Serbia (2012)

Degree of reliance on imported energy: 

<p>
<u>Serbia</u><br />
In 2009, 42% of the total primary energy requirements of Serbia were covered by import with a growing trend of import dependency, mainly in the form of crude oil, gas and petroleum products.<br />
<br />
The imports/exports balance by energy source in 2007 was as follows (all units ktoe):<br />
Solid Fuel: 951.2 / 45.4<br />
Oil and Products: 4090.1 / 61.5<br />
Natural Gas: 1824.9 / 0.0<br />
Electricity: 779.4 / 786.7<br />
&nbsp;</p>

Main sources of Energy: 

<p>
Serbia<br />
Total installed electricity capacity (2008): 8,359 MW<br />
- Coal: 61.8% (5,171 MW)<br />
- Hydro-electric: 33.8% (2,831 MW)<br />
- Gas-mazut: 4.3% (353 MW)<br />
<br />
Since 1991, Serbia has not been operating the two TPPs located in Kosovo (Kosovo A and B). Without these plants, the total installed capacity is 7124 MW.<br />
<br />
The total electricity production in 2008 reached about 40 TWh, of which 30 TWh were produced by TPPs (including CHP) and the remaining 10 TWh by HPPs.<br />
<br />
<u>Share of total primary energy supply* 2009 (IEA): 14 450 ktoe&nbsp; </u><br />
Coal and peat: 55%<br />
Oil: 27.1%<br />
Natural gas: 9.6%<br />
Hydro: 6%<br />
Biofuels and waste: 2%<br />
Geothermal solar and wind: 0.3%<br />
<br />
*Share of TPES excludes electricity trade<br />
&nbsp;</p>

Country: 

Serbia

Extent of the network: 

<p>
According to the AEA (Austrian Energy Agency) report, all households in Serbia are electrified and metered.</p>

Capacity concerns: 

<p>
<u>Serbia</u><br />
The modernization and revitalization of the Serbian power plants is seen as an urgent priority.&nbsp; The Serbian energy infrastructure is generally old and outdated (for example, according to the Energy Program, some 60% of the total installed power infrastructure belonging to Serbian hydro electric power plants is more than 40 years old, whilst the average age of Serbia&rsquo;s thermal power plants is 30 years), often in a very bad condition due to more than 10 years of neglect, a lack of investment, and the severe damage it took during the NATO bombing in 1999. The repair process started in 2000 with the assistance of international funds. However, the process is far from being finished, and much of the existing infrastructure is awaiting modernization which will require significant investments by both the public and private sector.<br />
&nbsp;</p>

Potential for Renewable Energy: 

<p>
<u>Serbia </u><br />
In Serbia the share of renewable resources in gross electricity consumption reached 30.44% in 2006, which is almost the same figure compared to domestic production (30.3%).<br />
<br />
Serbian renewable electricity generation is dominated by the hydropower sector which produced 10,235 GWh of electricity in 2006: with a total domestic built-in generation capacity of 2,217 MW (without pumped storage plants).<br />
<br />
Biomass, geothermal and wind energy sources are currently not used for electricity generation although there is potential for all of them.&nbsp;&nbsp;<br />
<br />
However, there is an intention from the Government to change this situation.&nbsp; The third priority of the Energy Policy of Serbia is the New Renewable Energy Source Selective Utilization Program, which includes a plan for the utilization of biomass, geothermal, solar, wind power and hydroelectric sources &ndash;especially on small rivers.&nbsp; According to the goals of the Program, the share of renewable energy sources in final energy consumption should rise by 1.5-2% by 2015.&nbsp;<br />
<br />
Currently, solar energy is only utilized in Serbia via the solar thermal installation at the &quot;Rusanda&quot; Melenci Hospital. A solar water heating system is installed for sanitation purposes there.<br />
&nbsp;</p>

Potential for Energy Efficiency: 

<p>
<u>Serbia</u><br />
Energy intensity is 0.33 ktoe/US$(2000) the highest among all Energy Treaty parties, indicating that energy is not produced and/or used efficiently.<br />
<br />
The most important aspects of energy rationalization, increase in energy efficiency in consumption and reduction of electricity losses are:<br />
<br />
More efficiently preventing theft of electricity and transferring it to regular consumption,<br />
- Constructing priority plants on the network,<br />
- Activating the existing ones and installing new facilities for compensation of reactive power,<br />
- Improving consumers&rsquo; measuring and controlling connections.<br />
&nbsp;</p>

Ownership: 

