Electricity

Serbia publishes qualification results for its first wind, solar power auctions

Serbia publishes qualification results first wind solar power auctions

Photo: Richard Humphrey / https://creativecommons.org/licenses/by-sa/2.0/legalcode

Published

August 16, 2023

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Published:

August 16, 2023

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Within the procedure for the first renewable electricity auctions in Serbia, bids for 519.1 MW in total were declared valid for the competitive bidding for a wind power quota of 400 MW. Investors in solar power projects applied for just 36.2 MW of the possible 50 MW, but the conditions were met for only 11.6 MW. The official ranking needs to be published within five workdays.

Sixteen businesses submitted their bids for market premiums for the production of electricity from renewable sources, the Ministry of Mining and Energy of Serbia said. The combined capacity of their planned facilities is 816.5 MW, of which they applied with 602.8 MW. Total investments are valued at EUR 107.4 million, according to the statement.

Eleven participants passed to the bidding phase. 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 lowest wind power bid was EUR 64.48 per MWh, compared to EUR 88.65 per MWh for solar power

The available quota for wind power projects is 400 MW while bids for an overall of 519.1 MW were declared valid. The projects in question are for 725.5 MW in total capacity, the authorities wrote in a report on the government’s auctions website Oieaukcije.mre.gov.rs. Namely, the participants didn’t have to apply an entire project for a 15-year contract for difference (CfD).

The share of capacity that entered the procedure landed at 71.6%. The available quota was oversubscribed by 29.8%.

Conversely, 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.

Only one wind power project fails to meet bidding requirements

Here are the enterprises with the market premium bids that the supervisors declared valid:

  • Vetropark Lipar with its Kula 3 project, for 7 MW offered out of an overall 10 MW;
  • Vetropark Torak with its Kula 2 project, for 7 MW offered out of an overall 10 MW;
  • Vetropark Lipar with its Kula 4 project, for 7 MW offered out of an overall 10 MW;
  • MK-Fintel Wind with its Ram project, for 6.6 offered out of an overall 9 MW;
  • Čibuk 2 Wind Energy with its Čibuk 2 project, for 108.5 offered out of an overall 150 MW;
  • Vetrozelena with its Vetrozelena project, for 210 offered out of an overall 291 MW;
  • Crni Vrh Power with its Crni vrh project, for 105 offered out of an overall 150 MW;
  • Enlight K2-Wind with its Pupin project, for 68 MW offered out of an overall 95.5 MW.

The only participant that failed to meet the conditions is MK-Fintel Wind, in its application for its Košava wind power plant, for the entire 47.5 MW. The same owner already operates a wind farm of the same name, with a capacity of 68 MW. For the second phase for Košava it submitted a request for a 68.4 MW connection.

Three solar power projects make it to final phase

In the first phase of Serbia’s maiden solar power auction, three applications fulfilled the conditions to qualify:

  • Terra Solar with its IMT Knjaževac project, for 1.2 MW offered out of an overall 1.5 MW;
  • Novo Selo Power with its Lebane – Novo Selo project, for 6.4 MW offered out of an overall 8 MW;
  • Hiperion Sol with its Margisol project, for the entire 4 MW offered.

Four projects didn’t make it to the next phase. After the market premiums are officially awarded, the unallocated part of the quota can be transferred to the next auction.

“We can be exceptionally pleased with the response from investors, which represents the best recognition for the work to improve the legal framework and at the same time it shows the trust that the Republic of Serbia enjoys among investors when it comes to investing in the green energy sector. 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,” Minister of Mining and Energy 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.

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