Serbia: Energy sector and state power utility under lobby pressure from RES developers

24. August 2015. / News Serbia Energy

Until recently, the Serbian Government representatives claimed that Serbia was obliged to provide 27 percent of energy from renewable resources by 2020 – due to the obligations towards the European Union. According to the national data, already now, Serbia achieves more than 21 percent of energy from renewable resources in its overall energy mix. This is more than the European plan for obligatory participation of renewable energy by 2020 – which amounts to only 20 percent of the total generated energy!

In the electricity production in Serbia, more than 30 percent comes from clean renewable resources – large hydro power plants – which the local environmental lobby declares as environmentally damaging, therefore asking the electricity produced by them to be deleted from the overall balance of domestic renewable energy.

Was it because of this that, in its recent report, Eurostat lowered the official percentage of participation of renewable energy in Serbia?

According to the data on renewable energy production in Europe during 2013, which Eurostat published in May 2015, Serbia had the renewably energy participation of only 12.8 percent in the overall energy mix – which contradicts the domestic data that Serbia in fact has more than 21 percent of clean renewable energy in its overall energy balance.

Stating such low percentage of domestic renewable energy in the European official statistics (Eurostat) nevertheless requires an intervention of the competent services in the country. Serbia, with more than 21 percent of renewable energy exceeds the EU plan which requires than only 20% of the overall energy is generated from renewable resources – and, therefore, it is not obliged to enter the construction of inefficient wind generators and solar panels that will only increase the present electricity price for domestic consumers.

It seems that the domestic public does not understand that the uneconomical electricity production from wind generators in Serbia will not affect the foreign investors who are building them in our country – as long as the state (the EPS) is paying high subsidies for the electricity delivered by them in the domestic power grid.

It is strange that the Serbian Government and the local experts are also not reacting to the extremely aggressive activity of the sellers of foreign wind generators in Serbia, as well as of certain local environmental groups – which deliberately diminish the existing scope of renewable energy in our country and manipulate the data presented to the Serbian public. This refers even to certain data from the studies on the cost-efficiency of investment in wind power generation in our country.

In a large national study, Wind Atlas of AP Vojvodina, which has been prepared for the purpose of wind generators construction, the data on the energy potential of wind at critical speeds for efficient electricity generation has been specified incorrectly: for the wind with the speed of 5.5 m/sec, it has been specified that its energy potential amounts to 250 W/m2 – although the actual wind potential at this speed amounts to only 200 W/m2.

In this way, the energy potential of wind with the speed of 5.5m /sec has been artificially increased by 25% – which should justify the construction of the otherwise extremely uneconomical wind generators for our conditions.

The Serbian state has recently approved foreign investments of more than half billion dollars in the construction of wind generators in Serbia, on the basis of such data. By all odds, domestic consumers will pay for this mistake through increased electricity prices.

The data on the amount of subsidies which the Serbian state, i.e. the EPS, gives for electricity production from wind generators and small hydro power plants (up to 30 MW) cannot be found in the Serbian press.

According to the previously available data, by the 2009 regulation on feed-in-tariff system, Serbia granted subsidies for the generation of electricity in local wind power plants having been delivered to the power grid– in the amount of 9.5 eurocents per kWh.

According to the data published by the international magazine REW, Serbia has accepted the obligation to pay the electricity from small hydro power stations (up to 30MW of capacity) delivered to the power grid (at subsidized prices) in the amount of 0.0975-0.195 dollars (USD) for kWh, i.e. 9.75-19.5 dollar cents for kWh – or approximately 9-18 eurocents for kWh, depending on the size of the hydro power station.

The wholesale price of electricity in Serbia, approved in mid-2015, amounts to 3.23 RSD for kilowatt-hour (kWh), i.e. only 2.69 eurocents for one kWh of electricity delivered to the power grid.

Such low wholesale price of electricity can hardly cover the costs of sustainable electricity generation from the existing thermal power stations and hydro power stations but it is not sufficient so as to be used for funding the replacement of outdated plants and the construction of new ones, too – and it is certainly insufficient so as to cover the additional costs for the subsidized electricity from wind power plants and small hydro power stations.

The critics who mention that the wholesale price from German thermal power plants is also just somewhat more than three eurocents per kilowatt-hour should be reminded that an addition of more than six eurocents for the electricity from renewable resources is included in the price of more than 29 eurocents for one kWh of electricity for German households, not to mention the additional subsidies for coal production, too.

According to the Eurostat data for the entire territory of Europe, from May 2015, the electricity price for households is the lowest in Serbia and in Kosovo – and they estimate this electricity price in our country, together with the grid costs and fees, at around 6 eurocents for one kilowatt-hour.

In the European Union, the average electricity price for households amounts to 20.8 eurocents for one kWh. The electricity price in Denmark is the highest and it amounts to EUR 0.304 per kWh over there; in Germany, it amounts to EUR 0.297 per kWh; in Ireland, it amounts to EUR 0.254 per kWh;

In the EU, the lowest electricity price is in Bulgaria and it amounts to EUR 0.09 per kWh; in Hungary, it is EUR 0.115 per kWh; and in Malta, it amounts to EUR 0.125 per kWh;

The electricity price according to the consumer standard, i.e. the electricity price measured according to the consumer income level in various European countries, is the lowest for the consumers in Iceland, then in Norway and Finland – and the electricity price in Serbia is ranked fourth according to this criterion.

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