Integration of renewable energy sources in southeast Europe: A review of incentive mechanisms and feasibility of investments

Abstract

Incentivizing development and deployment of renewable energy sources (RES), but also other low carbon technologies (LCT), has been a successful way of promoting new technologies by creating a feasible investment case and making them competitive with traditional energy sources. Although different incentive mechanisms exist, feed-in tariffs have shown to be the best model for accelerating LCT development guaranteeing producers preferential prices for the produced electricity over a period of time and enabling them access to the power network to sell/inject produced electricity. Due to these benefits, feed-in tariff models are the most common model for stimulating RES integration in southeast Europe.The paper reviews the current state of preferential tariffs for RES in countries of southeast Europe. While some countries already have significant installed RES capacity, others are still in the planning stage. The review shows that the amount of installed capacity of a specific technology has a strong impact on the support for the future projects for same technology. This comprehensive review of legislative development supporting RES, as well as technologies preferred in different countries of the region, is supported with feasibility assessment of investing in RES using the example of two different technology projects, wind and photovoltaic, analysing the impact of the current tariffs on the return on investment for each country of the region.