The Croatian energy market operator Hrote launched the first market premium auction for large renewable energy projects with a tendering quota of 648 MW and a 4 July bidding deadline.

The most acceptable bidders will be selected by the beginning of August and awarded a market premium contract for a 12-year period, said Hrote in the announcement on its web page on Friday.

The auction will support new solar, hydro, biomass, biogas and geothermal power plants larger than 500 kW and wind farms larger than 3 MW. Most of the quota in this auction is intended for solar projects (300 MW) and wind farms (300 MW).

A market premium is an incentive system in which the energy market operator pays the monthly difference between the contracted price and the electricity market price. According to Croatia’s state aid programme for 2021-2023, if the market price is larger than the contracted one, the producer must pay Hrote the difference.

The auction sets the maximum reference value of electricity at HRK 495.63/MWh (EUR 66/MWh) for solar power plants, HRK 460.91/MWh for wind farms, HRK 1095.58/MWh for hydropower plants, HRK 1263.96/MWh for geothermal power plants, HRK 1411.57/MWh for biomass power plants and HRK 1482.23/MWh biogas power plants.

The maximum reference value is based on the production costs of different types of power plants and it is readjusted by 1 April each year.

The total tendering quota to encourage electricity production from renewable energy sources through a market premium system in Croatia will reach 2,010 MW by the end of 2023. The planned amount of support is EUR 783m.

As Hrote’s deputy director Darjan Budimir told Montel in May, the next large renewables auction will be held in the autumn.

(EUR 1 = HRK 7.5)