We Investigate: Where Are the Winners of the RES Auctions Today? – Pupin Fastest, Chinese Reach Crni Vrh

Successful, best and biggest in the region, an example for other countries – these are just some of the words used by local and foreign investors and bankers to characterize the auctions for the allocation of the market premiums for renewable energy sources, which were held in Serbia for the first time last year.

The Ministry of Mining and Energy has been open about how satisfied it is too, saying that the estimated value of the investments of all the power plants amounts to EUR 1.26 billion. The seriousness of the offers is shown by the fact that the interested companies have submitted banking guarantees and money deposits worth over EUR 18 million, which guarantees their intention to also realize the project, the ministry believes.

And while the ministry has recently announced new auctions for this year, we have investigated where the nine winners are now, six months after the publication of the final ranking list at the first auctions. Have they started building? When will they deliver the first green kilowatt-hours? Are they late with the construction? What kind of penalties await them if they don’t meet the deadlines?

It is certain that, by 2028, all the power plants have to be built, otherwise, the banking guarantee is collected. Although the investors still have enough time to finish the projects within the deadline, the impression is that all of them, except one, are late compared to the initial announcements.

The Wind Farm Pupin in Kovacica is the only one whose construction has started and which, according to the announcements, will be completed at the beginning of next year. Initially, the commissioning of Cibuk 2 in Kovin and Vetrozelena in Pancevo was also announced for 2025.

On the Crni Vrh mountain, the wind has changed direction. The only 100% Serbian-owned winner at the auctions, Crni Vrh Power, was sold at the end of last year to Chinese companies which paid a serious capital of EUR 25.2 million.

Vetrozelena in the phase of collecting offers for construction

The winner of the first auctions for the allocation of the market premiums for renewable energy sources, Vetrozelena, is a project that was commenced by the company CWP in the area of Dolovo and Banatsko Novo Selo, in the territory of the city of Pancevo. Vetrozelena is the second such project that CWP is realizing in Serbia, after the Wind Farm Cibuk (158 MW of installed capacity).

In April last year, CWP joined forces with the Chinese company PowerChina Resources in order to build the Wind Farm Vetrozelena.

As CWP said for eKapija, Vetrozelena has obtained all the necessary building permits and is currently in the phase of collecting offers for the construction of all the segments of the project. Although it was initially announced that the power plant would be commissioned in early 2025, which was also announced on the company’s official website, CWP has not given us a concrete answer to the question whether it will truly be so.

– Vetrozelena, with a maximum installed capacity of 300 MW and 48 wind turbines, will comply with the set time deadlines for the construction, in accordance with the stipulations of the Law on the Use of Renewable Energy Sources, proscribed for the Temporary Preferred Producer – says the statement that CWP has submitted to us.

The company says that the development of RES projects is a complex process which, in some countries in the region, can take up to ten years.

– Although there is room for improvement and optimization of the procedures in Serbia, the speed at which the Vetrozelena project was developed is an example of an efficient process in the current circumstances. This project is a result of four years of dedicated work and engagement, so we are very proud to be among the pioneers in energy transition of Serbia, together with our partner PowerChina Resources – points out CWP.

As they further explain, the importance of the project is additionally emphasized by their victory at the recent auctions, as well as the signing of the Agreement on the Market Premium and the Agreement on the Purchase of Electrical Energy with Elektroprivreda Srbije.

– These events signify considerable progress for the entire energy sector of Serbia – CWP concludes for our portal.

Vetrozelena won the biggest quota of 210 MW with the offered EUR 64.48 per MW, which was also the most favorable price among the participants when it comes to wind farms.

Construction of Cibuk 2 announced earlier for January

The second-placed wind farm, looking by the awarded quota of 108.5 MW, Cibuk 2, will be built southeast of the existing Wind Farm Cibuk 1, around 40 kilometers from Belgrade, in the municipality of Kovin.

As announced earlier, the power plant should begin working in 2025 and it will produce 430,000 MWh a year, securing enough electrical energy to power around 100,000 households.

We haven’t learned whether the construction is going as planned, because we had not received answers before this article was published.

The Cibuk 2 project is being developed by Masdar Taaleri Generation (MTG), a company co-owned by Masdar from the United Arab Emirates and the Finnish Taaleri Energia.

As the director of Masdar Taaleri Generation, Vladimir Milanovic, said in September last year in an interview with the RES Serbia portal, “curiously, even with the events that we have been witnessing in the past few years in Europe and the world, the development of Cibuk 2 is being brought to a close without any major problems.”

– That is a consequence of both the experience acquired at the previous project and the successful cooperation with the local partner who contributed a lot to bringing the project closer to the beginning of the construction within a record deadline, so we expect to start the construction in January last year – announced Milanovic.

It was initially announced that the power plant would be built in two phases, first 150 MW, with wind generators of close to 7 MW each, and as much in the second phase, so Cibuk 2 should have an installed power of over 300 MW eventually.

At the first auctions, a quota of 108.5 MW was allocated to the company Cibuk 2 Wind Energy at an offered price of EUR 73.7 per MWh.



