Across Europe, record low water levels are being recorded. The rivers receded, old ships, ancient bridges, and even forgotten messages written in the riverbeds during dry times centuries before are emerging. Serbia is not an exception, so due to droughts and significantly reduced river levels, our country loses 3.2 million euros in potential earnings from the Đerdap Hydroelectric Power Plant alone on a daily basis.
Hydropower plants account for 30 percent of total electricity production. HPP Đerdap 1, which last year produced 46 percent of the total energy produced at the HPP, this August generates 6,000 megawatt hours (MWH) per day, which is about 50 percent less than the average for this time of the year. When this figure is multiplied by the average price of kilowatt hours on the market in the past seven days, which is 536.69 euros, we arrive at 3,220,140 euros.
Instead of thinking about export or a more efficient redistribution of what is produced, Serbia is forced to import electricity. According to Miodrag Vulić, Director of the Department for Dispatch Planning and Production Management in “Elektroprivreda Srbije”, the daily deficit caused by the drought is 9,000 to 10,000 megawatt hours per day, or between 4.8 and 5.3 million euros at average prices from the current week.
The cost of electricity – the trillion dollar question
The sums allocated for imports can easily be higher in the future. These are also realistic expectations because the prices of electricity, which depend to the greatest extent on gas, are increasing every day. How high it will go is a question that is difficult to give a precise answer to.
“That is the most expensive question. Not for a million, but for a trillion dollars. No one can say that precisely. We have futures where at this moment electricity is sold in the future, but that is not a guarantee that it will be like that in two or three months. The last quarter of 2022 is selling for 660 euros at the moment. The reason is that gas has almost gone up again. It has gone over 250 euros per kilowatt hour (KWH), or 2500 per cubic meter, and is expected to continue to rise. If you were earlier If we bought electricity a month, we would pay 450 euros for it. Now that price is 660. That’s all I can say”, energy adviser Nenad Jovanović told the N1 portal.
When it comes to estimates for the fall-winter period only, Željko Marković, an energy consultant at Deloitte and one of the long-time former directors of “Elektroprivreda Srbije”, was somewhat more precise in his predictions. He says that according to the current forecasts on the reference exchanges, the average electricity prices that will be traded during the fall and winter will be around 790 euros per (MWH) megawatt hour.
“The price of gas has increased by about 60 percent in the last month, while the average price on the day-ahead market has increased by about 20 percent in the last month. Future deliveries (futures) in 2023 are currently being traded on the Hungarian stock exchange at a price of 680 EUR/MWh, while for the same delivery period a month ago it was traded at a price of 360 EUR/MWh, and I am afraid that such an upward trend will continue in the future”, Marković believes, Nova writes.
