Conservatism still dominates Serbian energy sector, potential of energy transition underestimated

To help accelerate Serbia’s energy transition and reduce emissions, it would perhaps be best for state power utility Elektroprivreda Srbije (EPS) to build a major, 300 MW solar power plant as a first step. In the long run, the solar power plant’s output would be cheaper than that of any coal-fired power plant, Nikola Rajaković, a professor at the University of Belgrade School of Electrical Engineering (ETF), says in an interview with Balkan Green Energy News.

The one-time state secretary at the Ministry of Mining and Energy and a former managing board chairman at EPS says that the key issue concerning the Serbian energy sector is what it will look like in the post-lignite phase. Rajaković believes that Serbia has sufficient renewable energy sources to substitute coal.

However, he says that Serbia’s traditional conservatism and influential coal lobby will mount opposition to shutting down coal mines and TPPs. He believes that it is not fully understood what kind of potential lies in energy transition using renewables technologies, energy efficiency, and smart technologies for the creation of highly sophisticated and lucrative jobs – the only way to speed up economic growth.

The EU has formulated a goal to cut greenhouse gas emissions to net zero by 2050. Its energy transition is ongoing. Where is Serbia in all that?

The EU has been making steps toward such ambitious goals and is certainly a worldwide leader in this field. I have no dilemma as to whether Serbia should contribute, as much as it realistically can, to this energy vision. It would be extreme to expect only economic powerhouses to do all the work.

In Serbia, the real issue is what the energy sector will look like in the post-lignite phase

Serbia’s contribution on the regional level is not negligible. Why? Because Serbia relies on coal, which is a major burden in terms of environmental protection. In Serbia, the real issue is what the energy sector will look like in the post-lignite phase, which will be here in some 50 years.

The EU plans for this phase much, much sooner?

The EU’s pace is definitely, tangibly, more accelerated. In Serbia, the key issue for thinking people in the energy sector is how to achieve the optimal trajectory of the transition to renewable energy sources. The risks are many… The EU’s goals for 2030 are ambitious. and for 2050 extremely ambitious. Meanwhile, Serbia is slowly progressing toward its target of a 27% share of renewable energy sources.

Officials say that the target will not be achieved within the planned timeframe.

Serbia started too late, as its logic has been, is, but hopefully will not be – conservative. This is why the country was slow to get started with wind energy, while solar energy has been completely neglected and that to me seems to be the one being considered the least. The situation is no better with biomass. Inertia has something to do with it. Serbia is insufficiently working on energy transition and energy efficiency.

How much are the national energy strategy, EPS’ operations, and political decisions in line with the current and future developments in Europe’s energy sector?

EPS is in realistically a difficult position. It relies on coal and will be affected by many inevitable changes as a result. The company should slowly change its portfolio – it is certainly not banned from developing renewable energy capacities. Why wouldn’t EPS build a major solar power plant, for example with an installed capacity of 300 MW, in the south of Serbia, where there is enough available land? This would be not only a political but also visionary decision. Such a plant’s production would be cheaper than any coal-based production.

The costs of CO2, health care, remediating ash depositories, and shutting down TPPs have never been included in the price of a kWh produced by TPPs

This is especially true in light of the fact that the price of a tonne of CO2 is over EUR 20, while there are also other costs that should be counted in, such as the costs of health care, remediating ash depositories, and shutting down thermal power plants (TPP). These costs have never been included in the price of a kWh of electricity produced by TPPs, except for academic purposes.

EPS has embarked on the construction of the B3 unit of TPP Kostolac. And now, the construction of TPP Kolubara B is again being discussed.

That was a mistake. It would have been better to have a solar power plant built – the equivalent of the new unit at TPP Kostolac would be a 1,000 MW solar power plant. It is not clear to me what will be achieved with TPP Kolubara B. The plan shows that we don’t know what we are doing. And this is why we cannot achieve the 27% renewables target. And instead of working on achieving the target, we are planning on Kolubara B? I don’t get it.

The TPP projects now being developed will only cause headaches

The construction of a third, 700 MW unit at TPP TENT B should have been decided on 15 years ago. The chance was missed and now there is no getting around it. The TPP projects now being developed will only cause headaches.

Does Serbia have a sufficient renewables potential to replace coal?

Of course. We should not forget that the great scientist and visionary Nikola Tesla was pointing out that nature is offering solutions for energy needs – for example solar energy – but that it is up to engineers to figure out how to tap into these sources the right way. These sources include solar and wind energy, hydropower, biomass, geothermal energy, and energy-from-waste. The solar energy potential is particularly impressive. It would be sufficient to use south-facing roofs, parking spaces, abandoned mines and similar locations, whereas arable agricultural land should not be used for these purposes.

Then what is the future of coal-based electricity production in Serbia?

The future is definitely a phase-out. There is another important detail to be considered here. It is not up to this generation to deplete all coal resources using the technologies available today. It is a strategic and ethical issue. Who can guarantee that our great-grandchildren won’t be technologically more advanced and able to use coal much more efficiently than we do today? We are using it at an efficiency rate of 33%, and they may be able to achieve a 95% efficiency rate.

The coal lobby is the architect of EPS’ business decisions and direction

Do we have the moral right to burn this natural resource in such a primitive way? We do not. Do we have any responsibility towards the future generations? I definitely feel it. Under no circumstances should coal reserves be depleted.

What kind of obstacles to coal phase-out do you expect?

The coal lobby is strong in Serbia. It has played a significant political part in the country, in remaining in and getting to power. The lobby is the architect of EPS’ business decisions and direction. Objectively speaking, the union manages EPS… And with all due respect, union reasoning is not and cannot be the reasoning that can provide a strategic insight into a problem, let alone solutions. Their perspective is narrow, which I don’t hold against them, but this is a fact.

