Sanja Božinovska
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Seven months ago, the new government of North Macedonia took office, marking the kickoff for the establishment of the Ministry of Energy, Mining, and Mineral Resources. According to the Minister, Sanja Božinovska, the ministry has been built from the ground up. Simultaneously, her team has been drafting new laws, developing strategies for constructing state-owned power plants, and working on a solution for the Čebren project. In an interview with Balkan Green Energy News, Božinovska discussed the country’s top energy priorities and the steps needed to achieve them.
Firstly, the Ministry of Energy, Mining, and Mineral Resources needed to address a critical issue: securing energy supplies for the winter. Sanja Božinovska stated that the new Government of North Macedonia inherited a challenging situation in the energy sector and had to make every effort to ensure a reliable energy supply throughout the winter.
The Minister identified sustainable, baseload, and homemade energy as a long-term priority. A key step towards this goal was to review all projects undertaken by the state-owned power utility, Elektrani na Severna Makedonija (ESM).
“There is a pumped storage hydropower plant Čebren project, and we are also a country with many sunny days. So, our goal is to make a combination of renewables and hydropower. In addition, regarding baseload energy, we plan to install two gas-fired cogeneration power plants,” she explains.
We want to come up with two or three models for the implementation of the Čebren project
It is a long-term vision, but the ministry anticipates achieving it in eight to ten years. For instance, constructing a large hydropower plant typically takes at least eight years.
The cornerstone project is Čebren, which has seen 14 unsuccessful tenders for its construction. According to minister Božinovska, ESM possesses numerous designs and feasibility studies for the project that were developed in the 1960s. She mentions that there is an entire room filled with related documents. To move forward, the decision was brough a working group consisting of experts and professors to be established.
“The goal is to analyze and revise existing studies, such as obtaining new hydrological data. The result should be two or three models for project implementation. No one wants another unsuccessful bidding process,” she emphasized.
The state wants to have majority ownership in new renewable projects
The vision of the new ministry is for North Macedonia to become self-sufficient in electricity production. According to Božinovska, it is crucial for the country to focus on domestic electricity generation, as it currently lacks new renewable energy capacities. Most of the new facilities are owned by private investors, and she emphasizes the need for change in this regard.
Asked about a model to install renewable energy power plants owned by the state, she says that it is connected with financing. The new government, in her words, has, again, inherited very little room in last year’s budget and has a lot of debts to repay.
A joint venture is a possible model for the new facilities
“The assessment of the investments needs to be conducted. Previously, it was estimated that the green transition would cost EUR 3 billion, which includes expenses not only for new facilities but also for the grid improvements. Once we determine the final figure, we will define the implementation plan and initiate discussions with financial institutions,” the minister notes.
The final decision on the model for the construction of state-owned power plants has yet to be made. Božinovska stresses that it could be a joint venture model, adding that it depends on the funds the state will be able to secure.
“One thing is certain: if private investors are included, we want to have majority ownership because North Macedonia needs to own energy production capacities,” she says.
Auctions are being prepared with the EBRD
Like other countries in Southeast Europe, North Macedonia is flooded with investor applications for the grid connections of new solar and wind projects.
The transmission system operator (TSO) MEPSO has a huge waiting list for the preliminary grid connection. In her words, the investors want to connect a total capacity of 9,000 MW.
“The new law on energy will deal with the large number of grid connection applications. The law is almost finished. It is mainly focused on the transposition of EU regulations, but it will also define energy storage, the role of the power exchange,” Božinovska notes.
I hope we will launch the auctions by the end of the year
Regarding incentives for private investors, she says that the country plans to introduce contracts for difference (CfDs), as in Albania and Serbia.
The Minister explains that they have already started negotiations with the European Bank for Reconstruction and Development (EBRD) on the auction framework and adds that she hopes that the auctions will be launched until the end of the year.
Everything has to be transparent, negotiations as well
The former government has prepared four proposals for strategic partnerships in the energy sector with private companies. They were sent to the parliament for adoption. However, the ministry has withdrawn all the proposals. In Minister’s view, it isn’t a good solution for the state to give EUR 50 million to the investor or sign a power purchase agreement for 30 years.
“We want strategic partnerships, but only if the projects are strategic and bring benefits for the country itself. The idea is to avoid the situation where one company gets special conditions and others don’t. Everything has to be transparent, negotiations as well,” she says.
Coal phaseout and CBAM – a great headache for the Western Balkans
Decarbonization and coal phaseout are causing headaches to all decision-makers in the Western Balkans. The Carbon Border Adjustment Mechanism (CBAM) is also involved. Božinovska stresses that the government is aware of the problem and that coal power plants are the biggest source of baseload energy.
“We are also familiar with the fact that these facilities date back to the eighties and their operation is near the end. We will try to use everything from them, but also to install a 200 MW cogeneration facility in Bitola to substitute one unit of the coal-fired power plant in REK Bitola,” she notes.
Coal power plants will be used until we install facilities for the substitution
In other words, North Macedonia is going to use coal until you secure new facilities for baseload production? Yes, she adds.
“We are talking with the EU, they are also aware of our position. On top of that, 3,000 jobs in the coal sector need to be taken care of. The transition must be just and orderly done,” Božinovska stresses.
Asked about the start of the CBAM’s implementation on January 1, 2026, she points out that during the last meeting of the Energy Community Ministerial Council, all contracting parties said the truth – no one is ready.
If nothing changes, CBAM will have a big impact on the economy
There is a possibility to get an exemption for electricity and the country has started market coupling with Greece, which is one of the main preconditions. However, the process needs at least 18 months from the day the new energy law enters into force, so the country cannot do it until January 1, 2026.
In addition, Božinovska highlights the proposition of the European People’s Party (EPP) to put CBAM on hold for at least two years. Brussels will understand the situation, it isn’t something that North Macedonia doesn’t want to do, but it takes a lot of human capacities, according to Božinovska.
“If nothing changes, and the CBAM enters into force on January 1, 2026, it will have a big impact on the economy. Our exports won’t be competitive in the EU. We didn’t calculate all impacts, the Secretariat’s estimation was EUR 200 million,” she notes.
The contract for the gas interconnector with Greece will be signed soon
North Macedonia doesn’t have a significantly developed natural gas network, there is only one interconnector with Bulgaria. When the ministry was established, the European Investment Bank (EIB) and EBRD informed it that the tendering procedure for the interconnector with Greece had been canceled.
“We did everything to launch a new procedure and succeeded. Greeks have already started the construction on their side, and we have to build 65 kilometres. The good news is that the price achieved at the tendering is EUR 12 million lower than that achieved in the previous procedure. Soon the contract for the construction will be signed,” she stresses.
The country has signed the memorandum on the North Macedonia – Serbia interconnector and the preparation of the feasibility study is underway. This pipeline, in her words, could be a transit route for the transportation of gas from Greece to Central Europe.
“The plan is also to increase the use of gas in households, to lower air pollution. It is a part of the government’s wide and long-term activity to increase the air quality, Božinovska notes.
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