<p>
<u>Serbia<br />
Power sector</u><br />
The power sector in Serbia operates via two public enterprises:</p>
<ul>
<li>
Electric power industry of Serbia (EPS, <a href="http://www.eps.rs/english.htm">http://www.eps.rs/english.htm</a>) &ndash; This public enterprise is the only electricity provider in Serbia. EPS was established by decision of the Government of Serbia on 1 July 2005. Main activities: electricity generation; electricity distribution and distribution system management; electricity trade; coal production, processing and transport; steam and hot water production in combined heating processes. The total net capacity of EPS&rsquo;s electric power generating facilities is 8,355 MW of which 5,171 MW is in lignite-fired thermal power plants, 2,831 MW in hydro power plants and 353 MW in fuel oil and natural gas combined heat and power plants.</li>
</ul>
<p>
&nbsp;</p>
<ul>
<li>
&ldquo;Elektroprivreda Srbije&rdquo; (EMS, <a href="http://www.ems.rs/eng/index.htm">http://www.ems.rs/eng/index.htm</a>) is the largest electricity company in the State of Serbia. It is state owned with main business activities in electricity production, transmission and distribution, managing of electricity system, export-import of electricity. Elektroprivreda Srbije is a Public enterprise and started its operation in July 2005 as the independent Transmission System and Market Operator in Serbia.</li>
</ul>

Structure / extent of competition: 

<p>
<u>Serbia </u><br />
The Public enterprise EPS is comprised of 11 legally independent subsidiaries- 4 generation companies, 1 generation/coal mining company, 5 distribution/ supply companies and one coal- mining company.<br />
<br />
The Public enterprise Elektroprivreda Srbije (EMS) was established in January 2005, as the independent Transmission System and Market Operator in Serbia.<br />
<br />
However, the separation of distribution and supply in the electricity sector still has to be completed. Further efforts are needed to achieve unbundling and real market opening together with a pricing policy offering a sustainable tariff reflecting costs. In the gas sector, the legal unbundling of Srbijagas remains to be achieved along with proper implementation of the Regulation on conditions for access to the natural gas transmission networks.<br />
&nbsp;</p>

Existence of an energy framework and programmes to promote sustainable energy: 

<p>
The basis of the energy policy is included in the proposed Serbian Energy Laws.<br />
<br />
The Energy Law of July 2004 contains the Energy Sector Development Strategy of the Republic of Serbia that proposes policies for incentives for financial investments in energy facilities using renewable energy sources, incentives for increasing energy efficiency, and methods for ensuring environmental protection.<br />
<br />
Serbia has passed a range of commitments to the international community. They have also adopted a number of strategies and action plans with the purpose of modernizing the energy sector. The most important of the strategies is the &ldquo;Energy Sector Development Strategy until 2015&rdquo;, launched in 2005; and the &ldquo;Decree on Amendments and Supplements to the Decree on Program for the Realization of the Energy Sector Development Strategy of the Republic of Serbia until 2015, for the Period 2007-2012&rdquo;, (hereafter &ldquo;the decree&rdquo;).&nbsp;&nbsp;<br />
<br />
The Decree&rsquo;s goal is to increase the share of electricity produced from RES from 30.3% in 2007, to 32.5% of the total national consumption of electricity in 2007 by 2012. The goal is to be realized by increasing RES-based production of electricity by 739 GWh in 2012, of which 47% is to originate from NRES. Apart from this, the Amendment Energy Sector Development Program envisages at least 2.2% market share of biofuels in the total fuel consumption in the traffic sector, calculated based on energy content of the fuels.<br />
<br />
The &ldquo;Energy Strategy until 2015&rdquo; outlines the priorities of the energy sector according to the perceived importance for the country. It lays the foundation for priorities and planned investments, primarily in the conventional energy sector. In the latter, RES is the main focus. The decree regulates the definitions of RES, the contents of biomass, hydro power, and size of power production and co -generation plants. A very important element of the decree is that it opens the opportunity to give privileged electric power producers access to feed in tariffs. The feed in tariffs element was enacted in 2009.<br />
<br />
The National Energy Efficiency Action Plan was adopted in July 2010. The government adopted<br />
implementing legislation on renewable energy&nbsp; in November 2009, namely on privileged producers of electricity, including incentive measures (feed-in tariffs) for electricity produced from renewable energy sources. However the main elements of the acquis on renewable energy remain to be transposed. Serbia does not have a legislative framework on energy efficiency in place. The law on rational use of energy remains to be adopted.<br />
&nbsp;</p>

