Serbia is ready for its first renewable energy auctions

The Energy Agency of the Republic of Serbia (AERS) announced the maximum purchase price for electricity produced in wind power plants which will be 5.57 Eurocents per kilowatt-hour (kWh). The amount is almost two times lower than the feed-in tariffs that the owners of existing wind farms receive in Serbia. The methodology for determining the maximum purchase price was adopted in line with the law on renewable energy sources. Maximum purchase prices will be published by AERS for each type of power plant and sub-types for which the quotas are set.

The regulatory framework for the first auctions in Serbia is complete, and the Ministry of Mining and Energy could announce them by December 25. Investors will have an option to apply for premiums at auctions for the entire installed capacity of planned power plants or a part of the capacity, according to the decree on market premiums and feed-in tariffs adopted by the Serbian government.

The decree envisages two-way premiums, where the state will pay the investor if the winning price from the auction exceeds the benchmark price, but if the winning price is lower than the benchmark price, then the investor pays the difference to the state.

Some of the most important conditions for participating in auctions are:

– a financial instrument in the form of a bank guarantee or cash deposit,
– the final energy permit,
– valid location conditions or valid building permit,
– the confirmation from the transmission system operator that the connection to the grid is part of the planning documents.