CONSTRUCTION OF PLANTS AND

ELECTRICITY/HEAT GENERATION FROM

BIOMASS IN THE REPUBLIC OF SERBIA GUIDE FOR INVESTORS
Branislava Lepoti Kovaevi, PhD Law
Dragoslava Stojiljkovi, PhD Mech. Eng.
Bojan Lazarevi, BSc El. Eng

IZGRADNJA POSTROJENJA I
PROIZVODNJA ELEKTRINE/TOPLOTNE
ENERGIJE IZ BIOMASE U REPUBLICI SRBIJI VODI ZA INVESTITORE
Dr Branislava Lepoti Kovaevi, dipl.prav.
Dr Dragoslava Stojiljkovi, dipl.ma.in.
Bojan Lazarevi, dipl.el.in.

1 INTRODUCTION ...................................................................................................... 1
1.1 Definition of Biomass/Biogas Fuelled Power Plants .................................................... 2
1.2 Sources of Law ................................................................................................................ 3
2 BIOMASS/BIOGAS POWER PLANTS ..................................................................... 6
2.1 Types of Power Plants .................................................................................................... 6
2.2 Basic Data on Biomass/Biogas....................................................................................... 7
3 POWER PLANT CONSTRUCTION .......................................................................... 8
3.1 Sources of Law ................................................................................................................ 8
3.2 Procedure for Construction of a Power Plant ................................................................ 9
3.2.1 Selection of the Location, Perusal of Valid Planning Documents, and Information
on Location .............................................................................................................. 10
3.2.2 Energy Permit .................................................................................................. 11
3.2.3 Requirements for Connection ........................................................................... 15
3.2.4 Location permit ............................................................................................... 16
3.2.4.1 Procedure for Issuing the Location Permit ................................................. 16
3.2.4.2 Forming the Building Plot ......................................................................... 18
3.2.4.3 Water requirements, water approval, and water permit ............................... 19
3.2.5 Environmental Impact Assessment ................................................................... 23
3.2.6 Technical Documentation ................................................................................ 28
3.2.7 Construction permit ......................................................................................... 33
3.2.8 Construction of a Structure and Technical Inspection of the Structure .............. 34
3.2.9 Operating Permit ............................................................................................. 36
4 ACQUIRING THE RIGHT TO ENGAGE IN THE ACTIVITY OF ELECTRICITY
GENERATION ........................................................................................................... 37
4.1 Investing in a Public Company Generating Electricity .............................................. 38
4.2 Entrusting the Pursuit of Activities of Public Interest ................................................ 39
5 CONCESSIONS ....................................................................................................... 41
5.1 Concession Granting Procedure ................................................................................... 42
5.2 Concession Agreement ................................................................................................. 44
5.3 Obligation to Establish a Concessionary Enterprise ................................................... 45
5.4 Reassignment of Concession ........................................................................................ 46
6 ENERGY LICENCE................................................................................................. 46
7 CONNECTING THE POWER PLANT TO THE GRID............................................ 47
7.1 Connecting the Power Plant to the Electricity Grid .................................................... 47
7.2 Connecting the Power Plant to the District Heating Network .................................... 50
8 OBTAINING THE STATUS OF A PRIVILEGED POWER PRODUCER AND
PERTAINING INCENTIVES...................................................................................... 51
8.1 Obtaining the Status of a Privileged Power Producer ................................................. 51
8.2 Incentives for Power Producers in Biomass/Biogas Power Plants ............................ 54
9 CONCLUSION ........................................................................................................ 56

CONSTRUCTION OF PLANTS AND ELECTRICITY/HEAT

GENERATION FROM BIOMASS IN THE REPUBLIC OF SERBIA
- GUIDE FOR INVESTORS
1 INTRODUCTION
Renewable energy sources1 are sources of energy found in nature that are
either fully or partially renewable including, in particular, the energy of
watercourses, wind, non-accumulated solar energy, biomass, geothermal energy,
biofuels, biogas, synthetic gas, landfill gas, gas from wastewater treatment plants
as well as uncontaminated wastewater from the food-processing and timber and
wood processing industries. Utilization of such sources contributes to a more
efficient exploitation of the countrys own resources for power generation,
reduction of greenhouse gases, reduction of import of fossil fuels, development of
local industry, and job creation.
Within the meaning of fuel for generation of electricity and heat, which is
considered as a renewable energy source, biomass1 denotes a biodegradable
organic matter originating from agriculture, forestry and supporting industries and
households, comprising the following: plants and parts of plants; fuel produced
from plants and plant parts; plant residues and by-products originating from
agriculture (straw, maize stalks, branches, stones/pits, and shells/peals); residues
of animal origin (fecal matter) originating from agriculture; plant residues in
forestry (logging residues); uncontaminated biodegradable residues in foodprocessing and timber and wood processing industries and separated
biodegradable municipal waste fraction.
It should be pointed out that biomass1 does not include any of the fossil
fuels, peat, paper or cardboard, textile, animal body parts, industrial waste2
except waste defined as biomass, municipal waste3, waste originating from
municipal wastewater treatment plants, and commercial waste.
Biogas1 is the gas produced from biomass in anaerobic processes. Biogas
can also be used for generation of electricity and heat. Biogas power plants4 are
the power plants that use gas produced by fermenting agricultural waste (liquid
manure and fecal matter from cattle and poultry farms), from biomass, from
biomass residues derived from the primary processing of agricultural products
that do not contain any hazardous substances, animal residues, and body-parts.
There are some terminological differences between the energy and the
environmental laws and regulations. The regulations in the energy field make a

The Decree on Requirements for Obtaining Privileged Electricity Producer Status

(Official Gazette of the RoS, No. 72/2009).
2
Waste is any substance or object classified as waste in the Q-List, which is disposed of or
is intended to be disposed of or is required to be disposed of by its owner in compliance with the
provisions of the Law on Waste Management (Official Gazette of the RoS, No. 36/2009).
3
Municipal waste is the residential waste (household waste) as well as any other type of
waste which is, due to its nature or composition, similar to household waste in compliance with
the law governing waste management - the Law on Waste Management (Official Gazette of the
RoS, No. 36/2009).
4
The Decree on Incentives for Electricity Generation Using Renewable Energy Sources
and by Combined Heat-and-Power Generation (Official Gazette of the RoS, No. 99/2009).
1

distinction between the power plants using biomass5 and those using waste6. From
the environmental regulations point of view7, certain types of biomass can be
classified as waste. Therefore, the environmental regulations (the Law on Waste
Management8 and the pertaining by-laws9) call for obtaining the necessary
permits10 from the Ministry of Environment and Spatial Planning for specified
types of biomass while, for other types, this is not a requirement. .
1.1 Definition of Biomass/Biogas Fuelled Power Plants
The power plants fuelled with renewable energy sources that use
biomass/biogas as their fuel are energy facilities used for engagement in the
activities of electricity and/or heat generation. There are different types of
biomass/biogas power plants, depending on whether they generate electricity or
heat or they simultaneously generate heat and power within a combined cycle.
Likewise, there are various types of power plants depending on whether they use
biomass or biogas or a combination of these fuels, in addition to some secondary
fossil fuel.
Biomass/biogas power plants of a capacity of up to 10 MW are considered
as small power plants within the meaning of the Energy Law. 11,12
It should be pointed out that not all power plants that use biomass/biogas
are considered as the plants using renewable energy sources, since biomass can
also be used as a secondary fuel in other types of power plants. In terms of using
5

Power plants having installed capacities of up to 10 MW that utilize only biomass in their
production process, or biomass combined with a secondary fossil fuel, provided that the calorific
value of the biomass used on annual level makes up at least 80% of the total primary fuel the
Decree on Incentives for Electricity Generation Using Renewable Energy Sources and by
Combined Heat-and-Power Generation (Official Gazette of the RoS, No. 99/2009).
6
Power plants that generate electricity using renewable energy sources, except for biomass,
provided that, in the generation process, the calorific value of the used renewable energy sources
at annual level makes up at least 90% of the total primary fuel, and provided that the secondary
fuel used is a fossil fuel, biomass or waste - the Decree on Incentives for Electricity Generation
Using Renewable Energy Sources and by Combined Heat-and-Power Generation (Official Gazette
of the RoS, No. 99/2009). For details, please see Chapter 2.1 hereof.
7
The Rulebook on Requirements for Collection, Transportation, Storage, and Treatment of
Waste Used as Secondary Raw Material or for Energy Generation provides the definition of the
waste used for energy generation. This is the waste that may be recycled, i.e. reused to generate
energy therefrom, i.e. for utilization of biodegradable or heat-treated waste energy for electricity
and/or combined heat-and-power generation (agricultural waste, municipal waste, tires, waste
solvents, waste from refinery plants, biomass, sludge from sludge treatment plants, etc.). For
details, please see Chapter 2.1 hereof.
8
The Law on Waste Management (Official Gazette of the RoS, No. 36/2009).
9
Further to the EU accession process, the Republic of Serbia should incorporate into its
own legislation the provisions of numerous EU Directives including, inter alia, those related to the
waste management as stipulated in the Directive 2000/76/EC of the European Parliament and of
the Council of 4 December 2000, on the incineration of waste. Article 2, paragraph 2, subparagraphs i), ii), iv) of this Directive stipulate which substances are not the subject of the above
Directive.
10
Depending on the specific case, in order to use biomass that can be classified as waste in
accordance with the environmental laws and regulations, it is necessary to obtain the following
permits: the permit for waste collection, the permit for waste transportation, the permit for waste
storage, the permit for waste treatment, and the permit for waste disposal (there is also a provision
for obtaining an integrated permit).
11
The Energy Law (Official Gazette of the RoS, No. 84/04).
12
Further information on types of biomass power plants can be found in Chapter 2 hereof.
2

the renewable energy sources, only the power plants that use biomass/biogas as
their primary fuel can be classified as biomass/biogas power plants.
The activities of electricity, heat, or combined heat-and-power generation
are the activities of public interest. There are specifically prescribed requirements
for acquiring the right to engage in such activities.
Generation of electricity and/or heat using biomass/biogas is considered as
energy generation using renewable energy sources for which the Republic of
Serbia has prescribed certain incentives, and the power producers operating the
power plants on renewable energy sources are considered to be privileged power
producers, provided they meet certain requirements13.
1.2 Sources of Law 14
Construction of biomass/biogas power plants and engaging in the activities
of electricity and/or heat generation in such plants are regulated by numerous
laws and regulations of the Republic of Serbia.
The sources of law of the Republic of Serbia referred to herein can be
divided into two main groups of statutes and regulations, which will be detailed in
further chapters hereof.
The first group of regulations includes those governing the area of
construction of a concrete energy facility and the procedure for obtaining the
Construction Permit for such a facility, as well as the method of determining the
fitness of the facility for use and obtaining of the operating permit for the actual
facility.
The second group of regulations includes those dealing with the acquiring
of the right to engage in electricity and/or heat generation, since this is a two-step
procedure: the first step is to acquire the right to engage in the activities of public
interest, and the second one is to acquire the right to engage in an energy-related
activity.
It should be emphasized that the Law on Concessions15 is the only statute of
the Republic of Serbia, further to which one may simultaneously acquire the right
to construct an energy facility and the right to engage in the activities of public
interest.
Construction of biomass/biogas plants and engaging in activities of
electricity generation in the Republic of Serbia are regulated under the following
laws and regulations: the Law on Planning and Construction16, the Law on Spatial
Plan of the Republic of Serbia17 and relevant Planning Documents18, the Energy
Law, the Law on Ratification of the SEE Energy Community Treaty between the
European Union and the Republic of Albania, the Republic of Bulgaria, Bosnia
and Herzegovina, the Republic of Croatia, the FYR of Macedonia, the Republic
13

More details on privileged power producers can be found in Chapter 8 hereof.

The sources of law referred to in this document were in force on August 27, 2010.
15
The Law on Concessions (Official Gazette of the RoS, No. 55/03).
16
The Law on Planning and Construction (Official Gazette of the RoS, Nos. 72/09 and
81/09).
17
The Law on Spatial Plan of the Republic of Serbia (Official Gazette of the RoS, No.
13/96).
18
Planning documents include spatial plans and urban plans. Spatial plans include: 1) The
Spatial Plan of the Republic of Serbia, 2) The Regional Spatial Plan; 3) Spatial Plans of Local
Self-Government Units; 4) Spatial Plans of Special-use Areas. Urban plans include: 1) Urban
Master Plan; 2) General Regulating Plans, 3) Detailed Regulating Plans.
14

of Montenegro, Romania, and the Republic of Serbia and Kosovo, through the
United Nations Interim Administration Mission in Kosovo, pursuant to the United
Nations Security Council Resolution 124419, the Law on Ratification of the
Stabilization and Association Agreement between the EU Member States on the
one hand, and the Republic of Serbia, on the other20, the Law on Ratification of
the Convention on Access to Information, Public Participation in Decisionmaking and Access to Justice in Environmental Matters21, the Decree on
Conditions of Electricity Delivery22, the Decree on Requirements for Obtaining
Privileged Electricity Producer Status and Criteria for Verification of Compliance
with Requirements23, the Decree on Incentives for Electricity Generation Using
Renewable Energy Sources and by Combined Heat-and-Power Generation24, the
Rulebook on Criteria for Issuing Energy Permits, Contents of the Application and
Procedure for Issuing Energy Permits25, the Rulebook on Requirements
Regarding Professional Staff and Terms of Issuing and Revoking Energy
Licenses for Engaging in Energy-related Activities 26, the Energy Sector
Development Strategy of the Republic of Serbia27, the Decree on the
Implementation Program of the Energy Sector Development Strategy of the
Republic of Serbia by 2015 for the Period from 2007-201228, the Law on Public
Companies and Activities of Public Interest29, the Law on Public Utility
Services30, the Law on Waters31, the Decree on Compensation for Water Use,
Water Protection, and Compensation for Excavated Materials from Watercourses

19

The Law on Ratification of the SEE Energy Community Treaty between the European
Union and the Republic of Albania, the Republic of Bulgaria, Bosnia and Herzegovina, the
Republic of Croatia, the FYR of Macedonia, the Republic of Montenegro, Romania, and the
Republic of Serbia and Kosovo, through the United Nations Interim Administration Mission in
Kosovo, pursuant to the United Nations Security Council Resolution 1244 (Official Gazette of the
RoS, No. 62/06).
20
The Law on Ratification of the Stabilization and Association Agreement between the EU
Member States on the one hand, and the Republic of Serbia, on the other (Official Gazette of the
RoS, No. 83/08).
21
The Law on Ratification of the Convention on Access to Information, Public
Participation in Decision-making and Access to Justice in Environmental Matters (Official Gazette
of the RoS, No. 38/09).
22
The Decree on Conditions of Electricity Delivery (Official Gazette of the RoS, No.
107/05).
23
The Decree on Requirements for Obtaining Privileged Electricity Producer Status and
Criteria for Verification of Compliance with Requirements (Official Gazette of the RoS, No.
72/09).
24
The Decree on Incentives for Electricity Generation Using Renewable Energy Sources
and by Combined Heat-and-Power Generation (Official Gazette of the RoS, No. 99/09).
25
The Rulebook on Criteria for Issuing Energy Permits, Contents of the Application, and
Procedure for Issuing Energy Permits (Official Gazette of the RoS, Nos. 23/06 and 113/08).
26
The Rulebook on Requirements Regarding Professional Staff and Terms of Issuing and
Revoking Energy Licenses for Engaging in Energy-related Activities (Official Gazette of the RoS,
Nos. 117/05, 40/06, and 44/06).
27
The Decision on the Energy Sector Development Strategy of the Republic of Serbia by
2015 (Official Gazette of the RoS, No. 44/05).
28
The Decree on the Implementation Program of the Energy Sector Development Strategy
of the Republic of Serbia by 2015, for the Period from 2007-2012 (Official Gazette of the RoS,
Nos. 17/07, 73/07, 99/09, and 27/10).
29
The Law on Public Companies and Activities of Public Interest (Official Gazette of the
RoS, Nos. 25/00, 25/02, 107/05, and 108/05).
30
The Law on Public Utility Services (Official Gazette of the RoS, Nos. 16/97 and 42/98).
31
The Law on Waters (Official Gazette of the RoS, No. 30/10).
4

for 201032, the Rulebook on Contents of Technical Documentation to Be

Submitted in the Procedure for Obtaining the Water Approval and Water
Permit33, the Law on Environmental Protection34, the Law on Strategic
Environmental Impact Assessment35, the Law on Environmental Impact
Assessment36, the Law on Integrated Pollution Prevention and Control37, the Law
on Air Protection38, the Law on Waste Management39, the Law on Nature
Protection40, the Decree on the List of Projects for which Environmental Impact
Assessment (EIA) Study is Mandatory and the List of Projects for which EIA
Study May Be Required41, the Decree on Types of Plants and Activities Eligible
for Issuance of Integrated Permits42, the Rulebook on Contents of the Application
for Decision on the Need for Environmental Impact Assessment (EIA) Study and
Scope and Contents of EIA Study43, the Rulebook on Contents of Environmental
Impact Assessment Study44, the Criteria and Standards for Determining Energy
License Fees for Engaging in Energy-related Activities45, including the Decision
on Coefficient Value for Calculation of Energy License Fee for Engaging in
Energy-related Activities for 201046, the Rulebook on Contents of Information on
Location and Contents of Location Permit 47, the Rulebook on Contents and
Procedure for Issuing Construction permits48, the Rulebook on Contents and
Method of Carrying Out Technical Inspection of Structures and the Procedure for

