Large consumers and new electricity price in Serbia, challenges and power trading

18. April 2013. / News Serbia Energy

The price attack can be fatal to Serbian industry because of price increase to the biggest consumers. What is even worse, it won’t help EPS because it marks bigger and bigger losses.

EPS increased electricity price for almost 70 percent for high voltage consumers on 31 January only a month after the market liberalization for this category and it immediately lost Messer Company which consumes about 5% of total consumption of all buyers in open market.

This company concluded a supply contract with Slovenian electricity trader GEN-I after it had tried to reach a compromise with EPS unsuccessfully.

-Our company and several big consumers tried to explain extreme negative consequences that such price increase can have on the rest of industry. However, we concluded that electricity price shall increase but in several steps after several meetings with EPS’s Administration and representatives from Energy Ministry. Offer from GEN-I that includes energy transport and their provision was lower, although this company is a trader, not electricity producer. Such dramatic price increase can’t be absorbed by industry. This is a disaster for us and our buyers who are already in heavy situation. It occurs to me, sometimes, that small remains from industry and business bother everyone and that it will be the best to turn everything off- Ernst Bode, Executive Director of EPS explains.

Seven companies sent several appeals and requests to Ministry of Energy, Finance and Industry, Energy Agency and EPS after the first offer in the beginning of December. They asked for price increase to be done in stages in order not to cause extremely high expenses and chain reaction of price increase. Appeals were not answered and EPS sent a new one, almost identical offer they had to answer in one day. This behavior conditioned Messer to choose more affordable offer from one Slovenian distributer instead from Serbian produces which looses 7 million EUR yearly this way. Other buyers committed to EPS that they will purchase electricity from EPS until the end of the year. What will happen later, we shall see. Serbian electricity price for those who work in Serbia is 30% more expensive than electricity in Leipzig i.e. 16% higher than at Hungarian stock market.

Executive Director of EPS, Aleksandar Obradovic, has rushed to boast that EPS had saved 95% of buyers but he forgot to say that 5% was lost in an only one day because of the offer and there is possibility to lose more is it continues policy harmful for Serbian industry and EPS. 8 of 27 consumers on high voltage are companies in reconstruction phase that don’t pay for electricity any way and EPS practically transfer its losses to several remained liquidity consumers. These companies suppose to pay for losers’ debts, losses of EPS but also 1,6 billion dinars in the name of the bonus to employees.

Business secret

EPS announced that it will export 700 MW of electricity in February and March this year but the price for energy abroad is declared as business secret. Considering the prices of two European stock markets, EPS sells electricity at 30% lower price than for Serbian consumers.

Source;Serbia Energy/Agencies

 

Download as PDF :

Download PDF