Drivers and Barriers for Investments in Wind Energy in Serbia: “Don Quixote against the windmills”

Abstract: The objective of this thesis has been to explore the potential for expansion of wind power in Serbia, through analysis of the key drivers and barriers for further development. This has been done primarily through literature review and semi-structured interviews. After elaborating on the institutional setting and national legal framework, this thesis examines international circumstances that impact investments in wind energy. These factors include the Acquis Communautaire of the European Union and the Clean Development Mechanism (CDM) of Kyoto Protocol. The negotiations with the EU for the status of candidate country result in the need for restructuring energy sector, which commenced with transposing the legal norms of the Acquis in the sphere of energy. However, this research depicts existing procedural barriers, such as complicated and contradicting licensing procedures and vague scheme for attaining subsidies for producing power from renewable energy sources. Thesis further examines the potential of wind energy to comply with National CDM Criteria and Indicators of Sustainable Development. Generally, the issue of wind energy development is embedded in the context of energy pricing and the issue of energy security. In this milieu local communities can benefit greatly from wind energy. The potential for wind energy development on the local level was analysed through the SWOT (strengths-weaknesses-opportunities-threats) analysis of the position of municipalities. The SWOT analysis aimed at indicating different managerial strategies those municipalities could take, pointing out drivers and barriers in this process. Research suggests that actors involved on the local and national level have the lack of understanding of crucial processes, followed by high transaction costs, the lack of will and the lack of human capacities. However, potential benefits that local actors observe – the broader level of job creation, the transfer of technologies and the raise of capacities – are seen as strong drivers and give significant impulses to wind energy sector development.