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Serbia completes first premium auctions for renewables

16 investors with a total power plant capacity of 816.48 megawatts (MW) participated in Serbia’s first auction for the allocation of renewables market premiums last week, of which 602.8 MW were offered to fill the quota (16 August).

The estimated investment value of all the power plants is 1.26 billion euros, Serbia’s Mining and Energy Ministry said in a press release. Interested companies submitted bank guarantees and cash deposits worth more than 18 million euros, which guarantees their intention to implement the projects, the Ministry added.

From the total number of registered investors, 11 participants qualified for the bidding stage. In the auction procedure for wind power plants, four investors filled the quota, while three filled the quota in the solar power plant auction. 

The lowest offered price was 64.48 euros per megawatt-hour (MWh) for wind power plants and 88.65 euros per megawatt-hour for solar power plants.

“The auctions for the allocation of market premiums for a total of 450 MW are the largest auctions that are conducted at once in the Western Balkans region and the first auctions within the three-year incentive plan through which we will secure a total of 1,300 MW from green energy. We can be extremely satisfied with the response of investors, which represents the best recognition for the work on improving the legal framework and at the same time shows the confidence that the Republic of Serbia enjoys among investors when it comes to investments in the green energy sector,” said Serbia’s Mining and Energy Minister Dubravka Đedović.

“The realised prices for most of the capacities are almost twice lower than the current market prices, so we have plenty of reasons to be satisfied, especially since we will get an additional 550 MW, which will double the total current green energy capacity in Serbia. This is very important for the economic growth of our country, because it will generate investments worth more than one billion euros in the next few years,” the Minister added.

Minister Đedović also emphasised that the successful implementation of the auction process is an important step in Serbia’s energy transition.

The market premium is an incentive for electricity production, through which the state protects the producer from changes in market prices compared to the price the producer offers at the auction by paying the difference between the offered price at the auction and the market price. If market prices are higher than the producer’s offered price at the auction, the producer will pay the difference to the state.

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