Current energy debates or legislation: 

<p>
Serbia is planning to introduce a system of energy management in order to increase energy efficiency. The system will make it easier to monitor the implementation of energy efficiency projects, both in the private and public sector, which will help define future EE strategies. The bill entails the creation of an energy efficiency fund. The draft law will allow subsidies and other forms of incentives for projects aiming to raise energy efficiency. It is also in accordance with EU regulations, the National Plan for EU Integration and the treaty establishing the Energy Community.</p>

Major energy studies: 

<p>
Structure and Trends of Energy Consumption in the Serbian Industry from 1990 to 2000 by the Serbian Energy Efficiency Agency (SEEA).<br />
<br />
Project &#39;Training in energy audits in industry: The first project started in the Serbian Energy Efficiency Agency. It was aimed at creating a group of experts trained in industrial energy audits.<br />
&nbsp;</p>

Role of government: 

<p>
The Ministry of Mining and Energy (MEM) (<a href="http://www.mre.gov.rs/main.php?jezik=eng">www.mre.gov.rs/main.php?jezik=...) is in charge of the implementation of the energy policy as defined by the Government and the Serbian Parliament. It performs the various administrative, regulatory and supervisory functions in the sectors of energy and mining, electric energy, oil, gas, heating power and nuclear power.<br />
<br />
The MEM prepares the proposal of the Energy Program and the annual Energy Balance. Within its regulatory functions, it prepares draft proposals of energy laws and issues regulations for the implementation of energy laws. The MEM is over the issuance of energy permits for the construction of energy facilities. Through the Energy Inspectorate, it monitors compliance with the various energy laws and regulations by the participants in the energy sector. It also supervises the design, construction and maintenance of the energy facilities as well as the quality of the energy supply available to the consumers.<br />
<br />
The Ministry of Environment and Spatial Planning (&ldquo;MESP&rdquo;) decides about the issuance of permits necessary for the construction of energy facilities, including location permits, construction permits and use permits.<br />
<br />
In addition, the MESP decides about the issuance of environmental permits which need to be obtained by investors in the energy sector. This includes granting the approval of an environmental impact assessment study and integrated environmental permits.<br />
<br />
The Ministry of Agriculture, Forestry and Water Management ( &ldquo;MAFWM&rdquo;) is in charge of the regulation and supervision of Serbian forests and waters, directly or through public enterprises established by the Government to manage these resources. Such enterprises are the Public Enterprise &ldquo;Srbija&scaron;ume&rdquo;, established to manage and supervise the use of the national forests and the Public Water-management Enterprise &ldquo;Srbijavode&rdquo; which is in charge of the management and the use of national waters.<br />
<br />
Local governments are responsible for the preparation of the &ldquo;Program of Development of the Energy Sector&rdquo; in their respective territories in accordance with the Energy Strategy. They perform regulatory functions with regard to their respective district heating systems.&nbsp;<br />
&nbsp;</p>

Government agencies in sustainable energy: 

<p>
The Regional Environmental Centre for Central and Eastern Europe (REC) operates in Serbia as an international organization, following the Memorandum of Understanding signed by REC and the Ministry of Foreign Affairs of FR Yugoslavia, in June 2001.<br />
<br />
The Energy Efficiency Agency was established in 2002 with the goal of promoting and enhancing energy efficiency in Serbia. The current status and operations of the Energy Efficiency Agency are regulated by the 2004 Energy Law.<br />
<br />
The Energy Efficiency Agency operates as a primarily consultative body and does not have any regulatory powers. The main duties of the Energy Efficiency Agency are to propose measures for the improvement of energy efficiency and to manage and coordinate programs for the rational consumption of energy and the use of renewable energy resources.<br />
<br />
The Energy Efficiency Agency is managed by a director appointed by the Government and it is answerable to the Government for its action.<br />
<br />
Regional Centres for Energy Efficiency were established after establishing SEEA in 2002. Supported by Norwegian Government in terms of financial and technical assistances, main objectives of these centres are implementation of the energy policy in the area of energy efficiency, RES and environmental protections. There are currently five REEC in Serbia.<br />
<br />
The Environmental Protection Fund was established in the framework of Law on the Environment Part of the regulatory framework for use of renewable resources does exist, but the laws are not yet fully implemented.<br />
&nbsp;</p>

Energy planning procedures: 

