Serbia: Power market liberalization, EPS and Messer supply story

22. August 2013. / News Serbia Energy

I still think that we will try to return Messer because contracts are being made on annual level and we are big and stable partner and we can offer most to our consumers together with our production capacities and position at market, says Aleksandar Obradovic EPS CEO.

Consumer does not see producer, he sees only supplier because the function of electricity production and supply are two different things. I can buy electricity at open market and to resell it or to produce it myself. You, as clients, don’t see that. All production capacities in EPS will sell electricity to “EPS Supply” or, for example TSO company “Elektromreza Srbije. But, nobody will be able to buy it directly from TPPs TENT or TPP Kostolac. All companies work this way (RWE, CEZ, they have its companies for supply and you are making a contract with supplier which is strictly regulated by law. Everything is allowed here: if you want to be more aggressive at market, you can go shorter way or even with loss, only to take over a part of market- like in any other business segment.

Q: You want to say that this price is not profitable?

They need to know that, everyone has right to come with any price, competition for consumers is open. I still think that we will try to return Messer because contracts are being made on annual level and we are big and stable partner and we can offer most to our consumers together with our production capacities and position at market.

Messer says that high voltage electricity is 30% higher in Serbia than in Germany.

This is not true at the first place and the second, all current buyers on high voltage have made a profit on social electricity price for almost a decade and no one of them appealed to purchase electricity at much lower prices than it should be and they saved hundreds million EUR. They have had right to buy electricity at open market during the last 8 years, but they didn’t do that because EPS was the most profitable. When you have tariff price on the one side and market price that is much buyer on the other side, you will for sure pick tariff price. On the other side if some trader offers lower electricity, it is not a criticism to EPS because EPS is producer and has more expensive electricity. The question is when this buyer arranged this purchase – his purchasing price was maybe lower than our producing price. The fact that we are producers does not mean we have the cheapest electricity at any moment and insurance costs always. I need to buy electricity at some previously determined price and then to begin winter season peacefully. However, how do you know which price will be? What if I bought more expensive electricity now than in February and someone says in February “Why did you pay it 55, when it is 45 now’? Or it can be opposite. We can make profit from it. That’s why I don’t understand articles with questions: “Why did you buy electricity a year in advance, why didn’t you wait for lower price? Price is dynamical category, which depends from many factors, and no one can predict it.

Source; Serbia Energy/EPS

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