32

The Decree on Compensation for Water Use, Water Protection, and Compensation for
Excavated Materials from Watercourses for 2010 (Official Gazette of the RoS, No. 17/10).
33
The Rulebook on Contents of Technical Documentation to Be Submitted in the
Procedure for Obtaining Water Approval and Water Permit (Official Gazette of the RoS, No.
3/78).
34
The Law on Environmental Protection (Official Gazette of the RoS, Nos. 135/04 and
36/09).
35
The Law on Strategic Environmental Impact Assessment (Official Gazette of the RoS,
No. 135/04).
36
The Law on Environmental Impact Assessment (Official Gazette of the RoS, Nos. 135/04
and 36/09).
37
The Law on Integrated Pollution Prevention and Control (Official Gazette of the RoS,
No. 135/04).
38
The Law on Air Protection (Official Gazette of the RoS, No. 36/2009).
39
The Law on Waste Management (Official Gazette of the RoS, No. 36/09).
40
The Law on Nature Protection (Official Gazette of the RoS, No. 36/09).
41
The Decree on the List of Projects for which Environmental Impact Assessment (EIA)
Study is Mandatory and the List of Projects for which EIA Study May Be Required (Official
Gazette of the RoS, No. 114/08).
42
The Decree on Types of Plants and Activities Eligible for Issuance of Integrated Permits
(Official Gazette of the RoS, No. 84/05).
43
The Rulebook on Contents of the Application for Decision on the Need for an
Environmental Impact Assessment (EIA) Study and Scope and Contents of EIA Study (Official
Gazette of the RoS, No. 69/05).
44
The Rulebook on Contents of Environmental Impact Assessment Study (Official Gazette
of the RoS, No. 69/05).
45
The Criteria and Standards for Setting Energy License Fees for Engaging in Energyrelated Activities (Official Gazette of the RoS, Nos. 14/06, 40/06,126/07, and 120/08).
46
The Decision on Coefficient Value for Calculation of Energy License Fee for Engaging
in Energy-related Activities for 2010 (Official Gazette of the RoS, No. 109/09).
47
The Rulebook on Contents of Information on Location and Contents of Location Permit
(Official Gazette of the RoS, No. 3/10).
48
The Rulebook on Contents and Procedure for Issuing Construction permits (Official
Gazette of the RoS, No. 26/10).
5

Issuing Operating Permit49, the Rulebook on Contents, Scope, and Manner of

Producing Pre-Feasibility and Feasibility Studies for Construction of Structures50,
the Rulebook on Requirements and Procedure for Issuance and Revoking of
Licenses to Urban Planner-in-charge, Designer-in-charge, Contractor-in-charge,
and Planner-in-charge51, the Rulebook on Method, Procedure, and Contents of
Data Required for Assessing Fulfillment of Requirements for Issuance or
Revoking the License for Preparation of Technical Documentation and License
for Construction of Structures, for which the approval for construction is issued
by the Ministry or by the Autonomous Province52, the Rulebook on Scope and
Method of Doing Review of Main Designs53.
2 BIOMASS/BIOGAS POWER PLANTS
2.1 Types of Power Plants
The biomass/biogas power plants are the facilities for generation of
electricity, heat or combined heat-and-power, consisting of one or more
production units. Combined heat-and-power generation represents simultaneous
generation of both electricity and heat. Power plants can be based on various
technologies, including: different types of boilers, internal combustion engines,
and plants with gas turbines.
Further to the prevailing regulations, power plants can be classified
according to several criteria, in view of the following laws and regulations:
- The Energy Law,
- The Rulebook on Criteria for Issuing Energy Permits, Contents of the
Application, and Procedure for Issuing Energy Permits,
- The Law on Planning and Construction,
- The Decree on Requirements for Obtaining Privileged Electricity
Producer Status and Criteria for Verification of Compliance with
Requirements,
- The Decree on the List of Projects for which Environmental Impact
Assessment (EIA) Study is Mandatory and the List of Projects for which
EIA Study May Be Required.
The Energy Law defines power plants as follows: 1) Large power plants,
and 2) Small power plants. Small power plants have a capacity of up to 10 MW
while large power plants have or exceed the capacity of 10 MW.
49

The Rulebook on Contents and Method of Carrying Out Technical Inspection of

Structures and the Procedure for Issuing Operating Permit (Official Gazette of the RoS, No.
111/03).
50
The Rulebook on Contents, Scope, and Manner of Producing Pre-Feasibility and
Feasibility Studies for Construction of Structures (Official Gazette of the RoS, No. 80/05).
51
The Rulebook on Requirements and Procedure for Issuance and Revoking of Licenses to
Urban Planner-in-charge, Designer-in-charge, Contractor-in-charge, and Planner-in-charge
(Official Gazette of the RoS, Nos. 116/04, 69/06).
52
The Rulebook on Method, Procedure, and Contents of Data Required for Assessing
Fulfillment of Requirements for Issuance or Revoking the License for Preparation of Technical
Documentation and License for Construction of Structures, for which the approval for
construction is issued by the Ministry or by the Autonomous Province (Official Gazette of the
RoS, No. 114/2004).
53
The Rulebook on Scope and Method of Doing Review of the Main Designs (Official
Gazette of the RoS, No. 36/98).
6

The Rulebook on Criteria for Issuing Energy Permits, Contents of the

Application, and Procedure for Issuing Energy Permits stipulates the following
electricity/heat generating facilities:
1) Facilities for electricity generation of a rated capacity from 1 MW to 10
MW,
2) Facilities for electricity generation of a rated capacity that exceeds 10
MW,
3) Facilities for heat generation having an installed capacity in excess of 1
MW.
The Law on Planning and Construction specifies the authorities in charge of
issuing the Construction Permits, as follows:
1) For the power plants generating electricity/heat using renewable sources
of energy and having or exceeding the capacity of 10 MW, as well as
for combined heat-and-power plants, the Construction Permits shall be
issued by the Ministry in charge of civil engineering affairs, or by the
Autonomous Province, respectively,
2) The power plants of a capacity below 10 MW shall be within the remit
of local selfgovernment bodies.
The Decree on Requirements for Obtaining Privileged Electricity Producer
Status and Criteria for Verification of Compliance with Requirements defines the
power plants eligible to obtain the status of a privileged power producer,
specifically:
1) Power plants utilizing only biomass in their production processes, or
biomass combined with a secondary fossil fuel or waste, provided that
the calorific value of the biomass used on annual level makes up at least
80% of the total primary fuel,
2) Combined heat-and-power plants using fossil fuels or fossil fuels
combined with a renewable energy source or waste, provided their total
annual efficiency levels exceed the corresponding values of the
minimum total annual efficiency levels of a combined heat-and-power
plant stipulated in this Decree.
The Decree on the List of Projects for which Environmental Impact
Assessment (EIA) Study is Mandatory and the List of Projects for which EIA
Study May Be Required makes a distinction between the following plants:
1) Plants having or exceeding the capacity of 50 MW (List I) for which
the Environmental Impact Assessment Study is mandatory, and
2) Plants having a capacity from 1 to 50 MW (List II) for which EIA
Study may be required.
2.2 Basic Data on Biomass/Biogas
When handing down a decision on construction of a biomass/biogas
power plant, the available quantities of biomass or of the raw materials for
production of biogas must be analyzed in detail. The available quantities of
biomass or of the raw materials for biogas production have to be considered on a
long-term basis, specifically taking into account acceptable and competitive
prices. At the same time, it is necessary to study the characteristics of biomass or
of the raw materials for biogas production and feasibility of their transportation
from the point of origination to the biomass/biogas power plant.
The Feasibility Study analyzes, in particular, the spatial, environmental,
social, financial, market, and cost-effective aspects of the investment for the opted
7

solution, elaborated in the preliminary design that serves as a basis for making the
decision on feasibility of the investment and initiating the procedure for issuing
the Construction Permit.
3 POWER PLANT CONSTRUCTION
3.1 Sources of Law
Regulations on construction of power plants using renewable sources of
energy, which use biomass/biogas as fuel, can be classified in three main groups:
the regulations governing the area of planning and construction of facilities, the
regulations governing the area of environmental protection, and the regulations
governing the area of the energy sector.
The group of the regulations governing the area of planning and
construction of facilities includes: the Law on Planning and Construction, the
Law on Spatial Plan of the Republic of Serbia, the Rulebook on Contents of
Information on Location and Contents of Location Permit, the Rulebook on
Contents and Procedure of Issuing Construction permits, the Rulebook on
Contents and Method of Carrying Out Technical Inspection of Structures and
Issuing Operating Permit, the Rulebook on Contents, Scope, and Method of
Preparing the Preliminary Feasibility Study and Feasibility Study for
Construction of Structures.
Spatial plans (regional spatial plans, spatial plans of the units of local selfgovernment, and spatial plans of areas for special use) and urban development
plans (the urban master plan, general regulating plan, detailed regulating plan) are
planning documents. The regulations governing the area of construction prescribe
the procedure for obtaining the location permit, the Construction Permit, and the
operating permit while planning documents define the objectives of spatial
planning and development, i.e. of spatial development, i.e. whether it has been
planned to construct a certain structure at a certain place in the Republic of Serbia
within a certain time period. The necessary element in order to obtain the above
permits is obtaining the technical requirements for connection to the electricity
grid or to a district heating network, as well as the water requirements, the water
approval and, in certain cases, the water permit as well, which are issued in the
procedure stipulated in the Law on Waters and the regulations adopted under this
Law.
The group of regulations governing the area of environmental protection
includes: the Law on Environmental Protection, the Law on Waters, the Law on
Forests, the Law on Environmental Impact Assessment, the Law on Integrated
Pollution Prevention and Control, the Law on Air Protection, executive
regulations adopted under the above laws, as well as other regulations governing
environmental protection as well as protection and use of natural assets.
The group of regulations governing the area of the energy sector includes:
the Energy Law, executive regulations under this Law, the Energy Sector
Development Strategy of the Republic of Serbia, and the Program of
Implementation of the Energy Sector Development Strategy of the Republic of
Serbia, and other above specified regulations related to the issuing of the energy
license, connection of a structure to the grid and the like.
The Energy Law stipulates that energy facilities may be constructed if the
Minister of Mining and Energy issues the energy permit to the applicant. The
8

procedure for obtaining the energy permit is regulated by the Rulebook on

Criteria for Issuing of Energy Permits, Contents of the Application, and
Procedure of Issuing Energy Permits. It also stipulates that the energy permit shall
be issued in compliance with the Energy Sector Development Strategy of the
Republic of Serbia and with the Program of Implementation of the Energy Sector
Development Strategy of the Republic of Serbia, which regulates the
requirements and the place where a concrete energy facility should be
constructed. The procedure for obtaining the energy permit precedes the
procedure for obtaining the Construction Permit for a concrete facility, which is
regulated by a group of regulations on planning and construction.
The procedures that are related to the obtaining of the energy permit, the
location permit, the Construction Permit, the operating permit, the license for
engaging in the activity, connection to the electricity grid or to a district heating
network, and other procedures necessary to obtain the ancillary documentation
are administrative procedures, and the deadlines for obtaining such decisions are
specified in the actual regulation governing the procedure for obtaining an
administrative decision necessary for construction of a biomass/biogas power
plant or for engaging in the activities of electricity and/or heat generation. In case
such deadlines are not specified in the concrete regulations, the Law on General
Administrative Procedure shall be applied on the deadline for issuing the concrete
administrative decision. 5455
3.2 Procedure for Construction of a Power Plant
In order to construct and utilize any structure in the Republic of Serbia, and
even the structure of a biomass/biogas power plant, it is necessary to meet the
following requirements: 1) To obtain the energy permit; 2) To obtain the location
permit; 3) To obtain the Construction Permit; 4) To construct the structure, and 5)
To ensure the technical inspection of the structure and to obtain the operating
permit.
Construction of facilities in the Republic of Serbia, formally, starts with the
obtaining of the Construction Permit, and it is carried out on the basis of the
Construction Permit and the technical documentation, under the conditions and in
the manner stipulated in the Law on Planning and Construction.
The following shall be attached to the application for the Construction
Permit: 1) The location permit; 2) The energy permit, which is necessary for
construction of energy facilities, which include biomass/biogas power plants of a
capacity exceeding 1 MW; and 3) The main design.
Within the procedure for obtaining the location permit from the competent
authorities and organizations, it is necessary to obtain the water requirements,
54

The Law on General Administrative Procedure (Official Herald of RoS, Nos. 33/97 and

31/01).

55

Article 208 of the Law on General Administrative Procedure stipulates that the deadline
for issuing of a decision by the competent administrative authority shall be 30 days, if it is not
necessary to follow a special examining procedure, or maximum 60 days as of the date of a duly
submitted application. General deadline for an appeal shall be 15 days as of the date of receipt of
the first-instance decision, unless the law stipulates otherwise. Article 236 of the Law on General
Administrative Procedure stipulates that, in case the administrative authority fails to issue the
administrative decision for which the application has been submitted, upon the expiry of the
deadline for handing down the decision, the applicant shall be entitled to lodge an appeal because
the first-instance application has not been decided on.
9

electric power and technical requirements for connection to the electricity grid,
requirements for connection to the public utility infrastructure, etc.
In order to obtain an energy permit, it is necessary to obtain the Information
on Location.
In any event, the procedure for obtaining the Energy Permit must be
completed prior to submitting the application for the location permit.
In the procedure for obtaining the Construction Permit, for biomass/biogas
power plants of a capacity exceeding 1 MW, preparation of the Environmental
Impact Assessment Study of the facility may be requested and, for capacities
exceeding 50 MW, it is mandatory.
3.2.1 Selection of the Location, Perusal of Valid Planning Documents,
and Information on Location
The first step of a potential investor, or of the person for whose
requirements the structure is constructed and to whom the Construction Permit for
construction of a biomass/biogas power plant will be made out, is certainly
selection of the location. This step must also be related to the analysis of the raw
material potential (biomass or raw materials for production of biogas), which will
be used for generation of electricity/heat in the biomass/biogas power plant.
The second step of the investor is verification as to whether the valid
planning documents envisage construction of an energy facility on the selected
location. One should bear in mind that power plants may also be constructed on
agricultural land, with the previously obtained approval from the Ministry of
Agriculture, Forestry and Water Management.
In the unit of local self-government, whose territory includes the selected
location, one can get for perusal the valid planning document in which it is
possible to check whether construction of energy facilities has been envisaged at
that location. Then, the application for the information on the location shall be
submitted for the desired location, for the purpose of obtaining the data on the
possibilities and limitations with respect to the construction on the reviewed
cadastral lot in line with the valid planning document.
The application for the Information on Location shall be submitted to the
authority in charge of issuing the location permit. A copy of the lot(s) plan shall
be submitted with the application for the information on the location, which has
been previously applied for in the competent real estate cadastral service in the
territory of the municipality. In parallel with the procurement of a copy of the
plan, the recommendation is to also apply for a transcript of the list of title deeds
for the subject cadastral lot(s) from the real estate cadastral service, in order to
identify the owner(s) of the land.
The information on the location, in addition to the name
of the applicant, the number of the cadastral lot, and the
place where it is located, shall also contain56 the data on:
1) The planning document based on which it is issued; 2)
The zone in which it is located; 3) The use of the land; 4)
Regulation and building lines; 5) Codes of construction;
56

The Rulebook on Contents of Information on Location and on Contents of Location

Permit (Official Herald of RoS, No. 3/10).
10

6) Requirements for connection to the infrastructure; 7)

The need to prepare a detailed urban plan or urban
design57; 8) The cadastral lot, or whether the cadastral lot
fulfills the requirements for the building plot with the
instructions on the required procedure for forming the
building plot; 9) Engineering and geological conditions;
10) Special requirements for issuing the Location Permit
(list of requirements). The information on the location
shall enable the person, to whose name it is issued, to
gather all the special requirements (requirements for
protection of cultural monuments, requirements for
preservation of the environment, etc.) and technical
requirements (the place and method of service
connections of the structure to the infrastructure lines, as
well as their capacities) prior to the issuing of the location
permit.
The information on the location shall be issued by the authority in charge of
issuing the location permit, within eight days as of the date of submitting the
application, against remuneration of the actual costs of issuing such information.
3.2.2 Energy Permit58
An energy permit is a permit for construction of an energy facility. It is
necessary to point to the fact that the energy permit for a biomass/biogas power
plant shall be issued provided that the construction of such a facility, by its type
and use, is in compliance with the Energy Sector Development Strategy of the
Republic of Serbia and with the Program of Implementation of that Strategy.
In order to obtain the energy permit, it is necessary to meet the criteria for
construction of power generating facilities stipulated in the Rulebook on Criteria
for Issuing Energy Permits, Contents of the Application, and Procedure for
57

An urban design shall be prepared for the formed building plot on the certified cadastral spatial plan. An urban design shall be prepared when that is envisaged in the urban development
plan, the spatial plan of the unit of local self-government, or in the spatial plan of an area of
special use and it shall contain: 1) The requirements for construction on the building plot
including all the special requirements, 2) Conceptual designs, 3) The description, technical
description, and explanation of the solution from the urban design, etc. The urban design may be
prepared by a legal entity or by an entrepreneur registered in the registry for preparation of
technical documentation, and the preparation of the design shall be managed by the town plannerin-charge, an architect. The competent authority of the unit of local self-government shall organize
a public presentation within 7 days, and then the urban design shall be submitted to the Planning
Commission, which shall, within 30 days, check whether the design has been harmonized with the
spatial document and the Law on Planning and Construction. The competent authority of the unit
of local self-government shall issue the certificate that the urban design has been prepared in
compliance with the urban development plan, the spatial plan of the unit of local self-government,
or with the spatial plan of an area of special use and the Law on Planning and Construction.
58
In addition to the energy license, the Energy Law stipulates the procedure for initiation
of the public invitation for tenders. This procedure shall be initiated in case there is no application
for the energy permit for construction of a future facility and the planned time schedule of
construction of energy facilities cannot be ensured, and there is a need to ensure safety in supply
of power. The Government shall decide on the initiation of the public invitation for tenders. The
public invitation for tenders shall be announced by the Ministry of Mining and Energy, or by the
unit of local self-government, according to the procedure regulating concessions.
11

