Serbia needs new investments in energy

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Serbia is facing an important decision on turning to new energy sources and development that will be based on climate neutrality. We will work on that through the preparation of the National Integrated Plan for Energy and Climate and the new strategy for energy development until 2050, and this will be seen through the priorities in the energy sector in 2021, where development is planned in several basic directions, said Zorana Mihajlovic, Deputy Prime Minister of the Republic of Serbia and Minister of Mining and Energy for the edition Serbia and the USA 20 years later – Investments and donations.
What are the most important activities of the Ministry of Energy in 2021?
The first direction is to increase energy efficiency, where we plan to establish the Directorate for Energy Efficiency. The role of the new institution will be to help companies increase energy efficiency, but also to support citizens to replace windows and doors in the next five years and thus reduce energy consumption, which in Serbia is four to five times higher than the EU average.
The other direction is the development of medium and large hydroelectric power plants that should be built by EPS, on the upper Drina, on Bistrica, and possibly less reversible HPPs on the Danube. These are investments worth four to five billion euros, and that would provide energy security with renewable sources.
Third, we will work to increase the utilization of biomass, which can be used much more as an energy source in heating plants. Also, our goal is to make greater use of all types of renewable energy sources, where the greatest potential is in the construction of solar and wind power plants.
The fourth direction is the construction of gas power plants, which could produce both electricity and heat. All this together should provide Serbia with energy security, reduce the negative impact of energy on the environment, but also ensure a better quality of life for citizens.
Unfortunately, the situation we found in the Ministry, from the legislative framework, the state of projects, the orderliness of public companies, is not good. Mining and energy have been asleep for a long time, and these sectors can contribute more to GDP, and make public companies profitable, and implement projects faster, and be better connected with neighbors, especially in the gas sector.
That is why one of the first steps is to “wake up” this sector, edit it, digitize procedures and open mining and energy to new investments. We have prepared a set of new laws and amendments to the laws in mining and energy, including the new law on renewable energy sources, which Serbia is adopting for the first time, which will harmonize with what is being done in other European countries, as well as European regulations.
In addition, a new law in the field of energy efficiency, amendments to the Law on Energy, as well as the Law on Mining and Geological Research, which we want to protect the mineral wealth of Serbia, but also to facilitate new investments.
An important effect of these laws will be, among other things, the digitalization of procedures modeled on construction permits, ie that we will have e-mining and e-energy and much more transparent and efficient procedures for investors.
Energy is a sector with great potential and great investment needs. What are the most important investments in energy in 2021?
This year will certainly be marked by important investments in the field of energy, from the construction of new power plants, revitalization of existing ones, investments in new gas pipelines, through the strengthening of the transmission and distribution network.
In the gas sector, one of the most important projects is certainly the construction of the gas interconnection Nis-Dimitrovgrad, which we will build with the support of the EU. The realization of this project will provide not only diversification of routes, but also diversification of gas suppliers. In that way, gas from LNG terminals from Greece from various producers will be able to arrive in Serbia, if there are free capacities from the TAP gas pipeline from Azerbaijan, and in the future it will be possible to use gas from the eastern Mediterranean. All this will mean greater security of supply for Serbia and the region, but also further development of the gas distribution network in central, eastern and southern Serbia.
Also, it is necessary to accelerate the gasification of Serbia, which in the previous period was unacceptably slow, and the expansion of the Banatski Dvor Underground Gas Storage is also planned.
In the power industry, the construction of the Kostolac B3 thermal power plant will continue, but investments in environmental protection are equally important, such as the desulphurization plants in TENT A and TENT B, or the wastewater treatment plant in TPP Kostolac B, which will reduce the harmful impact to the environment.
Joint projects with Republika Srpska are also planned, ie construction of hydroelectric power plants on the upper Drina, continuation of revitalization of HPP Djerdap 1. Also, investments in the transmission network are very important, primarily the Trans-Balkan corridor, which will be a kind of “energy highway”, but and investments in the distribution network, operated by EPS Distribution.
