Serbia: Energy Community transmits to the region, The Balkans needs a regional energy market in order to manage energy supply trilemma- security / sustainability / availability

15. December 2014. / News Serbia Energy

Head of the electricity unit at the Energy Community, Simon Uzunov, said that the Balkans region could not exist in terms of energy as the complex of separate units, but only as a connected regional energy market. According to him, Serbia is leader in implementing the reforms and moves fastest in that direction.

Mr. Uzunov said that the elements for the investments in the infrastructure development should be in accordance with the Third Energy Package: Directive on the electricity market, Regulation on networks access for the electricity transmission, the EU network codes,Directive on Renewable Energy Sources, the Large Combustion Plant Directive, and Regulation on guidelines for the development of Trans-European Energy Infrastructure.

When it comes to the electricity situation in the region, one of the problems is the appearance of a large number of the same projects in tenders. One of such examples is the Macedonian project of the pumped-storage hydropower plant “Čebren”, for which 9 unsuccessful tenders were announced. This, however, is not the only case.

In the region,investment decisions are made slowly, and procedures are not sufficiently efficient. For instance, it is necessary to provide about 20 different approvalsfor onesingle project. Local electricity markets are too small and under the domination of the national electric power industries.National production of electricity for the local useis predominant. At the same time, the local electricity prices are not attractive toinvestors;there is aproblem with collection of charges as well, present especially inAlbania.

The data availableto the tender participants are insufficient or unrealistic. Development and spatial plans are inconsistent and they often depend on the political priorities, whicharebeing changed too often. The existing production facilities in the region are insufficient, technologically outdated, and they will have to be replaced soon. Regarding this fact, there isa critical situationin Ukraine, Macedonia and Kosovo. Primary energy is dominated by coal, but the importance of hydropower and renewable energy sources is growing.

The region is characterized by the inadequate distribution of production capacities. Gas is used less than it is possible and necessary. The transport infrastructure is not critical, but it is going to be the subject of the future investments. The electricity market is developing slowly and uncoordinatedly in all segments such as: deregulation of production and liberalization of the wholesale trade, establishing of the market for “day-ahead” and “during a day”, allocation of interconnected transmission capacities.

Uzunov said that the issues in the region which would be discussed in the further period were: energy efficiency, use of technology, “smart networks”, deregulation of pricesand transparency in the structure of production costs, marketliquidity and the role of an organized energy market, technology implementation for energy storage, introducingthe renewable energy sources, the role of the market forcreating the correct prices and the energy supply trilemma- security / sustainability / availability.

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