In an interview with Demostat, Dubravka Đedović Handanović, Serbia’s Minister of Mining and Energy, discussed the pivotal transformation of Elektroprivreda Srbije (EPS) from a public entity to a joint-stock company. This shift is intended to enhance operational efficiency and competitiveness in a market now populated by both public and private energy producers.
Đedović Handanović explained that EPS remains the largest electricity producer in Serbia, offering favorable prices and ensuring state protection during crises. However, as a public company, EPS faced numerous legal and procedural constraints that hampered its agility. To address these issues, EPS has appointed a professional management team, including local and foreign Norwegian experts, to lead the company’s transition.
The minister noted that the Norwegian executives, coming from a country that relies heavily on renewable energy sources like hydropower, are well-versed in clean energy practices. They support the transformation towards sustainable energy, a goal shared by Serbia. However, Đedović Handanović emphasized the need for a gradual transition to avoid compromising the stability of the electricity supply, which currently relies on coal and thermal power plants. She cautioned against the hasty decarbonization efforts seen in some European countries, such as Romania, which led to sudden closures of mines and widespread job losses.
Đedović Handanović highlighted the social and economic impacts of transitioning from fossil fuels to clean energy, stressing the need for careful planning and financial investment. Serbia aims to source 45% of its electricity from renewable energy by 2030, up from the 27% achieved in 2021. The recent completion of the first renewable energy source (RES) auctions, which brought in competitive offers without long-term state contracts, marks a significant step forward.
The auctions secured an additional 713 megawatts of wind and solar energy, more than doubling the previous capacity and achieving lower prices. Despite this progress, Đedović Handanović anticipates that electricity prices will stabilize around 100 to 80 euros per kilowatt-hour in the long term.
The minister also discussed the importance of strengthening state-owned EPS and investing in new RES projects. Significant investments are required to maintain and upgrade thermal power plants to meet environmental standards. Desulphurization projects at TENT A and TENT B are underway, with TENT B expected to be completed next year. Additionally, EPS is investing in mining equipment, with 450 million euros allocated for new machinery.
Đedović Handanović acknowledged the challenges EPS faces, including the need for price adjustments to remain competitive and fund new investments. While no immediate price increases are planned, the government aims to ensure EPS’s sustainability through improved financial management and new business opportunities, such as marketing by-products from the desulphurization process.
The minister concluded by emphasizing the need for ongoing adaptation to global market changes and enhancing EPS’s resilience to future challenges.
