Zoran Vukovic, the executive director for supply at Elektroprivreda Republike Srpske
, says that, regarding the prices that are high, the first thing that comes to his mind is the price in electrical energy markets, especially the HUPX market.
– Last year, the prices skyrocketed. Practically 300, 500, and even up to EUR 1,000/MWh. That was a great blow to the power companies in the region which supply the consumers at subsidized prices. In the HUPX market, which is the reference market for the Western Balkans market, it was EUR 271.66. That is truly enormous. Now that price is EUR 140/MWh, during the first three months. The prices were truly high, especially for us who subsidize consumers.Imamovic
emphasizes that light should be cast on the causes of this current crisis, because, as he says, if observed globally, Europe has been the most affected by the energy crisis.
– BiH escaped the crisis as a winner, because it had a positive balance position, it had a surplus of energy, it exported. Exporting at those prices has led to great income, so the power companies in BiH, overall, went through the crisis quite successfully, unlike Serbia, North Macedonia and Albania, where they have had to subsidize those companies, in order to purchase energy at expensive prices. What was the alternative? The alternative was to go into a reduction regime, to switch off end-users. In that sense, BiH is the winner, as shown by all the data – Imamovic said.Zivkovic
points out that, in this crisis, it has been challenging to meet the primary goal of the security of supply of end-users at acceptable prices.
– To continue the topic, no price is too low for the end-users. The problems in production, the record drought last year, resulted in a financial effect. In the end, everything is measured by money, this included. The only escape from that situation is what we are currently doing – in order to balance between the extremely high and the extremely low prices, which both the producers and the consumers expect, our position needs to be highly efficient. That is the only way to satiate those two appetites. We have drastically raised the production and reliability of the thermal capacities. The examples are January and February 2022 and January and February 2023: the average production of EPS is higher this year by 700 MW per hour, the average value for two months. Of that, 560 MW comes from thermal capacities, and 240 from hydro potentials. That is the only way that we can carry this out. The other is to be innovative. There’s no shame in buying coal. Everybody says, you’re importing coal from the whole world. True, but if that coal is cost-effective at the current prices and if it brings a profit, of course we’re going to do it. Our landfills are 700,000 tons fuller in the first two months of this year, compared to the first two months of last year. The financial effects are slowly becoming apparent and, this year, we are all trying to compensate for last year and I hope we will succeed.Transfer Network Problem
An analysis of EP HZHB has shown that they have fared better for not being directly in markets, emphasizes Leko
– I’ll explain why, especially when you’re in BiH. For today, the output capacities from BiH at some points is 20, and in some EUR 30/MWh and it is not easy to “target” that capacity price, unless you’ve made a good long-term move, like Elektroprivreda RS, which has leased an annual capacity at much lower prices. The question is why the capacities are big. At the opening of the panel, we heard about 1,000, 5,000, 10,000… even 25,000 new MW in renewable sources. I claim that this network will not be able to take that in the next 50 years. I will take the liberty of proposing for next year for the main topic of SET to be the transfer network problems, that is, the reception of energy from renewable sources.
We all have a thousand, two, or five consents in principle, so the investor gets consent in principle with that paper, invests funds and gets all the permits, practically a building permit and a concession agreement, but can’t connect to the network. That’s a problem. We also expect help from the Energy Community in initiating more discussion about that problem, because we can’t move forward without it. All we hear are populist statements like “we will build solar capacities.” We certainly need them in order to decarbonize, but there’s only sunlight for eight hours. That is why the capacities during those eight hours are at EUR 50. Another question pertains to problems in BiH, it’s not just the energy from BiH that raises the price of capacities. In the past 15 days, we’ve had a quite favorable hydro situation, we’ve been recording surpluses, we’re selling them outside, which leads to clogging and increases the price of capacities. Do you know how much energy goes from the south through BiH toward the west? I am inviting the gentlemen from the competent regulatory bodies, when there’s clogging, not to take the same view on those who transport and those who produce and supply people here. We need some priorities after all. Several days ago, it happened that the Croatian operator of the transfer system blocked the border and brought the trade down to zero.
Most of those present here are maybe hearing this for the first time. We have a surplus of 500 MW. What do we do with it? Is that amount of 500 MW to spill over into BiH? Those are the problems that need to be addressed, and everybody is avoiding that topic
– Leko underlines.The moderator of the panel, Jasmina Trhulj of the Energy Community, pointed out, in response to this topic, that the Energy Community was preparing a study
at that moment which aimed for the implementation of a new energy package, adopted in order to secure a 70% availability at cross-border transfer capacities.Market in Montenegro to Open on April 26Dejan Draskovic, the COO of BELEN
, says that there will be a market which will start at 10.15 am, which means that the participants will have the option of trying to close their positions earlier.
– We believe that, on one hand, it will act as a motivating factor. I always expect the traders to contact us. They are very experienced in this job, they know how to position themselves and how to approach with all their positions, regardless of whether they are long- or short-term. I hope that the passive participants will use the opportunity and be more active in the market, at least for the flexible hours which, in a long-term profile, they wouldn’t be able to get, or they would pay penalties. Recently, a small hydro power plant was registered in Serbia as a participant in SEEPEX, which is a signal for others that small producers can become participants which will sell their production under the market conditions and that they simply don’t have to depend on incentives. In a way, that promotes green energy, as well as the market itself. In order to further stimulate liquidity, we have entered an arrangement with Elektroprivreda Crne Gore, which has agreed to also be the “marketmaker”. At every hour, they will be both the purchaser and the seller at the same time. We also have a certain number of small hydro power plants which have exited the incentive system in order to place their energy locally, but also through mediators in the region. Back in 2013, energy from Montenegro started appearing in the markets of Slovenia, Hungary, Serbia and Croatia. It’s not a new thing, and what is new is that a market is now opening here as well. We expect a cautious start, but the interest of the producers is even better than we predicted. We already have 11 registered participants
, and we haven’t even started the final tests. That is a remarkable sign. That is the first step, that foundation that we need in order to do what’s necessary, which is to merge the markets.Long-Term Agreements on Purchase of Green Energy
Vladan Rankov, the commercial director of CWP Global Serbia, believes that the way to overcome the crisis was to consider variable price structures, to shorten the period of agreements on long-term purchase and to negotiate different crediting conditions with the banks.
– Those were the main challenges for us. When it comes to the consumers, I believe that long-term agreements on the purchase of electrical energy from renewable sources can be a good mechanism for how to protect end-users from high prices. My opinion is that the trend will be how to bring green energy to end-users
. That is the key to unlocking additional capacities in renewable sources in the coming period. It’s not all about how to obtain the building permit, but also how to finance a large project which is not included in the company’s balance and how to secure a long-term agreement on the purchase of electrical energy, which is a guarantee for the possibility of paying out the loan. My opinion is that the key will be how to bring green energy to end-users, because they are the ones who traditionally can enter hedging arrangements in the long term – Rankov pointed out.
Let us remind that the Trebinje Energy Summit 2023 was held between March 22 and 24, organized by Elektroprivreda RS, the City of Trebinje and the company SET
.The eKapija portal is a media sponsor of the Summit.
More about the panels and events can be found in a special section at the link available HERE