Republic of Serbia
Ministry of Energy, Development and Environmental Protection
Energy Sector Development Strategy of
Republic of Serbia up to 2025 with projections
to 2030 – Draft
Prof. dr Dejan Ivezic
University of Belgrade – Faculty of Mining and Geology
Project realization:
-
Analysis of previous Strategy realization
-
Energy resources and energy potentials of the Republic of Serbia
-
Scenarios of development
-
Energy balances by fuels (oil and oil derivartes, natural gas, coal,
electricity, heat and RES) for 1990-2010
-
Total energy balances for 1990 – 2010 period
-
Energy Sector Development Strategy of Republic of Serbia up
to 2025 with projections to 2030 – Draft
Team for project realization

doc. dr Marija Živković

dr Branislava Lepotić Kovačević

prof. dr Nenad Đajić

prof. dr Petar Đukić

doc. dr Jovan Mikulović

prof. dr Vladimir Pavlović

prof. dr Dušan Danilović

prof. dr Dragan Ignjatović

doc. dr Snažana Grujić

Aleksandar Vučetić, dipl.ecc.

doc. dr Miloš Tanasijević

doc. dr Vesna Karović Maričić

Aleksandar Madžarević, MSc.

Miroslav Crnogorac, MSc
Energy Sector Development Strategy
of Republic of Serbia up to 2025 with projections to 2030
Content:
I
Introductory Considerations
II Energy Resources and Potentials of the Republic of Serbia
III Basic Assumptions of Serbian Energy Sector Development
IV The Strategic Priorities of Serbian Energy Sector Development
V
The Development of Energy Sectors
VI Legal, Institutional and Socio-Economic Framework
of Serbian Energy Sector Development
VII Serbian Energy Sector after 2030
Annex 1 – Total Energy Balances and Energy Indicators
I Introductory Considerations


Energy and economy development

Driver and a key element of economic change

Base for economy development

Reduction of energy intensity, but increasing of energy
consumption
Sustainability as a challenge for energy development

Energy efficiency

Renewable energy

Less negative consequences for the environment

The principle of user/polluter pays

Economic efficiency and energy market

Social acceptability
II Energy Resources and Potentials
Geological reserves of fossil fuels, (mill. toe)
Proved and Probable
Geological Reserves
Total geological
reserves and
resources
Hard coal
2,77
4.02
Brown coal
37,7
45.17
134,25
193
1.583 (780*)
3.698
Energy Resource
Brown-lignite coal
Lignite
Oil
Natural gas
Oil shale
* Without AP Kosovo and Metohija
**Kerogen
10,14
3,37
0
50
398**
II Energy Resources and Potentials
Available
TP in use
Unused
available TP
Total, available
TP
Biomass
1,054
2,351
3,405
Agricultural biomass
0,033
1,637
1,67
Wooden (forestry) biomass
1,021
0,509
1,53
0
0,205
0,205
Hydroenergy
0,909
0,770
1,679
Wind energy
≈0
0,103
0,103
Solar energy
≈0
0,240
0,240
0,05
0,175
0,180
0
0,043
0,043
1,968
3,682
5,65
RES (mill. toe/year)
Biodegradable communal waste
Geothermal energy
Biodegradable waste
RES TOTAL
TP – technical potential
II Energy Resources and Potentials

Fossil energy resources in Serbia have not been sufficiently
explored (except coal) and the data are not conclusive.

Geological reserves of the primary energy sources (coal, oil,
natural gas, oil shale) are still, an important basis for the
development of production and their use in the future for the
energy sector of Serbia.

Renewable energy sources (excluding large hydropower
plants) are at an early stage of development.
III Basic Assumptions
of Serbian Energy Sector Development

