Serbia is making great strides in energy; electricity prices must be increased

After a period of many years when not much was happening as far as the alignment of Serbian energy regulations with the European Union is concerned, a lot is indeed happening now, said the director of the secretariat of the Community. energy, Janez Kopač. He praised the reforms but also stressed that electricity prices for households need to be increased as the lack of segregation of Srbijagas activities is the biggest problem in the sector.

Serbia is still close to the top of the region when it comes to the electricity market and has achieved great success when it comes to oil reserves, but it lags far behind in the gas sector, he said. Director of the Energy Community Secretariat, Janez Kopač, to the members of the National Assembly. from Serbia. He said he was “happy with the processes” underway in the country that Deputy Prime Minister and Minister of Mines and Energy Zorana Mihajlović has set in motion.

“We barely manage to comment on everything that comes from Serbia on a daily basis… After a period of many years where there wasn’t much going on, there really is a lot going on now and of course we are very happy with it. “, did he declare. said during a presentation of the annual report of his organization on the progress made in the implementation of the legal order of the Energy Community and the European Union.

At a meeting ahead of the session of the relevant parliamentary committee, Mihajlović thanked Kopač for his help in creating laws and amendments and underlined that Serbia and the Energy Community will cooperate in the fields of energy transition, decarbonization and the fight against climate change. The two officials also visited the construction site of the flue gas desulphurization unit in the Nikola Tesla A thermal power station (TENT A).

Srbijagas is the biggest problem in Serbia’s energy sector

Serbia once led the region in all sectors, and now it lags behind Montenegro, North Macedonia and Albania, which accelerated reforms, Kopač said. The oldest infringement procedure within the Energy Community is the one that was launched in 2013 because the transmission and distribution activities of Srbijagas were not separated, he noted and affirmed. that it is the “biggest problem in the energy sector“. Srbijagas is the public gas company.

The infringement procedure against Srbijagas is the oldest in force in the Energy Community

Serbia assumed this obligation as early as 2006 with the second energy package, Kopač stressed and expressed his conviction that the problem would be solved this year.

Mihajlović responded that the separation would be effected relatively soon and highlighted four bills from his sector that will soon be sent to parliament. She said the country is on the right track in terms of investments, especially in solar and wind energy and underlined the importance of future work to produce an integrated national climate and energy plan. These documents are commonly known as National Energy and Climate Plans – PNECs.

EMS is not completely separate from EPS

The process of separating power transmission system operator Elektromreža Srbije from state-owned power producer Elektroprivreda Srbije is also not complete, Kopač added. He claimed that it should be determined by law that the two public services are controlled by different ministries.

The share of cross-border electricity transmission capacity intended for trade must be increased to 70%

Electricity transmission system operators in the EU are required to ensure that 70% of cross-border capacity is intended for trade, which allows lower prices for consumers, and the quota could also be introduced in the Community energy, Kopač said. He pointed out that the level of Serbia is over 40% and the highest of the Western Balkans.

Serbia must continue to work on market coupling with its neighbors, Kopač said. The report notes that EPS is the only entity in Serbia to offer balancing services while this market segment is completely liberalized in Bosnia and Herzegovina. Serbia is carrying out a regionally coordinated capacity allocation only at the borders with Bulgaria and Croatia, making imported electricity prices higher than they could be, he said.

Low household electricity prices weigh on industry, says Kopač

The Energy Community Secretariat is concerned that electricity prices for households are much lower than the EU average, while they are not so low for industry, this which means the burden is on industry and the competitiveness of the economy is weakening, said Kopač and urged for tighter control of approved aid to socially threatened people so that only those who really have it. need get free kilowatts.

EPS electricity prices would double if carbon pricing were introduced

Electricity prices for households must be increased, Kopač stressed. He stressed that the introduction of carbon pricing “would push EPS into bankruptcy or increase prices horribly”. The head of the Energy Community secretariat said prices for carbon dioxide emission certificates reached 40 euros per tonne, which is close to what is released when 1 MWh is produced. In this way, EPS’s electricity prices would double, Kopač pointed out.

The secretariat will offer the state-controlled power producer to simply calculate the expenditure for CO2 allowances at the start and combine it with the price of electricity, he said. The money paid for the certificates would stay in the country and it could be used for energy efficiency measures and support for green energy production, he said.

Coal subsidies are unacceptable

Direct subsidies for power generation from coal in Serbia were twice as high in 2019 as for renewables, making it the worst in the region, and Kopač warns he is not allowed to stimulate the coal industry. As for EPS, the operator of the distribution network is still not separate. The retail market has been liberalized but EPS, which is both the guaranteed supplier and the back-up supplier, controls 99% of the supply because the regulated price of the guaranteed supply is lower than the market price and what is economically justified, the report says.

Renewable energy auctions, which are in the works, could reduce stimulus to near zero

Serbia’s share of renewables reached 20.3% in 2018 compared to the target of 27% set for 2020. Feed-in tariffs are unnecessarily high, which has led to a situation where new investments are practically blocked, says Kopač. The problem could be solved with the Renewable Energy Sources Act which is being rolled out, so with the introduction of auctions, the stimulus “may be close to zero,” he said.

“Investors are lining up” to apply when the law takes effect, he said and added that he is “full of confidence that rapid development in the positive direction”. According to the secretariat’s calculations, there were only 11 MW of solar power installed in Serbia at the end of 2019.

The monopoly of rising domestic gas prices

Among other objections, Kopač mentioned that the HorgoÅ¡ gas interconnector, on the border with Hungary, is practically closed for all entities except those to which Serbiagas allows its use. Srbijagas has a monopoly, which is bad for consumers, and resolving this obstacle is a condition for opening Chapter 15 of the EU membership negotiations, he said. According to the secretariat’s estimates, household gas bills would be 20 euros lower per year if there was competition.

The report states that the Commission for the Protection of Competition has taken no decision on anti-competitive behavior in the energy sector and that the State Aid Control Commission has made no decision on energy. .

Energy efficiency is the energy of the future

The Energy Community Secretariat recommended in February that clearer clauses be included in the draft law on energy efficiency and rational energy consumption and that Serbia continue to align with the guidelines of organization, because it is slow to do so.

“It’s not just about the deadlines. We want countries to move forward in development because the electricity or gas you don’t use is the cheapest. The main energy of the future is energy efficiency. Too much energy is wasted, ”Kopač said.

SO2 emissions in Serbia were six times higher than allowed in 2019

Regarding environmental protection, the biggest objection was raised regarding sulfur dioxide emissions, mainly from thermal power plants Kostolac and Nikola Tesla or TENT. They were six times higher than the legal limit in 2019 and even more if EU regulations are applied, Kopač said and stressed that the desulphurization plants were not installed on time.

“We are not here to criticize. It is constructive criticism. We would love to help you. Your success is our success because, in the end, the work of the Energy Community is only evaluated through the progress of members. We are here for you, ”he said.

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