Conference “The Balkans – a new European energy source”, The geostrategic position – another advantage of Serbia

16. April 2013. / News Serbia Energy

Serbia may be a transit country for electricity, gas, oil and oil products. – All customers who have already made contracts, want so-called hotel “all inclusive” packages i.e. contracts on total electricity supply.

The Balkans is certainly not an entirely new source of energy, but it is known to all and it is up to us to use it maximally for the benefit of all countries, especially for increasing the energy stability of Serbia – said Ms. Zorana Mihajlović, Minister of Energy, Development and Environmental Protection, at the 10th Regional Conference on the safe and profitable investments in energy sector “the Balkans – Europe’s new source of energy”, held on 20th  March, in Belgrade’s “Sava Center”.

She pointed out that the Balkans deserves attention, because it is the shortest and most profitable route between the East and the West, being possibly the safest way as well.

The Balkans must take the advantage of its geographical position, which is why Serbia should exploit the comparative advantage of its position – said Ms. Zorana Mihajlović, adding that we should be a transit country for electricity, gas, oil and oil products, as well as a country that can be a storage for energy products, which all together is also supposed to be a vision of our country. As an example of such projects, she brought up the project of the pipeline “South Stream”, through which natural gas from Russia should be transported to the countries of the European Union, as well as the pipeline from Niš to Dimitrovgrad.

– The goal of the Serbian government is to build power plants, thermal power plants, hydro power plants, invest in energy infrastructure, wind energy, biomass and alternative energy sources – said Ms. Mihajlović. – The modernization of the plant follows up, in order to become more efficient and to produce electricity, in addition to the heating energy. She pointed out that the necessary legislative framework, needed for investments in renewable energy sources, was provided in Serbia. It is realistic to expect that our country shall gain 27 percent of total energy consumption from renewable energy sources until 2020.

The conference discussed also the role of Serbian economy in the construction of new facilities, as well as the investing in the energy sector in Southeast Europe and the design and implementation of an appropriate legal framework. Loup Brefort on behalf of the World Bank said that Serbia should not be afraid of foreign investors, because cooperation can only bring mutual benefits for both investors and Serbia.

Turkey was present as a “friend country” of the conference, represented by Mehmet Kemal Bozay, Turkey’s ambassador to Serbia. He introduced the energy resources of his country and stressed out that Turkey invested most in the development of the energy system, and that the goal of Turkey is to implement the energy security and to increase energy efficiency.

– Turkey could be one of the investors in energy projects in Serbia. A project in the energy sector should be eco-friendly and there is a greater understanding of the implementation and realization of the projects, because Turkey is being increasingly faced with climate changes – said the Ambassador of Turkey.

The role of Serbian economy in the construction of new facilities, as well as investing in the energy sector in the Southeast Europe and the design and implementation of an appropriate legal framework were also discussed at the conference. Loup Brefort on behalf of the World Bank said that Serbia should not be afraid of foreign investors, because it can only bring mutual benefits for both investors and Serbia.

– The Balkans lies in the heart of Europe and strives for safe, reliable and clean energy. The position of this region is an advantage. It is a region with untapped potential. Therefore, there is the possibility of connecting demand with undeveloped potential of making offers. We all know that the development of the Balkans, as a source of energy for the rest of Europe, would be extremely expensive and that it needs help from the state. Therefore, it is important that the state interests coincide with the interests of the investors – concluded Mr. Brefort. – Serbia and the rest of the Balkans will need foreign investments in order to achieve the objectives, and the World Bank could contribute not only to the political dialogue, but also to improve the legal framework and provide funding.

Mr. Dragan Vlaisavljević, Director of EPS’ Department for electricity trade, explained that next month EPS was going to stop with reserve electricity supplying.

– There have been a lot of troubles, but everything is moving forward. I hope  that this time next year we are going to have the opportunity to discuss about the  first operation day of the energy market, SERPEX, with a strategic partner – he said, adding that it remains to enable the distribution system to provide the necessary market information to our market operator “Elektromreža Srbije”. – One of the tasks is to cover 45,782 customers with the measuring technique. They lose the right to the public supply, which is in fact, a kind of privilege.

As Mr. Vlaisavljević explained, all customers who have signed the contracts until now, wish so-called “all inclusive” packages or complete supply contracts.

– In order to raise the market liquidity, full supply contracts should be replaced by different kind of contracts. Customers are not qualified enough to know how to make a purchase – Mr. Vlaisavljević said. – A sore point is the cancellation of regulated tariffs, firstly in the year 2013 for the high-voltage, and in 2014 for medium voltage, where 4,000 customers should appear on the market and to make purchase at the best prices in a market competition.

According to him, the shortcoming will be overcome by establishing SERPEX for a day-ahead of the market and gaining the reference price, thereby increasing transparency. It is important to move towards the path of greater integration with neighboring markets at the regional level.

– Serbia is no different than other markets, because institutional, financial, operational and price risks are present everywhere. There is no such thing as free lunch, and no such thing as billing for 200 days – said Mr. Vlaisavljević. – We, as the eighth region have to integrate with each other in order to connect with the pan-European market. An important project is the establishment of the energy market which would provide signals to both sellers and buyers.

Mr. Vladimir Janković, Director of the business electricity market “Elektromreža Srbije”, spoke about the role of EMS in the energy market. He pointed out that out of the total 1370 employees, even 350 of them have an university degree, because, according to him, the main value are not the transformers, but people.

Any changes in the energy sector, as Mr Janković said, require people who learn quickly and are ready to changes.

– In accordance with the international obligations and our legislation, we finally began with the opening of the electricity market. I think this is a big step forward. There was a great skepticism regarding our success – said Mr. Dejan Popović, State Secretary of the Ministry of Energy adding that the Ministry so far respected the given dates and the first step was at the same time the hardest.

He pointed out that a very specific feature of our market is that the process of liberalization is opposed by the consumers, because of the fact that the price is lower than in the neighboring counties.

– The best indicator of this is the consumer who is no longer supplied by the EPS. I hope that every step from now, once that we have broken the ice, will be the easier one – said Mr. Popović.

The rational energy management and sustainable energy future were discussed by: Ms.Dragica Sekulić, Deputy Minister for Energy Efficiency of Montenegro, Goran Pichler, project coordinator, renewable energy – UNDP SGE, as well as the projects representatives from Norway and Austria.

Balance responsibility

Mr. Vladimir Janković of EMS said that the concept of balance responsibilities has been introduced, and that everyone who participates in the market must bear responsibility between what is agreed and what has been done. The difference is charged and EMS is responsible to administer the balance responsibility.

– The decision on the method of services pricing will be made this year. The one that does not find its way to the market, has the right to be supplied by EPS for 60 days and after that EMS is required to cut out those on the transmission system or i.e. the operator should cut out those on the distribution system. More than 40 percent of buyers will be obliged to buy electricity on the market, since the regulated prices are not going to be applied to them. Like in telecommunications, the supplier is expected to offer a variety of packages – said  Mr. Janković.

Role and task

Ms. Ljiljana Hadžibabić, a member of the Council of the Energy Agency, focused on the role of the Agency in the opening stages and later stages of development and market monitoring. She pointed out that the task of the Agency is to secure that the investors will be treated equally on our market, and the duty is to make a stable regulatory framework that will support the reliable and sustainable supply at reasonable prices.

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