The energy transition brings higher electricity bills to the citizens and economy of Serbia

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The energy sector of the Republic of Serbia is in a special focus because it is of special importance for achieving the goals and climate neutrality in 2050, they say in the Ministry of Mining and Energy. And environmental obligations to the EU mean additional costs. Serbia cannot continue economic growth without domestic production of electricity from coal, which it has now thanks to a reliable supply and the price of electricity itself, says the editor of the Energy Balkans portal, Jelica Putnikovic.
Serbia has an obligation to the European Union to reduce carbon dioxide emissions, while at the same time the production of electricity on coal is one of the biggest polluters, which raises the question of what the price of so-called decarbonization is, what it will mean for the country’s path to the EU, EPS as a producer of electricity, and what about citizens as end users?
The Ministry of Mining and Energy reminds that in 2019, the European Commission adopted the European Green Agreement (Green Deal) as a new development strategy of the European Union in order to establish a modern, climate-neutral and competitive economy.
“The Zagreb Declaration, from May 2020, confirmed the accession of the Western Balkans region to the EU’s ambitions in the field of climate, in accordance with the Paris Agreement and the promotion of the Green Agenda in the Western Balkans. As part of the summit of the Berlin Process in November last year, the Declaration from Sofia on the Green Agenda for the Western Balkans was signed,” they state for in the relevant ministry.
Also, in accordance with the EU policy in the field of energy and climate and the aspiration to implement decarbonisation and achieve climate neutrality in 2050, the Ministerial Council of the Energy Community adopted a Recommendation on the preparation and development of integrated national energy and climate plans by the Energy Community.
These plans cover all five dimensions of the energy union: energy security, the internal energy market, increasing energy efficiency, decarbonisation, ie increasing the use of renewable energy sources (RES), research, innovation and competitiveness.
“In accordance with the above recommendation, Serbia is obliged to develop and adopt an Integrated National Energy and Climate Plan for the period from 2021 to 2030, which would consider the contribution to the energy and climate goals of the EU until 2030 with a projection until 2050. In addition, this document will set goals in the field of energy efficiency, renewable energy sources and reduction of greenhouse gas emissions in 2030 with projections until 2050, and they will have a great impact and significance for the overall economic development of Serbia. The document is in the process of being drafted, the draft document will be prepared in October this year, and its adoption is planned for the beginning of next year,” they note in the Ministry of Mining and Energy.
Having in mind the above, it is necessary to prepare new strategic documents, ie draft a new Energy Development Strategy of the Republic of Serbia for the period until 2040, with projections until 2050 and the Program for the implementation of the Energy Development Strategy.
“The Ministry of Mining and Energy has started drafting these documents as well. The energy sector of the Republic of Serbia is in special focus because it is of special importance for achieving the goals and climate neutrality in 2050. After the preparation of the mentioned documents, it will be possible to give more detailed information,” they say for our portal.
What is the “price” of so-called decarbonization?
Serbia, as well as all developing countries, imposes the EU decarbonisation system as an environmental obligation, although the Transboundary Mechanism for Adjusting CO2 (CBAM), which implies the introduction of a tax on imports of certain products from third countries, is actually an economic measure, explains Jelica Putnikovic.
“At the same time, Western European countries have transformed their economies, helping companies with systemic, protectionist measures, but also with financial support, which the poor countries of the Western Balkans, as well as Serbia, cannot do. The price of decarbonisation is actually an imposed cost that will affect not only the companies that produce electricity in coal-fired power plants, but also the economy that consumes that electricity, because their products will not be competitive on the EU market. All this will create an even bigger gap between poor and rich countries,” states our interlocutor.
According to her, Serbia, ie the Electric Power Industry of Serbia, has started reducing pollution from thermal power plants. In addition, the state provides support for the construction of new capacities for the production of renewable, green energy, and the new energy laws also recognize the importance of energy efficiency, ie, the reduction of energy waste.
“It should be said, however, that the entire model of European energy legislation was created in such a way that it puts obstacles in front of the countries that are in the ‘waiting room’ for joining the EU. This can be best seen if we compare EPS with a German electricity company that produces electricity from coal, because Berlin did announce the closure of thermal power plants, but also huge subsidies for the companies themselves and workers who will lose their jobs.”
Therefore, our interlocutor believes that Serbia cannot continue the economic growth that it now has thanks to a reliable supply and the price of electricity without domestic production of electricity from coal.
“Market liberalization, which the EU is forcing with claims that it will bring smaller bills for the economy and citizens, is just a marketing mantra which, in fact, means bigger bills. Decarbonization will bring citizens not only an increase in the price of electricity, but also a number of other products. And that will certainly endanger the standard of the domestic consumer,” she notes.
When asked how Serbia can reduce carbon dioxide emissions without endangering the amount of electricity, our interlocutor answered that the very significance of the impact of carbon dioxide on climate change is exaggerated.
“Serbia, of course, should continue with projects that will reduce emissions of CO2 and other pollutants from EPS and industrial plants, to force gasification and the transition to RES district heating systems and households, to ban the import of old cars because we have become a cemetery for vehicles whose use is prohibited in the EU. But, the story about carbon dioxide has become a mantra of politicians, which is very convenient in trade campaigns and preventing competition from developing countries,” concludes Putnikovic, Energija Balkana reports.