When there is no electricity from the wind, the cost falls on Electric Power Industry of Serbia, News
It is difficult to plan the production of electricity from wind and sun, because it depends on meteorological conditions, so there are always deviations from the plan, which in this case costs EPS, says Zeljko Markovic, consultant at Deloitte, former director of EPS.
The official letter sent by Elektroprivreda Srbije, Elektromreža and the Energy Agency two days ago to Zorana Mihajlović, Minister of Energy, urging that insisting on a rapid increase in electricity production capacity, primarily from wind, could endanger Serbia’s electricity system, once again raised the question who is in a hurry to fill the pockets of investors who build wind farms and install solar panels. And that is to the detriment not only of EPS and EMS, but also of all electricity consumers who pay green kilowatts every month through their bills, even though they have not warmed up to them at least this winter. On the contrary.
This was confirmed at the recently held open session of the Government of Serbia when the director of EMS Jelena Matejić warned that in early December we had the opportunity to see what it means to have wind energy falling from zero to three megawatts, up to 50, which caused us necessary the cost of buying electricity when it is most expensive.
As they confirmed in a letter to the Ministry of Energy, EPS, EMS and AERS are leaving the working group dealing with renewable sources because the idea of connecting to the extent envisaged would dramatically endanger the Serbian electricity system, not only financially, but also at risk of total disintegration, the so-called blackout.
Asked what the two sides disagree on, Zeljko Markovic, former director of EPS explains that EPS and EMS in their statement emphasize their disagreement with Articles 10 and 11 of the Law on the Use of Renewable Energy Sources. Namely, each balance group (balance responsible party) is obliged to submit its plans in advance in terms of production and consumption of electricity, and to adhere to these plans, and this is called balance responsibility. If the balancing group does not adhere to these plans, ie if it does not deliver or take over electricity from the system as reported by the plan, the system operator, ie EMS, takes into account the balance of production and consumption, and compensates for these deviations it has that, it charges from the balance responsible party.
– The law stipulates that the guaranteed supplier, ie EPS, takes over the balance responsibility for energy producers from renewable sources, and in that case bears the costs, if those producers do not produce electricity in accordance with the plan. On the other hand, it is very difficult to plan production from wind and sun, because it depends on meteorological conditions, so there are always deviations from the plan, which in this case costs EPS. Of course, having in mind that EPS is a state-owned company, the state, in order to encourage production from renewable energy sources, consciously, as an incentive measure, determined the balance responsibility to EPS through the law – our interlocutor emphasizes.
He also adds that, as an incentive measure, the state has determined the priority of taking over energy produced from renewable sources, which means that in certain situations, when there is no electricity, EPS must reduce its own production, giving priority to production from renewable energy sources (RES). Therefore, EPS and EMS do not agree with the stated legal solutions, which were adopted through legal regulations, and AERS supports them in its statement.
Asked whether any of these requests have anything to do with increasing the amount that citizens pay for RES and whether they would increase with the MRE proposal, he answered that the tax for RES that citizens pay refers to the work of power plants built so far. The income from that tax is used to pay feed-in tariffs, ie the agreed prices for the purchase of electricity from privileged producers. The new Law on the Use of RES also envisages incentive systems through feed-in tariffs, but only for power plants of lower power, while a new method of incentives was introduced for power plants of higher power, through market premiums. This way of incentives is many times more favorable for citizens in terms of RES tax compared to feed-in tariffs. Because, unlike the feed-in tariff system, where every kilowatt-hour produced is purchased from a privileged producer at a set price, the privileged producer sells electricity on the free market through a market premium system, and the state only reimburses the difference between the price sold and the price determined at the auction, when that producer applied for incentives.
Also, the contract that the privileged producer has with the state is two-way, that is, when the price on the market is higher than the bid, the privileged producer is obliged to pay the difference in price to the state.
– To illustrate, let the privileged producer sign a contract with the state at a guaranteed (auctioned) price of 50 euros per megawatt-hour. If the market price is 40 euros, the state is obliged to reimburse him 10 euros per megawatt-hour for each megawatt-hour produced and sold, and if the market price is 60 euros per megawatt-hour, then he is obliged to pay 10 euros to the state for every megawatt-hour sold. From this it is clear that the potential obligations of the state to the privileged producer, depending on market prices, can be many times less than the system with feed-in premium, and therefore there would be less burden for citizens through the RES tax – concludes our interlocutor.
EPS, EMS and AERS are only not satisfied with the reality or the truth about the situation and the fears of responsibility in case of further deterioration of the situation. As for EMS AD, they cite problems with the integration of high-power plants producing energy from renewable energy sources, pointing out the consequences that such plants can cause instability in the transmission system, avoiding to explicitly say that in fact they did nothing to create conditions, ie that they have not developed in the previous period to a sufficient extent and that they are not able to build a transmission system to the necessary extent in the coming period, such as related companies in the region, especially in the EU. This is how the Ministry of Energy comments, citing these three companies that two days ago publicly asked the Minister to postpone and implement the adoption of all bylaws that provide incentives for the production of electricity from renewable sources.
The hidden truth about the situation, business capabilities and available capacities of the mentioned companies has come to light. They do not want to change anything because the declining productivity of EPS suits both. If EPS had built its own capacities for the production of electricity from renewable energy sources of RES, the situation in Serbia would not be nearly as critical. The Ministry understands the needs of every management that has led to this situation in the power system, to defend itself and look for the culprits wherever possible. The Ministry states that it will not take a single step, unlike the mentioned entities, which would in any way endanger the priority task of Serbia’s energy policy, which is energy security.
Any reasonable person will understand that numerous lies told at the expense of the ministry are just a clumsy attempt to replace theses and avoid responsibility for the catastrophic results of energy entities. Until serious changes are made in the work of energy entities, including the Agency, the Ministry will regulate the dynamics of application of regulations in accordance with Government decisions, but not outside the statutory deadlines, ie implementation must be harmonized with the current situation and possibilities of energy entities also declare.
Asked whether the adoption of new bylaws is in a hurry to pack everything until the election, even if the new Minister of Energy is not in this position in the new government, everything will be over before a large American company is expected to be interested in the construction of wind farms and solar panels came to Serbia, the Ministry replied that these were untrue and unsubstantiated qualifications and that they could only say that the allegations were completely incorrect, Politika reports.