Issuing Energy Permits. 59 The energy permit for construction of facilities for
electricity generation shall be issued by the Ministry of Mining and Energy while,
for construction of facilities for heat generation, it shall be issued by the unit of
local self-government, or by the City of Belgrade, depending on whose territory
the structure is going to be constructed. In case it is a biomass/biogas power plant,
which generates both electricity and heat, the project owner shall have to submit
two applications for the energy permits: to the Ministry of Mining and Energy
the application for the energy license for electricity generation, and to the unit of
local self-government, or to the City of Belgrade for construction of a heat
generating facility.
For electricity generating power plants of a capacity below 1 MW and for
heat generating power plants of a capacity below 1 MW, issuing of the energy
permit has not been envisaged, which means that, for such facilities, the
Construction Permit shall be issued, without following the procedure for issuing
the energy permit.
The application for the energy permit, subject to the
Energy Law, shall contain the data on: 1) The location at
which the power plant is to be constructed; 2) The
deadline for completion of construction; 3) Type and
capacity and energy efficiency; 4) The energy
commodities, which the energy facility will use; 5) The
method of generation and takeover of electricity/heat; 6)
The method of protection of the environment in the course
of construction and operation; 7) The requirements that
are related to the termination of operation; 8) The amount
of planned financial resources for construction and the
method of providing such resources.
The Rulebook on Criteria for Issuing Energy Permits, Contents of the
Application, and Procedure for Issuing Energy Permits specifies the Application
Form for the energy permit, separately for construction of the energy facility for
electricity generation, and separately for construction of an energy facility for
heat generation. Depending on the capacity of a power plant, the application for
the energy permit for construction of the energy facility for electricity generation
shall be submitted, specifically: for rated capacities from 1 MW to 10 MW
Form O-1, or for rated capacities of over 10 MW Form O-2. The application for
the energy permit for construction of an energy facility for heat generation of a
capacity exceeding 1 MW shall be submitted by filling in the Form O-10.
The following data shall be specified in the Application
Form for the energy permit for construction of a power
plant: 1) General data on the applicant (name, address,
state, official registration number of the applicant, tax
identification No., legal and organizational form, data on
59

The criteria for construction of electricity/heat generating facilities are as follows: 1)

Fulfillment of the requirements for safe and unobstructed functioning of the power system; 2)
Fulfillment of the requirements for designation of the location and land use; 3) The requirements
for environmental protection; 4) Requirements with respect to the measures for protection of the
health of people and safety of people and property; 5) Requirements related to energy efficiency;
6) Requirements for the use of primary sources of energy.
12

the management, data on registration, name of the contact

person); 2) Basic data on the facility (name of the facility,
the location of the land, technical data on the energy
facility, share of the energy facility in system services,
primary and secondary fuels); 3) The value of the
investment (the amount of the planned financial resources
and the method of their securing); 4) The financial
position of the applicant (relevant statement of a bank that
it is willing to support the applicant or the investor in
financing the construction of the energy facility and
evidence of adequate credit-worthiness of the applicant);
5) The envisaged economic and service life of the facility
as well as the method of rehabilitation of the location
upon termination of the service life of the facility
(removal, disassembly of the facility); 6) Harmonization
with the spatial plans and the concept of development of
the energy sector (the excerpt from the urban development
plan or the decision on urban development requirements
if such a decision has been adopted or issued, the decision
of the competent authority on the use of the land including
the established measures of and requirements for
protection of the environment if such a decision has
been handed down, and the opinion of the electricity
transmission or distribution system operator on the
requirements for and possibilities of connection to the
systems; 7) Feasibility study for construction of the
energy facility. In case the energy facility is to be
constructed in stages, which represent technical and
technological entireties, the application shall contain the
data on the planned stages of construction and the final
deadline for completion of the work.
The Application Forms for the energy permit for
construction of a power plant from 1 to 10 MW and of a
power plant of a rated capacity of over 10 MW are almost
identical, the only difference being that the Form for
issuing the energy permit for construction of a power
plant of a rated capacity exceeding 10 MW is more
detailed with respect to the provision of basic data on the
facility and definition of the share of the energy facility in
system services. In case of such a facility, the applicant
shall propose possible options for share in system services
with respect to the regulation of active power, with respect
to the regulation of reactive power, and the possibility of a
share in the primary, secondary, and tertiary regulation.
The Application Form for the energy permit for
construction of an energy facility for heat generation of a
capacity exceeding 1 MW is almost identical to the Form
for the energy permit for construction of a small power
plant; it is even somewhat simplified in the part, which is
13

related to the provision of the basic data on the facility

technical data.
The investor shall submit the following with the application for the energy
permit: 1) The information on the location issued within a period of maximum
one year; 2) The decision of the competent authority on the use of the land on
which the energy facility is going to be constructed including the established
measures and requirements for environmental protection (if such a decision has
been handed down); 3) The feasibility study for construction of the energy facility
for which the energy permit 60 is applied for, which shall also specifically contain
the study of possible impacts on the environment including the proposed
measures for environmental protection61; 4) Relevant statement of a bank that it is
willing to support the applicant or the investor in financing the construction of the
energy facility, specifying the name and type of the energy facility to which the
statement refers, the location of the energy facility, maximum capacity of the
facility, and the amount of the investment in construction of the energy facility; 5)
The opinion of the electricity and/or heat transmission or distribution system
operator on requirements for and possibilities of connection of the new facility to
the system. 626364

60

The feasibility study for construction of the energy facility, for which the energy permit
is applied for, shall contain in particular: 1) Objectives of the investment including the basic data
on the investor; 2) The analysis of current state - spatial location of the facility, its function, and
importance in view of the type and capacity of the energy facility; 3) Market analysis the
method of generation, procurement, takeover, and sale of electricity/heat and energy commodities;
4) Technical description of the plant and technological processes operating modes and the
method of exploitation of the plant; 5) The analysis of energy efficiency of the facilities including
the data on electricity/heat and energy commodities to be used; 6) The planned deadline for
construction of the energy facility and service life of the energy facility; 7) The analysis of the
procurement market; 8) The analysis and assessment of the selection of the location, analysis of
possible impacts on the environment including the proposed measures of environmental
protection, relationship with respect to natural, cultural, and historic assets, impact on climate,
surface and ground waters, flora, fauna, and soil; 9) Financial analysis of the assessment including
calculation of the required investments and sources of financing and obligations towards the
sources; 10) Sensitivity analysis and analysis of the risk of the investment; 11) Analysis of the
sources of financing and financial obligations (own funds, domestic sources, foreign and
international sources, guarantees, and liabilities); 12) The analysis of the organizational and staff
capacities (organization, staff potential); 13) Proposed measures concerning the requirements for
and method of regulation of relationships in case of a temporary or permanent termination of
operation, or exploitation of the energy facility; 14) Proposed measures to be undertaken for the
purpose of protection of the energy facility and the proposed measures, which will define all the
required parameters for possible restart of operation of the energy facility at a later stage. By its
contents, this feasibility study is the closest to the Preliminary Feasibility Study including the
general design.
61
The environmental impact assessment is described in more detail in Chapter 3.2.5 hereof.
62
The Energy Law, the Decree on Conditions of Electricity Delivery, the Distribution Grid
Code, and the Transmission Grid Code specify the procedure for connection of the producers
facilities to the electricity grid. Neither the Decree, nor the Codes, or indeed any other regulations
stipulate the procedure for issuing the opinion of the energy entity in charge of transmission, or of
distribution of electricity within the procedure for issuing the energy license. In view of the above
fact, this procedure does not have a specific form, but the economic operator, whose facility
should be connected to the electricity grid, when preparing the application for such an opinion,
should submit as many documents as possible, which are necessary for connection of the facility
to the electricity grid or, if he/she does not have such documents, then at least as many data as
possible, which the specified documents should contain. The application for connection to the
electricity grid has been dealt with in Chapter 7 hereof.
14

The energy permit shall be issued within thirty days from the date of
submitting the application. The unsatisfied party may lodge an appeal against the
decision on the energy permit within seven days from the date of receipt of the
decision.
The energy permit shall be issued for a period of two years and its validity may
be extended at the request of the holder.
3.2.3 Requirements for Connection
Prior to issuing the location permit, it shall also be necessary to obtain the
requirements for connection to the electricity grid and to the heat distribution
network. If the investor fails to obtain the above requirements on his/her own,
the authority in charge of issuing the location permit shall obtain them ex officio
prior to issuing the location permit.
Within the procedure for preparation of the urban development planning
document, the location permit or of the main design for construction of the
facility, at the request of the investor or of the competent authority, the energy
entity to whose system the power producers facility is to be connected, shall
issue the requirements for connection of the producers facility to the electricity
grid. The requirements for connection shall define the possibility for connection
of the producers facility to the electricity grid, or define the electric power and
technical requirements needed for preparation of the main design for
construction of the facility.
The procedure starts when the application is submitted for the requirements
for connection.
The following shall be submitted with the
application: 1) Evidence of the payment of the expenses of
issuing the required requirements for connection as per the
pricelist; 2) Other documentation, which is specified by
the energy entity in the application form for the
requirements for connection.

63

Drafting of the Rulebook amending the Rulebook on Criteria for Issuing Energy Permits,
Contents of the Application, and Procedure for Issuing Energy Permits is under way, according to
which some of the documents, which are required with the application for the energy permit, are
amended. According to that draft, the following shall be submitted with the Application for the
energy permit: 1) The Information on the Location or the location permit issued within a period of
maximum one year (if issued), 2) The Preliminary Feasibility Study, 3) Relevant statement of a
bank that is willing to support the applicant or the investor in financing the construction of the
energy facility, 4) The opinion of the electricity transmission or distribution system operator on
the requirements for and possibilities of connection of the new facility to the system.
64
Prior to the adoption of the new 2009 Law on Planning and Construction, there had been
a discrepancy between the provisions of the Rulebook on Criteria for Issuing Energy Permits,
Contents of the Application, and Procedure for Issuing Energy Permits and the provisions of the
Law on Planning and Construction with respect to the priority in issuing the Except from urban
development plan and issuing of the decision on urban development requirements and the energy
permit. This discrepancy was avoided by deletion of the terms: the decision on urban development
requirements and the excerpt from the urban development plan. Instead of them, the terms: the
location permit and the information on the location were introduced.
15

The technical report, based on the analysis made, shall establish whether
there are electric power and technical conditions for possible future connection of
the facility according to the submitted application.
Based on the technical report, the energy entity, to whose system the facility
of the producer is to be connected, shall issue the decision on the requirements for
connection to the investor in construction of the facility, or to the competent
authority. The requirements for connection shall contain the definition of their
validity period. An appeal may not be lodged against the decision on the
requirements for connection (the decision on the requirements for connection does
not contain the grounds for it or instructions on the legal remedy). The decision on
the requirements for connection shall be issued within the deadline prescribed by
the law65.
3.2.4 Location permit66
The Law on Planning and Construction prescribes that the location permit is
the document, which contains all the requirements and data needed for
preparation of the technical documentation (the preliminary and the main design),
in line with the valid planning document. The location permit is also a
prerequisite for issuing the Construction Permit. Location permits for construction
of power plants for electricity/heat generation from renewable energy sources of a
capacity of 10 MW and over, as well as for combined heat-and-power plants and
for power plants constructed in the protected environs of outstanding cultural
assets, and of cultural assets registered in the Lists of the World Cultural and
Natural Heritage and of facilities in protected areas in compliance with the
decision on protection of cultural assets, as well as of facilities within the
boundaries of a national park and of facilities within the boundaries of protection
of a protected outstanding natural asset, shall be issued by the ministry in charge
of civil engineering affairs, or by the Autonomous Province, and for all other
power plants, by the competent authority of the unit of local self-government
(city/town, municipality) in the territory of which the structure is going to be
constructed.67
3.2.4.1 Procedure for Issuing the Location Permit
The documentation necessary to obtain the location permit for construction
of a power plant is specified in the Law on Planning and Construction. The
following shall be submitted as obligatory exhibits to the Application for the
location permit: 1) A copy of the lot plan (issued within a period of maximum six

65

The deadline for issuing the requirements for connection is 30 days; more about this can
be found in the footnote No. 55 hereof.
66
Related to the obtaining of the documentation necessary for issuing the location permit
for power plants (of up to 10 MW) there are cases of overlapping of the required documentation
(on the right to use the land, technical documentation,...) for issuing certain documents.
67
The structure of a power plant within the boundaries of a national park or within the
boundaries of protection of a protected outstanding natural asset is within the competence of the
Ministry of Environment and Spatial Planning.
16

months); 2) The certificate of the cadastre of underground installations; 3)

Evidence of the ownership right or of lease of the construction land68'69.
Apart from
permit shall
constructed,
use of the
like.70

the above, the application for the location

also contain the data on the structure to be
particularly on the planned layout, type and
structure, technical characteristics and the

The Law on Planning and Construction stipulates that the building plot shall
be formed prior to submitting the application for the location permit.
If the authority in charge of issuing of the location permit establishes that
adequate documentation has not been submitted with the application for the
location permit, it shall notify the applicant thereof within eight days. In case the
planning document does not contain all the requirements and data for preparation
of the technical documentation, the competent authority shall obtain them ex
officio, at the expense of the investor. The authorities, or organizations authorized
to issue such requirements and data shall act further to the request of the
competent authority within 30 days.
The competent authority shall issue the location permit within 15 days as of
the date of a duly submitted application or of obtaining the requirements and data,
which it shall obtain ex officio.
The location permit shall particularly contain71: 1) The
name and family name of the investor including personal
identification No., or business name or name of the
investor including the seat and PIB; 2) The number and
surface area of the cadastral lot; 3) The data on the
existing facilities on the lot that need to be removed; 4)
The defined access to a public traffic area; 5) The use of
the structure; 6) Building lines; 7) Codes of construction;
8) Requirements for connection to roads, public utility,
and other infrastructure; 9) Possible and mandatory stages
in the project implementation; 10) List of mandatory parts
of the main design; 11) The name of the planning
document based on which it is issued; 12) The statement
that the legally valid location permit is the basis for
68

This evidence for issuing of the location permit is exactly the same as for issuing the
Construction Permit. As evidence of the ownership right, or of lease of the construction land for
construction or for carrying out of the work on the construction land or on the facility, which is
owned by a number of persons a certified consent of such persons shall also be submitted.
69
When construction of line infrastructure facilities is in question, the decision of the
competent authority establishing the public interest for expropriation, in compliance with a special
law, or the servitude and right-of-way agreement with the owner of the servient estate, shall serve
as the evidence of the ownership right for issuing the location permit.
70
In practice, for obtaining the location permit, the general design (conceptual design) is
prepared and submitted, which contains: technical description of the location, architecture, the
structure and foundation of the structure, the method of heating and cooling the structure,
description of the technical solution for securing excavation of the foundation pit, the terrain and
the adjacent facilities, etc.
71
The Rulebook on Contents of Information on Location and on Contents of Location
Permit.
17

preparation of the preliminary and of the main design if

the structure referred to in Article 133 of the Law on
Planning and Construction is in question, or for
preparation of the main design; 13) The obligation of the
designer-in-charge to prepare the design in compliance
with the codes of construction and requirements from the
location permit; 14) The statement that the issued location
permit shall cease to be valid if the investor, within two
years as of the date of the legal validity of the decision on
the location permit, fails to submit the application for the
Construction Permit.
An appeal may be lodged against the decision on the location permit, issued
by a unit of local self-government, within 8 days. An appeal against the decision
on the location permit of a unit of local self-government shall be decided on by
the ministry in charge of town planning affairs, or by the competent authority of
the Autonomous Province, or by the competent authority of the City of Belgrade
(for construction or reconstruction of facilities of up to 800 m of gross floor
area), if the structure is to be located in the territory of the Autonomous Province,
or of the City of Belgrade.
An administrative suit may be instituted by action against the decision on
the location permit, which is issued by the ministry in charge of town planning
affairs, or by the competent authority of the Autonomous Province.
3.2.4.2 Forming the Building Plot72
A building plot is a part of the construction land, with the access to a public
traffic area, which has been constructed or is envisaged for construction by a plan.
For construction of power plants, the building plot represents a belt of land
of incomplete expropriation of a part of the cadastral lots through which the
structure will stretch and of individual lots on which the appurtenant aboveground facilities are to be located. In addition to an incomplete or complete
expropriation, servitude and right-of-way agreements concluded with the owners
of the cadastral lots shall also be recognized as the evidence of the resolved
property-rights relations for construction of line infrastructure facilities.
Power plants may also be constructed on agricultural land, with the
previously obtained approval from the ministry in charge of agricultural affairs.
Prior to submitting the application for the location permit, the
Allotment/Reallotment Plan, i.e. the plan forming the building plot shall be
prepared. The reallotment plan implies the plan forming one or more building
plots on a number of cadastral lots while the allotment plan implies the plan
forming a number of building plots on a single cadastral lot.
72

Provisions of the Law on Planning and Construction, in this case, are not quite clear with
respect to the formation of the building plot for construction of a biomass/biogas power plant.
Article 69, paragraph 1, prescribes that, for construction of electric power facilities or equipment,
a building plot of a smaller area may be formed than the area envisaged in the planning document
for the particular zone, provided there is an access to the facility, or equipment, for the purpose of
maintenance and elimination of defects or accidents.
18

The allotment or reallotment plan shall be drawn up by a company, or by

another legal entity or by an entrepreneur, registered in the relevant registry.
Drawing up of the allotment plan shall be managed by the town planner-in
charge, an architect. The specified plan shall also contain the Design of Geodetic
Survey Benchmarking. .
The allotment or reallotment plan shall be submitted to the authority in
charge of town planning affairs of the unit of local self-government for
verification. If the plan is in compliance with the valid planning document, the
competent authority shall verify the plan within 10 days and, if not, it shall notify
the party that has submitted the plan thereof. A complaint against the above
notification may be submitted to the municipal or to the city/town council within
3 days as of the date of its submittal.
Thereafter, the Application for undertaking the allotment, or reallotment,
shall be submitted to the Authority in charge of the affairs of state survey and
cadastre (RGA the Republic Geodetic Authority).
The following shall be submitted with the application for
undertaking the reallotment/allotment: 1) The evidence of
resolved property-rights relations for all the cadastral lots,
and 2) The reallotment or allotment plan verified by the
authority in charge of town planning affairs of the unit of
local self-government, an integral part of which shall also
be the Design of Geodetic Survey Benchmarking. The
authority in charge of the affairs of state survey and
cadastre shall hand down the decision on forming of
cadastral lot(s) further to the above application. An appeal
may be lodged against this decision within 15 days as of
the date of submitting of the decision.
For obtaining the location permit for the facilities of biomass/biogas power
plants, the Article of the Law on Planning and Construction may be applied,
which regulates special cases of forming of a building plot. For construction of
electric power facilities, a building plot may be formed of a smaller area than the
area specified in the planning document, provided there is an access to the
facility, or to equipment, for the purpose of maintenance and elimination of
defects or accidents. An access easement agreement with the owner of the
servient estate shall also be recognized as a resolved access to a public traffic
area.
3.2.4.3 Water requirements, water approval, and water permit73
The Law on Waters differentiates between the general and special uses of
waters. The water requirements shall be issued within the procedure for
preparation of the technical documentation for construction of new facilities,
which may have a permanent or a temporary impact on the changes in the water
regime, or which may threaten the objectives concerning the environment. The
right to the special use of waters shall be acquired by the water permit.
73