The lobby is influential and politically strong, and it will take time and a changed climate to usher in progressive energy principles.

How much is coal phase-out a social issue that means a loss of jobs and how much a strategic issue that concerns electricity imports? In Germany, the commission in charge of setting the pace of the coal-fired power plant shutdown is called the Commission on Growth, Structural Change and Employment.

Many social elements are certainly at play. Options to ease the social impact could include opening high-tech plants in Lazarevac or solar power plants and plants producing solar panels at abandoned open-pit coal mines.

If the decision is made to shut down coal mines and coal-fired power plants within a few decades, which is a very certain future, there will be problems. Preparations are needed in the form of creating other jobs.

Which renewable energy sources should be subsidized and how?

Solar and wind energy represents the two largest potentials today in that particular order, both globally and locally. Solar power technologies applicable today in the form of hybrid solar collectors convert solar radiation into electricity and thermal energy. The investment cost has decreased sevenfold over 15 years and will continue to fall.

Auctions are considered today to be the optimum model for the construction of power generation capacities using renewable energy sources. The state should hold auctions over the next two decades for the construction of solar power plants with a major installed capacity – perhaps as much as 5,000 MW, which would be equal to five Đerdap hydropower plants (HPPs). It should also seek bids to operate the plants for 25 years. The latest deals have been agreed at USD 35 per MWh, in places with more sunshine than Serbia, while wholesale electricity prices in Europe are at EUR 50 per MWh.

The state should hold auctions over the next two decades for the construction of solar power plants with a major installed capacity – perhaps as much as 5,000 MW

Apart from major power plants, the focus should also be on distributed generation, on rooftops, parking lots, etc. What will encourage electric vehicles (EV)? EV charging stations along the highway, not gas stations. EV charging stations do not have to be connected to the grid – they can be autonomous, powered by their own solar panels.

Wind energy is another promising potential. In Serbia, the 500 MW quota for feed-in tariffs is certainly not the end of the story. The construction of wind energy facilities should resume, but not with feed-in tariffs.

However, the decree on incentives for renewable energy sources was extended at the 11th hour, and auctions have been pushed back…

Now was the right time to introduce auctions. We can all see they yield results. What are we waiting for?

Also, Serbia can be the world leader in geothermal energy, considering its potential. All these are resources, and it is up to us to decide which technologies to apply – we certainly have the know-how. Whether we will be a leader in the application of smart grid technologies also depends on us. There is enough expertise at our universities and institutes, but state support is necessary.

Small hydropower plants (SHPPs), but also large HPPs, are increasingly criticized as energy facilities with an adverse environmental impact. Does Serbia need them?

There are no energy facilities that don’t exert an environmental impact. We need energy and need to produce it from some sources. The extreme examples – such as running streams through pipes – are impermissible.

We should consider matters on a case-by-case basis and not build SHPPs with an adverse environmental impact

However, small impoundment hydropower plants should be built, as they not only produce energy, but can also bring other benefits, including tourism development and job creation. It is bad to go from one extreme to another. We should consider matters on a case-by-case basis and not build SHPPs with an adverse environmental impact.

When it comes to large HPPs, the untapped potential of the upper Drina, the mid-course of the Drina and other available rivers should be exploited. That should be done and not discussed until 2100, as we are doing now.

These projects, as well as the Đerdap 3 and Bistrica pumped storage HPP projects, have been discussed for years.

The problem is political and concerns relations between Montenegro, Serbia, and Bosnia and Herzegovina. It is compounded by the technical issue of how to integrate variable renewable energy. Counting on the conventional system, engineers initially said that Serbia cannot connect more than 500 MW of wind power to the grid. They counted on the construction of the Đerdap 3 and Bistrica pumped-storage HPPs – which would be very, very expensive to build.

The solution is in demand management. Demand will be aligned with fluctuations in production. The paradigm has shifted. We have always worked to satisfy “his majesty demand.” Why wouldn’t we manage the consumption of air conditioners, water heaters, refrigerators, etc. instead? These appliances are now built to be managed.

And what will serve for storage? EV batteries will, the vehicle-to-grid technology. E-mobility will soon prove to be a leader in many segments.

Conservative issues are no longer issues in this field.

It is not a matter of whether something can be done…

But whether there’s a will. All that needs to be done is to operationalize knowledge.

Pumped-storage HPPs come as the very last solution for resolving variable energy

There is also the power-to-heat technology – in Denmark, for example, when wind turbines operate at night and no one is consuming the energy they generate, the energy is converted into thermal energy and stored, which provides heating for months.

Pumped-storage HPPs come as the very last solution for resolving variable energy. They are very expensive to build. Serbia is not building them because it has no money to do it. I am not against the project, but Đerdap 3 with its huge capacity of 2.4 GW would make sense only at the European level. Perhaps Bistrica [with a capacity of 680 MW] should be pursued, to be used for regional balancing. But no options should be dismissed.

Experts have an answer?

Yes, but technical and technological measures to ease the human impact on climate are not the only thing at play – we also have the game of economic and financial measures and the game of regulatory measures. Technologies represent the only aspect where there are no games. The experts’ answer is clear – renewable energy source and smart grids, thanks to which renewables can reach their full potential. Digitalization stems from smart grids.

We will have smart energy systems at home – this is around the corner

For example, a smart meter should not measure only the consumption of electricity, but also water, gas, heat… The smart grid breathes life into the integrated energy concept. We will have smart energy systems at home – this is around the corner. These systems will involve a smart meter and all energy consumption will be controlled via a device such as a smartphone, which will have software enabling cost minimization and other benefits.