Serbia: Energy security vs Risks of energy dependence – “gas loop”

25. April 2014. / News Serbia Energy

“South Stream is just another (gas)”silk cord “around the neck of an economy already squalid. Although participation in the project is only reasonable choice, it must not remain only strategic choice for Serbia gas energy. There are different opinions on energy security of Serbia, one of the them recently raised the attention in Serbia. Serbia Energy brings digest brief analysis of possible methods and ideas for overcoming the energy dependence and achieving relative energy balance of Serbian energy market.

The energy picture of Serbia is not encouraging. The oil sector is almost entirely comprised of NIS and its capacity. Relating to gas, it is broken in the purchase, transport and distribution of imported, mainly Russian gas, as well as the system of domestic reserves exploitation. The main characteristic of all energy systems is a distinct technological obsolescence and low energy efficiency, and the current alarming and unacceptable long-term technological condition for the environment protection. The age of the power plants (between 12 and 42 years) is particularly worrying, and nearly 99 % of total energy reserves are reduced to coal. The only significant renewable energy potential, which Serbia has, is water. Other RES have not a significant share in the energy balance.

Among the projects that in the future should be implemented are the construction of new thermal power plants, and several hydropower plants. However, of all the projects, the most notable is one, both for the extent of the potential energy gain, and also for the economic effort required for its completion – it is the “South Stream”.

Russia is the largest single supplier of EU natural gas, but, as the author points out, this is not about relying on one country, but only one company – “Gazprom”. Serbia almost completely surrendered its energy system under the control of Russian partners. NIS and “Banatski Dvor” are dominantly owned by “Gazprom”, and the only energy infrastructure company that have remained in the exclusive property of the state of Serbia, is “Srbijagas”. According to the author, it will not be a big surprise if “Gazprom” requests to participate in the “Srbijagas” ownership structure.

For the Serbia independence, both in the energy, but also in terms of foreign policy, it is important to establish some balance level in the energy market. This balance can only be achieved by diversifying supply sources.

But it is certain that by the South Stream realization Serbia will solve some of its major energy problems. By accessing the strong infrastructure, provided that “Gazprom” would be able to provide the necessary amount of unrestricted trade, it will facilitate the adaptation of existing and construction of new energy potentials and thus will open up great opportunities for new economic development.

For now, there is no possibility of creating a “gas loop” around Serbia. Gas as fuel, is not so widespread in Serbia, unlike, for example, the countries of the former USSR. Precautions must not be neglected, and more attention must be paid to long-term strategies and economic benefits that can increase profits of the energy sector. Otherwise, we could find in a situation in which foreign partners would control a good portion of our energy economy.

Source; Serbia Energy

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