In just 19 days of July, the Electric Power Industry of Serbia (EPS) spent 5.2 billion dinars on importing electricity. During peak hours, the cost of imported electricity soared to 693 euros per megawatt-hour—up to 14 times more than the rate EPS charges its customers. On July 17th, EPS imported 29 gigawatts, costing around five million euros. Energy consultant Nenad Jovanović noted on social media that these high costs are better than experiencing power shortages.
By July 18th, the situation worsened: EPS’s imports surpassed the production of all Serbia’s thermal power plants. At 8 PM, the price per megawatt-hour reached 746 euros, with 1,164 megawatts expected to be imported. Jovanović reported that from July 1st to 19th, EPS imported 300 gigawatts, surpassing last summer’s record of 240 gigawatts.
Grčić’s departure and EPS’s ongoing struggles
This record is a stark reminder of past issues, reminiscent of late 2021 when EPS, under Milorad Grčić’s management, faced similar challenges. Despite the criticisms and a request from President Aleksandar Vučić for stabilization, Grčić was eventually appointed president of Obrenovac. The new management, led by Miodrag Tomašević, has not resolved the issues, leading to further difficulties.
According to Jovanović, the high import prices are not surprising given the seasonal consumption patterns. “Prices are high because transmission constraints prevent cheaper electricity from reaching regions with high demand,” he explained. On July 19th, while Austria’s price was 70-80 euros per megawatt-hour, Hungary’s price was 700-800 euros.
EPS’s short-term planning and recent strategies
Jovanović noted that while high consumption was expected during winter, the summer heatwave has increased demand, revealing weaknesses in EPS’s planning. This situation has led to high import costs and operational strain on domestic resources. The recent overhaul of the Bajina Bašta hydropower plant, which now operates using cheaper imported electricity, is one of the steps EPS is taking to manage these high costs.
In the first half of the year, EPS exported electricity, earning around 70 million euros. However, in just 19 days of July, the company spent 45 million euros on imports. Whether the latter half of the month will offset this difference remains uncertain. The forecasted drop in temperatures may reduce consumption and, consequently, import needs.
EPS’s failure to secure favorable rates in advance could be attributed to financial constraints, as significant collateral is required for such transactions. The recent state guarantee for a 100 million euro liquidity loan from the Italian Cassa Depositi e Prestiti might alleviate some of EPS’s financial burdens.
In the past few months, EPS benefited from negative electricity prices on European exchanges, which led to the import of electricity at no cost. However, this opportunity has passed, and the current situation highlights the urgent need for better long-term planning and financial management.
