The energy sector in Serbia

Serbia, with a population of around 7.1 million, satisfies most of its electricity demand from domestic production. Electricity production in Serbia relies around 70% on coal, while the remaining 30% is generated in hydropower plants. The electricity market in Serbia is dominated by the national power utility EPS (Elektroprivreda Srbije – Power Industry of Serbia), which owns all large generation capacities and supplies most consumers.

Serbia has large coal reserves, with 4.5 billion tonnes of proven lignite deposits. The reserves are located in two main coal basins, Kolubara and Kostolac. The coal mines in Serbia are owned and managed by subsidiaries of EPS.

The Kolubara Mining Basin provides around 75% of the lignite used for EPS’ thermal generation. It produces 29 to 31 million tonnes of lignite annually, which is supplied to the Nikola Tesla and Morava power plants, together producing more than 50% of Serbia’s electricity. The Drmno mine near Kostolac provides the other 25%, averaging 9 million tonnes.

Serbia has produced oil and gas in small quantities since the mid-50s, but is heavily reliant on imports, mostly from Russia.

Electricity generation in 2016, in GWh

Data from the Serbian national energy balance for 2017

Serbia has undertaken commitments to increase the share of renewable energy under the Energy Community Treaty to 27% by 2020, however in 2015 it had managed only 21% renewable energy – mostly wood used for space heating. As of May 2018 wind power construction is finally speeding up somewhat and in its energy strategy implementation plan, Serbia has committed to bring online more than 500 MW of wind power by the end of 2020.

No new large hydropower plants have been built for several years, although several are mentioned in the energy strategy as possibilities. In recent years, a proliferation of small hydropower plants has started to cause concerns as they are often sited in or near protected areas. Inadequate planning and assessment of cumulative impacts means that they often cause a large amount of damage compared to the small amount of electricity they generate. Financiers of the plants are often hard to trace but include Austria’s Erste, Unicredit and the EBRD.

As Serbia intends to join the EU, it should also be aiming for 80-95% emissions reductions by 2050, in line with EU policy. However Serbian government and EPS plan to remain locked-in to a carbon-intensive energy system, most notably through the construction of the 350 MW Kostolac B3 lignite power plant and the expansion of the associated mine from 9 to 12 million tonnes annually.

Although Kostolac B3 is the only plant expected to be built before 2025, the Serbian Energy Strategy also puts forward several more fossil fuel generation plants for construction:

• Nikola Tesla B3 – 750 MW – lignite
• Kolubara B – 2 x 375 MW – lignite
• Novi Kovin – 2 x 350 MW – lignite
• Štavalj – 300 MW – lignite
• CHP Novi Sad – 340 MW – gas (may consist of separate plants)
• Other gas combined heat and power plants – 860 MWe – gas

The coal plants would also entail expansion of lignite mining, for example the opening of the Radljevo field in the Kolubara region.

Not only does this exacerbate climate change, but ironically Serbia’s coal mines have also suffered from its consequences. In May 2014 the Kolubara mines were turned into polluted lakes. Each of the four mines was flooded, two of them completely. In the biggest open-pit mine, Tamnava West, ten huge excavators used for mining were flooded, and six of them completely underwater.

The Drmno mine also suffered serious flooding in 2014. During the May floods a heroic effort was mounted to save the mine, but between July and September of the same yearmore than 2 million cubic metres of water spilled into the mine, bringing with it around 800, 000 cubic metres of sludge and mud, and engulfed mining machinery in mud.

With its traditional forms of generation not proving resilient to climate change, Serbia would do well to diversify its energy mix and work more on energy efficiency. Serbia has promising potential for renewable energy, but as with all the countries in the region, different sources put the exact figures at quite different levels, depending among other things on whether they use sustainability criteria.

Serbia has significant potential for energy efficiency and has a target to increase energy efficiency be 20% by 2020 under the Energy Community Treaty. Inefficient use of energy represents a major concern in the country. It has the second-highest energy intensity in the region, nearly four times as much as the EU average. Incentives to save energy are limited due to artificially low electricity prices but this is going to have to change in the coming years as Serbia integrates into the European electricity market.

Sources:

1. Energy Community Implementation Report 2017
2. EPS website
3. Serbia Energy Strategy till 2025 with projections till 2030
4. Implementation program of the energy sector development strategy of the Republic of Serbia for the period to 2025 year with projections to 2030, the year of the period 2017 to 2023 year (sic)