Serbia: By 2025 EPS will Invest 4.5 Billion Euros

, News Serbia Energy

Head of Strategy Department in Power Industry of Serbia (EPS) Aleksandar Jakovljevic announced today that Serbia does not have and will not have major issues with stable power supply to consumers in the coming years and that by 2025, investments in that department will amount to EUR 4.5 billion.

During the Conference “The Economist: the World in 2017”, he said that EPS has surplus electricity during summer which is exported, and a deficit during winter when the electricity is imported, and that the system is relatively balanced.

“We expect that in the years to come the production will meet the demand, because despite the consumption increase, we will increase energy efficiency”, said Jakovljevic
He also added that the major pillar of electricity production in the coming years will still be coal and hydropower plants.

“The State has developed a strategy to increase the electricity production from renewable energy sources, but they cannot be alternative to thermal power plants and coal”, said Jakovljevic.

He pointed out that fighting climate changes brings new challenges to energy sector and that Serbia needs to adjust and integrate into electricity markets in the region, as well as in Europe.

“Due to fighting climate change, the EU has foreseen with the Third Energy Package that 20 percent of electricity should be produced from renewable energy sources, however this brings new problems as the electricity produced in such way is expensive”, said Jakovljevic adding that consumers in Serbia will experience that.

According to him, electricity producers in Denmark receive a compensation which is higher per kilowatt than the electricity price, and in Serbia it amounts EUR 0,00075 per kilowatt.

“The outburst” of power plants producing electricity from renewable energy sources influence the decrease of wholesale electricity price resulting in reduced revenues of even large power companies and reduced investments as well. The incentives for the construction of all power production facilities are necessary and the EU is planning subsidies to ensure the security of supply to consumers, said Jakovljevic.

Dragisa Martinovic, Advisor to General Manager at Srbijagas, pointed out that in two weeks Serbia should finalize negotiations with Gazprom regarding the expansion of gas storage in Banatski Dvor”

“We need to expand the storage in order to ensure stability of gas supply to consumers, as Central and Southern Europe will face a new problem in next two years, and that is the expiration of Contract between Gasprom and Ukraine regarding the gas transit through this country”, said Martinovic.

“If in two years’ time, gas is not transported via Ukraine, Hungary will not have enough gas for its own needs”, said Martinovic.

He added that the price of gas in Serbia is lower than average in the European markets and that the price is expected to be USD 158 per 1,000 cubic meters in January next year while the average prices in the European market amount around USD 180.

“This is the reason why there are no new companies in Serbia that would offer a cheaper gas than the current price”, said Martinovic.

He pointed out that at the moment no one can predict the price of oil in the next four to five years.

“Three to four years ago the price of barrel was from 120 to 150 dollars, and in the next few years a slight increase to 80 dollars per barrel might be expected”, said Martinovic

He added that because of the low price of this fuel revenues of international companies are decreasing, and therefore investments in this sector, which means the production will be reduced too.