Serbia: 2014 Winter energy security plan, Gov ready for gas crisis, the report

Published on 2. September 2014., News Serbia Energy

The floods left serious consequences at the energy system, but we will not run out of energy this winter. 470 million cubic meters of gas in Banatski Dvor until the end of the month. Enough coal at the dumps

Fears that threaten us with restrictions this winter, that it will be cold in the apartments, are not unreasonable. The floods have left the catastrophic consequences at the energy system of Serbia, and memories of the gas crisis of 2009^th are still fresh, particularly in a situation where conflicts in Ukraine do not calm monthly. However, the competent assure us that even in the darkest scenario our country will not run out of energy.

Mining and Energy Minister Aleksandar Antic argues that citizens should not have any reason to be concerned, because the energy supply in Serbia will be stable this winter. He says that cuts are not an option, because the Government, the Ministry of Energy and “Electric Power Industry of Serbia” have the answers for everything, even the worst scenarios regarding the energy supply.

And the first EPS man Aleksandar Obradovic assures consumers that the power system of Serbia is stable and will remain so. EPS has decided to import electricity this summer because the price is far more favorable at this moment, and all the coal produced in the Kolubara and Kostolac is preserved for the winter, when the kilowatts price is drastically higher.

Dumps in TPP “Nikola Tesla” in Obrenovac stored about 1.2 million tons of coal and 200,000 tons is located at the Kolubara landfill.

EPS prepares various scenarios in collaboration with colleagues from Europe that may occur in the fuel supply for the winter. For now there are three. The first is to provide as soon as possible an additional amount of own coal, the second refers to the negotiations for the electricity purchase and the third is eventual purchase of certain coal quantity in the region.

Priorities

A priority is how to get enough coal to generate electricity. Kolubara basin, the largest EPS supplier of coal, by dewatering mine Veliki Crljeni and his putting into operation, it was able to reach 80 percent of the former production. In order to achieve 100 percent, it is necessary to dry the biggest mine – “Tamnava – West Field”. The companies that will pump water and mud out from the pit have been recently selected, and the work is expected to begin later this month. If selected “Energotehnika Juzna Backa” from Novi Sad and the Romanian company “SC NESS Project Europa SRL” work by capacity which they promised, and that is from 20 to 30 cubic meters of water per second, it is believed that a deal could be completed in several months.

According to Ljubinko Savic, the Secretary of Energy Chamber of Commerce of Serbia, our power system is able to largely meet all consumers.

– Even in the years when the energy system was fully prepared for the winter period, we imported the missing amounts of electricity during the peak consummation – says Savic. – Now that we have huge consequences on our mines from flooding, we do everything that our citizens do not feel it this year. I believe we will succeed in doing so. On the other hand, the electricity market is functioning well and it operates the last two years. Large industrial consumers and part of the small and medium enterprises, as well as some institutions have changed their supplier, so they are no longer supplied by our public enterprises. This is an additional advantage because that part of the electricity that they consume is available for consumer use.

When it comes to the gas, the competent in the Ministry of Energy claim that the underground gas storage in Banatski Dvor is loaded. Currently there is 449 million cubic meters of gas, and 470 million cubic meters is supplemented by special methods, which is a historic maximum.

Supplementing

These quantities, however, are only sufficient for about three months. If Ukrainians decide to punish a part of Europe and screw taps, the year 2009^th could repeat to us. The authorities, however, argue that there is little chance that something like this happens and if it happens, Serbia has a ready answer.

– Unfortunately, we already have had experience with the “Ukrainian crisis”; if all announcements are implemented, and again this year there is another crisis, I hope that this experience will help us to “painless” overcome it- says Savic. – From “Srbijagas” and from the level of the Ministry of Energy and Mining announce that our underground gas storage “Banatski Dvor” will be filled to its maximum capacity by the end of August. There are intensive works on its charge, and these are amounts which with domestic production, I hope, will be sufficient for priority customers in the coming cold days. It is possible that some small amount we will purchase from the underground gas storage facilities in Europe, especially in Hungary, Austria and Germany. These quantities can be got only when they meet the needs of their own market and estimate that there will be some surplus. But then the prices are considerably higher than contracted, and such a “privilege” should be counted only in the worst possible scenario for the energy system of Serbia. It is recommended that all others in a timely manner, where possible, and where technical replacement capacity can be used by any other energy source, provide additional alternative fuel, coal, oil fuel and wood.

According to him, the part of consumers, especially in urban areas, which traditionally use gas in cold days, is likely to pass on the electricity stoves.

– It is not the interest of any of our power system, and it should be our as individuals- says Savic. – Is it really going to come and to which extent, will largely depend on prices and pricing policies of the Government in this area, but also from the weather conditions. However, I am convinced that Serbia is doing everything to be ready to welcome the coming winter season, and to have an answer in the case of gas crisis. I think that we have to rely primarily on available domestic resources. Underground storage of natural gas will be filled to its designed capacity, the coal reserves in the dumps of our thermal power plants are filled, oil refineries is working steadily and in the refining sector there is enough space for the production of heavy oil. These are the key energy sources, which may be substituted for the missing quantities of natural gas in the case of a gas crisis, and they are here in our market. We can “survive” gas crisis without much difficulties by good coordination.

Neither higher price covers all

“Electric Power Indusrty of Serbia” has big claims from consumers, faces with huge losses on antiquated networks and with all the inventive methods of electricity theft. In addition, the May floods seriously jeopardize system.

– EPS suffered extensive damage during the floods in May and we still review all measures that can be taken to minimize the consequences of the flood impact on stability of electricity supply and EPS business – emphasize in this public company. – Increasing the electricity price is not a solution for the effects of flooding and it can make up only a third of the EPS financial needs.

The import is continued

Price of kilowatt on the market is more favorable during the summer months, and so the coal deposits are filled until the winter, in order to provide as much raw material to produce electricity. From May 15^th and since the declaration of emergency due to flooding, EPS bought 714.464 million kilowatt-hours by the end of July on the open market for what was needed 30.5 MEUR. The average price is 4.2 euro cents per kilowatt.