signals coming from the Serbian government in terms of its plans for the development of the local renewable energy sector.

“The government in Belgrade is putting in place a solid regulatory framework. It is approaching the sector with caution and has so far avoided the mistakes made by other countries in the region that resulted in rapid and chaotic development of too many projects. The Serbian authorities said they target 450 MW of wind power capacity eligible for feed-in tariffs [FiTs] and this benchmark, although quite low, gives investors a good idea where they stand and what their chances of getting into the quota are,” Enchev said.

If a project is included in the FiTs quota – which happens when it is granted a construction permit – then the developer secures a preferential tariff of 95 euro per megawatt-hour for a period of twelve years, the official said, adding that a flaw in the regulations is that the tariff is not adjusted for inflation. When this flaw is fixed, and a bankable power purchase agreement model is finally defined by the administration, the wind industry will be ready to take off, Enchev said.

Commenting on the wind energy potential of EU-bound Croatia, Enchev said the country has an adequate regulatory framework but, due to its dependence on tourism, zoning regulations are very restrictive which makes it difficult to secure development sites. In addition, wind patterns there are irregular so finding a location with good wind resource is challenging.

($=0.7809 euro)