Issuing of the water requirements, the water approval, and the water permit is regulated
by the Law on Waters.
19

This Law defines the following water documents; 1) The water

requirements, 2) The water approval, 3) The water permit, and 4) The water
order. Water documents shall be issued by the ministry (the Ministry of
Agriculture, Forestry and Water Management). If the structure is located in the
territory of the Autonomous Province, then such documents shall be issued by the
competent authority of the Autonomous Province and, if the structure is located in
the territory of the City of Belgrade, such documents shall be issued by the
competent authority of the City of Belgrade (the Water Administration). Water
documents shall be issued within two months from the date of filing the
application.
An appeal may be lodged against a water document issued by the competent
authority of the Autonomous Province, or of the City of Belgrade, to the Minister
of Agriculture, Forestry and Water Management, within 15 days. An
administrative suit can be instituted against the decision of the Ministry of
Agriculture, Forestry and Water Management.
The Law prescribes that, for the procedure for preparation of the technical
documentation for construction of new and reconstruction of the existing facilities
and for carrying out of other work, which may have impact on the changes in the
water regime, the investor shall obtain the water requirements (specifying
technical and other requirements that must be met). It also prescribes that, for the
requirements of preparation of the technical documentation, it is necessary to
obtain the water approval, which specifies that the technical documentation for
the facilities and for the work has been prepared in compliance with the water
requirements. The water permit, which shall be obtained once the structure has
been constructed (the operating permit may be issued without having obtained the
water permit), specifies the manner and conditions for the operating and use of
waters and discharge of waters. The procedures for issuing the above documents
will be explained in more detail below.
Prior to issuing the water requirements (which are an element of the
location permit, and are necessary for preparation of the design documentation
the main design), it is necessary to obtain the Opinion of the Republic
organization in charge of hydrometeorological affairs (the Republic
Hydrometeorological Service - RHMS) and the Opinion of the public watermanagement enterprise (Public Water-management Enterprise Srbijavode for
the territory of the Republic of Serbia except for the Autonomous Province of
Vojvodina, i.e. of the Public Water-management Enterprise Vode Vojvodine for
the territory of the Autonomous Province of Vojvodina).
The Opinion of the Republic Hydrometeorological Service shall be obtained
on the basis of the submitted Application.
The following shall be submitted with the application74: 1)
The topographic map of the area (1:25000) with indicated
layouts of the facilities, 2) The technical description, and
3) In case of unstudied catchment areas, the hydrological
study (usually made based on meteorological data as well
as on the hydrological data from the adjacent catchment
areas).
74

There is nothing prescribed as to what should be submitted with the application for the
Opinion from RHMS what has been specified herein is a general assessment of the author in line
with the discussions in the specified organization.
20

The opinion of the public water-management enterprise shall be obtained

after submitting the Application for the opinion.
The following shall be submitted with the application75: 1)
A copy of the plan with the plotted facilities, 2) The
excerpt from the planning document the information on
the location, 3) The technical description of the solution
(if available, the General Design may be submitted).
After obtaining the Opinion of RHMS and the Opinion of the public watermanagement enterprise, the Application for the water requirements shall be
submitted.
The following shall be submitted with the Application for
the water requirements: basic data on the location, use,
and size of the structure and, as required, preliminary
studies, and the General Design (Conceptual Design),
which provide a more detailed insight in the impact of the
structure on the water regime. For issuing the water
requirements, the opinion of the public water-management
enterprise shall be mandatory. In addition to the above
specified, the following shall be submitted with the
Application for the water requirements: 1) A copy of the
plan (including the plotted position of the structure),
which shall be issued by the competent Real Estate
Cadastre; 2) The registered land certificate (for the
cadastral lot on which the structure is constructed), which
shall be issued by the competent Municipal Court, or by
another competent authority; 3) Certificate of resolved
property-rights relations: evidence of the ownership use
of the land by the investor, approval of the public watermanagement enterprise if the construction of a structure of
public interest on the water land is in question; 4) The
plan of use of the areas, which shall be issued by the
competent municipal town planning department.76
The competent ministry (the Ministry of Agriculture, Forestry and Water
Management), or the defined competent authority (the Provincial Secretariat, the
Water Administration or the local self-government) shall issue the Decision
Issuing the Water Requirements. The Main Design shall be prepared based on this

75

There is nothing prescribed as to what should be submitted with the application for the
Opinion from public water-management enterprises what has been specified is a general
assessment of the author in line with the discussions in the specified organizations.
76
The contents of the documentation, which shall be submitted with the application, are
contained in the form VU, which can be downloaded from the Web site: www.minpolj.gov.rs /
arhiva / vodoprivreda / vodoprivredna akta (Archive / Water Management / Water Documents).
In compliance with the Law on General Administrative Procedure, the authority may request the
Investor to complete the documentation.76
21

Decision. The obtained Decision Issuing the Water Requirements shall be one of
the elements of the location permit.77
Once the location permit has been obtained, one shall proceed with the
preparation of the design documentation the main design of the power plant.
In order to proceed with the following stage obtaining of the Construction
Permit, it is necessary, inter alia, to obtain the Water Approval on the specified
design documentation. The Water Approval shall establish that the technical
documentation the Main Design, has been prepared in compliance with the
water requirements.
The documentation for issuing the water approval shall be
specifically the technical documentation the Main
Design, which shall contain: 1) The technical report; 2)
Computations: hydrological, hydraulic, of stability, level
of pollution, etc.; 3) Graphical exhibits: layout plans,
plans, and cross-sections with the necessary elements for
establishing the impact of the water regime on the
structure and vice versa; 4) Presentation of the natural
water regime; 5) Presentation of the projected water
regime; impact of the structure on the natural and the
projected water regime; 6) The impact of the natural and
projected water regimes on the structure. The approvals of
the Ministry of Health and of the Ministry of Environment
and Spatial Planning shall also be submitted along with
the above application.
The following shall be submitted with the application for
the water approval on the main design: 1) The Decision
Issuing the Water Requirements; 2) The Main Design; 3)
The report on the review of the design; 4) Other
documents, which are required in the Decision Issuing the
Water Requirements.78
The water approval shall cease to be valid if, within two years from the date
of its obtaining, the application for the Construction Permit is not submitted to the
competent authority. The decision establishing expiry of validity of the water
approval shall be handed down by the authority, which has issued the water

77

Exceptionally, subject to Article 118, of the Law on Waters, the authority in charge of
issuing the water requirements may request from the applicant to obtain the opinion of the
Ministry of Environment and Spatial Planning and/or of a specialized scientific institution
(establishments, institutes, etc.). For the facilities and works in a territory of a spa resort, the
applicant shall obtain the opinion of the ministry in charge of the affairs of tourism. There is no
specifically prescribed procedure for obtaining the above opinions.
78
To assist an applicant, the list of all the required documentation for obtaining the water
documents can be found on the Web site of the Ministry of Agriculture, Forestry and Water
Management: www.minpolj.gov.rs Link: Arhiva Vodoprivreda - Vodna akta - Obrazac zahteva
VS (Archive - Water Management Water Documents - Application Form VS). Exhibits that
shall be submitted can be downloaded from the Web site of the Ministry of Agriculture, Forestry
and Water Management, Form VDP. In compliance with the Law on General Administrative
Procedure, the authority may request the Investor to complete the documentation.

22

approval. An appeal may be lodged against this decision to the minister within 15
days as of the date of submitting the decision.
Once the structure has been constructed, and prior to obtaining the
operating permit, it is necessary to submit the application for the Water Permit to
the Ministry of Agriculture, Forestry and Water Management, or to the competent
authority. The Water Permit is required for the exploitation and use of waters and
natural and artificial watercourses, lakes, and ground waters, for discharge of
waters and other substances into natural and artificial watercourses, lakes, ground
waters, and public sewers, as well as in case of increase of the capacity of the
already existing structure for the increase of the quantity of in-taken and
discharged waters, changed nature and quality of discharged waters. This License
shall be issued for a period of maximum 15 years so that, maximum two months
prior to its expiry, its validity should be extended if there is the issued Decision
on Water Permit. The right acquired on the basis of the Water Permit may not be
assigned to any third party without the consent of the issuing party, and this right
shall terminate: upon expiry of the validity thereof, by waiver of the right, and by
failure to exercise the right without justified reasons for over 2 years.
The following shall be submitted with the application for
the water permit: 1) The water approval; 2) Evidence of
fulfillment of the requirements from the water approval;
3) The technical documentation based on which the
structure has been constructed, including all the
modifications and additions made in the course of
construction; 4) The report of the commission on the
completed technical inspection of the constructed
structure or plant; 5) The opinion of the public watermanagement enterprise concerning the fulfillment of the
requirements from the water approval, the impact of the
structure on the water regime, the impact of the water
regime on the structure, and the requirements for issuing
the water permit. In case some other documents are also
required, which depends on the specific features of the
structure, the Investor, after submitting the application,
shall be subsequently notified by the Ministry to complete
the documentation.79
3.2.5 Environmental Impact Assessment
Environmental impact assessment is a very important element in the process
of construction of a power plant. Within the procedure for obtaining the energy
permit, it is necessary to make a study of possible impacts on the environment
including the proposed measures for protection of the environment.

79

To assist an applicant, the list of all the necessary documentation for obtaining the water
documents can be found on the Web site of the Ministry of Agriculture, Forestry and Water
Management: www.minpolj.gov.rs Link: Arhiva Vodoprivreda - Vodna akta - Obrazac zahteva
VD (Archive Water Management Water Documents Application Form VD). In compliance
with the Law on General Administrative Procedure, the authority may request from the Investor to
complete the documentation.
23

Should the competent authority find it necessary, as an element for issuing

the Construction Permit, it shall be necessary to make the Environmental Impact
Assessment Study for the power plant.80
Environmental impact assessment for a biomass/biogas power plant,
including the proposed measures for environmental protection, shall be made
when making the Environmental Impact Assessment Study for a biomass/biogas
power plant. Depending on its presence on either of the lists of projects of the
Decree on the List of Projects for which the Environmental Impact Assessment Is
Mandatory (List I) and on the List of Projects for which the Environmental
Impact Assessment May Be Requested (List II), making of the Environmental
Impact Assessment Study for a biomass/biogas power plant is either mandatory or
may be requested. The projects of power generating plants (electricity, heat,
steam...) in facilities of over 50 MW are on List I of this Decree81 - which means
that, for such facilities, making of the Environmental Impact Assessment Study is
mandatory. Power generating plants (electricity, heat, steam...) in facilities of a
capacity from 1 to 50 MW are specified in List II of the Decree82 - which means
that, for such facilities, making of the Environmental Impact Assessment Study
may be requested. The scope of such impact depends on the location of the
facility, on the capacity of the facility, on the concrete environment of the facility,
etc. Making of a Study is not required for the power plants of a capacity below 1
MW.
The Law on Environmental Impact Assessment stipulates for which
biomass/biogas power plants the Environmental Impact Assessment Study may
be requested. In such cases, the owner of the project for the facility shall submit
the Application for deciding on the need for impact assessment to the competent
authority. Competence of the authority in the procedure for establishing the need
for making of the Impact Assessment Study is the same as in the case of
establishing the competence for issuing the Construction Permit.83
The application concerning the need to assess the impact shall be submitted
in the prescribed form, in compliance with the Law on Environmental Impact
Assessment and the Rulebook on Contents of the Application for the Need to
Assess the Impact and Contents of the Application for Determining the Scope and
Contents of the Study of Environmental Impact Assessment Study.

80

The necessary element for issuing the Construction Permit for power plants of a capacity
of 50 MW or over is assessment of the impact on the environment made in a clearly defined
format the format of the Environmental Impact Assessment Study for the power plant. For
power plants of a capacity of 1-50 MW, the Environmental Impact Assessment Study is
mandatory if the competent authority80 finds it necessary.
81
Plants generating electricity, steam, hot water, technological steam or heated gases, using
all types of fuels, as well as plants driving operating machines (thermoelectric power plants,
district heating plants, gas turbines, plants with internal combustion engines, and other combustion
equipment, including steam boilers) of a capacity of 50 MW or over.
82
Plants generating electricity, steam, hot water, technological steam or heated gases
(thermoelectric power plants, district heating plants, gas turbines, plants with internal combustion
engines, other combustion equipment), including steam boilers, in combustion plants using all
types of fuels of a capacity from 1 to 50 MW.
83
The competent authority, within the procedure for environmental impact assessment for a
power plant of 10 MW and over, is the Ministry of Environment and Spatial Planning, or the
competent authority of the Autonomous Province, if the power plant is located in the territory of
the Autonomous Province. The competent authority in the procedure for environmental impact
assessment for a power plant of up to 10 MW is the competent authority of a unit of local selfgovernment.
24

The application concerning the need to assess the impact

shall contain84: 1) Data on the project leader; 2) The
description of the location; 3) The description of the
characteristics of the project; 4) Presentation of the main
alternatives that have been analyzed; 5) The description of
the environmental factors that may be exposed to the
impact; 6) The description of possible major harmful
impacts of the project on the environment; 7) The
description of the measures envisaged for the purpose of
prevention, mitigation, and elimination of major harmful
impacts; 8) Other data and information at the request of
the competent authority. The following documentation
shall be submitted with this application: 1) The
Information on the Location or the verified Urban Design
(issued within a period of maximum one year); 2) The
conceptual design or the preliminary design, or the
excerpt from the preliminary design; 3) Graphical
presentation of the micro- and macro-location; 4)
Requirements and approvals of other competent
authorities and organizations obtained in compliance with
a special law; 5) The evidence of payment of the Republic
administrative fees and duties; 6) Other evidence at the
request of the competent authority.
Within 10 days, the competent authority shall notify the interested
authorities and the public about the submitted application. The interested parties
shall submit their respective opinions within 10 days from the date of receipt of
the notification. The competent authority shall decide on the application within an
additional period of 10 days. If it is decided that the impact assessment is required
for the reviewed power plant of over 1 MW, the same Decision may determine
both the scope and contents of the impact assessment study. If it is established
that impact assessment is not required, the competent authority may specify
minimum requirements for environmental protection in the Decision. The
decision shall be submitted to the project owner, interested authorities, and to the
public within 3 days as of the date of handing down the decision.
The project owner and the interested public may lodge an appeal, and the
competent second-instance authority85 shall hand down the decision within 30
days from the date of receipt of the appeal.
If, further to the application related to the impact assessment, the Decision
has been handed down in which it was decided that impact assessment is required
and if, in the same Decision, the competent authority has not specified the scope
and contents of the impact assessment study, the project owner shall submit the
84

The Application Form concerning the need to assess the impact of a project on the
environment is specified in the Rulebook on Contents of the Application Concerning the Need for
Impact Assessment and Contents of the Application for Determining Scope and Contents of the
Environmental Impact Assessment Study.
85

The second-instance authority, in the procedure against the decision of the competent
authority of a unit of local self-government is the Ministry of Environment and Spatial Planning,
or the competent authority of the Autonomous Province if the power plant is located in the
territory of the Autonomous Province.
25

Application for determining the scope and contents of the impact assessment
study to the competent authority, in the prescribed form.
The specified application shall contain: 1) The data on the
project owner, 1a) The description of the location, 2) The
description of the project, 3) Presentation of the main
alternatives that have been analyzed, 4) The description of
the environmental factors that may be exposed to the
impact, 5) The description of possible major harmful
impacts, 6) The description of the measures envisaged for
the purpose of prevention, mitigation, and elimination of
major harmful impacts, 7) Non-technical summary of data
from 2) to 6), 8) Data on possible difficulties encountered
by the project owner in collecting the data and
documentation, 9) Other data and information at the
request of the competent authority. The following
documentation shall be submitted with the specified
application: 1) The excerpt from the urban development
plan or verified urban design, or the decision on urban
development requirements issued within a period of
maximum one year, 2) The preliminary design, or the
excerpt from the preliminary design, 3) Graphical
presentation of the macro- and micro-location, 4)
Requirements and approvals of other competent
authorities and organizations obtained in compliance with
a special law, 5) Evidence of payment of the Republic
administrative fees and duties, and 6) Other evidence at
the request of the competent authority.
Within 10 days, the competent authority shall notify the interested public
about the submitted application. The interested parties shall submit their
respective opinions within 15 days as of the date of receipt of the notification.
Within 10 days, the competent authority shall hand down the decision on the
scope and contents of the impact assessment study. The decision shall be
submitted to the project owner and to the interested public within 3 days.
The project owner and the interested public may lodge an appeal, and the
competent second-instance authority shall hand down the decision within 30 days
from the date of receipt of the appeal.
The detailed procedure for making of the Environmental Impact
Assessment Study for a biomass/biogas power plant is regulated by the Law on
Environmental Impact Assessment and by the bylaws under this Law86. This Law
stipulates that the concrete impact assessment study for a biomass/biogas power
plant is an integral part of the documentation, which shall be submitted with the
application for the Construction Permit or with the report on commencement of
the project implementation (construction, carrying out of the work, change of
technology, change of activity, and other activities).
86

The bylaws of the Law on Environmental Impact Assessment that are binding for this
issue are the Rulebook on Contents of the Application Concerning the Need for Impact
Assessment and Contents of the Application for Determination of Scope and Contents of the
Environmental Impact Assessment Study and the Rulebook on Contents of Environmental Impact
Assessment Study.
26

