Serbia, Clear government plan is expected regarding the diversification of energy sources

, News Serbia Energy

The reporter of the European Parliament for Serbia, Vladimir Bilčik, told Euronews Serbia that the opening of new clusters in negotiations with the European Union will depend on economic and structural reforms, including energy. As he said, the Government of Serbia should have a clear plan regarding the diversification of energy sources, and from Brussels they say that they will help Belgrade along the way. 

“We are all cutting off the supply of Russian fossil fuels, gas and oil, because Russia has become an unreliable partner. We cannot cooperate with Russia, because it has attacked Ukraine, a sovereign country. Fossil fuels are also used as a weapon, but also as a means of influencing certain governments, including governments in the Western Balkans. The European Union is ready to work with our partners in Serbia to make sure that Serbia has other sources of natural gas and oil, as well as other forms of energy,” said Bilčik.

Energy is a key topic because there is an energy war between Russia and the EU, Jelica Minić, president of the European Movement in Serbia, told Euronews Serbia. She says that the EU was very dependent on Russia when it comes to fossil fuels, and that the process of diversification is something that it must go through as well, and therefore Serbia too.

“There is no way to transfer Russian energy to Serbia if we insist that we only want Russian energy. There are funds that have been determined for the entire region, both in the short and medium term, which will go to infrastructure and diversification, because it is in the interest of the EU to diversify the sources and to insist on renewable sources as much as possible, and this is what Bilčik was talking about,” Minic said, adding that there is still much that needs to be done.

Energy will be an “absolute priority” for the new Government of Serbia, Prime Minister Ana Brnabić said while presenting her program. Serbia, as she pointed out, needs greater independence in that field and that it “does not rely on only one source and one partner, especially when those parties show that they are insecure and that they use the issue for political reckoning and imposing policies”.

The first step is the gas pipeline to Bulgaria

The first step on that path is the construction of a gas pipeline to Bulgaria, from where gas from Azerbaijan should arrive in Serbia. The construction of the gas interconnector between Serbia and Bulgaria began on February 1 last year, on the part of the gas pipeline from Niš to the border with Bulgaria near Dimitrovgrad, and the deadline for the completion of the works is October this year. The value of the project is 85.5 million euros, and the construction of Serbia is supported by the EU, with a loan from the European Investment Bank (EIB) of 25 million euros, while 49.6 million euros are grants from the IPA fund of the EU, and the remaining 11 million euros are secured from the Serbian budget and Srbijagas funds.

The Minister of Energy, Dubravka Đedović, stated a few days ago that the interconnection with Bulgaria is of strategic importance for the country’s energy security, because its construction will diversify the gas supply. During her recent visit to Baku, Đedović stated that Azerbaijan is a country that is recognized to help Europe when it comes to gas.

“With the completion of the interconnection, we will not only have another supply route, but we will finally be able to say that we are no longer dependent on only one supplier. The gas pipeline will enable the flow of gas from Central Asia. The plan is to continue the construction of gas interconnections, primarily with North Macedonia, because we will have the opportunity to connect to the Southern Gas Corridor,” she says.

Since the beginning of 2021, Serbia has been supplied with Russian gas from the direction of Bulgaria through the “Balkan Stream” gas pipeline, and the Ministry of Energy notes that before the commissioning of this gas pipeline, Serbia was supplied with gas from the direction of Hungary, which is still active.

“The completion of the construction of the Serbia-Bulgaria gas interconnection is planned for the last quarter of 2023. The start of supplying Serbia with this gas pipeline can be expected at the beginning of 2024. The completion of the Serbia-Bulgaria gas interconnection on the territory of Bulgaria (60 km) is coordinated with the completion of the works on the section on the territory of Serbia (109 km), while the interconnector connecting Bulgaria and Greece has already been put into operation in October 2022. With the completion of the gas interconnection Serbia-Bulgaria, Serbia will have the opportunity to supply gas sources that reach Greece, primarily gas from Azerbaijan or from the LNG terminal,” the Ministry of Energy told Euronews Serbia.

