The energy sector in North Macedonia

North Macedonia relies predominantly on fossil fuels (low-grade lignite and gas) and hydropower, and is dependent on electricity imports. The total production of electricity in 2020 was 5,436 GWh, and another 2,965 GWh was imported to satisfy the total domestic electricity demand. 

North Macedonia electricity generation, 2010-2020 

Source: IEA Statistics 

The electric power generation capacity in North Macedonia in 2021 mainly consisted of two coal thermal power plants with a total of 824 MW installed capacity, nine large hydropower plants with 571 MW installed capacity, 108 small hydropower plants with 135 MW installed capacity and three gas CHP plants with 287 MW installed capacity. The long-dormant Negotino heavy fuel oil plant was also fired up in response to the energy crisis that hit the country but made a negligible overall contribution of 0.5 per cent to overall production. 

In January 2020 the government adopted the new Energy Development Strategy 2020-2040 which elaborates three different scenarios: reference (business as usual), moderate transition and green (strong decarbonisation) scenarios. The moderate transition and green scenarios both foresee coal phase-out in 2025 which makes it the first country in the Western Balkans to layout concrete options for a pre-2030 coal phase-out. The final decision on which scenario will be implemented will be made later in 2020, but considering that the strategy sees the green scenario as the least cost option it is likely that the country will move away from coal sooner rather than later. 

The smaller thermal power plant REK Oslomej is operating occasionally during winter months. Discussions about “urgent need for modernization of the obsolete equipment” have been going on for years now, but according to the Energy Strategy it is phased out in all three scenarios. It will be replaced by a 120 MW PV plant on top of the now depleted lignite mine. 

In the moderate transition and green scenarios in the Strategy, phase out of the РЕК Bitola lignite-fired power plant in 2025 is also recommended. In the reference scenario investments for modernization and pollution control are given instead of phase out. 

There are two operational open cast lignite mines – Suvudol and Brod-Gneotino. The total reserves stand at about 75 million tonnes and estimated deposits for the next 15 years. According to the state owned electricity production company 5-year investment plan 2018-2022, the commissioning of a new Zivojno mine could extend the coal supply to TPP Bitola for another ~10.6 years. However, this new mine would involve underground operations, with which the country has no experience to date. Also, an increase in the price of such locally-sourced lignite is anticipated due to the higher cost of coal production in the new mines and transport over longer distances and on rough terrain. 

Domestic production of electricity increased in 2021 compared to 2020, but were still lower than 2019. Electricity imports amounted to 33 percent of total consumption. This percentage does not include the import of natural gas for energy transformation. 

Natural gas is imported from Russia through a single entry point at the Bulgarian border. Gas is mainly consumed by industrial customers and the three CHP plants, while households have an almost negligible share of total consumption due to the very limited spread of distribution networks. 

Under Energy Community Treaty commitments to increase the share of renewable energy in its mix, North Macedonia had a target of 28 per cent in gross final energy consumption in 2020. In April 2017 North Macedonia amended its National Renewable Energy Action Plan submitted to the Energy Community in 2012, to take into account lower biomass baseline data (17.2% compared to 21.2% originally). Based on the revised biomass statistics, the 2020 target for the share of renewable energy sources in gross final energy consumption was changed from 28 per cent to 23 per cent. The Energy Community’s Ministerial Council adopted a decision approving this revision in November 2018. The share of renewable energy in gross final energy consumption in 2020 stood at 19.2 per cent, still a long way from the target. 

In spite of the incomplete legal framework for renewables, several renewable energy projects have become operational in recent years contributing to an increasing share of energy from renewable sources in the energy mix each year. 

North Macedonia has a 36.8 MW wind farm at Bogdanci and has been reported to be moving forward with expanding it. It was the first country in the Western Balkan region to put into operation a sizeable wind facility. There are also two more wind farms that should be built in the next 5 years since they already have most of the permitting process done, which should bring total wind installed capacity to around 86 MW. 

Solar PV capacity reached 45 MW by the end of 2021, and three large-scale solar plants came online in 2022. ESM’s 10-MW solar plant on an old coal mine at Oslomej, initiated before the current energy crisis, started test operations in April. In October the 8-MW Trkani plant near Kochani, built by companies controlled by former deputy prime minister Kocho Angjushev, also came online. In the same month, a 17-MW plant near Skopje built by Slovenia’s GEN-I came online. This trend is expected to continue, with several more large solar plants planned.  

Around 96 small hydropower plants have gone online since 2010, and, like other countries in the region, North Macedonia has plans for more large hydropower. The Energy Development Strategy recommends a total of 998 MW new hydro capacity to be added until 2040 in all scenarios. 

North Macedonia has plenty of room for energy efficiency improvements. Electricity distribution losses amounted to 13.4 per cent in 2021, and practices such as heating on electricity have contributed to increasing energy costs for many households. 

For a more in-depth look at barriers to a sustainable energy transition in North Macedonia and our proposals for how to overcome them, see our 2021 study with the Friedrich Ebert Stiftung: The Political Economy of Energy Transition in Southeast Europe – Barriers and Obstacles.