Renewables

Viktor Andonov joins Belgrade Energy Forum 2024 in May: ESM earmarks EUR 1 billion for decarbonization

Viktor Andonov BEF 2024 North Macedonia ESM EUR 1 billion decarbonization

Photo: Balkan Green Energy News

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February 26, 2024

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Published:

February 26, 2024

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North Macedonia’s state-owned power utility ESM is preparing EUR 1 billion for investments in decarbonization by 2030, says Director for Development and Investments Viktor Andonov and a member of the management board, who will participate at the upcoming Belgrade Energy Forum.

ESM has achieved the biggest progress in decarbonization among government-controlled electric power industries in the Western Balkans. North Macedonia is preparing in total a EUR 3 billion investment plan for the coal phaseout, grid strengthening, new capacities and a just transition of its two coal regions.

The country’s goal is to build renewable electricity plants of 1.7 GW in total capacity. Most of the investments are envisaged to be mobilized from the private sector.

New financing models would resemble crowdfunding

Elektrani na Severna Makedonija is preparing to invest EUR 1 billion by 2030. in a switch to cleaner energy sources, new Director for Development and Investments Viktor Andonov told Balkan Green Energy News.

“Assisted by European Bank for Reconstruction and Development – EBRD, ESM will make its decarbonization strategy so that it can keep pace with the energy sector in the region and Europe. I expect help from the government in devising new models of financing for green projects, ones that would include domestic enterprises, households, banks and others. Like crowdfunding,” he explained. It is important both for the company and the just transition in North Macedonia, Andonov underscored.

Belgrade Energy Forum 2024 will be organized on May 13 and 14

Scheduled to attend a panel discussion on state-owned electricity producers during Belgrade Energy Forum (BEF 2024) on May 13 and 14, Andonov is set to present ESM’s work on capacities that would replace coal plants. The chiefs of power utilities will speak about the cooperation with investors and international financial institutions as well as about the European Union’s CO2 import duty, introduced through the Carbon Border Adjustment Mechanism (CBAM).

“Belgrade Energy Forum is an excellent place for discussions on energy policies in our region, to shed light on the status of our countries with regard to the EU, as well as to again meet our colleagues and partners from the energy sector,” Viktor Andonov pointed out. Until recently, he was the energy advisor to the prime minister.

City of Bitola with its surroundings is priority, especially REK Bitola coal complex

The priority for ESM is the city of Bitola and its surroundings, where the biggest coal power and mining capacity is situated, Andonov explained. The REK Bitola power plant of 700 MW needs to be replaced in the next ten or so years, he added.

North Macedonia’s overall plan includes the construction of two gas-fired cogeneration plants that will be able to switch to hydrogen, Andonov asserted. He noted that one of them, of 300 MW for electricity, is supposed to replace one existing unit in REK Bitola.

The new facility would also generate heat for district heating in Bitola, the country’s third-largest city, which is already connected to the complex via a hot water pipeline. The construction of a distribution network for 35 significant public buildings is underway. The next phase will be to cover households. A feasibility study will be produced together with Germany’s KfW Development Bank for a local solar thermal system as well, Andonov said.

Studies are underway, in partnership with the EBRD and KfW, for photovoltaic plants with a combined capacity of over 200 MW on a former open cast coal pit in REK Bitola. Andonov expressed optimism that they would be completed within three years. He revealed that the possibility is being considered to install battery energy storage systems at the same location, as well as hydrogen production units.

GE may participate in projects for two cogeneration plants

The second combined heat and power – CHP or cogeneration – facility should be installed in Negotino next to the existing oil-fired power plant, ESM’s representative said.

“There is an option to plan a larger capacity, around 800 MW, if the power plant will be built jointly within Open Balkan. A memorandum of understanding was signed with General Electric, GE, for both gas-fired cogeneration plants, for technical design and solutions,” Andonov stated.

The cogeneration facility adjacent to the Negotino power plant will have 800 MW in electricity capacity in case it is built jointly within the Open Balkan framework

The memorandum on the EUR 3 billion investment plan was signed in December in Dubai on the sidelines of the United Nations Climate Change Conference COP28 with a consortium of international financial institutions led by EBRD. In addition to replacing power plants that use coal, which the government intends to phase out by 2030, the document envisages a socio-economic renewal of the coal areas of Pelagonia and the Southwest and the implementation of a program for energy efficiency, production decentralization and clean heating energy.

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