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Serbia launches first renewables auction

Serbia has announced the launch of its first auction for the allocation of market premiums for wind power plants with a 400 megawatt (MW) capacity and solar power plants with a 50 MW capacity (14 June).

These renewable energy (RES) projects will be supported through a contract for difference for 15 years. The market premium serves as an incentive for electricity production, safeguarding producers from market price fluctuations. It involves the state covering the difference between the price offered by the producer at the auction and the market price. If market prices exceed the producer’s auction price, the producer pays the difference to the state. The Serbian stock exchange (SEEPEX) sets the reference market price, Serbia’s Mining and Energy Ministry said.

“It is estimated that with the successful implementation of the auctions, Elektroprivreda Srbije will earn more than three million euros annually, taking into account the relevant market prices,” said Serbia’s Mining and Energy Minister, Dubravka Đedović.

The government has set the maximum auction prices for RES producers at 105 euros per megawatt-hour for wind power plants and 90 euros per megawatt-hour for solar power plants. Investors offering prices below the maximum defined price will gain a competitive advantage and access incentives, which is expected to lower electricity costs. The public call for applications will appear on the ministry’s website.

The upcoming launch of the auctions was first announced yesterday at the European Bank for Reconstruction and Development (EBRD) Headquarters in London by Serbia’s Prime Minister, Ana Brnabić, where she met EBRD President Odile Renaud-Basso to discuss, among other topics, energy-sector cooperation.

“We are proud to support Serbia in their ambition to decarbonise the power sector and their ambitious targets to accelerate the integration of renewable energy sources through open and transparent auctions. Our cooperation on broader sector reform and the implementation of auctions has helped to reach this milestone in the transition to a secure, resilient and more sustainable energy sector,” said Matteo Colangeli, EBRD Head of the Western Balkans.

The launch follows a technical cooperation project with the Ministry of Mining and Energy, led by the EBRD and supported by the government of Switzerland via a grant from the Swiss State Secretariat for Economic Affairs (SECO).

The auction marks the first round of a three-year plan, which envisages the total allocation of premiums for 1,000 MW of wind power capacity and 300 MW of solar power capacity.

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