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

According to Minister of Mining and Energy, Dubravka Djedović, the auction process is digitized and that will ensure a fast, efficient and transparent implementation of the process, which will result in 450 new green megawatts for the economy and citizens in the power system of Serbia.

"As Prime Minister Ana Brnabić announced after the meeting with the European Bank for Reconstruction and Development in London, we launched auctions for the allocation of market premiums for RES. At the same time, these are the biggest auctions to be held at once in the Western Balkans region. We are implementing them in accordance with the best European and international practices and switching to market premiums which will enable better cost management and an overall greater benefit for our energy system. By this, we will encourage the inflow of direct foreign investments, the growth of GDP, the development of the construction industry, the potential reduction of electricity costs and a more secure supply of our economy and citizens. We are aware of the necessity of the transition to cleaner energy sources and we are working responsibly on taking measures to decarbonize our energy sector. I believe that the first auctions for 450 MW from RES are a clear indicator of our commitment to achieve a cleaner and healthier energy sector," said Minister Djedović.

The Minister also stated that the active participation of the EPS in this process is expected for the sake of a more secure supply of citizens and the economy.

"It has been estimated that following the successful implementation of the auctions, EPS will be generating more than 3 million euros annually, taking into account the relevant market prices," said Djedović.

The market premium is an incentive for the generation of electricity by which the state protects the producers from changes in market prices in comparison 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 the market prices are 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 calculating the market premium is the price of electricity on the Serbian power exchange (SEEPEX).

The maximum price that an RES producer can offer at an auction is defined by the Government and it amounts to 105 euros per megawatt-hour for wind farms, or 90 euros per megawatt-hour for solar power plants. Investors who offer the lowest price in comparison to the maximum price defined will have the preference for the granting of the incentives. This is expected to reduce electricity costs.

At the same time, these are the first auctions within the Three-Year Incentive System Plan, which foresees the allocation of market premiums for 1,300 MW for producers from renewable energy sources in the next three years.

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

The website oieaukcije.mre.gov.rs contains instructions and a public call for applications for auctions, and should any interested party would have any questions regarding the application process, the Commission for conducting auctions will provide answers. Applications will be submitted through the RES Auction portal during the next 60 days, i.e. until mid-August this year.

The implementation of the auctions was preceded by the adoption of amendments to the Law on the Use of Renewable Energy Sources (RES) and accompanying by-laws, which created the conditions for the faster integration of new capacities from RES into the Serbian power system, while preserving the reliability and stability of the system's operation and the active participation of EMS and EPS.