Auctions for Allocation of Market Premiums for RES Launched – 400 MW for Wind Farms and 50 MW for Solar Power Plants

The Government of Serbia and the Ministry of Mining and Energy have launched auctions for the allocation of market premiums for renewable energy sources – wind farms (400 MW) and solar power plants (50 MW). Applications will be submitted through the RES Auctions portal over the next 60 days, that is, until mid-August, it is said on the website of the ministry.

As the minister of mining and energy, Dubravka Djedovic, pointed out, these are the biggest auctions which are carried out at the same time in the Western Balkans region, and with a successful realization of the auctions, Elektroprivreda Srbije (EPS) will profit over EUR 3 million annually.

According to her, the auction process is digitized, which secures a quick, efficient and transparent implementation of the processes, which will result in 450 new green megawatts for the economy and the citizens in the electrical energy system of Serbia.

– We are carrying them out in line with the best European and world practice and we are switching to market premiums, which enable better cost management and a bigger overall benefit to our energy system. We will thereby incite the inflow of direct foreign investments, GDP growth, development of the construction industry, a potential reduction of the costs of electrical energy and a more secure supply of our economy and citizens. We are aware of the necessity of switching to cleaner energy sources and we are working responsibly on taking measures for the decarbonization of our energy sector. I believe that the first auctions for 450 MW from RES are a clear indicator of our orientation toward a cleaner and healthier energy – said minister Djedovic.

The minister also said that active participation of EPS in this process was expected, for a more secure supply of the citizens and the economy.

– It is estimated that, with a successful realization of the auctions, EPS will profit over EUR 3 million annually, considering the relevant market prices – said Djedovic.

A market premium is an incentive for the production of electrical energy by which the state protects the producer from the changes of the market prices compared to the price which the producer offers at the auction, by paying out the difference between the price offered at the auction and the market price. If the market price is higher than the price offered by the producer at the auction, the producer will pay the difference to the state. The reference market price for the calculation of the market premium is the price of electrical energy at the Serbian power exchange (SEEPEX).

The maximum price that a RES producer may offer at the auction is defined by the Government of Serbia and it amounts to EUR 105 per megawatt-hour for wind farms, that is, EUR 90 per megawatt-hour for solar power plants. Advantage in giving incentives will be given to those investors that offer the lowest price compared to the maximum defined price. This is expected to lead to a reduction of the electrical energy costs.

These are also the first auctions within the Three-Year Plan of the Incentive System, which envisages the awarding of market premiums for 1,300 MW to producers from renewable energy sources in the next three years.

Technical help for the development of the legal and regulatory framework for the implementation of the auctions is provided by the European Bank for Reconstruction and Development (EBRD), with the financial help of the Swiss State Secretariat for Economic Affairs (SECO) and the EBRD shareholders.

The website at oieaukcije.mre.gov.rs features the guidelines and the public invitation for applying for the auctions, and if those interested have any questions regarding the application, the Commission for the Implementation of the Auctions will answer them. Applications are to be submitted through the RES Auctions portal over the next 60 days, that is, until mid-August 2023.

The implementation of the auctions was preceded by the adoption of the amendments to the Law on the Use of Renewable Energy Sources (RES) and the accompanying bylaws which create the conditions for a faster integration of the new capacities from RES into the electrical energy system of Serbia, while maintaining the reliability and the stability of the system’s operations and the active participation of EMS and EPS, reminds the Ministry of Mining and Energy.

Vlada Republike Srbije

Ministarstvo rudarstva i energetike Republike Srbije

JP Elektroprivreda Srbije - Ogranak TENT Obrenovac

EBRD Evropska banka za obnovu i razvoj Beograd

Government of the Republic of Serbia

Ministry of Mining and Energy

Elektroprivreda Srbije

EBRD

Dubravka Djedovic

RES auctions

auctions for awarding market premiums for RES

solar energy

wind farms

solar power plants

decarbonization

market premium

incentive for the production of electrical energy

allocation of market premiums

Commission for the Implementation of the Auctions