Serbia has launched its second renewable energy auction, seeking 124.8MW of solar capacity alongside 300MW of wind capacity.
The auction is backed by the European Bank for Reconstruction and Development (EBRD), and successful bidders will be awarded a contract for difference (CfD) scheme to last 15 years. Solar projects will be able to make bids for as high as €72/MWh (US$76.2/MWh), slightly lower than the €79/MWh (US$83.6/MWh) offered for wind, and applicants will have until 5 February 2025 to make proposals.
This week''s auction is the second phase in a three-stage programme to expand operating renewable energy capacity in Serbia through government-backed tenders. The first auction, completed last year, saw bids made for 400MW of wind, plus 50MW of solar, so the latest round of auctions has seen interest in the solar sector grow.
"We expect that investors will again show significant interest in this auction and that the entire quota will be used, both for wind energy and for solar energy, and we hope for even more competitive and lower prices, because we expect great competition," said Dubravka Đedović Handanović, Serbian minister of mining and energy.
"This will bring us closer to achieving the goal foreseen in the three-year incentive plan for renewable energy sources (RES), which envisages 1,300MW of new capacity from RES," the minister added, referring to the overall capacity targets of the three-stage auction plan.
The call for proposals follows cooperation between the EBRD and the Serbian Ministry of Mining and Energy, which received a grant from the Swiss State Secretariat for Economic Affairs (SECO), as Serbia looks to leverage government support to accelerate its renewable energy plans. At this week''s Large Scale Solar Central Eastern Europe event, held in Warsaw, Dr Konrad Wojnarowski, undersecretary of state at the Polish Ministry of Development Funds and Regional Policy, said that a combination of public and private finance would be vital if Eastern Europe is to meet its renewables power targets.
The use of CfDs in both the first two rounds of the Serbian auction echoes other calls made at this week''s summit, where speakers suggested that the use of CfDs could help deliver "acceptable" returns for parties involved in offtake agreements. Serbia plans to dramatically alter its energy mix in the coming years, aiming to add 3.5GW of renewable power capacity by 2030 and meet half of its electricity demand with clean energy sources by the end of the decade.
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A 9.75 MW solar plant on a former mining dump in northeastern Serbia is set for completion and grid connection by the first quarter of 2025. It will be the first solar facility operated by state utility Elektroprivreda Srbije.
Image: Elektroprivreda Srbije
A 9.75 MW solar facility in Serbia is due to be completed in early 2025. The Petka PV project is being built on 11.6 hectares at the site of a former mining dump in Kostolac, northeastern Serbia.
It is utility company Elektroprivreda Srbije''s first solar project. The utility''s general director, Dušan Živković, said solar panels are currently being installed and on schedule for completion by mid-February 2025.
Elektroprivreda Srbije also recently closed a public tender to connect the solar plant to the electricity distribution network. It is expected to be connected to the grid within the first quarter of 2025.
Serbian Energy Minister Dubravka Đedović Handanović visited the Petka site earlier this week.
"There are no big or small projects, every megawatt is needed, because it means additional energy security and safety," she said. "With this production capacity, which will be online in the first three months of 2025, as well as the first EPS wind farm, which will also be in operation next year, we are definitely changing the image of our electricity industry."
Đedović Handanović reported a 50% increase in Serbia''s energy investments this year compared to 2023. These deals include an agreement between the Serbian government, Elektroprivreda Srbije, and a consortium of Hyundai Engineering and UGT Renewables to build six new solar plants totaling 1 GW. The plants will feature up to 200 MW of connected battery storage.
Figures from the International Renewable Energy Agency (IRENA) show that Serbia had cumulatively deployed 137 MW of solar by the end of 2023.
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Serbia is responding to European pressure to accelerate its energy transition to cleaner fuels by allocating €12 billion for wind, PV and hydropower facilities over the next two years. Thus far, there has been little in the way of development in the country, but some regulatory frameworks have been improved.
Image: Ivan Radic, Flickr
Serbia''s draft Economic Reforms Program for the 2022-24 period set out a bold vision for renewables development, with targets for 8.3GW of solar and 3GW of wind capacity. The draft is prepared every year by the Serbian Ministry of Finance for the European Union''s scrutiny and as part of the country''s laborious path to joining the bloc.
As part of €17 billion ($19.2 billion) of investment for the energy and mining sector, €12 billion will be set aside for wind farms, PV plants and hydropower facilities. Utility-scale PV projects could be built on 200,000 hectares of neglected, low-value agricultural land that could host 2GW of solar, according to the draft. As part of the plan, a cooperation agreement was signed in August 2021 between the Serbian Ministry of Mining and Energy and Chicago-based UGT Renewables for the construction of 1GW of solar spanning more than 2,000 hectares across a dozen locations.
The draft also envisages the construction of around 300MW of PV plants, valued at €200 million, on land owned by state-owned power utility EPS, primarily on its coal ash dumps. Last year, the utility announced a tender to analyze conditions for the construction of two solar power plants with a capacity of 9.9MW each on the ash dumps of TPPs Morava and Kolubara. EPS has previously unveiled plans to build a 9.95MW solar array on the landfill site of the former Cirkovac Mine and a 97.2MW PV plant on an existing ash and slag dump owned by Srednje Kostlačko Ostrvo. However, little progress has been made on these projects, even though they have been discussed for a long time.
Most of the solar capacity envisaged under the 2022-24 draft is supposed to come from rooftop PV. Last year, Serbia started promoting prosumer concepts and identified 600 square kilometers of rooftops as suitable for the installation of solar panels. According to the draft, installing PV on 10% of those surfaces would equate to 6GW of installed capacity and an annual output of 7TWh, which is around 20% of the total energy production in the country. The total installed capacity of state-owned projects would thus amount to 8.3GW deployed to the tune of EUR6.2 billion, the draft states.
According to the International Renewable Energy Agency, Serbia had an installed PV capacity of 29MW at the end of 2020. Around 10 MW of this installed power comes from an expired feed-in tariff scheme, which granted rates ranging from €0.124 to €0.146/kWh for rooftop PV arrays, depending on system size, and €0.09/kWh for ground-mounted installations, all under 12-year power purchase agreements.
"The solar sector in Serbia has been a major failure so far," Marijan Rancic, director of business development at New Energy Solutions and a member of the Association of Renewable Energy Sources of Serbia, told pv magazine. He pointed to the onerous red tape around rooftop PV and a lack of access to financing.
Last year, Serbia introduced the much-anticipated Law on the Use of Renewable Energy Sources, the country''s first such law intended to facilitate deployment of renewables in the country. The law envisages market premiums awarded in auctions and feed-in tariffs only for some small projects (such as those with a capacity below 500 kW and below 3MW for wind projects) and demonstration projects, and introduces the long-awaited legal framework for prosumers.
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