Serbian energy sector in 2010

Projections of final energy consumption

SWOT analysis of Serbian energy sector
Serbian energy sector in 2010
Final energy consumption 9,696 Mtoe
Other consumers 9.6%
Agriculture 1.8%
Non-energy consumption
Biomass 10.6%
8.3%
Household 32.5%
Oil Products 33.7%
Heat 8.8%
Transport 23.1%
Natural gas 11.9%
Industry 24.7%
By sectors of consumption
Electricity 24.5%
Coal 10.5%
By energy sources
Serbian energy sector in 2010
Primary energy consumption
15,531 Mtoe
Hydro energy 6.7%
Consumption for electricity
generation
Natural gas 1.4%
Biomass 6.7%
Natural gas 12.2%
Hydro energy 34.5%
Coal 64.1%
Oil 23.7%
By energy sources
Coal 50.7%
Serbian energy sector in 2010
Primary energy consumption structure in region
Albania 1.8%
Hungary 21.9%
Bosnia and Herzegovina 5.5%
Croatia 7.3%
FYR Macedonia 2.5%
Montenegro 2.8%
OECD
World
Serbia 13.3%
Hungary
Romania
Bulgaria
Serbia
Romania29.7%
Bulgaria15.2%
Montenegro
FYR Macedonia
Croatia
Bosnia and Herzegovina
Albania
toe/capita
Primary energy consumption per capita
Serbian energy sector in 2010
Primary energy consumption per GDP in 2010
OECD
World
Hungary
Romania
Bulgaria
Serbia
OECD
Montenegro
World
FYR Macedonia
Croatia
Hungary
Bosnia and Herzegovina
Romania
Albania
Bulgaria
Serbia
Montenegro
toe/1000$2005
FYR Macedonia
Croatia
Bosnia and Herzegovina
Albania
kWh/capita
Electricity consumption per capita
Projections of Final Energy Consumption

Middle level of fertility is assumed for demographic projections

Average economy growth 3%

Baseline scenario („business as usual”)

Scenario with energy efficiency measures (maximal
introduction of energy efficiency measures in all phases of
energy cycle)
Serbian Energy Sector Model
GDP projection
5
Раст БДП (%)
4
3
2
1
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
0
-1
Demographic projections
Укупно становништво Србије за три варијанте демографских пројекција: средњи, ниски и
- Household
- Industry
- Transport
- Agriculture
- Construction
- Other consumers
- Non-energy sector
укупна популација у хиљадама
в и с о ки ф е р ти л и те т
8000
7500
7000
6500
6000
5500
2002 2007 2012 2017 2022 2027 2032 2037 2042 2047 2052
пројекциони период
Варијанта средњег фертилитета
Варјанта ниског фертилитета
Варијанта високог фертилитета
Millions toe
Projections of Final Energy Consumption
Difference
in 2020 is
0.920 Mtoe
Baseline scenario

Difference
in 2030 is
1.359 Mtoe
Scenario with energy efficiency measures (EE)
Tables “by consumption sectors” and “by energy sources”
SWOT analysis of Serbian energy sector
Weaknesses (internal):
Strength (existing):




Tradition and experience in the previous
Serbian energy sector development
Available resources and potentials
Energy infrastructure systems
technically in relatively preserved
condition
Ratification and entry into force of the
Treaty establishing the Energy
Community
Signing of the Stabilization and
Association Agreement between Serbia
and the EU











High external energy dependence
Non-economic energy prices and disparities
in prices of energy and fuels
Irrational use of energy
Technological obsolescence of existing and the
lack of new facilities
The inefficiency of energy public companies
The legacy of nature devastation and
excessive pollution
Underdevelopment of the internal electricity
and natural gas market
Lack of strategy for economic and social
development of the country
The lack of transparency in energy policy
making
Lengthy and complex procedures to obtain
permits and licenses
Underdevelopment and the inadequacy of
energy statistics
SWOT analysis of Serbian energy sector
Options
(development potential):





Integration of the Republic of Serbia
into the EU
Raising the overall economic
competitiveness of energy systems
Improving energy efficiency
Introduction of cleaner production
principles in the energy sector
Construction of South Stream pipeline




Construction of gas interconnections
with systems in neighboring countries
Upgrade of existing and construction
of new natural gas storage
Construction of new facilities for the
power transmission
Building a new system for transport
and storage of oil and oil products
SWOT analysis of Serbian energy sector
Threats
(to development):





Energy crisis in the world and the possibilities
of new energy "shocks"
New sudden increases in energy demand in
the world, or creation of a new crisis areas
Global disagreement about climate change
policy and "cleaner" energy strategies
Deepening social and economic crisis,
growing poverty, indebtedness and slow
economic development of the country
Falling behind changes in energy policy in the
region due to unresolved social and political
issues





