Serbia Completed its Second RES Auction, and 10 New Solar Photovoltaic and Wind Power Projects Will Receive Incentives of EUR 782 Million
/BELGRADE, SERBIA, February 21, 2025, 10:00 CET, GGF, RENEWABLE MARKET WATCHTM/ In the second round of auctions for the allocation of market premiums for renewable energy projects (RES) announced by the Ministry of Mining and Energy in November 2024, investors applied for 41 projects. The offered quota of 424.8 MW for solar and wind power plants was significantly exceeded. The total capacity of the power plants that received incentives is 645 MW, and the total planned investment value is 782 million euros.
The second round of auctions was extremely successful, both in terms of capacity and offered prices, but also in terms of the fact that all electricity from power plants that receive incentives will go to the Serbian Electric Power Company to supply our economy and citizens. Seven projects were registered for wind power plants, while 34 applications were received for solar power plants. The offered quota has been fully used, and the capacity that will be built is 645 MW, i.e. we will have 10 new wind and solar power plants. The offered prices are very competitive, i.e. 50.9 euros per megawatt-hour for solar and 53.5 euros per megawatt-hour for wind, which is significantly below market levels. "According to our incentive model, this means that we do not expect there to be any subsidization of power plants, but rather that they will mostly return extra profits to the state as long as market prices are higher than those offered by the auction winners," said Minister of Mining and Energy Dubravka Đedović Handanović, regarding the completed auctions.
The total value of the investments to be implemented is 782 million euros, which will significantly contribute to economic growth this year and next, the minister stated. "New wind and solar power plants will bring greater energy security because, for all projects, investors have offered to purchase the energy produced to supply domestic consumers for the next 15 years. In other words, green energy will remain in Serbia and will not be exported to other markets," added Đedović Handanović.
The minister emphasised that the prices obtained at the auctions were highly favorable. "We expect that in addition to green energy and a more secure supply to the state, or EPS, there will also be financial benefits," she said.
The three-year incentive system plan adopted by the Government in 2023 foresees the allocation of market premiums for 1,300 MW for renewable energy producers. In the first round of auctions successfully conducted in 2023, the total installed capacity of power plants that will be on the grid by the end of next year is 715 MW.
The market premium is an incentive for electricity production by which the state protects the producer from changes in market prices compared to the price offered by the producer at the auction by paying the difference between the price offered at the auction and the market price. If market prices are higher than the producer's price offered at the auction, the producer will pay the difference to the state. The reference market price for calculating the market premium is the price of electricity on the Serbian Electricity Exchange (SEEPEX).
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