Serbia: Electricity supply market still in green phase, price influences the market development

Published on 6. February 2015., News Serbia Energy

The electricity market liberalization in Serbia has also started two years ago, and apparently, there is no crowd on it, or it might be better to say – there are many people who have signed up to participate in it, but they do not take part. In fact, as was confirmed in the Energy Agency, there are even 84 licensed electricity suppliers in Serbia, but only three supply end customers – “Electric Power Industry of Serbia”, the Slovenian company “Gen-i” and Ltd. “Vukovic 1967” from Veternik.

As a reminder, all except households and small customers must have a supply contract under market conditions, and they are free to choose suppliers on the market since the beginning of this year, but do not have to, because they still have the right to a public supply. Households and small customers, unlike other consumers, may, but need not to enter into a contract with the electricity supplier. Guaranteed supplier supplies customers at regulated prices, and by the decision of the Government of Serbia it is “Electric Power Industry of Serbia”. This essentially means that the January 1^st did not even bring some major changes for this consumer category, or they can remain on public supply and supply at regulated prices in accordance with existing agreements because they have the right and opportunity, but not the obligation, to contract supply on the market with any electricity supplier.

Among those who sell electricity to final customers on the domestic market also is the Slovenian company “Gen-i”, but for now, as they say in the company, their customers are not those of the category of household / small customers. The reason is, emphasized in the company, that applicable regulated electricity prices are lower than the market ones, so other suppliers cannot be competitors to the guaranteed supplier. In the company “Gen-i” says that they offer electricity on the Serbian market to customers of all categories except households and small customers, and that prices vary. Whereas the price is public in the case of customers who have contracted supply through public procurement, the price for the others is the price of the contractual relationship part and is not public. Since customers have different activities, different shapes and power consumption, also prices are different, and they are formed on the basis of transparent wholesale market prices.

So, only the households and small customers can be supplied at prices regulated by the Energy Agency. Small customers are electricity consumers (legal entities and entrepreneurs) who have less than 50 employees, the total annual income of up to ten MEUR in dinar equivalent, which are all connected to the distribution electricity system with voltage below one kilovolt and whose electricity consumption in the previous year is up to 30,000 kilowatt-hours.

When changing the supplier, the proper procedure must be observed, which must not be longer than 21 days and it is free of charge. It should be noted that households, if they want EPS to continue to be their supplier, must not sign new supply contract, if they remain in the regulated market.

The liability goes in addition to the license

It should be noted that for the electricity supplier job is required the license to supply, regulated balancing accountability to the transmission system operator and interest in the supply of end customers. By all accounts, there are suppliers and licensees, but, as they say in AERS, due to the low kilowatt price of regulated supply, it is not expected that many households buy kilowatts on the open market.

However, households that want to change the supplier may do that on a free market, where prices are liberalized. If someone changes its mind, it can easily return to the regulated public supply.