<p>
The renewable energy sector in Serbia is in the process of establishment. Utilization of RES is currently limited to hydropower plants and non-commercial use of biomass and geothermal energy. Hydropower is the only RES utilized for electricity generation and registered in the official Serbian Energy Balance.<br />
<br />
However, numerous bylaws, technical standards and guidelines in the field of RES utilization are still outstanding. In particular, the lack of a document outlaying procedures and technical prerequisites for connecting RES power plants to the national grid is obvious. There is lack of technology and equipment standards, as well as regulations on design, manufacture, control and assembly of devices which utilize RES.<br />
<br />
Currently there are no accredited certification laboratories for RES technologies in Serbia. Moreover, there are no regulations which provide standardized methods for the exploitation of RES-fuelled plants.<br />
&nbsp;</p>

Energy regulator Date of creation: 

<p>
Serbian Energy Agency (<a href="http://www.seea.gov.rs/English/Prezentacija1.htm">http://www.seea.gov.rs...)<br />
The Energy Agency was established by the Energy Law, brought in force August 1, 2004. The Agency is a regulatory body i.e. legal entity with all the rights, liabilities and responsibilities stipulated by the Energy Law and other regulations.<br />
&nbsp;</p>

Degree of independence: 

<p>
As per the Energy Law, the Council (managing body of AERS) consists of the President and four members, with staggered terms of office (5, 4 and 3 years), elected by the National Assembly.<br />
<br />
The Agency is functionally independent from any government bodies, all energy entities and users of their products and services.<br />
<br />
The Council is the managing body of the Energy Agency.<br />
<br />
The National Assembly of the Republic of Serbia approves the Financial Plan of the Agency. Funds for the establishment and operation of the Agency are provided from revenues obtained from license fees, a part of the tariff for access to systems and use of systems, as well as other revenues obtained from performing activities within its competency.<br />
&nbsp;</p>

Regulatory framework for sustainable energy: 

<p>
<u>Serbia</u><br />
As defined by the Serbian Energy Law, producers who use renewable energy sources or waste in their power generation processes, those who generate electrical energy in power plants considered as small power plants (within the meaning of the Serbian Energy Law), as well as CHP producers that meet energy efficiency criteria, are considered as privileged producers.&nbsp;<br />
<br />
According to the law, privileged producers of electric or heating energy have the right to subventions, custom duties relaxation, and tax reductions, in accordance with the law and other legislation which regulates taxes, custom duties and other taxation, subventions and other incentives. Privileged power producers shall be entitled to subsidies, tax relieves, customs exemptions, and other relieves in line with laws and other regulations on taxes, customs and other duties, such as subsidies and other incentive measures.<br />
<br />
The Decree on Measures of Incentives for the Production of Electricity Using Renewable Energy Sources was adopted by the end of 2009 and it precisely defines measures of financial incentives for the production of electricity using renewable energy sources and the purchase conditions. The most important aspect of this decree is that it defines the feed-in tariffs for electricity produced by NRES power plants. However, at this moment it is not clear from which financial sources the higher price of green electricity (feed-in tariffs) will be paid, nor is the mechanism for the payment of feed-in tariffs defined.<br />
&nbsp;</p>

Regulatory roles: 

<p>
Serbian Energy Agency<br />
The Agency was established as a regulatory body for: enhancing and directing the development of the energy market in accordance with the principles of non-discrimination and effective competition; monitoring the implementation of regulations and operating codes; harmonising the activities of energy entities providing regular supply of energy and services to customers and ensuring their protection and equal treatment.<br />
<br />
The regulator has jurisdiction in electricity, gas, oil and district heating sub- sectors.<br />
<br />
The main activities:<br />
- Approves tariff systems for tariff consumers of power and natural gas, as well as tariff systems for access to and use of the energy transmission and transportation.<br />
- Determines criteria and methods for determining the costs of connection to the energy transmission, transportation and distribution.<br />
- Approves grid codes, the energy market code and operation code for natural gas storage systems.<br />
- Issues licenses for carrying out energy activities.<br />
<br />
However, several competencies have not been granted to the regulator yet. Tariffs are not yet cost-reflective. Amendments to the Energy Law, concerning the supply function in both the electricity and gas sectors and extension of the legal responsibilities of the AERS, remain to be adopted.<br />
&nbsp;</p>

Role of government department in energy regulation: 

<p>
Serbian Chamber of Commerce: The Energy and Mining Association works under the industry sector of the <a href="http://www.pks.co.yu">Serbian Chamber of Commerce</a>. The scope of its work is: development of energy and mining sector, initiator and sub creator of laws, decisions and regulations regarding energy sector, monitors financial flows of international energy companies, foreign investments and overlooks the process of electricity, gas and oil derivates market liberalization.</p>

