Successful first phase of energy transition in Balkans, especially Serbia

The first phase of the transition to renewable energy sources in the Western Balkans has been successful, particularly in Serbia, speakers pointed out at Belgrade Energy Forum 2024, organized by Balkan Green Energy News. According to the ministerial panel on strategies for advancing the region’s energy transition, the process requires stronger cooperation between countries, but also greater support from European financial institutions.

The Energy Community Secretariat’s Deputy Director Dirk Buschle said the implementation of the first part of the transition to renewable energy sources in the Balkans was very successful, particularly in Serbia. However, he added it was the easy part of the job.

A lot has been achieved in the Balkans, reforms have been implemented, the share of renewables has been increasing, and their costs have fallen, he said, but added there was still work to be done on coupling with European markets and addressing the issue of market fragmentation.

The focus, according to him, should be on new interconnectors and on strengthening their capacity and tackling market fragmentation. The classic role of the state is to support the construction of infrastructure, establish an appropriate framework, and provide incentives, financial support and regulatory instruments, the official said. He also stressed the advantage of using instruments like the Energy Community.

Buschle said the priority for all countries in the region should be the transformation of state-owned utilities, stressing that until now energy markets have been built around such companies.

State-owned utilities should not become some kind of dinosaurs but rather transform themselves – to play an active role, with reforms and new management practices so that they can build their own vision of the transition aligned with the set targets.

Also, state companies should not abuse the dominance they have built over the years and decades and should not exclude the private sector and investments coming from it, Buschle noted, adding that the green transition should also take into account workers, who must not be left behind.

The energy transition, according to him, has become a reality in the Balkans and one of the region’s top priorities. It is necessary to control whether the targets for 2030 are being met and whether they are in line with EU standards, the Energy Community’s top official underscored.

“The lesson learned in the EU is that it is very good to set specific targets, which have nothing to do with political cycles, to know where we are going and how to realize those goals in stages,” he asserted. It is also important to identify projects and secure financing, Buschle added.

Coordinating the panel was Francesco Sassi, a researcher in the energy security unit at the Observatory of International Politics of the Italian Parliament and Ministry of Foreign Affairs and Cooperation.

Đokić: EUR 2.5 million worth of investments

Minister of Mining and Energy of the Republic of Srpska Petar Đokić has said that the energy transition project must continue through regional cooperation in order to ensure the best possible outcome, adding that the entity’s government has expressed its willingness for collaboration and joint projects with neighboring countries.

He highlighted the joint project with Serbia – the construction of hydropower plants in the upper course of the Drina River – adding that he hopes regional cooperation would give it fresh momentum in the second half of the year. The investment includes the construction of hydropower plant Buk Bijela.

The entity’s government wants to enhance its cooperation with Montenegro, given that the political conditions have imporved, Đokić emphasized.

“It is a demanding and expensive process. Our countries, due to decades of hardship, are lagging behind in overall development. Our investment potentials are not so ample, but we do need broader cooperation in terms of funding so that the Balkans can contribute to the overall growth of each individual country, but also of the region as a whole,” he said.

He said that the hydropower project in the middle course of the Drina has a huge potential, adding that Bosnia and Herzegovina as a whole, as well as Serbia and other partners, could participate in it.

He also pointed out that the Republic of Srpska would continue, without hesitation, to be a partner to Europe.

Đokić said the entity has energy projects in advanced stages of development and that investments worth EUR 2.5 billion are being realized, with the first facilities expected to be completed and connected to the grid in 2026 and 2027.

The combined capacity is 1,719 MW, of which 680 MW is being developed by government-controlled power utility Elektroprivreda Republike Srpske (ERS), and the rest by partners and private investors, according to him.

Work is also underway on developing cross-border transmission capacities and interconnections with Montenegro, Serbia, and Croatia.

He also pointed out that the Balkan region needs stronger support in terms of financing for such projects, and he called for greater involvement of European financial institutions – the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB).

On mining, Đokić said the Republic of Srpska has promising potential, with 136 projects in the pipeline, but that there is a lot of opposition that needs to be addressed, most notably from non-governmental organizations.

Mujović: Carbon neutrality by 2050 at the latest

Minister of Energy and Mining Saša Mujović said Montenegro’s goal is to reduce greenhouse gas emissions by 55% by 2030 at the latest, and that its long-term objective is to achieve carbon neutrality by 2050.

He estimated that Montenegro is on track to get 200 MW of new green energy capacity through several projects. They include the 60 MW Gvozd wind farm, which will probably be completed by the end of 2025, and a new 60 MW generator at the Perućica hydropower plant, the minister underscored.

Montenegro already generates over 60% of its energy from renewable sources, Mujović noted. The rest comes from the Pljevlja thermal power plant, but the country is under the obligation to start shutting it down which, he says, is much easier said than done.

Mujović stressed that Montenegro must build new renewable energy capacities, but also strengthen its hosting capacities.

He added that the country has an ambitious plan and is well on its way to meeting the Energy Community’s requirements, also warned there can be no progress without political stability.

Wind and solar power, according to the minister, can be auxiliary sources of energy, but not the main ones, so Montenegro’s objective and intention is not to focus solely on solar or wind power plants, but to simultaneously invest in stable energy sources.

Gonul (IRENA): Infrastructure is the key challenge

Gurbuz Gonul, Director for Country Engagement and Partnerships at the International Renewable Energy Agency (IRENA), said infrastructure is the key challenge to increasing the share of renewables. He explained that today’s energy systems are based on fossil fuels and that change requires a lot of time and investment.

He said that USD 720 billion needs to be invested in this field globally until 2030.

According to Gonul, tripling the share of renewable energy by 2030 is an ambitious goal and a strong political signal, and IRENA will provide support in the Balkans as well, under the umbrella of the Energy Community.

Trans Adriatic Pipeline could transport hydrogen

Vugar Veysalov of the Trans Adriatic Pipeline (TAP), which connects Greece, Albania and Italy via the Adriatic Sea, said Europe would still need natural gas to achieve its economic targets.

According to him, TAP is there to ensure supply, but efforts are also being made to create opportunities for other, renewable gases to be transported through the pipeline.

Vaysalov said that TAP could potentially transport hydrogen or other low-carbon gases.

He said that a study was conducted in 2021 to determine the potential for hydrogen transportation, and that the initial results were encouraging.