Energy transition is inevitable, but opposition is very strong

The implementation of the energy transition in Serbia and the region is inevitable, and it is also the stance of those who do not believe in climate change and are against the closure of coal-fired power plants. Since the transition will affect not only the energy sector but the entire society, for example the largest exporters in the country, all stakeholders must be involved in finding solutions for its implementation – the government, experts, and non-governmental organizations, according to speakers at a conference titled “How can the countries of the Western Balkans implement a sustainable energy transition?”

Deputy Prime Minister and Minister of Mining and Energy of Serbia Zorana Mihajlović said it is good to discuss the solutions for energy transition but that there is constant opposition to implement it. The people in Serbia will be the biggest obstacle to the energy transition, she added at the conference, organized by Energija Balkana.

In order to push the process into action, the government will take the reins into its own hands and create a framework for all activities, in her words.

Some people say the energy transition failed in Europe as electricity became more expensive and they blame the CO2 tax, but it is not true, she said.

It is not a good message for the energy transition that EPS has been building the Kostolac wind farm ever since 2017

Mihajlović said the energy transition envisages a much different role for the state-owned companies, and a change in their business model.

Capital investments of power utility Elektroprivreda Srbije (EPS) aren’t satisfactory, she said.

Mihajlović said EPS started the Kostolac wind farm project in 2017, and that it didn’t finish it yet.

“We must demonstrate the will to implement the energy transition for it to happen, but now there is a lot of resistance,” she underlined.

Milutin Đukanović, President of the Board of Directors of Montenegro’s power utility Elektroprivreda Crne Gore (EPCG), said the country has the potential to build wind farms and solar power plants, but that the biggest obstacle are the administrative barriers as they extend the time of project implementation.

EPCG has launched the Solari 3,000 and Solari 500 projects to help households and companies, respectively, install solar panels on rooftops. It will increase the use of renewables and enable them to become prosumers.

EPCG wants the Solari 3,000 program to become the Solari 100,000

Base energy is important and EPCG is developing large solar, wind farm, and hydropower projects.

“These projects take time, but there is nothing stopping us from starting projects like these two, which can be realized very quickly and give excellent results, said Đukanović, adding that EPCG wants the Solari 3,000 project to grow into Solari 100,000.

Mihajlović: We have to make an energy mix that will guarantee energy security

Coal power plants in Serbia will not be closed within a decade or two, but a plan will be made for some to go offline, said Mihajlović. Those that are the most modern, such as Kostolac B3, which is being built, will certainly continue operation, and they may become some kind of reserve.

“It is no longer a question of whether something is being imposed on us, but whether we can make an energy mix that will guarantee our energy security and secure environmental protection. I think we can,” she said.

Dragan Vlaisavljević, executive director for electricity trading at state power utility Elektroprivreda Srbije (EPS), said record high electricity prices in the European Union show how successful the energy transition is. He expressed the view that the administration in Brussels was unsuccessful in conducting energy policy.

However, Serbia must initiate the energy transition, and the only question is how fast to implement it, he added.

Proposals coming from outside of the region do not take into account its characteristics, and would bring higher bills for consumers and reduce energy security

Considering the situation in Western Balkan countries, Vlaisavljević said that because of poverty and the fact their markets aren’t well connected, the transition would take longer and be more expensive. The proposals coming from outside of the region do not take into account its characteristics and the outcome will be higher bills for consumers and a reduction in energy security, he said.

Vlaisavljević recognizes three models of energy transition. The first is wind, solar and energy storage, the most expensive option, the second one relies on the use of natural gas as a transitional fuel, and the third is based on nuclear power plants.

According to him, the introduction of the cross-border adjustment mechanism (CBAM), scheduled for 2026, will hit the heavy industry of Serbia much more, steel for example, than EPS, which produces electricity.

Sanja Filipović, advisor at the Institute of Social Sciences and a professor at Singidunum University, also pointed to the economic impact of the transition. Serbia must make a thorough analysis of energy transition costs and the financial impact of the EU’s Fit-for-55 package, proposed to make the bloc climate neutral by 2050.

The largest exporters from Serbia will have a CO2 tax as early as 2026

“It is certain that the changes taking place in the EU will have an impact on us, so Serbia must see how much it would cost,” she added.

Filipović said the largest Serbian exporters – Hesteel Serbia, Zijin Copper and Tigar Tyres – are facing the cross-border CO2 tax as early as 2026.

The energy transition is inevitable, said Filipović, adding Serbia must take care of its interests and secure as much as it can from the EUR 9 billion planned by the EU’s Economic and Investment Plan for the Western Balkans.