Regulatory barriers: 

<p>
It could be observed that the RES energy production sector in Serbia is in its initial stage. Although further enhancement in the institutional and regulatory framework is required, the government and state level institutions through their current actions seem to have set the RES energy production as their main concern.<br />
<br />
Key obstacles for RES deployment lay in the area of regulatory and institutional capacity. The lack of an effective regulatory environment makes it hard to implement existing laws and largely blocks entrepreneurs from implementing their own projects. While several laws are in place, often there are no sub laws or regulations on how to implement these laws.<br />
<br />
The existing RES-related legal framework is imprecise and incomplete. Neither the Energy Law, nor other laws distinguish biofuel as a special fuel category which can be used in transport. Therefore, they do not provide necessary legal framework for its exploitation, i.e. for implementation of Directive 2003/30/EC.<br />
<br />
In addition, there are no clearly defined obligations for operators of power distribution system to prioritize RES producers when connecting to the national grid, which is one of the obligations defined by Directive 2001/77/EC. Although the Energy Law obliges the electricity distributors to give priority status for the power plants based on NRES under equal conditions, it fails to specify what it meant by equal conditions allowing a buyer to put various restrictions on the energy suppliers from RES. The necessity to amend the Energy Law and its clarifications in regards to the definition of biofuels and responsibilities of power distribution system operators was recognized in 2007 but no improvements have been achieved to this day.<br />
&nbsp;</p>

References: 

IEA Energy Statistics (2009). Available at:&nbsp;<a href="http://www.iea.org/countries/non-membercountries/serbia/">http://www.iea... [Accessed 16th September 2013]<br />
<br />
Austrian Energy Agency Country Profile - Serbia. Available at:&nbsp;<a href="http://www.iea.org/countries/non-membercountries/serbia/">http://www.iea... 16th September 2013]<br />
<br />
C. Karakosta et al. Review and Analysis of Renewable Energy Perspectives in Serbia. International Journal of Energy. Volume 2. Issue 1. 2011. Pp 71-84. Available at:&nbsp;<a href="http://ijee.ieefoundation.org/vol2/issue1/IJEE_05_v2n1.pdf">http://ijee.... [Accessed 16th September 2013]<br />
<br />
M. Tesic et al. Renewable Energy Policy in the Republic of Serbia. Renewable and Sustainable Energy Reviews. Volume 15, Issue 1, January 2011. Pp 752-758. Available at:&nbsp;<a href="http://dx.doi.org/10.1016/j.rser.2010.08.016">http://dx.doi.org/10.1016/... [Accessed 16th September 2013]<br />
<br />
Serbia Energy website. Serbian Energy Sector Insight. 25 February 2011. Available at: <a href="http://www.serbia-energy.com/index.php?option=com_content&amp;view=artic... [Accessed 16th September 2013]<br />
<br />
KPMG. Central and Eastern European Renewable Electricity Outlook 2008. Available at: <a href="http://www.czechmarketplace.cz/en/99.central-and-eastern-european-renewa... 16th September 2013]&nbsp;<br />
<br />
European Commission. Serbia 2010 Progress Report. EC Staff Working Document. 9 November 2010. Available at: <a href="http://ec.europa.eu/enlargement/pdf/key_documents/2010/package/sr_rappor... 16th September 2013]<br />
<br />
Embassy of Denmark, Belgrade. Sector Analysis: Serbia Energy and Environment. November 2010. Available at:&nbsp;<a href="http://serbien.um.dk/en/~/media/Serbien/Documents/TCreports2/Environment... 16th September 2013]<br />
<br />
Serbia Business website. Energy Management to help Serbia save energy. 20 February 2011. Available at: <a href="http://www.serbia-business.com/index.php?option=com_content&amp;view=art... 16th September 2013]<br />
<br />
Serbia Energy website. Actors in Serbian Energy Sector. 25 February 2011. Available at:&nbsp;http://serbia-energy.com/serbian-energy-data-base-companies-metal-produc... [Accessed 16th September 2013] Restricted Access<br />
<br />
M. Golusin et al. The Analysis of the Renewable Energy Production Sector in Serbia. Renewable and Sustainable Energy Reviews. Volume 14, Issue 5, June 2010. Pp 1477-1483.&nbsp;Available at:&nbsp;<a href="http://ideas.repec.org/a/eee/rensus/v14y2010i5p1477-1483.html">http://id... [Accessed 16th September 2013]