Serbia: the 2021 renewables act replaces tariffs with premium auctions. What about biogas?

Serbia has moved from feed-in tariffs to market premium auctions: on 20 April 2021 the National Assembly adopted four energy acts, including the act on the use of renewable sources. For new biogas projects this means a departure from the high, administrative rates of the 2016 decree.

The old rates

The 2016 decree raised the tariff for biogas power plants. According to the chair of the Serbian Biogas Association (quoted by Balkan Green Energy News), it was 17.22 eurocents per kWh for an installation with a capacity of 1 MW; the rate depended on size. Biogas investors described an investment boom after this increase. We give the rates as reported by the cited sources.

What the 2021 act changes

• Market premium is a top-up to the market price, expressed in eurocents per kWh and paid monthly for energy fed into the grid.
• Auctions: the ministry runs them within limits set by the government. The maximum price is a ceiling that bids cannot exceed.
• Support period: 15 years.
• Feed-in tariffs: retained for small sources (below 500 kW, for wind below 3 MW) and demonstration ones.
• Balancing: for premium-supported producers, balancing responsibility remains with the guaranteed supplier until an organised intraday market is launched.

Significance for biogas

The details depend on implementing decrees and the regulator's methodology. What matters for biogas plants is that the level of support ceases to be known in advance: the premium is decided by the auction bid, within the maximum price.

A similar direction (from tariffs to premiums with auctions) can be seen in the EU; for Poland we describe it in the context of renewable energy auctions. Serbia currently remains outside the EU, but takes part in the Energy Community.

How to read this

By comparison: under the guaranteed tariff model the generator knows the rate in advance and sells energy to a designated buyer. Under the market premium model it sells electricity on the market itself, and the premium tops up revenue to the level resulting from the auction. The advantage is a lower cost for customers; the drawback is greater revenue volatility and the need to handle balancing. When assessing a biogas project, both the bid price and the market price risk over the 15 years of support therefore matter. It is also worth checking whether the installation qualifies for a tariff or must go to an auction, because the 500 kW threshold separates these paths.