Energy Transition an Expensive, But Inevitable and Profitable Process

The transition to renewable energy sources will cost us, but far less than what the production of electricity costs us today, is the conclusion of the panel “Energy Transition: Switching to Renewable Energy Sources”, held within the conference “Energy in the Balkans: Transition to Renewable Energy Sources and Improvement of Energy Networks”, organized at Hotel Mona Plaza in Belgrade.

According to Nicola Bertolini, the head of Cooperation of the Delegation of the European Commission in Belgrade, the diversification of energy supply is necessary in order to reduce the dependence on Russian energy.

– The European Union is dependent on Russia’s fossil fuels – he said.

Talking about the potential and the utilization of renewable energy sources in Serbia, Bertolini emphasized that it was also necessary to create and expand capacities in Serbia and to secure new and better gas supply routes.

– There is a corridor which connects Italy and Serbia when it comes to the flow of energy sources, and the next very important project would be to establish a gas interconnection between Serbia and Bulgaria.

As he emphasized, the European Union can provide guarantees for the financing of both public and private investors, which are willing to invest in RES. The support pertains to the entire Western Balkans, which would also enable the utilization and development of human capital.

Market not yet liquid for energy from RES

When asked where Serbia is in the development of the RES market and which mechanisms we can apply in order to improve the switch to RES, the state secretary at the Ministry of Mining and Energy of Serbia, Zoran Lakicevic, says that Serbia is already in the process of transition. RES, including solar panels and wind farms, along with water power, make up 30% of energy in our system.

– We hope that the measures adopted within the legal frameworks will incite investments in RES. When that framework is completed, we can expect the first auction as well. Our market is not yet liquid for energy from RES, but we expect it to be in the upcoming period – Lakicevic noted.

As he added, Serbia cooperates with the European Union on implementing the mechanisms and frameworks that are harmonized with the EU norms in order to switch to green energy.

– Investments in solar panels on roofs have begun as well, and we also already have the first signed agreements of that type with EPS, in order for the owners to become producers of electricity.

Connections not to be made fast and to cost a lot

Davor Bajs, the expert for the energy infrastructure at the Energy Community Secretariat, emphasized that Europe had been inciting the construction of renewable energy sources for some time.

– Coal power plants are increasingly less sustainable in the electrical energy market because they are obliged to pay the fee for the emission of carbon-dioxide into the atmosphere, which was established on the level of the European Union. In the Balkans, the transition from the production of electricity from coal power plant to solar power plants or wind farms will be a challenge – Bajs notes.

As he said, in the former Yugoslavia, the hydro potential had already been utilized to a high degree, and what the generations before us built and established is still used by us today.

– The region has engineering knowledge and Elektromreza Srbije has 13,000 MW, which shows the interest of the investors in the construction of RES power plants. Connections will not be made in a short amount of time and they will cost a lot, and it should be noted that some wind farms can survive in the market without incentives – Bajs pointed out.

Also, what’s important to note, according to Bajs, is how important it is to make a good estimate about who to award guarantees to for the connection. Investors frequently get permits for the connection, although their goal is only to bring the project up to a certain level, only to sell it later, which should certainly not be the purpose of this transition.

North Macedonia as a good example

North Macedonia has adopted all the necessary laws when it comes to energy transition, and, according to Viktor Andonov, the adviser to the prime minister of North Macedonia for energy, the transition process is good and based on the implementation of strategies and plans.

– As the first project, I would highlight the Oslomej power plant, where the goal is to replace the old thermal power plant. The agreement with two companies from Bulgaria and Turkey has been signed and we hope that the process of the replacement of the old thermal power plant with new technologies will be completed by the end of next year – Andonov said.

He noted that a large part of the job had been done with the very adoption of the legal framework which had provided security to investors for making such investments and emphasized that the quickest way of building wind farms was in fact to build them close to transfer systems.

In Republika Srpska, according to Petar Djokic, the minister of energy and mining in the Government of RS, they take the transition process very seriously and with the utmost responsibility.

– We have worked a lot on the legislation in that field and we have now achieved the kind of legislation framework that the European Union requires and today we have power plants of 700 MW contracted and under construction, whose value is BAM 2.20 billion – he emphasized.

As he added, the plan is for these facilities to be completed in the next 5 years, and there are already plenty of new requests for investments, which will largely change the energy situation in Republika Srpska.

– I believe that we are on a good train where the stations are not wrong. The Law on Renewable Energy Sources incites the construction of small facilities on residential buildings, whereas, on office buildings, there are already examples of that process going on for some time now. Those are small facilities, but they are important for the whole process of transition – Djokic concluded.

The panel was moderated by Dubravka Kosic of the K&F Advokati law office, and the conference was organized by Confindustria Serbia.

S. M.

Konfindustrija Srbija

Ministarstvo rudarstva i energetike Republike Srbije

MONA PLAZA d.o.o. Beograd

Akcionarsko društvo Elektroprivreda Srbije Beograd

Ministarstvo energetike i rudarstva RS

Vlada RS Banja Luka

KF Advokati

Delegacija Evropske unije u Republici Srbiji Beograd

Confindustria Serbia

Ministry of Mining and Energy of Serbia

Hotel Mona Plaza Belgrade

EPS

Elektroprivreda Srbije

Government of North Macedonia

Government of Republika Srpska

Ministry of Mining and Energy of Republika Srpska

K and F law office

Energy Transition Switching to Renewable Energy Sources

Energy in the Balkans Transition to Renewable Energy Sources and Improvement of Energy Networks

Cooperation Department of the European Commission Delegation in Belgrade

Nicola Bertolini

Zoran Lakićević

Davor Bajs

Viktor Andonov

Petar Đokić

Dubravka Kosić

Energy Community Secretariat