Regional power market development, expectations from Gazprom Energy

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The region of south east Europe, including Italy is in deficit. In 2010 deficit was 40Twh which is equivalent to 9 Gwh of power. Main importers are Italy, Hungary, Greece, Croatia. Main exporters are Bulgaria, Romania and Bosnia and Hercegovina.

The project of installing underwater power cable is in progress, between Italy and Montenegro, which will enable power export from region. Special starting point is Italian Secci energy hydro power project in Serbia, all produced electricity will be exported via Italy to EU energy market.

According to the experts from Gazprom Energy by 2020, due to inefficiency, exploitation due dates and noncompliance with EU environmental demands, numerous providers will be shut down in the region. Main trends in regional market development are expected to cover development of grid networks and flow scheme, managing nuclear energy issues, RES usage development and Energy efficiency increase.

For Serbian market Gazprom energy expects that Serbia might close down 600MW of inefficient power gen plants by 2020, in the same time new power gen plants are expected to be completed. In connection with the RES development plans and increase in power share up to 6% (app.500MW) a need for balancing the energy system with new traditional powers will be needed.

When it comes to coal utilization in region, according to Gazprom Energy interpretation of OECD analysis, coal will have an actual share of25-30% in the energy balance of forthcoming decades. Therefore it is needed to consider the possibilities of joining forces for coal production in the region. Main deposits in Serbia are 2 coal basins: Kolubara ( deposits aprox.4 billion t, annual production aprox.30mil t) and Kostolac Kovin basin( deposits aprox.1,5bill tons, annual production aprox 9 mil tons). In regard to coal usage Gazprom energy expects that 600MW coal fired plant in Kovin starts its operation in 2016, new 740MW B3 TENT in 2017, Kolubara 700MW new unit in 2016 and Kostolac 350MW B3 unit in 2020.

Looking at the RES incentives for green energy generation Serbia developed solid starting feed in tariff and legal framework, conclusions of Gazprom Energy unit in Serbia.

There is a clear competition in wind energy development area, in obtaining the status of temporary privileged producer. Current total quota determined by law is 450MW and current planed projects reaches 1.713MW.

The conclusions of Gazprom Energy on regional market development are that region will be one of the main exporters of electricity to Italy. Fossil and hydro will be basis of power industry in the region. RES ( biomass and wind mostly) usage will develop as governments supporting schemes make RES projects attractive and competition in RES area will develop furthermore.