Methodologies for feed-in tariffs and market premium for renewable energy sources

At the session held on October 28, 2021, the Energy Agency of the Republic of Serbia adopted the methodology for setting the maximum electricity purchase price and the methodology for setting the maximum feed-in tariff for electricity. ‘electricity.

The Law on the Use of Renewable Energy Sources has defined that the Agency adopts these methodologies, which create the basis for the implementation of this law and for the launch of auctions for electricity produced from renewable sources. ‘renewable energy.

In accordance with the Law on the Use of Renewable Energy Sources (“RS Official Gazette” No. 40/2021, “RES Law”) which was adopted in April 2021, producers of electrical energy in from renewable energy sources can acquire incentives in two in the form of market premium or feed-in tariffs. Both types of incentives are granted through auctions.

Among the conditions precedent to the organization of auctions, it is necessary to set maximum amounts for the market premium and the feed-in tariff, amounts which cannot be exceeded by the bids of the auction participants. To do this, the Energy Agency of the Republic of Serbia (“AERS”) has adopted two methodologies: i) Methodology for the determination of the maximum market premium for electric energy and ii) Methodology for the determination maximum feed-in tariffs for electrical energy (both methodologies: “Methodologies”). The methodologies were adopted after a public consultation conducted by AERS and were published in the Official Gazette of the Republic of Serbia no. 103/2021.

The methodologies are based on the principle of the levelized cost of electrical energy to prevent the granting of incentives to participants with unreasonably high bids. In addition, when calculating the maximum amount of market premium and feed-in tariffs, the methodologies provide that the following parameters should be taken into account: i) investment costs, ii) operating costs, iii ) fuel costs for electric power generation, iv) annual electric power generation, v) discount rate, vi) power plant operating time, and vii) power plant efficiency coefficient. Power plant.

According to the RES law, AERS has the obligation to calculate the maximum amounts of market premium and feed-in tariffs for each type of power plants eligible for incentives, based on the Methodologies. Such AERS calculations must be made in December 2021 and will be applicable to the auctions organized next year. In addition, the amounts are expressed in euro cents per kWh.

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