Serbia has launched its first renewables auction for wind and solar, totalling 450MW, with support from the European Bank for Reconstruction and Development (EBRD).

The 450MW auction comprises 400MW of wind and 50MW of solar.

Auctions will be supported through a contract for difference (CfD) for a period of 15 years with the Electric Power Company of Serbia, which aims to offer a secure energy supply to its citizens.

The CfD is an incentive for electricity producers by which the state protects them against volatility in market prices in relation to the price offered by the producer at the time of auction.

The producers are paid the difference between the price offered at the auction and the market price.

The maximum price a producer can offer at an auction has been set by the government and stands at €105 ($113.71) per megawatt-hour (MWh) for wind farm projects and €90/MWh for solar plants.

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Producers who quote below the maximum defined price will have an advantage in receiving the incentives while reducing electricity costs for consumers. 

Serbian Mining and Energy Minister Dubravka Đedović stated: “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. These are at the same time the largest auctions to be held at once in the western Balkans region.

“We implement them in accordance with the best European and world practices and switch to market premiums, which enable better cost management and an overall greater benefit for our energy system. With 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 for our economy and citizens.

“We are aware of the necessity of switching to cleaner energy sources and are working responsibly to take measures to decarbonise our energy sector.”

The auction was the result of technical cooperation with Serbia’s Ministry of Mining and Energy, led by the EBRD.

It was supported by the Government of Switzerland through a grant from the Swiss State Secretariat for Economic Affairs.

The auction encourages market integration of renewables, as developers will be supported with market prices.

It is the first of a three-year plan that aims to develop a total of 1GW of wind and 300MW of solar.