The Impact Assessment Study shall contain: 1) The data

on the project owner, 2) The description of the location at
which the project implementation is planned, 3) The
description of the project, 4) Presentation of the main
alternatives of the project that have been analyzed, 5)
Presentation of the state of the environment at the location
and close environs (micro- and macro-location), 6) The
description of possible major impacts of the project on the
environment, 7) Assessment of the impact on the
environment in case of an accident, 8) The description of
the measures envisaged for the purpose of prevention,
mitigation, and possible elimination of any major harmful
impact on the environment, 9) The program of monitoring
of the impact on the environment, 10) Non-technical short
presentation of the data specified under 2) to 9), 11) Data
on technical deficiencies or non-existence of adequate
expert knowledge and skills or inability to obtain relevant
data. The obtained requirements and approvals of the
other competent authorities and organizations shall also be
submitted with the Study. The Study shall also contain the
basic data on the persons, who have participated in
making the study, on the responsible person, date of
making the study, signature and seal of the responsible
person, as well as the seal of the licensed organization,
which has made the study and which is registered for
preparation of this type of documentation in the Business
Registers Agency. 87
Maximum within one year from the date of receipt of the final decision on
the scope and contents of the impact assessment study, the project owner shall
submit the Application for the approval of the impact assessment study. The
impact assessment study (3 copies in paper and 1 in electronic form) and the
decision of the competent authority from the previous stage of the procedure shall
be submitted with the application.
The public authority shall ensure public insight in, the presentation of, and
public debate on the study and it shall notify the interested parties about its time
and venue within 7 days. Public debate may be held within minimum 20 days
from the date of notification.
Within 10 days from the date of receipt of the application for the approval,
the competent authority shall form the Technical Commission for evaluation of
the impact assessment study and, within 3 days after it is formed, the study shall
be submitted to the Commission for evaluation. Upon completion of the public
insight in it, the competent authority shall submit the Report with the overview of
the opinions of the interested parties to the Commission within 3 days.
At the proposal of the Technical Commission, the competent authority may
request from the project owner to make amendments and supplements within a
certain time period. The Technical Commission shall submit the report with the
87

Detailed prescribed contents of the study are contained in the Rulebook on Contents of
the Environmental Impact Assessment Study.
27

evaluation of the Impact Assessment Study and a proposed decision to the

competent authority within 30 days from the date of receipt the documentation
from the competent authority.
Within 10 days from the date of receipt of the Report from the Technical
Commission, the competent authority shall notify the interested parties about the
decision approving this study or about the rejection of the application for the
approval on the impact assessment study, specifically about: 1) The contents of
the decision; 2) The main reasons on which the decision is based; 3) The most
important measures, which the project owner shall undertake for the purpose of
prevention, mitigation, or elimination of harmful impacts. The (unsatisfied)
project owner and the interested public may institute an administrative suit
against the specified decision.
The Law on Environmental Impact Assessment also regulates the procedure
for updating the Environmental Impact Assessment Study due to the lapse of
time. It is necessary to point to the fact that the validity of the Decision on
Approval of the Impact Assessment Study shall be two years, within which time
period the project owner shall commence the construction of the power plant.
Upon expiry of this deadline, the competent authority may hand down the
decision on the making a new Impact Assessment Study or on updating the
existing one. This decision shall be handed down on the basis of the application
of the project owner. The same decision shall also be handed down in case the
project owner must deviate from the documentation based on which the
environmental impact assessment study for a biomass/biogas power plant has
been made. In the latter case, the application for the approval of the updated
Impact Assessment Study shall be submitted prior to submitting the application
for the Construction Permit.
The Law on Environmental Protection stipulates that the Ministry of
Environment and Spatial Planning shall issue the preliminary consent on the
approval for the use of natural resources or assets. This consent shall verify
fulfillment of requirements and measures of sustainable use of natural resources,
or assets (air, water, land, forests, geological resources, plant and animal life) and
environmental protection in the course and after termination of engaging in the
activity. 88
3.2.6 Technical Documentation
Construction of facilities is carried out on the basis of the Construction
Permit, according to the technical documentation for construction of the structure.
Technical documentation is a set of designs that are prepared for the
purpose of: establishing the concept of the structure, elaboration of requirements,
the method of construction of the structure, and for the requirements of
maintenance of the structure. Technical documentation is prepared on the basis of
the Location Permit, which contains all the requirements and data required for
preparation of the technical documentation. The energy permit shall not be
submitted with the application for the Construction Permit for construction of a
biomass/biogas power plant of up to 1 MW, because the energy permit is not
issued for them.

88

Article 15 of the Law on Environmental Protection.

28

According to the Law on Planning and Construction, the technical

documentation for construction of a structure shall consist of: 1) The general
design; 2) The preliminary design; 3) The main design, and 4) The detailed
design. The As-built Design of a structure pertains to the technical
documentation, which shall be prepared after construction of the biomass/biogas
power plant, prior to obtaining the operating permit.
Prior to the commencement of preparation of the technical documentation
for construction of the structure referred to in Article 133, paragraph 2 of the Law
on Planning and Construction, for which the Construction Permit shall be issued
by the competent ministry, or by the Autonomous Province, the preliminary work
shall be carried out, based on the results of which the preliminary feasibility study
and the feasibility study shall be made.
A general design shall contain the data on: 1) The macrolocation of the structure; 2) General layout of the
structure; 3) The technical and technological concept of
the structure; 4) The method of providing the
infrastructure; 5) Possible variants of spatial and technical
solutions from the aspect of fitting in the space; 6) Natural
conditions; 7) Environmental impact assessment; 8)
Engineering, geological, and geotechnical characteristics
of the terrain from the aspect of establishing the general
concept and justifiability of construction of the structure;
9) Exploratory works for preparation of the preliminary
design; 10) Protection of natural and immovable cultural
assets; 11) Functionality and rationality of the design.
A preliminary design shall specify: the use, position, form, capacity,
technical, technological, and functional characteristics of the structure,
organizational elements of the structure and views of the structure.
A preliminary design shall contain the layout plan and the
data on: 1) The micro-location of the structure; 2)
Functional, structural, and form-relevant characteristics of
the structure; 3) Technical, technological, and exploitation
characteristics of the structure; 4) Engineering, geological,
and geotechnical characteristics of the terrain and soil
including the preliminary analysis of stability and safety
of the structure; 5) The design of the foundation of the
structure; 6) Technical, technological, and organizational
elements of construction of the structure; 7) Measures for
prevention or mitigation of negative impacts on the
environment; 8) The conceptual design of the
infrastructure; 9) Comparative analysis of the variant
technical solutions from the aspect of properties of the
soil, functionality, stability, assessment of the impact on
the environment, natural and immovable cultural assets,
rationality of construction and exploitation, the amount of
the costs of construction, transportation, maintenance,
providing of power, and other costs.

29

A layout plan, which is the necessary element of the

Preliminary Design, depending on the type of structure,
shall contain: 1) Lengths of each side of the building plot;
2) Height levels of the existing land and leveling; 3)
Regulation and building lines, including the presentation
of the existing and planned facilities with outer
dimensions, number of floors of the planned structure
including the presentation of the final story or roof
structure with plane slopes; 4) The position and numbers
of adjacent cadastral lots and buildings, as well as the
name of the street. .
The general design and the preliminary design, the preliminary feasibility
study, and the feasibility study for the facilities referred to in Article 133,
paragraph 2, points 5), 9), and 20) of the Law on Planning and Construction (of
the facilities 50 meters high and over, when a power plant structure is located in
protected environs of an outstanding immovable cultural asset and of cultural
assets registered in the Lists of the World Cultural and Natural Heritage and of
facilities in protected areas in compliance with the decision on protection of
cultural assets, as well as of facilities within the boundaries of a national park and
of facilities within the boundaries of protection of a protected outstanding natural
asset, in compliance with the law, and for power generating facilities from
renewable energy sources of a capacity of 10 MW and over, as well as for
combined heat-and-power plants), shall be subject to review (expert supervision)
by the committee, which shall be formed by the minister in charge of civil
engineering affairs (hereinafter referred to as: the Review Committee).
The Review Committee shall submit, to the investor, the report with the
measures, which must be applied when preparing the main design.
The deadline for submitting the report may not exceed 60 days as of the
date of a duly submitted application. The costs of design review shall be borne by
the investor.
A main design shall specify the civil engineering, technical, technological,
and exploitation characteristics of the structure including the equipment and
installations, technical, technological, and organizational solutions for
construction of the structure, the investment value of the structure, and the
requirements for maintenance of the structure. In addition to the elements of the
Main Design strictly prescribed in the Law on Planning and Construction, this
design shall also contain the statement of the designer-in-charge and the entity
that has done the review, confirming that the main design has been prepared in
compliance with the location permit and the rules of profession. The investor
shall obtain the approval on the Main Design from the authorities, or
organizations, when it is specified in the requirements contained in the location
permit.
A Main Design (the main design-level technical
documentation) shall be prepared for the requirements of
obtaining the Construction Permit and construction of the
structure. The Main Design shall contain: 1) The layout
plan; 2) Detailed engineering, geological, and

30

geotechnical requirements for construction of the

structure; 3) Topographical surveying documents; 4) Data
on the functional, structural, and form-relevant
characteristics of the structure; 5) Elaboration of technical
and technological characteristics of the structure including
the equipment and installations; 6) Computation of
engineering facilities, stability, and safety of the structure;
7) The design of the foundation of the structure; 8) Data
on the required surveying in the course of construction; 9)
Technical solution of the infrastructure including the
method of service connections and landscaping of free
areas; 10) Requirements for protection of the structure and
adjacent facilities; 11) Technical, technological, and
organizational solutions for construction of the structure;
12) Elaboration of the measures for prevention or
mitigation of negative impacts on the environment
through the adequate technological process; 13) Costs of
construction and maintenance of the structure; 14) Other
designs, studies, and data depending on the use of the
structure.
A detailed design shall contain the elaboration of all the necessary details
for construction of a structure according to the main design. This design shall be
prepared for the requirements of carrying out of the work on construction if the
Main Design does not contain elaboration of details needed to carry out the work.
An As-built Design presents the as-built state of a structure and it shall be
prepared for the requirements of obtaining the operating permit, for exploitation,
and maintenance of the structure. This design is the main design with the
amendments occurring in the course of construction of the structure. In case there
have been no deviations from the main design in the course of construction of the
structure, the investor, the person who has exercised the supervision, and the
contractor shall corroborate and certify, on the main design, that the as-built state
is equal to the designed state.
Inter alia, the preliminary feasibility study89 and the feasibility study90 may
be made. The preliminary feasibility study shall contain the General Design. The
feasibility study shall contain the Preliminary Design.
The technical documentation for construction of facilities may be prepared
by a company, or by another legal entity, or by an entrepreneur, registered in the
89

The preliminary feasibility study specifies the spatial, environmental, social, financial,
market, and economic justifiability of the investment for the variant solutions defined in the
general design, based on which the planning document shall be adopted, as well as the decision on
justifiability of the investment in preliminary work for the Preliminary Design and for making the
Feasibility Study. It is mandatory for the facilities referred to in Article 133 of the Law on
Planning and Construction, which include the facilities for electricity/heat generation from
renewable energy sources of a capacity of 10 MW and over, as well as combined heat-and-power
plants.
90
The feasibility study determines the spatial, environmental, social, financial, market, and
economic justifiability of the investment for the selected solution, elaborated in the preliminary
design, based on which the decision on justifiability of the investment shall be handed down. It is
mandatory for the facilities referred to in Article 133 of the Law on Planning and Construction,
which include the facilities for electricity/heat generation from renewable energy sources of a
capacity of 10 MW and over, as well as combined heat-and-power plants.
31

relevant registry for preparation of technical documentation. The technical

documentation for construction of facilities for which the Construction Permit is
issued by the Ministry, or by the Autonomous Province, may be prepared by a
company, or by another legal entity, which is registered in the relevant registry
for preparation of technical documentation for that type of facilities and which
has employed persons with the licenses for the designers-in-charge, who have
adequate professional results in preparation of technical documentation for that
type and use of facilities, or who possess the licenses for preparation of technical
documentation for construction of facilities for which the construction approval is
issued by the ministry, or by the Autonomous Province.
The Law on Planning and Construction indicates that the Main Design may
be prepared after obtaining the Location Permit. The Main Design represents a
detailed elaboration of the technical solution, which has been obtained in the
previous stage of designing (the general or preliminary design, which are
prepared only for the facilities referred to in Article 133, paragraph 2 of the Law
on Planning and Construction), based on detailed exploratory works and on the
requirements defined in the Location Permit.
The general design shall be prepared when there is no detailed regulating
plan and, when the plan exists, the Feasibility Study and preliminary design shall
then be prepared, specifically only for the facilities referred to in Article 133,
paragraph 2 of the Law on Planning and Construction.
The investor shall obtain the approval of the main design from the
authorities or organizations, when it is specified by the requirements contained in
the Location Permit.
The Main Design shall be subject to review. Review of the Main Design
may be exercised by a company, or by another legal entity and by an
entrepreneur, who fulfill the requirements for preparation of technical
documentation prescribed by the law and who shall be designated and financed by
the investor. Review of the main design for construction of facilities for which the
Construction Permit is issued by the Ministry, or by the Autonomous Province,
may be prepared by a company, or by another legal entity, which is registered in
the relevant registry for preparation of technical documentation for that type of
facilities and which has employed persons with licenses for the designer-incharge, who have adequate professional results in the preparation of technical
documentation for that type and use of facilities, or who possesses the license for
preparation of technical documentation for construction of facilities for which the
construction approval is issued by the ministry, or by the Autonomous Province.
A report shall be made on the completed review, which shall be signed by
the designer-in-charge employed with the entity, which has done the review, and
the accuracy of the main design shall be certified on the actual design. Review of
the main design for construction of facilities, for which the Construction Permit is
issued by the competent ministry, or by the Autonomous Province, shall also
include verification of the harmonization with the measures contained in the
report of the review committee.91

91

If the Report on the completed review of the Main Design is positive, i.e. there are no
remarks that would give rise to the amendments of the design documentation, the specified
company shall affix its seal on the actual design - on the first page thereof, evidencing the
completed review, which shall be signed by the designer in charge of the review.

32

3.2.7 Construction permit

After completion of the review of the main design and getting a positive
report on the completed review or verification of the accuracy on the actual
design, the Application for the Construction Permit shall be submitted. If it is a
small power plant of a capacity of 10 MW and over or if it is located in protected
environs of outstanding cultural assets with clearly defined borders of cadastral
lots, and of cultural assets registered in the Lists of the World Cultural and
Natural Heritage and of facilities in protected areas in compliance with the
decision on protection of cultural assets, as well as of facilities within the
boundaries of a national park and of facilities within the boundaries of protection
of a protected outstanding natural asset, in compliance with the law, then the
application shall be submitted to the ministry in charge of construction affairs or
to the Autonomous Province, if the power plant is located in its territory. For the
facilities of a capacity below 10 MW, the application shall be submitted to the
competent authority of the unit of local self-government.
The following shall be submitted with the application for
the Construction Permit: 1) The location permit; 2) The
main design in three copies including the report on the
completed review and verification of its accuracy; 3) The
evidence of the ownership right or of the right to lease the
construction land; 4) The evidence of performed payment
of the fee for the construction land development; 5) The
evidence of payment of the administrative fees and duties;
6) The energy license (if the capacity of the power plant
exceeds 1 MW).
For the facilities for which the Construction Permit is
issued by the Ministry, or by the Autonomous Province,
the report of the review committee shall also be submitted
with the application.
The Construction Permit shall be issued within 8 days from the date of a
duly submitted application. The Construction Permit shall be issued in the form of
a decision. An integral part of the decision shall be the Main Design.
The Construction Permit shall particularly contain the data on: 1) The
investor; 2) The structure the construction of which is permitted (including the
data on the overall dimensions, capacities, surface area, estimated cost); 3) The
cadastral lot on which the structure is to be constructed; 4) The period of validity
of the Construction Permit and the deadline for completion of construction, 5)
The documentation based on which it is issued.
If the competent authority, upon receipt of the application, establishes that
the design has not been prepared in compliance with the codes of construction
contained in the location permit, it shall notify the investor within 8 days and
order him to harmonize the design within 30 days. If the investor fails to do so
within the stipulated time, the application shall be rejected.

