What Have the First RES Auctions Shown? – Serbia Yet to Get Serious Investors for Solar Power

Source: eKapija Thursday, 17.08.2023. 15:50
Illustration (Photo: Pixabay.com/Albrecht Fietz)Illustration
The Ministry of Mining and Energy has published the ranking list of the first auctions for the allocation of market premiums for wind farms and solar power plants in Serbia. The results have shown that, on one hand, there was a lot of competition for wind power, whereas, on the other – the response for solar power was weak. Danijela Isailovic, the manager of the RES Serbia Association, says for eKapija that the first wind and solar power auctions are successful and that it is important news in and of itself.

– It is important to note that the auctions were carried out in a professional, transparent manner in electronic form and that the Ministry of Mining and Energy carried out the process with maximum efficiency. Of course, the support of the EBRD, which has given crucial contribution to the creation of regulations and conditions for fair auctions in the past years, should not be forgotten – Isailovic believes.

She adds that the results of the auctions should be observed from several angles.

– Regarding the auction process for wind farms, the list of the participants, and especially the winners, has shown who the serious investors are who truly have the intention, the projects and the means to build power plants in Serbia. It has also been shown that the high auction price was a great decision of the Government of Serbia, because it led to competitiveness and resulted in low winning buyout prices – our interviewee says.

She points out that, for the Association, it is very important that, of the four winners at the auctions for wind power, three are their members.

According to her, there’s still work to be done on the solar energy market.

– Unfortunately, the auctions have shown that the wind power market is far more developed than the solar market and that we need serious projects and investors. That only a quarter of the modest quota of 50 MW is filled out shows that investors in solar are not ready for the demanding auction process, but it is good that the auctions were held as a kind of a pilot project which should be analyzed and learned from. Of course, we should praise the three companies which did meet the conditions and won the quota at the auctions, so we expect the construction of new solar power plants in Cuprija, Lebane and Knjazevac – Isailovic explains.

The weak competition, she says, has led to the high prices.

– It is unusual that the lowest price for the solar projects is nearly EUR 25 per MWh higher than the winning auction price for wind power, especially considering that the technology and the development of wind farms are drastically more expensive than solar power plants. However, the weak competition has led to such results – she says.

Both the state and the investors will be able to learn a lot from this process.

– These are all good lessons for the new auctions that we expect next year, but also a topic for the RES SERBIA 2023 conference, which will be held on September 14 in Vrdnik, and whose working title is Serbia After the Auctions – she concluded.

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