They will also invest in the energy efficiency of public buildings, and build new heating plants, which will use biomass. Also, we expect the continuation of the started projects in mining, among which is the construction of the smelter in Bor.
In which part of the energy sector do you see the most opportunities for attracting foreign direct investment?
There is an opportunity for investments in all parts of the energy sector, but it is important that as a country we have a clear goal, a strategic direction that we will set, among other things, a new energy development strategy and a national climate and energy plan.
The energy sector of Serbia needs investments, but those that are in line with our strategic direction, and that is the transition to a climate-neutral economy, efficient energy consumption, diversification of routes and gas supply, and in the electricity sector, greater reliance on renewable energy sources.
The same applies to mining, the condition for someone to be able to realize a new project in the field of mining is that in addition to economic development, these projects are of the highest standards when it comes to environmental protection.
If we put it this way, I believe that the state and citizens will benefit from it, through higher incomes, growth of living standards, better environmental protection, but also investors, who will have predictability and security, and the ability to plan their business and investments in the long run in Serbia.
General Electric has significant investments in wind farms in Serbia. Is there room to attract other US energy investments?
Serbia in the energy sector should be open to all investors, which I think was not the case with the energy sector as we found it. In the previous period, great progress was made when it comes to American investments, primarily in transport infrastructure, by signing a contract with Bechtel for the construction of the Moravian Corridor.
Last year, the American International Development Finance Corporation (DFC) started its activities in Serbia, which is also an opportunity for us to have more joint projects and American investments in Serbia in the coming period.
I believe that if we have a favorable business environment, a clear strategy of what kind of mining and energy sector we want and the message that Serbia is open to all investors, even in those sectors where there have been no investments from different countries, we will soon see serious and quality companies that recognize their interest in investing in Serbia.
Both in terms of its geostrategic position and economic growth, Serbia is a good choice for American investors in this region, and this is facilitated by the progress in bilateral relations between the two countries, which gives an additional impetus to the improvement of economic cooperation.
One of the points of the Washington agreement signed last year is the diversification of energy supply. What can Serbia do in that regard?
Serbia’s interest is to be energy safe in the gas sector, and in order to be energy safe, it is necessary for gas from different countries to pass through our territory, as well as to connect to all neighboring countries in the region through interconnectors.
This year, Serbia finally got another direction of gas supply, but it is very important that we work on diversification of suppliers, because that gives us greater security and the opportunity to have a more favorable gas price for both industry and households. I think that space should be made for everything – both for gas from gas interconnections, and for LNG that will come to ships, because Serbia needs gas to develop, and it is geographically positioned so that it is natural to be a transit route in energy, such as is already in traffic.
The Balkan Stream gas pipeline started functioning on January 1, and this year the works on the construction of the Nis-Dimitrovgrad gas pipeline should begin, for which a tender for a contractor has been announced. This gives us the opportunity to have gas and some other suppliers, both gas related to Azerbaijan and the new, Eastern Mediterranean gas pipeline, through which gas from Israel, through Cyprus, Crete, Peloponnese, Athens, Thessaloniki and Sofia could reach Serbia, ie. to Nis, which would thus become a gas hub in this part of the region.
Investments in energy protection are also closely related to investments in energy. What are the plans for investing in environmental protection and energy?
Energy and environmental protection are inextricably linked and there is no development of energy without environmental protection. Today, the whole world is aware of that, sustainable development and green energy are global politics and topics, and Serbia must be an active participant in that process.
We will establish our goals with the National Integrated Plan for Energy and Climate, but also in the strategy for energy development, which we will develop in accordance with all the requirements of sustainable development and energy transition.
What is valid for the strategic level will also apply to individual projects, because for all potential projects, both in mining and energy, one of the basic criteria is that there is no negative impact on the environment.
If we want Serbia to be a climate-neutral economy in the future, we must think about it now and everything we do now must lead us to that goal, which the European Union and other developed countries are moving towards. Energy is a sector that has a great impact on the future of Serbia and its citizens, because without enough energy, good quality and environmental protection, there is no economic development or better quality of life for the citizens of Serbia, Nova Ekonomija reports.