33

The ministry in charge of civil engineering affairs shall decide on an appeal

against a decision on the Construction Permit of a unit of local self-government.
The Autonomous Province has been assigned to decide on appeals against
the first-instance decisions on the Construction Permits of a unit of local selfgovernment, handed down for construction of facilities, which are to be
constructed in the territory of the Autonomous Province.
The City of Belgrade shall decide on an appeal against the first-instance
decision on the Construction Permits handed down for construction or
reconstruction of facilities of up to 800 m2 of gross floor area, in the territory of
the City of Belgrade.
No appeal may be lodged against the decision on the Construction Permit,
which is handed down by the competent ministry, or by the competent authority
of the Autonomous Province, but an administrative suit may be instituted by
action.
The Construction Permit shall cease to be valid if construction of the
structure is not commenced within two years as of the date of legal validity of the
decision.
3.2.8 Construction of a Structure and Technical Inspection of the
Structure
The investor shall report to the authority, which has issued the Construction
Permit and to the competent building inspector, the commencement of
construction of the structure, 8 days prior to the commencement of carrying out of
the work.
If the Construction Permit has been issued by the Ministry, or by the
Autonomous Province, the report shall also be submitted to the building
inspectorate the territory of which includes the location of the structure, for which
the report on commencement of carrying out of the work is submitted.
The report shall contain the date of commencement and the deadline for
completion of construction, or of carrying out of the work.
Prior to the commencement of construction, the investor shall provide:
marking of the building plot, regulation, leveling, and building lines, in
compliance with the regulations governing surveying; marking of the construction
site with an adequate panel, which shall contain: data on the structure, which is
being constructed, the investor, the designer-in-charge, the number of the
Construction Permit, the contractor, the commencement of construction, and the
deadline for completion of construction.
Construction of facilities, or the work may be carried out by a company, or
by other legal entity or by an entrepreneur, which are registered in the relevant
registry for construction of facilities, or for carrying out of work (hereinafter
referred to as: the contractor).
Construction of a structure, or carrying out of the work, referred to in
Article 133, paragraph 2 of the Law on Planning and Construction, may be
carried out by a company, or by another legal entity, which is registered in the
relevant registry for construction of such type of facilities, or for carrying out of
that type of work, which has employed persons with the licenses for the
contractor-in-charge and adequate professional results, or which has a license for

34

construction of facilities for which the approval for construction is issued by the
ministry, or by the Autonomous Province.
Obligations of the contractor shall be as follows: prior to the
commencement of the work, to sign the Main Design, to designate the Contractorin-charge by the decision, to provide, to the contractor-in-charge, the
Construction Contract and the documentation based on which the structure is
going to be constructed, to provide preventive measures for safe and sanitary
work in compliance with the law. The contractor shall be obliged to carry out the
work according to the documentation based on which the Construction Permit has
been issued, to organize the construction site in the manner, which will ensure
access to the location, to ensure safety of the structure and persons at the
construction site and its environs, to provide evidence of the quality of the work
carried out, to keep the daily progress record, the program and progress record,
and to provide the inspection book, to secure the facilities and environs in case of
suspension of the work. At the construction site, it is necessary to have the
construction contract, the Decision on designation of the contractor-in-charge,
and the main design at all times, i.e. to have the documentation based on which
the project is developed. The investor shall provide supervision in the course of
construction of the structure or of carrying out of work for which the Construction
Permit has been issued.
Supervision may be exercised by the person, who fulfills the requirements
prescribed by the Law on Planning and Construction for the designer-in-charge or
for the contractor-in-charge. The persons, who are employed in a company, or in
another legal entity or in an entrepreneurs shop, which is the contractor on that
structure, the persons, who exercise the inspection supervision, and the persons,
who work on the tasks of issuing of the Construction Permits in the authority in
charge of issuing Construction Permits, may not participate in exercising the
supervision over the structure.
Fitness of a structure for use shall be established through technical
inspection. Technical inspection of a structure shall be carried out upon
completion of construction of the structure, within 30 days as of the date of
submitting the Application for the technical inspection of the structure to the
ministry in charge of civil engineering affairs, or to the local self-government, or
to a the unit of local self-government (depending on the capacity of the facility, or
on the competent authority, which has issued the Construction Permit). Such
inspection of facilities shall be carried out by the commission, which shall be
formed by the competent authority, or by other legal entity assigned to engage in
such activities and which is registered in the relevant registry for engaging in such
activities. 92 The work of the Commission shall be paid by the investor. The
Commission shall issue the Report/Finding of the Commission for technical
inspection. In case of the facilities for which the environmental impact assessment
study has been made, a person, who is an expert in the area that is the subject of
92

By virtue of Article 31, paragraph 2 of the Law on Environmental Impact Assessment,

the competent authority, which has managed the procedure of impact assessment, shall appoint the
person, who shall participate in the work of the commission for technical inspection. This
appointed person may be employed or appointed in the competent authority, or in another
authority and organization or be an independent expert, who has evidence of the professional
background for participation in the work of the technical commission referred to in Article 22 of
this Law. The operating permit may not be issued if such appointed person does not confirm that
the requirements referred to in the decision issuing the approval on the Impact Assessment Study
have been fulfilled, in case the Decision that the Study must be made has been handed down.
35

the study, and who has acquired higher education in an adequate field, or at a
course, at the postgraduate academic studies - master, specialist academic studies,
or at undergraduate studies lasting minimum five years, must participate in
carrying out of the technical inspection. The costs of the work of the Commission
shall be paid by the investor. Minutes shall be taken of the technical inspection,
which shall be signed by the members of the commission.
If, for the purpose of establishing of the fitness of a structure for use,
previous tests must be performed and checking of installations, equipment, plants,
stability or safety of the structure, equipment, and plants for environmental
protection, equipment for fire protection or other tests, or if that is stipulated in
the technical documentation, the commission for technical inspection, or the
entity who has been assigned to carry out the technical inspection, may propose to
the competent authority to allow setting of the facility into trial operation,
provided it has established that the requirements for that have been met.
The decision on approval of setting the facility into trial operation shall
specify the duration of the trial operation, which may not exceed one year, as well
as the obligation of the investor to monitor the results of the trial operation and,
upon the expiry of the trial operation, to submit the data on its results to the
competent authority.
In the course of the trial operation of the facility, the commission for
technical inspection, or the entity, which has been assigned to carry out the
technical inspection, shall verify whether the requirements for issuing the
operating permit have been met and, upon expiry of the deadline for the trial
operation, it shall submit its report to the authority in charge of issuing of the
operating permit.
3.2.9 Operating Permit
A facility may be used after the operating permit has been previously
obtained.
The authority in charge of issuing the operating permit is the authority in
charge of issuing the Construction Permit. Such an application for a structure 50
meters high and over, when a power plant facility is located in protected environs
of an outstanding immovable cultural asset and of cultural assets registered in the
Lists of the World Cultural and Natural Heritage and of facilities in protected
areas in compliance with the decision on protection of cultural assets, as well as
of facilities within the boundaries of a national park and of facilities within the
boundaries of protection of a protected outstanding natural asset, in compliance
with the law, and for a power generating facility using renewable sources of
energy of a capacity of 10 MW and over, as well as for combined heat-and-power
plants, shall be submitted to the Ministry in charge of construction affairs and, if
such a facility is located in the territory of the Autonomous Province, the
application shall be submitted to the competent authority of the Autonomous
Province. As to the facilities of a capacity below 10 MW, the application shall be
submitted to the competent authority of the unit of local self-government.
The operating permit shall be issued when it is established that the facility
or a part of the facility, which can be independently used is fit for use. The
operating permit shall be issued within seven days from the date of receipt of the
finding of the commission, which stipulates that the facility is fit for use.

36

The operating permit shall also contain the warranty period for the facility
and certain types of works specified in a special regulation. (The Decision on
Minimum Warranty Periods for Certain Types of Constructed Investment Projects
or Works Carried Out on Such Structures (Official Herald of SRS, No. 2/74).
The procedure for obtaining the operating permit involves two stages. An
appeal may be lodged, within 15 days as of the date of submitting the decision, to
the Ministry in charge of construction affairs, or to the Autonomous Province if
the facility is constructed in the territory of the Autonomous Province.
No appeal may be lodged against the decision on the operating permit,
when the decision-maker is the ministry in charge of civil engineering affairs, or
the competent authority of the Autonomous Province, but an administrative suit
may be instituted within 30 days from the date of its submittal.

4 ACQUIRING THE RIGHT TO ENGAGE IN THE ACTIVITY OF

ELECTRICITY GENERATION93
There are different procedures for acquiring the right to engage in the
activities of public interest, depending on whether electricity or heat generation is
in question. In case of a facility, which shall generate both electricity and heat, it
shall be necessary to meet the requirements from both procedures.94
There are several ways of acquiring the right to engage in the activities of
electricity and/or heat generation.
The ways of acquiring the right to engage in the activity of electricity
generation are regulated under the Law on Public Companies and Activities of
Public Interest, while those for engaging in the activity of heat generation are
stipulated under the Law on Public Utility Services. The Law on Public Utility
Services defines the activity of heat generation as steam and hot water generation.
The first way is to make a capital investment in an economic operator
already entitled to engage in such (an) activity(ies).
The second way is to acquire the right to engage in the activities of
electricity and/or heat generation in the facility, over which an interested party
either has the ownership right or is already using the facility to pursue such
activities. In this case, the right to electricity generation shall be acquired by
concluding an Assignment Agreement with the Government of the Republic of
93

After acquiring the right to engage in the activity of electricity generation, an energy
entity, which produces electricity, shall contact the Ministry of Agriculture, Forestry and Water
Management or the Secretariat for Agriculture, Water Management and Forestry (if the entitys
seat is in the territory of the Autonomous Province of Vojvodina) with a request to define the
amount of the fee for utilization of surface, ground, and mineral waters and to calculate the water
utilization fee. This fee is defined only for a public electric power enterprise.
94
The current legislation of the Republic of Serbia does not include any provisions
regarding the modalities for acquiring the right to engage in an activity of public interest within a
combined heat-and-power generating facility. Since granting of the right to electricity generation
is within the remit of the Republic (the Ministry of Mining and Energy) and granting of the right
to heat (steam and hot water) generation is within the remit of a local self-government unit, and
that there are no provisions that would regulate, e.g. the prevailing business activity, until the
regulation that would regulate this area is adopted, the economic operator engaged in both
activities within the same facility should acquire the right to engage in both activities of public
interest from the competent authority.
37

Serbia for the activity of electricity generation. However, the right to heat
generation shall be acquired by concluding the Assignment Agreement with the
competent local self-government authority, in compliance with the regulations
passed by the assembly of the municipality, or of the city/town.
The Law on Public Companies and Activities of Public Interest stipulates
the obligation of a public company or any other economic operator, when
utilizing the goods of public interest (waters and watercourses included), to pay a
fee for utilization of such goods.
It should be pointed out that, for engaging in the activity of electricity
generation, in addition to acquiring the right to engage in such an activity as an
activity of public interest, it is also necessary to get a license to engage in this
activity, as an energy-related activity. The license for engaging in the activity of
electricity generation is issued by the Energy Agency of the Republic of Serbia.
For engaging in the activity of heat generation, in addition to acquiring the
right to engage in such an activity as an activity of public interest, it is also
necessary to obtain the license to engage in this activity. The license for engaging
in the activity of heat generation is issued by the competent authority of the local
self-government unit or by a city/town, or by the City of Belgrade.95
4.1 Investing in a Public Company Generating Electricity
According to the Law on Public Companies and Activities of Public
Interest, the Republic of Serbia shall establish a public company to engage in the
activities of public interest. These activities shall be implemented by the Republic
of Serbia through the Government. Consequently, by virtue of its actual
foundation, the Public Company is entitled to engage in the activity of electricity
generation. The situation is similar at the local self-government level. According
to the Law on Public Utility Services, municipalities shall set up Public Utility
Companies to provide public utility services. Therefore, it follows that, by virtue
of its actual foundation, a public utility company is entitled to engage in the
activities of steam and hot water generation (heat).
A public company represents an organizational form of an economic
operator, which has no assets of its own, but is the beneficiary of the assets of the
Republic of Serbia96, which means that its only asset is the right to use the stateowned property. Therefore, no other party, except the State itself, is entitled to
invest in a public company until such company has translated its assets into stocks
or shares, i.e. until it has undergone corporatization.
However, a public company may establish affiliated companies (a joint
stock company or a limited liability company), within the framework of its own
activities. A company affiliated to a public company is entitled to engage in
activities of public interest, provided it has been founded by the public company
for the purpose of pursuing the activities of public interest. Together with the
public company, an interested third party could establish a new joint venture
company. However, a better legally founded case would be for the third party to

95

Article 145 of the Energy Law.

The Law on Assets Owned by the Republic of Serbia (Official Gazette of the RoS, Nos.
53/95, 3/96, 54/96, and 32/97).
96

38

invest its capital only in an already established affiliated company of a public

company. 97
A public company may also buy stocks or shares of other economic
operators, sell its share in a public company (this is rather ambiguous in view of
the provisions of the Law on Assets Owned by the Republic of Serbia), and attend
to other businesses in accordance with the Law.
An affiliated company may already have a power plant as its asset and may
already be engaged in the activities of electricity and/or heat generation.
The second case is when an affiliated company is yet to construct a power
plant. In this case, it is necessary to follow the above described procedure for
construction of a power plant. For such a newly constructed power plant, the
affiliated company already has the acquired right to engage in the activity of
electricity generation, which right has been assigned to it by virtue of its articles
of incorporation signed by the parent public company.
The parent public company shall control the affiliated companys activities
of public interest by granting/declining approvals for: 1) The articles of
association; 2) Issuing guarantees, sureties, collaterals, pledges, and other
securities for operations outside the scope of activities of public interest; 3)
Tariffs (pricing policy, tariff system, etc.98); and 4) Any other decisions stipulated
by the Law.
The Law on Public Companies and Activities of Public Interest, which
stipulates the general rules for engaging in the activities of public interest and the
legal status of public companies, is a general statute compared to the Law on
Public Utility Services. The Law on Public Companies and Activities of Public
Interest stipulates that public utility services are the activities of public interest.
Consequently, the provisions of the Law on Public Companies and Activities of
Public Interest shall also apply to public utility services and thereby to the legal
status of public utility companies, unless otherwise regulated under the Law on
Public Utility Services, as lex specialis.
4.2 Entrusting the Pursuit of Activities of Public Interest
According to the Law on Public Companies and Activities of Public
Interest, any third party may engage in the activity of electricity generation,
provided such a party has fulfilled the required preconditions and concluded an
Agreement with the Government entrusting the activity of electricity generation
as an activity of public interest to such entity (hereinafter referred to as: the
Assignment Agreement). The procedure for conclusion of the Assignment
Agreement shall be administered by the Ministry of Mining and Energy. Unlike
the procedure for granting concessions, this procedure is not legally regulated in
sufficient detail.
The necessary requirements that any party interested in concluding the
Assignment Agreement should meet are: 1) Adequate technical prerequisites
(proprietary rights or the right to use a power plant constructed in compliance
97

Investments in affiliated companies are made in compliance with the Company Law
(Official Gazette of the RoS, No. 125/04).
98
A public companys approval of the decision on pricing policy or tariffs proposed by its
affiliated company is considered preliminary only since, according to the Energy Law, the final
approval of the electricity tariffs or prices of services for tariff buyers is granted by the
Government.
39

with the law, technical, and other regulations); 2) Staff capacity (the employees
working at the power plant shall have the necessary qualifications and other
prescribed skills); 3) Occupational safety measures in place; 4) Implementation of
prescribed requirements and methods of protection and improvement of the
environment.
The Assignment Agreement shall include the following
provisions concerning: 1) Work and business operation of
the economic operator entrusted with the subject activity;
2) Rights and obligations regarding the utilization of stateowned assets for pursuit of activities of public interest, in
line with the Law; 3) The economic operators obligation
to provide the conditions for uninterrupted, regular, and
high-quality satisfying of the needs of the users of such
products and services; 4) Mutual rights and obligations of
the contracting parties in situations when economic or
other conditions for pursuit of activities of public interest
are not provided; 5) Mutual rights and obligations in case
of a disruption in the business operation of the economic
operator; 6) Other rights and obligations and issues of
relevance for pursuit and protection of public interest.
For the purpose of monitoring and control of the pursuit of the activity of
electricity generation, the following documents of the economic operator, with
which the Government has concluded the assignment agreement, shall be subject
to its approval: 1) The Articles of Association; 2) Tariffs (pricing policy, tariff
system, etc.); 3) Any other decisions in accordance with the statutes and
regulations and the concluded Assignment Agreement.
It is important to highlight the characteristics of the Assignment Agreement:
1) There is no provision in the Law for a tendering procedure; 2) The Law does
not stipulate the obligation to specify the location for engaging in the activity of
electricity generation (unless the Agreement refers to a concrete facility); 3) The
Law does not stipulate a maximum duration of engaging in the activity of public
interest (if it is not defined in the Agreement); 4) The Law does not stipulate the
scope of engagement in such an activity; 5) The Law does not stipulate the
obligation to pay any fee for engagement in an activity of public interest.
Up to now, the Ministry of Mining and Energy has not entered into a single
procedure of negotiating an assignment agreement for electricity generation from
renewable sources.99
The Law on Public Utility Services prescribes that a municipal assembly
may outsource its public utility services to another enterprise or entrepreneur, in
compliance with the Law and the statutes passed by the municipal assembly100.
The method to regulate the outsourcing of the activities of public utility services

99

The Ministry of Mining and Energy has concluded Assignment Agreements in the field
of natural gas distribution with the economic operators none of which is a public company, after
they had obtained the licenses for engaging in such activities.
100
The Law on Public Utility Services stipulates that rendering of public utility services,
such as steam and hot water generation and supply, for example, shall be outsourced to another
economic operator in cases when establishing a public utility company would not be reasonable,
having in mind the scope of works and the number of beneficiaries involved.
40

is described, to a large extent, in the same manner as entrusting other activities of

public interest.
Outsourcing of public utility services shall be vested by a contract. Such
vesting shall be contracted for a period of five years, however, if the public utility
services or certain tasks within such activities are outsourced to an economic
operator, which undertakes the obligation to invest its own funds in these
activities, then the outsourcing period may last for the period required to return
the investment, but shall not exceed 25 years.
One of the general provisions stipulates that outsourcing of public utility
services shall be done by issuing a public invitation for tenders. However, for the
activities of steam and hot water generation and supply, it is stipulated that such
activities may be outsourced to another economic operator further to the tendering
procedure or by direct negotiations.101
A municipal assembly shall prescribe the requirements and the way of
organizing the tasks in providing public utility services and the conditions for the
use of public utility services.102
Unlike a public company, a public utility company may outsource rendering
of public utility services to another enterprise or entrepreneur in the way and
according to the procedure prescribed by a regulation of the municipal assembly,
provided they are not intended to provide an integral technical and technological
system, and subject to the approval granted by the founder.

5 CONCESSIONS
Concessions represent a form of granting and exercising: the right to
construct, maintain, and utilize public utility facilities for the purpose of
providing public utility services, the right to construct, maintain and utilize
energy and other types of facilities for the purpose of electricity and/or heat
generation, as well as the right to engage in other activities of public interest.
Concessions may also be granted for pursuit of the activity of electricity
generation on the already constructed power plants for engaging in the activities
of heat and/or electricity generation.

101

In case of a tendering procedure or direct negotiations, the Municipal Assembly shall

engage a specialized organization to review and make an expert evaluation of the submitted
tenders and, depending on the type of the activity involved, possibly to recommend revising of the
tenders accordingly.
102
The Municipal Assembly shall prescribe the requirements for and methods of
organizing the tasks in providing public utility services and conditions for the use of such services,
in particular: 1) Technical, sanitary-hygienic, health, and other special requirements for engaging
in such activities in order to provide the specified scope, type, and quality of the products and
services; 2) Method of securing the continuity in providing public utility services; 3) Rights and
obligations of a public utility company, of the economic operator to whom a specific service has
been outsourced, as well as of the users of public utility products and services; 4) The method of
billing a public utility service, as well as the rights of the users in case of non-delivery or
inadequate delivery of a public utility product or service or in case of failure to provide or
inadequate provision of a public utility service; 5) The relevant procedure and remits of municipal
authorities in the event of interruption of production of public utility products or failure to provide
public utility services, as well as in cases of numerous unforeseen circumstances, as well as
priorities thereof, in the event of a reduced scope of providing public utility services.