Construction of Wind Farm Pupin begins, operations to start next year

The third-placed winner at the auctions, Enlight K2-Wind, has already started building the Wind Farm Pupin within the existing complex Kovacica. A quota of 68 MW was allocated to the Wind Farm Pupin at an offered price of EUR 68.88 per MWh.

As the company told us, the development of the project of the Wind Farm Pupin was successfully concluded last year, when the phase of the construction of the project started. The planned period of the construction of the power plant is up to 18 months.

– The wind farm will consist of 16 wind generators Nordex N163/5.9, and the power plant will have a total power of 94.4 MW. The power plant is expected to start working at full capacity in the first quarter of 2025 – Veljko Ozegovic says for eKapija on behalf of the Wind Farm Pupin.

The EBRD recently announced that it had secured a loan of EUR 50 million for the construction of the Wind Farm Pupin and that the total value of the project was EUR 144 million.

– The completing of the financial structure of the project is going as planned – our interviewee reveals.

When asked whether they were satisfied with how quickly they obtained all the necessary permits and funds, Ozegovic points out that the first idea about the project was initiated back in 2018, whereas a more active development of the project started in 2019, with a successful finalization in 2023.

– Our experience has helped accelerate and optimize numerous project development processes, but the quickness of the development was also down to various factors, among which are those outside any potential influence, such as the market disturbance caused by the global political crisis, the Covid 19 pandemic and so on – notes Ozegovic.

Crni Vrh sold to Chinese company

Crni Vrh Power is the only company from the list of the winners which was 100% Serbian-owned (Ivan Pantelic and Nikola Petrovic) at the moment the auctions were held, but this changed at the end of last year, when the company was sold to a Chinese company.

According to the Serbian Business Registers Agency (SBRA), the company Crni Vrh Power is now owned by the Chinese companies CMC CAPITAL (HONG KONG) CO., LIMITED (49%) and SHANGHAI ELECTRIC POWER & ENERGY DEVELOPMENT LIMITED (51%).

At the end of last year, on November 11, 2023, a capital of RSD 615,234,456 (EUR 5.2 million) was paid, and on January 18, 2024, the decision was made for the monetary capital of the company to increase to EUR 20 million (RSD 2,343,836,000).

The new directors of the company, according to the SBRA data, are Li Yong, Sun Lan and Liu Xin. We couldn’t learn what their plans are, since they have not responded to our questions about the progress of the construction, the beginning of the work of the wind farm, the total value of the investment and the potential plans for the construction of new wind farms in Serbia.

According to earlier announcements, the Wind Farm Crni Vrh will be located at the tripoint of Zagubica, Bor and Majdanpek. At the end of May 2021, the Ministry of Mining and Energy issued the energy permit for the Wind Farm Crni Vrh with an installed power of 150 MW.

As announced earlier, the value of this investment in the wind farm has been estimated at around EUR 100 million.

At the auctions, Crni Vrh Power won a modest quota of 13.5 MW at an offered price of EUR 79 per MWh, which is the highest offered price of all the winners at the auctions. As the Ministry of Mining and Energy explained for eKapija, the change of ownership does not have an impact on the outcome of the auctions.

– Also, the change of ownership over projects is not an unusual practice in this type of business – the ministry added.

Ministry: All power plants need to be built by 2028

And how much time do investors really have to build the power plants which have received the market premiums? As the Ministry of Mining and Energy explained for us, the deadline for the construction of a power plant depends on whether the winners of the market premiums had a building permit at the time the auctions were held.

– If they had a building permit, the deadline for the construction lasts three years, with the possibility of extension for another year. If they didn’t have a building permit at the time of the auctions, the investor has a deadline of two years to acquire a building permit and another three years to build the power plant – the ministry notes.

The ministry is in contact with the investors, with which it exchanges information about their plans for when they intend to connect the power plant to the system for the purposes of the energy balance and the planning of the incentive funds.

– If the power plant is not built within the period of the validity of the decision on the acquisition of the status of a temporary preferred producer, the banking guarantee is collected. The investor has a clear deadline by which it has to build the power plant. Within that deadline, the investor independently optimizes the time and the resources for the realization of the project – they say at the Ministry of Mining and Energy.

Marija Dedic

Ministarstvo rudarstva i energetike Republike Srbije

CWPR Services doo Beograd

Masdar Taaleri Generation d.o.o. Beograd

Enlight K2-Wind doo Novi Beograd

EBRD Evropska banka za obnovu i razvoj Beograd

Elektroprivreda Srbije ad Beograd

Crni vrh power doo Žagubica

CWP

PowerChina Resources

EPS

CMC CAPITAL HONG KONG CO LIMITED

SHANGHAI ELECTRIC POWER AND ENERGY DEVELOPMENT LIMITED

Vladimir Milanović

Veljko Ožegović

market premiums for renewable energy sources

auctions

Wind Farm Pupin

Čibuk 2

preferred producer

energy transition

production of electrical energy

wind farms in Serbia

auction winners