Unfavorable demographic trends and
population aging
Political opportunism and lack of readiness
for depoliticization and professionalization
in energy sector
Backwardness and slow technological
development of energy systems, due to the
unfavorable economic situation
Lack of harmonization of standards and
regulations with the EU, or failure in
implementation
The adverse effects of climate change to
the energy sector
IV The Strategic Priorities of Serbian
Energy Sector Development
ENERGY
SECURITY
ENERGY
MARKET
SYSTAINABLE
ENERGY
- Reliable, safe and quality supply of energy and
energy sources
- Creating conditions for the safe and reliable energy
systems operation and sustainable development
- Energy market competition based on the principles
of non-discrimination, publicity and transparency
- Energy and energy sources’ customers protection
- Electricity and natural gas market development and
their connecting with the regional and internal
market of the EU
-Connecting the energy system of the Republic of
Serbia with the energy systems of other countries
- Providing conditions for promoting energy efficiency
in carrying out energy activities and energy
consumption
- Creating economic, commercial and financial
conditions for generating energy from RES and
combined heat and electricity generation
- Creating conditions for use of new energy sources
- Promoting environmental protection in all energy
related areas
- Creating conditions for investments into the energy
sector
IV The Strategic Priorities of Serbian
Energy Sector Development
Energy Efficiency
Renewable Energy Sources
Environmental Protection
National
& Regional
Market
Security of Supply
Reliability of Supply
Quality of Supply
IV The Strategic Priorities of Serbian
Energy Sector Development
Serbian energy sector have to be
market-based and economically
efficient to the extent that generate
its own development, but also to be
generator and secure base for the
development of the country.
Serbian energy development should be
with minimal effect to the environment.
IV The Strategic Priorities of Serbian
Energy Sector Development
Activities:








More intensive exploration of energy resources;
The development of the energy market based to the principles of
competition, transparency and non-discrimination;
The construction of new energy facilities or the rehabilitation and
modernization of existing ones;
A comprehensive and coordinated approach to the rationalization of energy
consumption and the overall increase of energy efficiency;
The establishment of adequate regulatory and organizational requirements
and simplifying and accelerating the procedure for obtaining approvals and
permits;
The extensive use of renewable energy sources, including of renewable
energy sources in the energy plans of cities and local communities as part
of a local energy strategy;
The reorganization and restructuring of the companies in energy sector
Further harmonization of existing regulations with EU regulations and
standards
IV The Strategic Priorities of Serbian
Energy Sector Development
Measures:

Raising capacity of financial institutions to finance energy efficiency
measures and production and placement of the best available energy
technologies and equipment;

Development of innovative financing mechanisms for energy services sector
(ESCO concept, etc..)

Encourage the development of domestic industries to follow the planned
development of the energy sector

Analysis of climate change impact to the energy sector and the adoption of
appropriate adaptation plans;

Systematic capacity building of scientific and educational institutions related
to energy sector;

Complete and timely information to the public about the state of the sector;

Education and awareness raising.
V Energy Sectors Development

Electric Power Sector

District Heating Systems

Renewable Energy Sources

Coal

Oil

Natural Gas

Efficiency of Energy Use
Electric Power Sector
Strategic Objectives
Strategic Activities
- Security of electricity supply of
domestic market
- Development of national and
regional electricity market
-Increasing of transmission
capacities / corridors over the
Republic of Serbia with
regional and pan-european
importance
- Decreasing of distribution loses
- Creation of opportunities for
net electricity export
- Revitalization of existing electric power
facilities:
- Adaptation of existing facilities to
obligations as Contracting Party in
Energy Community
- Revitalization and modernization of
existing HPPs
- Construction of new power plants fired by
conventional fuels
- Increasing of RES (hydro, wind, biomass,
solar energy) use for electricity production
- Revitalization of existing and construction
of new transmission capacities
- Modernization and construction of
distribution systems
- Liberalization of electricity market
according to Energy Law and market
price determination
- Sector reorganization for more efficient
operation of companies and attraction of
investments
- Capacity development of engineering
companies for greater participation in the
construction of power plants and
infrastructure
Current State
- Growth in net electricity import
- Outdated and inefficient
production capacities
- Dominant share of coal in
electricity production
-Market liberalization process
has started, but with strong
influence of "social" component
-Low and inadequate electricity price
Electric Power Sector
Priority Actions:
Reconstruction of TPPs
according to LCP Directive
Construction of new,
coal fired TPPs
700 MW until 2025
(350 MW until 2020)
Construction of RHPP Bistrica
Construction of 450 MW CHP
fired by natural gas until 2020
Construction of transmission and
distribution infrastructure
Difference in
2020 is
3000 GWh
Baseline scenario
Difference in
2030 is
3600 GWh
Scenario with energy efficiency measures (EE)
Electric Power Sector - Production
Construction of new facilities
Existing Thermal power plants
Existing Hydro power plants
New RES power plants
New Thermal power plants with conventional fuels
Projection of electricity generation
Existing Thermal power plants
Existing Hydro power plants
New RES power plants
New Thermal power plants
with conventional fuels
Electric Power Sector - Production
Project
Nominal
Power
Estimated
Time for
Project
Realization
Approximate
Investment
Value
4-6 years
1600
(mill. €)
TPP Nikola Tesla B3
750 MW
TPP Kolubara B
2 x 375 MW
6 years
1500
TPP Kostolac B3
350 MW
4 years
450
TPP Novi Kovin
2 x 350 MW
6 years
1330
TPP Stavalj
300 MW
5 years
650 – 750
CHP Novi Sad
340 MW
2-3 years
400
CHPs – natural gas
860 MW*
HPP Velika Morava
147,7 MW*
HPP Ibar***
117 MW**
HPP Srednja Drina*** 321 MW**
4 years
(realization in phases)
3-7 years
(realization in phases)
2-7 years
(realization in phases)
5-9 years
(realization in phases)
1500
360
300
819
PSHPP Bistrica
4 x 170 MW
5 years
560
PSHPP Djerdap 3
(I phase)
2 x 300 MW
5 years
400
Small HPPs
387 MW
6 years
(191 locations)
500
* Total power of few CHP
(Pancevo, Beograd, Nis, …)
** Total power of few
HPPs in cascade
*** Law on Ratification of the
Agreement between the
Government of the Republic of
Serbia and the Government of
Republic of Italy on cooperation in
energy sector defined the joint
implementation of these projects.
Electric Power Sector – Transmission and Distribution

