Serbia: Requesting a price increase because 150 million euros is needed for electricity import

15. July 2014. / News Serbia Energy

By now Serbia contracted electricity import in the amount of 62 million euros. It is going to be necessary to agree the import of at least 40 million euros more. Ordered electricity has not been paid yet. Direct damage is 120 million euros, while the indirect damages due to unrealized production and import are still under estimation, as said by EPS.

There are no precise data on how much electricity is going to be necessary to be imported in order to provide enough electricity for the winter.

-Although it is early for estimations, it is not excluded that the amount that would be necessary to be paid for energy stability this winter could reach even 150 million euros – according to information “Blic” got.
He added that this is going to depend not only on the price of imported electricity, but also on the amount of coal that “Kolubara” mines would be able to produce, having in mind that the mines are still mostly flooded. The later the operation of the mines starts, the more electricity would have to be imported.

Milorad Grčić

Milorad Grčić, the director of MB “Kolubara” stated that daily coal dispatching at the moment is half the amount of coal dispatched before the floods and added that drying out of particular basins started.

– 210 cubic meters of water flowed into the OPM “Tamnava West Field, all the systems for coal production are flooded. Until the floods began, this OPM was the backbone of coal production in MB “Kolubara”. Pumping out of the water from this OPM has not started yet. Only yesterday EPS sent the notification that “Kolubara” is going to call for a tender for pumping out of the water – says Mr. Grčić.

On the question when the coal production is going to normalize, he answers that production increase for 20000 tons is expected during August that will exceed 70 percent of former production.

The problem of possible price increase arose because not only that there is not enough electricity but the necessary amounts for the winter should be contracted and paid now. According to the calculation of the Ministry of finance, that was discussed by the Government last week, the price of electricity will increase first for 30 and after that for 20 more percent in order to provide money for the import. Against the price increase is the Prime Minister Aleksandar Vučić, who ordered to the Ministry of energy to find the model to stop the increase in price electricity.

– The Government applies the electricity price not to increase 30 percent that is the estimation of the Ministry of Finance.

Deputy Prime Minister Zorana Mihajlović, however, claims that the “price of electricity was not the topic of the Government discussions” and that the increase of electricity price will solve the issue of neither import nor flood damages recovery. She confirmed that EPS plans to import electricity in the amount of 150 million euros.
When asked about rising of electricity prices, people from EPS answered that this system was seriously damaged during the floods.

– All the measures that could be taken in order to decrease the impact of floods on the stability of electricity supply are still under estimation. The analyses show that only the direct damage of the production capacities is 120 million euros, while the indirect damages are still under estimation – according to EPS.

Analysis and then price increase

On the question weather and for how much the price increase of electricity is expected, the Ministry of energy gives the information that when making such decision, all factors and consequences related to it have to be analyzed first.

-That issue requires complex analysis of all macroeconomic factors. The percentage of price increase is the number that we get based on the comprehensive analysis and auctioning with the figures is not good if all the parameters are not estimated first- according to information Tanjug got from the Ministry.

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