41

It should be pointed out that the concession rights may be obtained for the
whole business cycle or for individual segments thereof, i.e.: 1) For construction
of a power plant and engaging in the activities of heat and/or electricity
generation, and 2) Solely for pursuit of the activities of heat and/or electricity
generation within an already constructed power plant.
The procedure for granting a concession and modalities of exercising the
concession rights are precisely regulated in the Law on Concessions. A
concession agreement shall form the legal ground for the concession. The
procedure for concluding such an agreement is much more detailed than the
procedure for conclusion of the assignment agreement, thus providing better legal
security. On the other hand, in view of the prescribed deadlines and stages, the
concession granting procedure may take much longer than the one for entrusting
the pursuit of activities of public interest by means of the assignment agreement.
A concession may be granted for maximum 30 years.
It is prescribed that the regulation of the requirements and the procedure for
concession granting shall be based on the principles of equal and fair treatment of
all participants in the procedure for concession granting and selection of the
concessionaire, free market competition, and autonomy of will of the contracting
parties.
5.1 Concession Granting Procedure
The proposal for granting a concession shall be submitted to the
Government by the Ministry of Mining and Energy or by the competent authority
of the Autonomous Province if the subject matter of the concession is situated in
the territory of the Autonomous Province. The proposal for concession granting
may also be submitted by a local self-government unit for the facilities within its
own territory. The initiative for granting a concession may also be submitted by
any interested person.
The proposal for granting a concession shall include
particularly the following: 1) The subject matter of the
concession; 2) Assessment of its feasibility and the amount
of the investment; 3) Tentative duration of the concession
period; 4) Basic requirements for implementation of the
concession; 5) Proposed amount of the fee; 6) Purpose of
exploiting the subject matter of the concession; and 7)
When the proposal is submitted by an interested party, the
data on that party as well (name of the company, personal
name, evidence of registration).
If the subject matter of a concession is the construction, maintenance, and
operation of a power plant of a strategic importance for the Republic of Serbia or
to which international importance is attached, the Government shall submit the
proposal for granting the concession involved to the National Assembly of the
Republic of Serbia.
Based on the position of the Government (i.e. of the National Assembly) on
the intention to grant a concession and based on economic, financial, social, and
other indicators, the Ministry of Mining and Energy shall draw up a Proposal for
Issuance of a Concession Deed, which it shall submit to the Government.
42

The proposal for adoption of the Concession Deed shall

include the following: 1) The subject matter of the
concession; 2) Reasons for granting the concession; 3)
Data on the impact of the concessionary business on the
environment, infrastructure, and other areas of economy,
and on the efficient operation of technical and
technological systems; 4) Minimum technical, financial,
and experience-related requirements that must be met by
prospective concessionaires in order to be allowed to
participate in the procedure of concessionaire selection
and negotiation; 5) Duration of the concession period,
including a reasoning therefore; 6) Data on the necessary
financial and other resources and the time schedule of
their employment; 7) The method of payment, issuing
guarantees, or other security instruments for the
fulfillment of concessionary obligations; 8) Rights and
obligations of the concessionaire in relation to the users of
services constituting the subject matter of the concession
and matters related to the filing of complaints by such
users; 9) Matters related to the requirements for and ways
of exercising supervision; 10) Fees and general conditions
of using the goods and conducting business; 11) Estimated
number of workplaces and skilled manpower in
connection with the implementation of the concession, if
this is a proposed element of the Concession Deed.
The Concession Deed shall be adopted by the Government and published in
the Official Gazette of the Republic of Serbia.
The Concession Deed shall include the following: 1) The
subject matter of the concession and designation of the
area in which the concessionary business shall be
conducted; 2) Duration of the concession period; 3) Main
elements of the public invitation for tenders, information,
and instructions relating to the tender dossier; 4)
Requirements to be fulfilled by a concessionaire; 5)
Award criteria for selecting the best tender; 6) Conditions
for and the manner of conducting the concessionary
business (conditions and manner of providing services to
the users, etc.); 7) Requirements concerning the
environmental protection, safety at work and protection of
health of the concessionaires employees; 8) Types and
amounts of guarantees or other securities for the
implementation of the concession; 9) Method of setting
the concession fee; 10) Other elements of importance for
regulation of mutual rights and obligations of the
concessionaire and the concedent. If the subject matter of
a concession is the reconstruction, remodeling or repair of
the existing facilities, the concession deed shall also
contain the estimated amount of the investment, which is
43

established with respect to the value of the facilities, the

reconstruction, remodeling or repair of which shall
constitute the subject matter of concession.
A concession shall be granted on the basis of the results of a public
tendering procedure completed beforehand. The public invitation for tenders shall
be published according to the specified procedure.
A public tendering procedure shall be managed by a Tender Committee
formed by the Minister of Mining and Energy, which shall also include one
member appointed by the National Assembly of the Republic of Serbia. If the
proposal for granting a concession is submitted by the competent authority of the
Autonomous Province, such authority shall also appoint a member to the
Committee. If the subject matter of the concession involves public utility services,
the competent body of a local self-government in the territory in which the
concessionary business is to be conducted shall appoint one member of the
Committee.
The Government shall render the decision designating the concessionaire,
upon receipt of the Tender Committees report on the completed public tendering
procedure.
The proceeds from the concession fee shall be regarded as revenue of the
Republic of Serbia and shall be remitted to the deposit budget account of the
Republic. In case the concession is granted in the territory of the Autonomous
Province, 30% of such proceeds shall be allocated for financing the development
and the infrastructure of the Autonomous Province. In case the subject matter of
the concession is pursuit of a concessionary business in the territory of a local
self-government unit, the proceeds from the concession fee shall be regarded as
the revenue of the local self-government unit. When a concession is granted in the
territory of a local self-government unit, 5% of proceeds from the concession fee
shall be remitted for financing the development and infrastructure of the unit of
local self-government in the territory of which the concession business is
conducted.
5.2 Concession Agreement
The Concession Agreement shall regulate mutual rights and obligations
between the State, as the Concedent, and the Concessionaire. The Agreement
shall regulate the time, place, and method of exploitation of a concession and the
obligation to pay the concession fee.
The Concession Agreement shall be concluded between the Government for
and on behalf of the Republic of Serbia and the Concessionaire, in accordance
with the Law on Concessions and the Concession Deed. If the subject matter of a
concession is construction of public utility facilities for the purpose of providing a
public utility service, the concession agreement with the concessionaire shall be
concluded by the competent local self-government body for and on behalf of the
local self-government unit, upon prior written approval granted by the
Government.
If a concession is granted to a number of parties, the concession agreement
shall be signed by each of the concessionaires, or by a person authorized by the
concessionaires, upon presenting a special power of attorney.

44

A Concession Agreement shall include provisions relating

to the following: 1) The parties to the agreement, the
subject matter of the concession, including the description
of the facilities, equipment, and plants; 2) Duration of the
concession period and conditions under which such term
may be extended, and the duration of preparatory
operations; 3) Manner and deadlines for securing the
funds for financing the concession business (financial
plan) and the time schedule of their employment, the
amounts and manner of securing the guarantees for
fulfillment of the concessionary obligations; 4) The
requirements for conducting the concessionary business;
5) The product and service standards, technology transfer;
6) The criteria for setting the end-user prices/tariffs for
products and services; 7) The concession fee (the amount,
deadlines, terms and the method of payment); 8) The
rights and obligations concerning the undertaking of
general safety measures, health and environmental
protection, as well as liability for damage resulting from
jeopardizing general safety and protection of the
environment; 9) The right to assign the concession; 10)
The time and manner of handing over the immovables,
facilities, equipment or plants and the condition in which
they must be handed over; 11) The conditions for making
amendments or termination of the Agreement and the
consequences thereof, changed circumstances, and force
majeure; 12) Manner of settling the disputes and
enforcement of the applicable law; 13) Such other
provisions that may be mutually agreed upon between the
contracting parties. The Agreement shall also stipulate the
way of exchanging notifications concerning the
performance of the Agreement, the manner of supervising
such performance, and of the exercising of the rights and
obligations of the contracting parties.
Based on the Concession Agreement and in keeping with it, the Concedent
and the Concessionaire may conclude a special contract with banks and other
financial institutions, regulating in greater detail the financing of the concession
as stipulated in the Concession Agreement.
The concession fee shall be set subject to the type, quality, category,
quantity, use, and market price of the respective natural resource or goods in
public use, respectively subject to the line of business, market conditions for
doing the business, duration of the concession period, assessed risk, and the
expected profit.
If concession granting requires expropriation and/or construction land
development, costs of such expropriation and/or construction land development
shall be borne by the Concessionaire, while the method of and deadlines for
payment of such costs shall be stipulated in the Concession Agreement.
5.3 Obligation to Establish a Concessionary Enterprise
45

The Concessionaire shall undertake to assign all its rights and obligations
resulting from the concession agreement to a separate concessionary enterprise.
The concessionary enterprise shall always be organized as a for-profit
corporation (either a joint stock or a limited liability company) performing the
concession agreement.
Since the Law on Concessions does not include any provisions stipulating
possible transfer of shares or stocks of the concessionary enterprise to a third
party, consequently, the conclusion may be drawn that such transactions are
neither prohibited nor conditioned by it.
Changes of the seat and status changes of the concessionary enterprise shall
be subject to approval by the founder.
The concessionary enterprise shall also obtain the license for pursuit of the
activities of heat and/or electricity generation.
5.4 Reassignment of Concession
A concession shall only be reassigned by means of a contract and upon
mandatory approval granted by the Concedent or otherwise such a contract shall
be deemed null and void. After the rights and obligations from the concession
agreement have been assigned to the concessionary enterprise, only the
concessionary enterprise shall have the right to reassign all the rights and
obligations to a third party through a contract, upon approval granted by the
Concedent.

6 ENERGY LICENCE
An Energy License is a permit issued by the Energy Agency of the Republic
of Serbia for engaging in an energy-related activity. The Energy License is an
administrative decision confirming fulfillment of the requirements prescribed
under the Energy Law and the Rulebook on Requirements Regarding Professional
Staff and Terms of Issuing and Revoking of Energy Licenses for pursuit of
energy-related activities. It is the last in a series of legal documents required for
engaging in energy-related activities. The energy license must be possessed by the
entity already in possession of a power plant, which has acquired the right to
engage in the activity based on the assignment agreement for pursuit of the
activity of public interest or based on the concession agreement.
The requirements for obtaining the energy license shall
include: 1) Registration in the Business Registry; 2)
Fulfillment of the technical requirements with respect to
the power plant itself (electric power, fire-prevention, and
environmental protection ones), including proprietary
rights or the right to use the actual plant; 3) The required
staff capacity available; 4) The required financial
resources have been made available (evidence of
solvency, balance sheet, etc.); 5) The energy entity has not
been denied the energy license in the past three years; 6)
46

No members of the management board have been

sentenced for an economic offence (CEO, any member of
the Board of Directors).
The energy license shall be issued for a period of 10 years.103 The license
fee shall be paid to the Agency at the time of the license granting. The energy
license holder shall pay a certain fee to the Agency for possession of the energy
license on annual basis.104
The energy license may be suspended or permanently revoked if the license
holder ceases to fulfill any of the requirements prescribed for granting the license
or fails to implement any other regulations related to the electricity generation.
The energy license shall not be required for heat or electricity generation for
ones own use or for electricity generation in power plants of up to 1 MW. The
Rulebook on Requirements Regarding Professional Staff and Terms of Issuing
and Revoking of Energy Licenses for pursuit of energy-related activities defines
the application form for issuing of the energy license for engaging in the energyrelated activity of electricity generation. When electricity generation is in
question, the forms are differently defined subject to the facilities in which
electricity is generated, so that there is a special form for facilities for electricity
generation within thermoelectric power plants.
The provisions of the Rulebook on Requirements Regarding Professional
Staff and Terms of Issuing and Revoking of Energy Licenses for pursuit of
energy-related activities specifies a special application form for issuing the
license for electricity generation in combined heat-and-power plants. The energy
license for the electricity generation in such plants shall be issued in compliance
with the provisions of the Energy Law and of the above Rulebook. The license
shall be issued by the Energy Agency.
The Energy Law prescribes that issuing of the energy licenses for the
activity of heat generation in district heating plants shall be within the remit of
local self-government units.105`106

7 CONNECTING THE POWER PLANT TO THE GRID

7.1 Connecting the Power Plant to the Electricity Grid
Once the Operating Permit and the right to engage in the activities of public
interest have been obtained, it is necessary to connect the power plant to the
electricity grid. A power producers facility shall be connected to the electricity
transmission and/or distribution system under the terms and conditions and in the
way stipulated under the Energy Law, the Decree on Conditions of Electricity
Delivery, and the Transmission and Distribution Grid Codes, in compliance with
103
104

Article 45, paragraph 2 of the Energy Law.

The license fee is set by the Energy Agency decisions, specifically: the Criteria and
Standards for Setting Energy License Fees for Engaging in Energy-related Activities (Official
Gazette of the RoS, Nos. 14/06, 40/06,126/07, and 120/08, and the Decision on Coefficient Value
for Calculation of the Energy License Fee for Engaging in Energy-related Activities for 2010
(Official Gazette of the RoS, No. 109/09).
105
http://www.aers.org.rs/Index.asp?l=1&a=36
106
Article 145 of the Energy Law.
47

the standards and technical regulations concerning the criteria for access to and
use of power plant facilities, equipment, and plants.
The energy entity, to whose system the power producers facility is to be
connected, shall approve the connection if it establishes that the equipment and
installations within the facility to be connected meet the requirements prescribed
by the laws and statutes, technical, and other regulations governing the
requirements for and method of exploitation of such facilities.
The facility shall be connected to the electricity transmission and/or
distribution system on the basis of the approval issued by the energy entity to
whose system the facility is going to be connected. The approval for connection
to the electric power system is an administrative decision issued in the form of a
Decision stipulating the terms and conditions that the applicant, the electricity
producer, shall fulfill in order to acquire the right to supply electricity to the
electric power system. The approval for connection shall be issued in the form of
a Decision, further to the application submitted by a natural person or by a legal
entity or by an entrepreneur.
The Energy Agency had adopted the Methodology for determining the costs
of connection to the grid107 and, based on this Methodology, the energy entity to
whose system power plants shall be connected, has adopted its own decision
specifying connection charges.
The application for access to and use of the system shall be submitted to the
energy entity in charge of electric power transmission or distribution, to whose
grid the power plant is to be connected.
The application shall be accompanied by the following
data on: 1) The name of owner of the facility or the holder
of the right to use the facility (for natural persons: the
name and place of residence, personal identification No.
and, for legal persons or entrepreneurs: business name or
name, seat, PIB, official registration No., account number,
and the name of the responsible person; 2) The facility,
for the connection of which, issuing of the approval for
connection is applied for (the address, type, location of the
facility, and the use of the facility); 3) Estimated time of
connecting the facility. In addition, it shall be required to
submit the data on: 1) The total installed capacity of the
facility, the number and power of generating units, source
voltage, and block transformer; 2) Expected annual and
monthly output; 3) Protection and measuring equipment;
4) The energy license and the license for engaging in the
activity of electricity generation for the facilities of a
capacity exceeding 1 MW (consequently, it follows that
one shall first obtain the license for engaging in the
activity, and only then apply for connection of the energy
facility to the grid).

107

The Decision on Establishing the Methodology for and Criteria and Manner of Setting Costs
of Connection to the Electricity Transmission and Distribution Systems (Official Gazette of the
RoS, Nos. 60/60, 79/06, and 114/06).

