Serbia: Power utility EPS prepares for winter shortage of 300-500MW

Published on 1. December 2014., News Serbia Energy

Electric Power Industry suffered major damage during may floods, in the first place on the Kolubara surface lignite mine which supplies the TENT power plants.

The open pit mine “Tamnava – West Field” was completely submerged with a large number of mining machines. It was created the lake with the contents of 210 million cubic meters of water. It was announced recently that the production plan was adjusted so that the planned production of 30 million tons was reduced to 24 million tons of lignite. Lack of 6 million tons should be understood as the fuel amount which thermal power plant with power of 500-600 MW burns annually in their furnaces.

Last month EPS announces tender for the import of approximately 1 million tons of lignite in the coming winter months, with the option to import another half million tons. From this we can indirectly infer that analysts and planners in EPS calculate to compensate for a shortfall of around 300 MW in the winter months.

Daily electricity import in a series of recent days has revolved around the figure of 8 million kWh per day or constant power of 300-350 MW. Without intention to do impermissible simplistic analysis, everything shows that it is expected the electricity shortage from its own production in the coming winter season, which will have to compensate the electricity import, coal import and possibly production increase from other open pit mines. Of course all this with the optimal management of the energy content from the existing water accumulations in hydro power plants.

The favorable circumstance is that the electricity for continuous delivery could be obtained this summer on the neighboring markets conveniently at prices around 35 € / MWh, which is indeed much more than what it is paid in EPS system, but much favorable than in previous years. Import and lignite price is very dependent on the transport length and it can easily drop unprofitable in comparison to the direct electricity import. The arrival of the heating season will also change the market situation especially when it comes to some other energy categories such as peak energy, working capital reserve and similar. With all that there is incoherence resulting from meteorological factors (temperature, hydrology). Precise estimate of winter energy balance cannot be given with sufficient precision at this moment. We certainly expect a complex and tense winter in energy terms.