‘The era of simple renewable energy generation in Southeast Europe is over’
The era of simple, standalone renewable energy generation in Southeast Europe is over. That was the central message delivered by Paul Lalovich, Managing Partner of Agile Dynamics, on the main stage of the Adria Future Summit in Porto Montenegro.
Speaking to an audience of more than a thousand investors, policymakers and industry leaders gathered in Tivat, Paul Lalovich argued that the region’s renewable sector has reached an inflection point – and that the developers who thrive from here will be those who pivot from megawatt-chasing to architecture.
His thesis, developed with co-authors Edward Bodmer, Aleksandar Vujic and Henrik Von Scheel, centres on what he calls the ‘Premium Stack’: a three-layered investment architecture designed to defend project returns, bypass siting friction, and secure premium offtake in a market that has fundamentally repriced.
A 3-layered investment architecture
The repricing, Lalovich noted, is already visible in the numbers. Romania’s onshore wind pipeline has been recalibrated from a theoretical 14 GW to an investable 3 to 5 GW, with the latest Contracts for Difference rounds clearing solar at €40.46/MWh and wind at €73.89/MWh. Serbia’s coal share, long cited at around 70%, stood at 61.03% in 2024 – still high enough to expose the country’s industrial exporters to the EU’s Carbon Border Adjustment Mechanism, which entered its definitive phase on 1 January 2026.
It is precisely this combination of compressed tariffs, grid curtailment and CBAM enforcement, Lalovich argued, that makes the Premium Stack indispensable. Layer one is defensive: co-locating Battery Energy Storage Systems with wind and solar assets to protect the 1.25x Debt Service Coverage Ratio that development finance institutions require.
In stress scenarios – simultaneous curtailment, a CfD haircut and an EURIBOR spike – a standalone Romanian wind project’s DSCR collapses to 0.95x, while a wind-plus-BESS hybrid holds the line at 1.28x. Storage, in other words, is no longer optional.
Layer two addresses land. Agrivoltaic deployments across the Pannonian Plain – Vojvodina, western Romania and eastern Croatia – preserve 60 to 80 percent of agricultural yield while generating electricity at €30 to €52/MWh, delivering composite unlevered IRRs of 15.5 to 17.0 percent. Just as importantly, agricultural classification accelerates permitting and defuses the land-use objections that have stalled conventional utility-scale projects.
Layer three is the strategic prize: long-term industrial Power Purchase Agreements with CBAM-exposed offtakers. A 20-year PPA at €75 to €90/MWh neutralises the carbon border tax for exporters such as Serbia’s HBIS steel complex while lifting equity IRRs into the 16 to 19 percent range.
For Lalovich, the implication for the Adria region is unambiguous. The Western Balkans Investment Framework and EBRD blended finance can compress the cost of capital by 200 to 400 basis points, turning unbankable projects into viable assets. But capital will only flow to deals structured with EUR-denominated contracts, BESS covenants, ICSID protections, EU Taxonomy alignment from day one, and CBAM-anchored offtake.
“The window is open,” Lalovich concluded, “but it rewards those who move with precision, not those who move with haste.”