After the meeting of Minister Đedović with Srbijagas director Dušan Bajatović, it was announced that the second phase of the gas pipeline project from Niš to Batajnica is planned, but the relevant ministry clarified that the start of functioning of the Serbia-Bulgaria gas interconnection is not conditional on the realization of this project.

“The construction project of the Niš-Batajnica gas pipeline is a continuation of the Serbia-Bulgaria interconnection project and is important above all because of the maximum use of the capacity of the planned gas interconnection of Serbia with Bulgaria and North Macedonia, as well as because of better regional connectivity, where Serbia plays a significant role as a transit country for gas transport”, the Ministry of Energy states.

What difficulties can there be in the way of diversification?

Vojislav Vuletić from the Gas Association tells Euronews that Serbia believes that the completion of the Niš-Dimitrovgrad gas interconnector will not significantly change the supply situation in Serbia.

“At the moment, we have 100 percent Russian gas at our disposal. I would like to have some other gas at our disposal, because then we could negotiate with both suppliers and in some way lower the price. However, in “For the next seven or eight years, there will be no other gas that we can rely on. With the completion of the gas pipeline to Bulgaria, we get one possibility that, if Azerbaijani or Iranian liquefied gas appears on the market, it can reach our territory via Bulgaria”, says Vuletić.

When asked whether, after the opening of the liquefied gas terminal in the Greek port of Alexandroupoli, Serbia could expect gas deliveries next winter, Vuletić believes that the possibilities of such realizations are small.

“Azerbaijan built a gas pipeline that goes and sends its production of 16 billion to Southern Italy. If a new deposit is opened in Azerbaijan, it may be possible to get some of it. The liquid gas that should reach Alexandropoulos is always under question.” because there is no liquefied gas on the world market in the quantities that could satisfy the needs of Europe, and at the same time our needs. The largest producers of liquefied gas – Australia, Indonesia, Qatar, Russia – sell their gas under long-term contracts, and the largest customers are large the industries of China, Japan, South Korea and India. So, the huge amount of liquefied gas that is produced has already been engaged and something little can be obtained. I will tell you that Croatia has built a terminal on Krk and has received one tanker so far,” he believes Vuletic.

Kovačević: Serbia can completely eliminate dependence on Russian gas

On the other hand, energy expert Aleksandar Kovačević tells Euronews Serbia that there are no major problems for the quick and effective diversification of Serbia’s supply of natural gas and notes that there are at least four or five different options for supply.

“Serbia can completely eliminate its dependence on Russian gas. This can be achieved by a combination of several solutions: by drastically reducing the use of gas in general by improving energy efficiency, by making smart use of domestic energy resources that are not currently being used, and by small gas imports from other sources and supply directions. All these possibilities have been available for many years, and now they are further improved with the development of technology,” says Kovačević.

He believes that the mentioned solutions can be applied very quickly and that in the next 12 months, big improvements can be achieved or even the problem can be completely solved.

“The recommendations of the European Union in this sense are only one aspect. The other aspect is that by using the available opportunities, the economic situation in Serbia will significantly improve, increase employment, improve the balance of payments and reduce the costs of security of supply,” Kovačević points out.

How the European Union helps

Naim Leo Beširi, director of the Institute for European Affairs, reminds Euronews Serbia that the EU has invested significant funds in renewable sources of electricity in Serbia, but also in the construction of gas interconnections, in order to reduce Serbia’s dependence on Russian gas, and thus the potential blackmail potential. 

When asked whether energy diversification can become a formal condition for opening or closing a cluster in the process of negotiations with the EU, he replied that relying on several different sources of energy supply is primarily in the interest of citizens and companies in Serbia.

“I don’t think anyone will insist on being at a loss, especially not blackmailing Serbia into buying something that is more expensive. When we talk about whether something is more expensive, we are not only talking about money, but also about the political price that Serbia pays when it comes to energy supply citizens of Serbia and the economy. The EU has already invested almost billions of euros in Serbia’s energy system, a good part of that money is non-reimbursable aid. One part comes from favorable loans that Serbia took from banks, but the Government of Serbia also participated in the divestment with its own funds”, he said.

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