Electricity will not become more expensive soon, more needs to be done on the reform of the Electric Power Industry of Serbia (EPS), said the Minister of Mining and Energy of Serbia, Zorana Mihajlovic.
In an interview with the Beta agency, she said that “EPS, like all other public companies, must be sorted out when it comes to costs and revenues, and then we can talk about real prices.”
“We have increased the price of electricity by about 1.3 euros according to the average bill of 25 euros, which will be applied from February, and I know that no price is good for citizens, each is high, but we must take care of basic production,” said Mihajlovic.
She added that “the price of electricity cannot cover the costs of EPS, which may not be realistic, and that the regulatory agency (Energy Agency of Serbia) must link the price of electricity, which is among the lowest in Europe in Serbia, to energy and business.”
According to her, the reform of EPS began in 2014, when the Law on Energy was passed, and in those six years “no one has essentially dealt with the division of activities, revenues and expenditures, not only in that company but also in ‘Srbijagas’ in order to form companies that perform work of general interest for all citizens, deliver quality energy and make a profit”.
“These days, due to the floods, some areas in Serbia do not have electricity, not because of so many disasters, but because in previous years, no investments were made in the distribution network or in the substations,” said Mihajlovic.
EPS, as she said, often does not know what exactly is the most important investment and it seems to her that more money went to affiliated companies than to the core business.
She pointed out that the Government of Serbia has made a decision to divide activities in EPS, which has production, mines, thermal power plants, hydroelectric power plants and distribution system operators (ODS), and to invest 300-400 million euros in distribution and substations in the next few years. It would not happen that consumers do not have electricity because snow has fallen or a flood has broken out.
The most important thing, as she said, is to produce enough electricity and to be of good quality so that, not in Belgrade, but in certain parts of Serbia, electricity would disappear five or six times during the day for a few seconds or minutes.
According to her, that prevents the normal operation of home appliances and causes damage, so in the “second step” consumers should be provided with quality electricity, and not have to receive what is delivered to them, and they should be provided with conditions to choose a supplier.
Asked whether the current leadership is responsible for the reforms in EPS, Mihajlovic said that “vacancies for directors of public companies must be announced urgently, that the criteria must be clear and that they cannot last for five years.”
“The responsibility of the people who run public companies is very important. Those who run them today have the best job, the state jumps in with money, solves problems, and directors have no responsibility and do not pay the bills, why an investment was chosen, why it is not completed or why citizens they don’t have electricity,” said Mihajlovic.
She added that “when the management is selected at the competition, it corresponds to the name and surname, and that the reason why this was not the case in previous years is that the Ministry of Mining and Energy was on the sidelines and slept a lot, which was a serious mistake.”
According to her, the Ministry of Mining and Energy is preparing changes to the law and has included companies and professional domestic and international institutions in that work to see what is best for the development of energy in Serbia.”
When asked what she promised to the Energy Community, which threatened punishment because the activities in Srbijagas and Jugorosgas were not separated, Mihajlovic said that these were not promises that bring Serbia into trouble, but enable the development of energy.
“Today, all distributions do not have licenses to work, it does not exist anywhere in the world. We have made a decision in the Government of Serbia to change everything that has not been done out of ignorance or intentionally in the previous six years,” she said.
She added that this will enable the opening of Chapter 15 in the process of Serbia’s integration into the EU, where one of the biggest problems is not knowing what is happening in state-owned companies, and that citizens suffer because of that, and the economy has the highest gas price in Europe.
Asked whether the director of Srbijagas, Dusan Bajatovic, would continue to be against these changes, Mihajlovic said that “the decision of the Government of Serbia was made, and it was not easy to work with Srbijagas in 2014 either.”
“I will remind you that the State Audit Institution (SAI) has not entered Srbijagas since 2012 or 2013. Now I have written to it and asked it to include Srbijagas in their plan,” said Mihajlovic, who is also the Deputy Prime Minister of Serbia.
She said that a working group had been formed and that deadlines had been set for what should be done in that company.
“People who are not ready to realize what the state and the expert team say should not run public companies and I will not hesitate to submit a decision on dismissal because it is not a question of Bajatovic, but of the gas economy of Serbia,” said Mihajlovic.
The gas industry, she said, “can make a profit, and not a small one”.
“We can have a strong gas economy, and not one company from when one person manages the entire gas economy,” said Mihajlovic.
Answering the question whether she expects pressure due to the construction of the Turkish (Balkan) Stream gas pipeline, Mihajlovic said that “there is always pressure from various sides because the gas pipelines are of inestimable value in every energy sector, including ours”.
“It is time for Serbia to open its gas market and electricity market, because that is a way to attract quality investments, and more offers provide more competitive prices for both gas and electricity,” said Mihajlovic.
She added that “she believes that it is possible to provide more realistic gas prices for the population, and that the real price is not known when one supplier dictates the price structure.”
Mihajlovic said that “the impression was made that Gazprom and other Russian companies are a priori against everything.”
“Jugorosgas’ was more modern than Srbijagas in some respects. Everyone has an interest in making money, but also the state of Serbia to have quality gas at acceptable prices. If the price of gas is high, the economy cannot work, and it would be a great pity if uses electricity. Together we can come to a solution,” Mihajlovic said.
Asked how she would “reconcile” environmental movements against the lithium mine near Loznica and the investor, the company ‘Rio Tinto’, Mihajlovic said that the company has been researching the area since 2004 and that the value of the entire mineral processing business is measured in tens of billions of euros.
“The vision of the Government of Serbia is for the country to become green, sustainable and neutral to climate change in the coming years. That is why no one will sign a binding document that will destroy the environment,” said Mihajlovic.
She pointed out that “they have to wait for all the studies and see which technology is in question”.
According to her, it will not be possible to start the exploitation, not only of that, but of any mine if the studies are not accepted in the public debate and are not in accordance with European directives.
“A new working group was formed from representatives of professional institutions, because the previous one met only once in four years, and we all reiterated that the most important thing is to preserve the environment, and we told ‘Rio Tinto’ and received the answer that it was clear to them,” said Mihajlovic.
When asked how the problems of small hydroelectric power plants will be solved, Mihajlovic said “that no one can agree that, due to small hydroelectric power plants, rivers should be introduced in pipes of 200-300 meters or five kilometers, and then the river should continue.”
She said that a new law on renewable energy sources is being prepared and that energy stability will not be based on small hydropower plants, but on solar energy, biomass, geothermal and wind energy, and that medium and large hydropower plants are on the other side.
According to her, the problem of a small hydroelectric power plant on the Rakiti River will be solved in agreement with the local self-government, Beta reports.
