Former Yugoslav power companies will survive through regional cooperation

, News Serbia Energy

Electricity generation activity of electricity companies in the Western Balkans – in fact, the countries that emerged from the disintegration of the SFRY – Serbia, BiH (and Republika Srpska) and Montenegro, although their total electricity generation capacity is just enough to meet the needs of domestic consumers export, a thorn in the side of all those who in the past two decades have failed to impose the implementation of economic transition, that is, the privatization of the electricity sector.

The Montenegrins, admittedly, sold part of their electricity to the company A2A, but that project proved to be a bad business move, for both sides, so the Italians left. The privatization of Elektroprivreda Srbije (EPS), which some obedient politicians (advisors from Brussels) tried to carry out, was fortunately thwarted. Fortunately, the experience of the Czech state, which privatized and then supported its electricity company CEZ, showed us how bad a move that would be.

Both EPS and Elektroprivreda Bosne i Hercegovine (EPBiH), Elektroprivreda Republike Srpske (ERS) and Elektroprivreda Crne Gore (EPCG) Brussels and the Energy Community respect the production of electricity from coal, insist on the closure of thermal power plants and total market liberalization – all to open the way for the placement of electricity produced in Western European countries. They insist, however, that much more capacity is being built in these countries for the production of electricity from renewable energy sources (RES). But, it seems that they do not have exactly the same criteria when the investor in RES is private capital and state, electric power companies.

An obvious example is the construction of three hydropower plants on the Drina (Buk Bijela, Paunci and Foca) in partnership between EPS and ERS.

This project was attacked by some politicians from BiH and Montenegro, as well as many non-governmental organizations, after the foundation stone for HPP Buk Bijela was laid in May.

The Buk Bijela hydroelectric power plant has been modified from the original idea – its capacity has been reduced, in order to avoid adverse impact on the environment, in fact, the canyon of the river Tara, which is under the protection of UNESCO.

The Montenegrin Ministry of Capital Investments and the Ministry of Ecology, Spatial Planning and Urbanism do not see anything controversial in the project as long as the water reservoirs do not cross the border. State Secretary for Ecology at the Ministry of Ecology, Spatial Planning and Urbanism Danilo Mrdak told Pobjeda earlier that, as far as the construction of the energy facility, Buk Bijela, is concerned, the Ministry’s position is that as long as the HPP is constructed in such a way, even at the highest water levels the future artificial lake does not enter the state territory of Montenegro, that department has no objections.

With this project, however, EPS is entering – as an investor in a ban where Serbia is not welcome. This can be seen in the statements of some Bosnian and Montenegrin politicians.

We will remind, after Serbian President Aleksandar Vučić recently said that Serbia will not sell EPS, but will work on expanding the Serbian company to the region, many welcomed the statement “with a knife”.

The announcement of the construction of HPP Komarnica did not pass without negative comments, about which the Agreement on joint financing of preparatory works between EPCG and EPS was concluded in 1992.

Due to all this, the conclusion is that in all these projects, in fact, it matters that for both EPCG and ERS, EPS is a partner – a Serbian company. If it was a company from the EU, for example, one would probably hear enthusiastic comments about this and that company helping the Republika Srpska, that is, Montenegro, in expanding its capacity for green energy production.

Lobbyists of Western capital are bothered by the very announcement of the regional connection of electricity companies ex YU. As well as the fact that EPS is forcing this regional cooperation.

If they unite – and if the profession is asked and not the pliable politicians will – these four power companies will be able to provide energy security to their consumers through a joint transformation into modern electricity companies, which will be profitable.

This, of course, does not mean that EPS will not strengthen as a regional player. But, in that, EPS does not endanger any of the neighboring electric power companies. Because, in order to survive the reduction of electricity production from coal, and the rest of the headquarters of local economies and companies that fill the state budgets of this electric power company with profit, even EPS, must join efforts.

Regional cooperation and a joint strategy of these four power companies is the way to their survival. And, if EPS is viewed as a threat, and not as a company ready to develop with its neighbors, there will be no regional cooperation.