Serbia: Renewable Energy Sources are Expensive and Serbia will Experience it

22. December 2016. / News Serbia Energy

Renewable energy sources cannot be alternative to the classic electricity production, as the electricity from renewables is expensive and consumers in Serbia will experience it.

During the Conference “The Economist: the World in 2017” this was a statement by Aleksandar Jakovljevic, Head of Strategy Department in Power Industry of Serbia, who also added that the major pillar of electricity production in the coming years will still be coal and hydropower plants.

“The State has developed a strategy to increase the electricity production from renewable energy sources, but they cannot be alternative to thermal power plants and coal”, said Jakovljevic.

“Due to fighting climate change, the EU has foreseen with the Third Energy Package that 20 percent of electricity should be produced from renewable energy sources, however this brings new problems as the electricity produced in such way is expensive”, said Jakovljevic adding that consumers in Serbia will experience that.

According to him, electricity producers in Denmark receive a compensation which is per kilowatt higher than the electricity price, and in Serbia it amounts EUR 0,00075 per kilowatt.

“The outburst” of power plants producing electricity from renewable energy sources influence the decrease of wholesale electricity price resulting in reduced revenues of even large power companies and reduced investments as well. The incentives for the construction of all power production facilities are necessary and the EU is planning subsidies to ensure the security of supply to consumers, said Jakovljevic

According to him, in the coming years Serbia will not have major problems regarding the stability of power supply to consumers. Jakovljevic announced that by 2025, investments in that department will amount to EUR 4.5 billion.

Dragisa Martinovic, Advisor to General Manager at Srbijagas, pointed out that in two weeks Serbia should finalize negotiations with Gazprom regarding the expansion of gas storage in Banatski Dvor”

Central and Southern Europe will face a new problem in next two years, and that is the expiration of Contract between Gasprom and Ukraine regarding the gas transit through this country. “If in two years’ time, gas is not transported via Ukraine, Hungary will not have enough gas for its own needs”, said Martinovic.

He added that the price of gas in Serbia is lower than average in the European markets and that the price is expected to be USD 158 per 1,000 cubic meters in January next year while the average prices in the European market amount around USD 180. “This is the reason why there are no new companies in Serbia that would offer a cheaper gas than the current price”, said Martinovic.

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