The Serbian government has unveiled its Draft Energy Development Strategy for 2040, with projections extending to 2050. The strategy outlines two scenarios: the BAU (Business As Usual) scenario, which maintains the current energy practices, and the S scenario, which advocates for significant changes to enhance sustainability.
Key Projections Under the S Scenario
- Primary energy demand: The S scenario anticipates a reduction in primary energy needs to 15,297 thousand tons of oil equivalent by 2040, a decrease of approximately nine percent from 2021 levels.
- Coal consumption: Coal use is projected to fall to 4,384.2 thousand tons by 2040, representing a reduction from 42.3 percent to 29.1 percent of the primary energy mix.
The draft strategy highlights that achieving this reduction will necessitate “retiring” certain thermal power plant capacities by 2030. Specifically, it proposes shutting down four blocks at TPP Kolubara A and considering whether TPP Morava’s units should be placed in cold reserve or decommissioned. The transition towards renewable energy sources will require a substantial shift in the structure of electricity production, moving away from fossil fuels as part of the decarbonization process.
Operational adjustments and investments
The strategy emphasizes that while transitioning away from fossil fuels, maintaining energy security is crucial. The operation of thermal power plants will be adjusted based on current electricity demands, with some units operating at full capacity while others may function at reduced power or remain in reserve status.
To facilitate this transition, the draft strategy calls for significant investments in the revitalization of existing thermal blocks. This includes projects to reduce emissions, such as desulfurization, nitrogen oxide reduction, and wastewater treatment. Specifically, blocks A1 and A2 at TENT A and both blocks at TPP Kostolac A will be upgraded to improve environmental performance. The document mentions only one new thermal capacity: Block 3 of TPP Kostolac B.
By 2030, the strategy outlines that thermal power plants deemed non-viable will be withdrawn from operation. This includes four remaining blocks at TE Kolubara A, with TE Morava’s future under review. The strategy predicts that these changes will not significantly impact Serbia’s overall electricity production.
Cost and future coal needs
The projected cost of revitalizing thermal blocks and implementing environmental protection measures is estimated at 1.57 billion euros by 2040. The strategy also notes that Serbia’s current electricity supply relies heavily on coal, and short-term coal shortages will be addressed through imports and improved mining techniques. The quality issues with coal in the Kolubara basin will be managed by selective mining and importing higher-quality coal from Kostolac. The Novi Kovin mine may also contribute with its capacity of three million tons per year.
Looking ahead, the strategy forecasts a reduction in coal use for households and district heating systems, aiming to halve the demand for brown/dried coal by 2040. This will necessitate the closure of unprofitable mines and investment in more promising ones.
Regional and local impact
The strategy acknowledges the significant regional and local impacts of the energy transition, particularly in areas dependent on coal mining and thermal power plants, such as Kolubara and Pomoravlje. The transition will affect local economies, requiring measures to ensure economic sustainability and support for affected communities.
To address these challenges, the strategy proposes a transition fund for local communities affected by the energy shift, financed by greenhouse gas emissions charges. Additionally, European funds will support the green transition in the most impacted regions, aligning with the Green Agenda for the Western Balkans.
The Draft Energy Development Strategy aims to balance the need for a sustainable energy future with the economic and social impacts on local communities, ensuring a fair and supportive transition.
