Acasă » Renewables » solar » Serbia to build over 500 MW in wind and solar after the 1st power auction based on a CfD mechanism

Serbia to build over 500 MW in wind and solar after the 1st power auction based on a CfD mechanism

17 August 2023

Serbia announced it received valid bids for wind power projects with a total capacity of 519 MW and solar projects with 11.6 MW capacity in the country’s first auctions for CfD-like premiums for electricity generation from renewable energy sources (RES). Bids for wind power projects exceeded the quota of 400 MW, while solar power projects attracted applications for just 36.2 MW of the 50 MW quota, the Ministry of Mining and Energy Dubravka Đedović said in a statement.

Eleven participants passed to the bidding phase – 8 wind projects and 3 solar projects. The available quota for wind power projects was 400 MW and it was oversubscribed by 29.8%. Bids for an overall of 519.1 MW were declared valid. The projects in question are for 725.5 MW in total capacity. Namely, the participants didn’t have to apply an entire project for a 15-year contract for difference (CfD).

The interest and the results for solar capacities were less impressive, as investors in solar power projects filed bids that would cover only 36.2 MW out of the available 50 MW. Moreover, only 11.6 MW fulfilled the requirements, or a mere 23.2%. The valid bids are for projects with a combined total capacity of 13.5 MW.


Serbia’s incentives plan

The lowest wind power bid was EUR 64.48 per MWh, the ministry revealed, while the ceiling was set at EUR 105 per MWh. As for solar power, the upper limit was EUR 90 per MWh and the lowest offer came in at EUR 88.65 per MWh. “The achieved prices for the most part of the capacity are almost two times lower than the current market prices, so we have plenty of reasons to be pleased, especially since we will get an additional 550 MW, which will double the current green energy capacity in Serbia,” Dubravka Đedović stated.

Market premium is an incentive for electricity production with which the government protects the producer from changes in market prices. It pays to the company the difference between the winning bid from the auction and the market price. When market prices are bigger than the producer’s price accepted in the auction, the producer pays the spread amount to the government. The CfDs scheme will be awarded for 15 years, and the reference price for calculating the premium is the price of electricity on Serbian power exchange market SEEPEX.

It was the first such auction for Serbia, which expects to award market premiums for 1,300 MW of renewables in the next three years as part of its incentives plan.

There is 100 MW in wind power capacity and 300 MW in solar, respectively, in plan for first quarter of 2024. Investors would compete for two-way market premiums for 150 MW in solar power capacity and 300 MW in wind power in the third round.

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