Petar Đokić: Republic of Srpska cannot escape paying for CO2 emissions

Fossil fuels are not the future, but they certainly are our present, Petar Đokić, minister of mining and energy of the Republic of Srpska (RS), has said in an interview with Balkan Green Energy News. What is in question is not the decarbonization of the energy sector but the pace at which it will be carried out, he added. The thermal power plants in the RS will inevitably face the obligation to pay for carbon emissions, while their employees and management are still rather casual about it, according to him. No European bank, according to Đokić, is willing to finance thermal power plant projects, not even overhauls, without special guarantees.

Minister Petar Đokić also talked about when the RS will close its coal-fired power plants, and whether there are plans to build new ones.

The European Union (EU) is preparing to introduce a carbon border adjustment mechanism (CBAM). Can the region avoid paying the carbon border tax?

The EU has announced the introduction of a carbon border tax, which refers mainly to electricity produced at thermal power stations, but also other large combustion plants, and we will have to pay it – there is no way to avoid it.

However, to meet this obligation we will develop a special program that will be coordinated with the Energy Community Secretariat. We will use the experience of other countries that have already joined the program.

The thermal power plants will inevitably face this obligation, and we are working on it, but employees at these plants and their management don’t seem to feel the burden of this issue and are still rather casual about this upcoming, inevitable obligation.

What do you mean by “casual?”

It’s as if they’re not aware of the gravity and inevitability of this issue. Understanding this problem is a prerequisite for concrete action, and our two thermal power plants are not showing any signs of grasping the issue and have done very little so far to educate their employees on the future obligation and its direct consequences.

How long will the existing thermal power plants in the RS continue to operate?

We’re all aware that energy has become a dynamic sector, where it is very difficult to determine the right time for certain measures and activities. The EU has set a 2050 target. In the RS closing down thermal power plants is not a favorable option due to everything I said before. However, there is strong will to find the best solution and some kind of balance between our reality and what is ahead of us.

What is in question is not the decarbonization of the energy sector but the pace at which it will be carried out

The thermal power plants are faced with great challenges and pressure, and there is no European bank today that is willing to finance thermal power projects, not even overhauls, without special guarantees.

Basically, what is in question is not the decarbonization of the energy sector – that is a certainty – but the pace at which it will be carried out. Our plan is to develop 1,000 MW of renewable capacity is the RS over the next 10 years in order to help achieve the determined pace of decarbonization and meet the demands ahead of us.

Surely, the position of the decision makers is not enviable because we must at the same time ensure the timeliness of our decisions and choose the efficient technologies in which we should invest. That will, in turn, help ensure the security of energy supply, the development of certain areas, the efficiency of operations of the enterprises, environmental protection, etc.

Will the RS build new coal-fired power plants?

Over 90% of thermal power capacities in the Western Balkan countries are more than 30 years old. Our two thermal power plants, in Gacko and Ugljevik, belong to that group.

The introduction of the obligation to pay for CO2 emissions will increase the costs of thermal power plants’ operations, but the costs of electricity imports would be even higher.

We need the energy produced by these power plants because we can’t easily replace these capacities with renewable energy and maintain our energy security. We are aware that the introduction of a carbon border tax will significantly increase the costs of these operators’ business, but it should be kept in mind that the costs of energy imports would be even higher. These are our current estimates.

For this reason we need capacities to replace thermal power plants, and we will invest in the development of such capacities.

Will these new capacities be coal-fired power plants?

Yes, to the extent in which it is necessary. I would like to point out that the RS has a number of regulations in the field of environmental protection which are harmonized with EU regulations and which are strictly applied in the construction of energy facilities. A facility’s environmental impact is one of the key criteria that must be met before construction is approved.

What is important is that the application of the latest technologies can minimize the environmental impact, as is the case with the desulfurization system at thermal power plant RiTE Ugljevik, whose deployment has cut harmful emissions by 95%, saving some 2,000 jobs.

You have said that the dispute over hydropower plant Buk Bijela, whose construction has recently begun, could slow down the decarbonization process. If hydropower plants are not being built, then there is no new capacities to replace thermal power plants that need to be shut down?

That’s right. We can’t shut down thermal power plants without first securing their replacement.

All our activities in the energy sector are closely tied to the guidelines from the Energy Community Treaty, to which we are very committed and which we seek to implement as they are defined. That can only be achieved through the implementation of new large-scale renewable energy projects, and that is something we have been working on over past couple of years.

We have so far launched both large-scale and smaller projects, such as HPP Dabar, HPP Buk Bijela, HPP Ulog, the hydropower plant on the Bistrica river, wind farm Grebak, and solar power plants Trebinje 1 and Bileća.

There is no energy transition or energy security without large-scale projects, such as HPP Buk Bijela

Over the next five years, these capacities could offset the shutdown of one thermal power plant and significantly change the energy mix in the RS.

There is no energy transition or energy security without large-scale projects, and attempts to obstruct projects such as HPP Buk Bijela are aimed at hindering the RS’ obvious progress in this area.

The energy transition is our commitment and our obligation, defined in our energy sector development strategy until 2035, but it must be carried out in phases in order to preserve the security of the energy system as a whole, given that about 63% of electricity in the RS is generated at thermal power plants fueled by domestic coal and that the sector employs thousands of people.

Fossil fuels are not the future, but they certainly are our present, which is why abandoning coal abruptly would deal a serious blow to our energy system and citizens and create other, much more serious problems.

The EU and the Energy Community are demanding that countries in the region decarbonize their energy sectors, but these countries are still highly dependent on coal. On the other hand, it is evident that the energy transition is happening in these countries and that there is an increasing readiness to do something, but also that they cannot implement the necessary changes at the same pace and in the same scope as more developed EU member states. What is the solution? How can the EU and the Energy Community help countries in the region to go through the energy transition as painlessly as possible?

The energy transition is an ambitious and lengthy process, which is demanding and difficult even for developed countries. This makes the challenges facing small countries and countries in transition even greater. The EU must recognize this, and what we expect from the union is to help finance the transitional period.

We also need technical assistance, as well as know-how and solutions that have produced positive outcomes in other countries.