48

In addition to the above, for the already constructed facilities, the

Construction Permit as well as the evidence of the ownership of or the right to use
the facility shall also be submitted.
The energy entity in charge of electricity transmission or distribution to
which the application for connection has been submitted, shall decide on the
application for connection of the power plant to the electricity grid within thirty
days from the date of receipt of the written application.108 The energy entity shall
issue a positive decision the Approval provided all the requirements have been
fulfilled, and based on the technical report, calculation of the costs for connection,
and other available documents. The approval shall be granted in the form of a
Decision. The Decision shall be issued with the validity for the period equivalent
to the period of construction of the facility or of completion of the works set out
in the application for connection. Validity of the Decision approving the
connection shall not exceed two years from the date of its handing down. At the
request of the applicant, the validity period of the Decision may be extended.
Such a request shall be submitted not later than 30 days prior to the expiry of the
validity period set out in the Decision.
An appeal against the Decision concerning the approval of the connection
may be lodged to the Energy Agency of the Republic of Serbia within 15 days
from the date of receipt of the Decision. The decision of the Agency on the appeal
shall be final and not subject to any administrative proceedings.
The costs of connection to the electricity transmission and/or distribution
system shall be borne by the applicant applying for connection. The amount of
such costs shall be calculated by the energy entity in charge of the electricity
transmission or distribution, in compliance with the Methodology for setting tariff
elements for calculating prices for access to and use of the system adopted by the
Energy Agency. The Methodology shall stipulate the method and detailed criteria
for calculation of the connection costs depending on the approved installed
capacity, point of connection, the need to carry out the work or the need to install
the necessary equipment, and other objective criteria.
After the Decision is issued, the power producer and the Buyer109 shall
conclude the Power Purchase Agreement110 stipulating their mutual rights and
obligations. 111 The Agreement shall be concluded in writing, for the period of 12
years, in accordance with the Energy Law, the law governing general obligations,
the General Terms and Conditions of Electricity Supply, the Distribution and
108

It is interesting that both the Energy Law and the Decree on Conditions of Electricity
Delivery prescribe that a facility is connected to the grid after conclusion of the power purchase
agreement, which is concluded between an energy entity and the electricity buyer. These
provisions should be stated precisely both in the Law and in the Decree, because they suggest that
the electricity buyers are always the ones that are connected to the electricity grid, which does not
always have to be the case, and it does not always have to be the power purchase agreement that is
to be concluded on the occasion of every connection to the electricity grid but just the agreement
on electricity transmission or on distribution via the grid. The actual sale of electricity, under the
conditions of an open electricity market and under the conditions when a power plant is connected
to the transmission or to the distribution system, does not have to be an integral part of the
electricity transmission or distribution activity.
109
In this case, the electricity Buyer is a public enterprise in charge of generation,
distribution of and trade in electricity.
110
The Power Purchase Agreement shall be based on a template drafted by the Buyer and
approved by the Ministry of Mining and Energy.
111
The Power Purchase Agreement shall be based on a template drafted by the Buyer and
approved by the Ministry of Mining and Energy.
49

Transmission Grid Codes, regulations stipulating, in more detail, the requirements

for acquiring the status of the privileged power producer, and the criteria for
verification of compliance with the requirements, as well as in accordance with
the incentives for electricity generation using renewable energy sources and
combined heat-and-power generation. 112 Together with the application for signing
the agreement, the privileged producer shall submit to the Buyer the Decision on
acquiring the status of the privileged producer. The Buyer shall conclude the
agreement with the privileged producer within 30 days as of the date of filing the
application in writing for signing of the agreement and, if all the requirements
have been met, connect the power producers facility to the transmission or to the
distribution system within the times and under the terms and conditions set out in
the Agreement.
It shall be prohibited to connect facilities to the electricity transmission or
distribution system unless the operating permit has been obtained, in compliance
with the Law.113

7.2 Connecting the Power Plant to the District Heating Network

A power plant shall be connected to the district heating network in
accordance with the provisions of the Energy Law and special regulations, if they
have been adopted.114
An energy facility shall be connected to the district heating system based on
the same provisions of the Energy Law that apply to the connection of an energy
facility to the electricity transmission or distribution system.
If an energy entity is engaged in the activities of generation of both heat and
electricity within one facility, such entity should be connected both to the district
heating pipeline and to the electric power system and operationally managed in
the way a power generating facility is managed.
A facility shall be connected to a district heating system based on the
approval by the energy entity to whose system the facility is to be connected,
provided that the equipment and installations of the facility that is to be connected
meet the requirements prescribed by the law, technical, and other regulations
governing the conditions and method of exploitation of such facilities.
The approval for the connection shall be issued further to the application of
the party whose facility is to be connected. The energy entity in charge of heat
distribution shall decide on the application for connection within 30 days from the
date of receipt of the written application. An appeal against this decision may be
lodged to the competent authority of the local self-government unit (in charge of
energy affairs) within 15 days from the date of submitting the decision.

112

Further information on obtaining the status of a privileged power producer can be found
in Chapter 8 hereof.
113
Further information on obtaining the status of a privileged power producer can be found
in Chapter 8 hereof.
114
The special regulations shall be deemed to include the regulations of a local selfgovernment unit related to the method of engaging in the public utility activity of heat (steam and
hot water) generation and of securing proper rendering of such service, its continuity, and the
rights and obligations of the public utility operator in charge of distribution and supply of heat.
Such regulations shall include the Operating Rules of the heat distributor, if they have been
adopted.
50

An approval for connection of a power plant to a district heating

system shall include: 1) The point of connection; 2) The method and
technical requirements for the connection; 3) Measurement points and
the method of measurement of the supplied heat; 4) The deadline for
the connection; and 5) Costs of the connection.
The applicant applying for connection shall bear the costs of connection.
The connection costs shall be calculated in accordance with the regulations of the
unit of local self-government governing the method of providing the public utility
services. The heat distributor shall connect the facility of the heat producer to the
system within the times and under the terms set out in the connection approval
document.

8 OBTAINING THE STATUS OF A PRIVILEGED POWER

PRODUCER AND PERTAINING INCENTIVES
The Energy Law establishes the category of privileged power producers.
Biomass/biogas power plants are considered to be privileged power producers on
two grounds: firstly, they use renewable energy sources in their power generation
process and, secondly, according to the Law, they appertain to small power plants
(of a capacity of up to 10 MW). The Energy Law stipulates that privileged power
producers have: 1) Priority rights in the organized energy market with respect to
other power producers offering electricity under the same terms and conditions,
and 2) They are entitled to subsidies, tax, customs, and other reliefs/facilities, in
compliance with the Law and other regulations governing such forms of levies,
subsidies, and other incentives. This Law also stipulates the application procedure
for obtaining the status of the privileged power producer as well as the
Governments obligation to issue a decision on the requirements for obtaining the
status of a privileged power producer.
As late as in the course of 2009, the Government passed the Decree on
Requirements for Obtaining Privileged Electricity Producer Status and Criteria
for Verification of Compliance with Requirements. The Government also passed
the Decree on Incentives for Electricity Generation Using Renewable Energy
Sources and by Combined Heat-and-Power Generation.
8.1 Obtaining the Status of a Privileged Power Producer
The Decree on Requirements for Obtaining Privileged Electricity Producer
Status and Criteria for Verification of Compliance with Requirements stipulates
that the producers generating electricity in small power plants are eligible to
obtain the status of a privileged power producer. This Decree 115prescribes as
follows: 1) In case a power producer is engaged in this activity in a power plant
containing different production units, it may obtain the status of the privileged
producer only for those production units that meet the requirements set forth in
115

Article 9 of the Decree on Requirements for Obtaining Privileged Electricity Status and
Criteria for Verification of Compliance with Requirements.
51

this Decree, and 2) The power producer engaged in the activity in multiple power
plants shall submit the application for the status of the privileged producer for
each such power plant separately.
A legal entity or an entrepreneur may obtain the status of the privileged
producer for the following types of power plants: a power plant that, in its
production process, utilizes biomass or biomass combined with any secondary
fossil fuel or waste, provided that the calorific value of the biomass used on
annual level makes up at least 80% of the total primary fuel, and a combined heatand-power plant that utilizes fossil fuels or fossil fuels combined with some
renewable energy source or waste, provided it reaches the total annual efficiency
ratio in excess of the corresponding value of a minimum total annual efficiency
ratio of a combined heat-and-power plant (according to the Table provided in the
Decree). The Decree also prescribes the method of determining the total annual
electricity output of the power plant for which the application is submitted for the
status of the privileged power producer, as well as the obligation of such producer
to have electricity measuring units installed in the power plant production units,
i.e. in each power plant separately. The total net electricity generated shall be
determined as the total electricity supplied to the electricity grid during one
calendar year, i.e. the total realized annual production of electricity within the
power plant less the plants own annual consumption and losses within the power
plant. Annual net production of heat shall be determined as the total heat supplied
to the heat distribution system within a calendar year, i.e. the total realized annual
heat generation of the power plant less the plants own annual consumption and
losses within the power plant. The Decree also prescribes the necessary
documentation to be submitted with the application for obtaining this status, as
well as definitions of all the necessary terms (primary energy, primary fuel,
calorific value of consumed fuel, calorific value of consumed fuel mixture, total
annual efficiency ratio).
The actual application procedure for obtaining the status of a privileged
power producer, as stated above, is defined by the Energy Law whereby the
procedure involves two stages. The application shall be submitted to the Minister
of Mining and Energy, who shall issue a decision within 30 days from the date of
filing the application.
The application for the status of the privileged producer
shall be accompanied by the following documentation: 1)
A copy of the license for engaging in electricity
generation activity in case the power plant is of a capacity
of 1 MW or over; 2) A copy of the contract with the
license holder in case the power plant is of a capacity of 1
MW or over, and the producer is not the license holder; 3)
The as-built design of the power plant facility; 4) A copy
of the agreement on access to and use of the distribution
or to the transmission system and, in case of power plants
of special characteristics with combined heat-and-power
generation, also a copy of the agreement on connection to
and takeover of heat, signed with the competent energy
entity or other economic operators; 5) The Operating
Permit; 6) The data on the person in charge of the power
plant operation.

52

Along with the application for the status of the privileged producer, for each
and every combined heat-and-power plant where the share of fossil fuels in the
total primary fuel exceeds 20%, in addition to the above documentation, the
following shall be submitted: (1) Expected annual production of heat, including
monthly production schedules; 2) Expected values of the total annual efficiency
ratio. The discontented party may lodge an appeal against such a decision to the
Government within 15 days from the date of submitting the decision. The Law
also stipulates the obligation of the Ministry of Mining and Energy to keep the
Registry of Privileged Power Producers.

53

8.2 Incentives for Power Producers in Biomass/Biogas Power Plants

The Decree on Incentives for Electricity Generation Using Renewable
Energy Sources and by Combined Heat-and-Power Generation prescribes in more
detail the incentives for electricity generation using biomass/biogas power plants,
incentives for purchase of such power (feed-in tariffs), and balancing and readout
of sold electricity.
This Decree reaffirms that biomass/biogas power plants appertain to those
facilities that are eligible to use the incentives, but that they must previously have
the status of the privileged power producer established within which the type and
the installed capacity of the power plant has been specified. The Decree
differentiates the following types of power plants: power plants of an installed
capacity of up to 10 MW using only biomass or biomass combined with some
secondary fossil fuel in their production processes, provided the calorific value of
the consumed biomass on annual level reaches at least 80% of the total primary
fuel; combined heat-and-power plants having installed capacities of up to 10 MW,
which use renewable energy sources, fossil fuels or fossil fuels combined with
some renewable energy source; and power plants using a separated biodegradable
fraction of municipal waste and of installed capacities of up to 10 MW.
The Decree stipulates the purchase prices of electricity, which differ subject
to the type of the power plant and the installed capacity. There are three types of
privileged power producers, divided into seven categories, specifically:
Item
Power Plant Type
1.

Biomass Power Plants

2.

Biogas Power Plants

3.

Landfill and Sewage Gas Power

Plants

Installed Capacity
(P) (MW)
up to 0.5 MW
from 0.5 MW up to
5 MW
from 5 MW up to
10 MW
up to 0.2 MW
from 0.2 MW up to
2 MW
over 2 MW

Incentive/Feed-in Tariff
(cEUR/1 kWh)
13.6
13.845 0.489*P
11.4
16.0
16.444-2.222*P
12.0
6.7

(P = installed capacity in MW; an example of calculation of the purchase

price for the power plant having the installed capacity of 1.2 MW: 13.8450.489*1.2=13.2582 cEUR / 1 kWh)
The mechanism stipulated under this Decree obliges the electricity Buyer a public company in charge of electricity generation, distribution, and trade in it,
to buy up the electricity from the privileged power producer, which meets the
requirements referred to in the Decree, at the prices set out in the above Table, in
RSD equivalent, at the medium rate of exchange of the National Bank of Serbia
on the date of making out the invoice.
The rights and obligations of the privileged power producer and the
electricity Buyer, respectively, shall be regulated in a Power Purchase Agreement.
Such an Agreement shall be signed for a period of 12 years.
The privileged producer, as the Seller of electricity and the contracting
party, shall prove its identity to the Buyer by the decision on obtaining the status
of the privileged producer. The privileged producer shall have the right to
terminate the Power Purchase Agreement by unilateral declaration of will termination, but without the right to conclude the same agreement again. The
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Agreement shall be considered terminated upon expiry of the thirtieth day from
the date when the Buyer receives the notice to that effect in writing. The
privileged producer, who has concluded the Agreement, shall not pay any
remuneration for the services of balancing to the Buyer and shall not be obliged to
pay for the service of electricity readout.
Readings of electricity at the privileged producers shall be taken by the
energy entity to whose grid the privileged producer is connected, in such a way
that readings shall be taken every first day in a month and not later than by every
fifth day in a month; the readout data for the previous month shall be submitted
both to the privileged producer and to the Buyer. Prior to the conclusion of the
agreement, the energy entity, to whose grid the privileged producer is to be
connected, shall have another obligation, to take, at the request of the privileged
producer or of the Buyer, the initial readout of the electricity meter. This
obligation shall be fulfilled within three days from the date of receipt of such an
application. 116
The Decree stipulates certain obligations of the Buyer: 1) To conclude the
agreement117 within 30 days from the date of submitting a written application for
conclusion of the Power Purchase Agreement, and 2) To provide the service of
balancing to the privileged producer without any remuneration. It also prescribes
that the Buyer shall be entitled to remuneration of expenses resulting from the
specified obligations. The amount of such expenses shall be determined on the
basis of energy quantities set out in the Energy Balance of the Republic of Serbia
for the forthcoming year. The Decree prescribes the method of calculation of such
expenses and the method of their remuneration. The Buyer shall be reimbursed
for the specified expenses by disclosing the same in the prices of electricity for
tariff buyers.118
The Buyer shall be obliged to notify the Ministry of Mining and Energy and
the Energy Agency about the revenues collected from remunerations and from
sales of electricity purchased from the privileged producers, as well as about the
costs related to the obligation to purchase the electricity from the privileged
producers.
The prescribed mechanism does not create any possibility for privileged
electricity producers to sell the electricity to future qualified buyers directly on
the market - at market prices, if competitive enough. Although it is not
specifically regulated, the above mechanism also establishes the obligation of the
energy entity, to whose electricity grid the privileged electricity producer from a
biomass/biogas power plant is connected, to ensure takeover of such electricity in
the grid.
116

At the time of writing this text, the energy entities operating the distribution grids are
affiliated companies of the Buyer.
117
The stipulated obligation to conclude the Power Purchase Agreement is set forth in the
Decree. In view of the fact that the Decree is an executive regulation, for the time being, breaches
or economic offences have not been prescribed as yet, for the case when the Buyer fails to fulfill
its obligation prescribed in the Decree and fails to conclude this Agreement within the prescribed
time or fails to conclude it at all.
118
The prices of electricity for tariff buyers shall be set by the Decision, which shall be
issued by the Public Company in charge of generation, distribution, and trade in electricity (PC
EPIS), based on the Methodology for Setting Tariff Elements for Pricing Electricity for Tariff
Customers (Official Gazette of the RoS, Nos. 68/06, 18/07, and 116/08), and on the Tariff System
for Calculation of Electricity for Tariff Buyers (Official Gazette of the RoS, Nos. 1/07, 31/07,
50/07, 81/07, 21/08, and 109/09) handed down by the Energy Agency of the Republic of Serbia.
The approval of this Decision shall be granted by the Government.
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The template of the Power Purchase Agreement119 stipulates the rights,

obligations, and responsibilities of the contracting parties (of the privileged
electricity producer in biomass/biogas power plants and the Buyer) with respect
to the buying up of electricity generated in the biomass/biogas power plant of the
privileged producer, as well as other issues ensuring operation of the power plant
in line with the requirements for electricity supply to tariff and other buyers,
under the terms and conditions stipulated in the same Agreement and in the
regulations governing the rights and obligations on the ground of generation and
sale of electricity from renewable sources. It is necessary to point to the fact that
the Template of the Power Purchase Agreement does not include any collateral
for fulfillment of contractual obligations, which would give a better legal security
to both parties. In view of the fact that it is the Template of the Agreement, there
should be no obstacle to stipulate some collateral for fulfillment of contractual
obligations in each concrete agreement.

9 CONCLUSION
Construction of a biomass/biogas power plant and engaging in the activity
of electricity and/or heat generation shall represent the entire process required for
the operation of such an energy facility. Establishing an affiliated company of a
public utility company, assigning the right to engage in the activity of public
interest, and concessions represent the three ways of acquiring the right to engage
in the activity of electricity and/or heat generation in biomass/biogas power
plants.
Further to the comparative analysis of legal aspects of all the three
modalities of engaging in the activity of electricity and/or heat generation in
biomass/biogas power plants, there are certain legal gaps and discrepancies with
respect to the interrelationship among these three legal institutes. Consequently, it
follows that there is an ample space for discretionary powers of the competent
authorities in these procedures, particularly when selecting the modality for
acquiring the right to engage in such an activity.
Depending on whether electricity or heat is generated, the competences of
the authorities that are in charge of protection of the public interest differ. In case
of electricity generation, it is to do with the energy-related activity, which is the
activity of public interest, which is within the competence of the Republic of
Serbia. If we are talking about heat generation, we are talking about a public
utility service, which is within the remit of a local self-government unit. This
means that engaging in the energy-related activity in biomass/biogas power plants
is regulated in different ways depending on the product of such a power plant.
Another peculiarity is acquiring the right to engage in the energy-related activity
that involves a co-generation process - combined heat-and-power generation
within the same plant. In this case, since two activities are in question, the nonenergy entity should apply to different authorities in order to acquire the right to
engage in both activities and, until both procedures have been completed, which
should finally yield a functionally achievable result in practice, it cannot start
generating electricity/heat, since the process is functionally undivided. Only in the
case of combined-heat-and-power process, the procedure for acquiring the license
119

Article 1 of the Template of the Power Purchase Agreement, www.mre.gov.rs

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to engage in energy-related activities calls for the energy entity to submit the
application to only one authority: the Energy Agency.
The procedure of granting the concession for construction of a
biomass/biogas power plant and simultaneous engaging in the activity of
electricity and/or heat generation offers a better legal security to investors than
other methods of acquiring such rights, because the interested party shall acquire
its right in a single, clearly defined procedure. The procedure for granting the
concession for construction of a power plant and simultaneous engaging in the
activity of electricity and/or heat generation is more time-consuming than a
separate procedure for obtaining the permit for construction of a power plant and
conclusion of the assignment agreement entrusting the activity of electricity
and/or heat generation. Related to the above stated, one should take into account
that, in the latter case, these are two separate procedures and that there is a period
of construction of the actual facility in between, so that such a phased procedure
does not provide sufficient legal security that it will be completed within a short
time and with a definite success.
It is necessary to point out the fact that investment in an affiliated company
of a public company for electricity and/or heat generation in the concrete power
plant(s), although it is subject to approvals by the Government, involves relatively
clear and short procedures. However, it cannot be affirmed with certainty that the
parent public company will allow the investor to hold a majority share. In such a
case, there is no choice but to precisely define and protect the rights of the
investor in the investment agreement. The risk of such an investment lies in the
dependence of the public company on daily political influences and the will of the
Government, which may issue an invitation for tenders in order to grant a
concession for engaging in the activities of the parent public company or which
can privatize the parent public company and thereby jeopardize the investors
rights in the affiliated company.

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