Serbia issues call to wind, solar power auctions with much lower ceiling prices

The Ministry of Mining and Energy of Serbia is organizing the second round of auctions for market premiums for wind and solar power projects. The quotas are 300 MW and 124.8 MW, respectively. Maximum prices are both much lower than the first time.

For the second time, Serbia is launching auctions for developers of photovoltaic and wind power projects, to bid for market premiums through contracts for difference (CfDs).

The current round brings another criterion, the Ministry of Mining and Energy said. The projects will also be qualified according to the percentage of capacity offered to the guaranteed supplier (state-owned power utility Elektroprivreda Srbije – EPS) or to end customers or both. Participants need to submit preliminary power purchase agreements (PPAs), or ones that they signed, for a term of at least three years.

Eligible are wind power projects with an approved capacity of at least 3 MW and solar power facilities of 500 kW and above. The deadline for submissions is February 5.

Auction price ceilings slashed in both segments

Bids are submitted through the ministry’s RES Portal – Auctions. The winners get the right to sign 15-year CfDs at the accepted price.

The maximum offered price for electricity from wind parks is EUR 79 per MWh, compared to 105 per MWh last time. The auction ceiling for solar power is EUR 72 per MWh. In the first round the level was EUR 90 per MWh.

The substantial cut in maximum prices that can be approved indicates expectations of stronger competition and interest.

Bidders don’t need to offer capacity of whole project

The available quotas are 300 MW for wind and 124.8 MW for solar. Participants need to offer 70% or more of the capacity of each plant.

They must provide a bank guarantee or cash deposit of EUR 30 per kW of the part of the project for which they are bidding.

Auction winners will need to submit a bank guarantee or cash deposit in the amount of EUR 60 per kW of their part of the quota.

In the photovoltaic segment, a participant and its related entities can be awarded a maximum of 105 MW for one project or more of them combined.

The completion of projects for which an auction participant acquired the right to a market premium is expected within a maximum of four years since acquiring the status of a temporary privileged producer, if it received the construction permit before the status. If not, the completion is expected within six years.

In case of force majeure, the completion of the projects may be expected within the additional one year, the call reads.