Strengthening of internal transmission
capacity and the capacity of the
regional corridors - 400 kV
transmission network in the direction of
northeast - southwest

Strengthening of internal transmission
capacity and the capacity of the
regional corridors - 400 kV
transmission network in the direction of
east-west

Strengthening of strategic directions in
110 kV transmission capacity

Modernization and investments in
distribution systems
Electric Power Sector – Market

Market opening until 2015

The growth of in electricity prices
 Why?
 maintenance of existing infrastructure
 investment in new infrastructure
 environmental costs
 Leads to a short-term increase in the cost of production and services
 Encourages the implementation of energy efficiency measures
 The use of other forms of energy to substitute, and where it is justified
own production
 Careful planning of continuing real growth in regulated electricity prices
to reach the level of prices in the region

Reorganization of energy companies based on market principles.
Electric Power Sector
Challenges:

Required resources
Year
Until 2020
Until 2025
Until 2030
Reconstruction of TPPs
according to LCP Directive
634
-
-
Modernization of existing HPPS
200
100
100
1100
500
500
360
300
300
2323
520
750
Investments in transmision systems
200
170
-
Investments in distribution systems
500
250
250
5317
7157
9057
Construction of new TPPs fired by
conventional fuels
Construction of PSHPP
Construction of RES plants
Cumulative investment (million €)
Electric Power Sector
Challenges:

Limit in СО2 emission and ETS

Electric power resources and projects at AP Kosovo and Metohija

Rights for RES use and “green energy” export
District Heating Systems
Strategic Objectives
Strategic Activities
- Security of heat supply with
strictly respect of environmental
limits in heat production
- Continual modernization of existing
district heating systems
- Increasing of energy efficiency
in production, trasport,
distribution and use of heat
- Increasing RES use for heat
production
- Sustainable operation of district
heating companies
- Institutional connection of DH
companies
- Expansion of existing DHS
- Promotion of fuels swich and their
more efficient use:
- Less share of oil derivatives and coal
Current State
- System based only to fossil
fuels (natural gas 48%, coal
23%, 29% oil derivates)
- Average age of facilities is 25
years
- High specific energy
consumption
- Absence of market, inconsistent
and inadequate method of
payment
Priority Actions:
- Creation and application of uniform
tariff system for heat production,
distribution and supply
- Higher share of biomass (including
co-firing in existing heat plants)
- Higher share of communal waste
- Increased use of sanitary hot water
- CHP in heat plants
- Capacity building in municipalities
related to market regulation
Reduction of energy losses
in the networks
Introduction of heat consumption
measurement and payment according
to energy consumed
District Heating Systems
Projected changes in the
structure of energy sources
for heat production
Oil products
Natural gas
Coal
Biomass
Year
2020
2025
2030
Reconstruction, modernization and building of
district heating plants
85
45
65
Rehabilitation of the distribution network
95
45
65
Rehabilitation of heating substations
40
25
30
220
335
485
Cumulative investment (million €)
Renewable Energy Sources
Strategic Objectives
Strategic Activities
- Increase in RES use for
less dependence of
energy import and
increasing energy
security
- Adoption and implementation of National renewable
energy action plans
- Determination of national targets for RES
utilization and monitoring of realization:
- RES use for electricity production
- RES use for heat production and in final
consumption:
- Substitution of fossil fuels (coal, oil derivatives
and natural gas) in heating
- Substitution of electricity in sanitary hot water
preparation
- Introduction of RES in building sector (primary
in public buildings)
- RES use in transport
- Development of distributive network for connection
of small electricity producers
- Production and use of equipment for more efficient
RES use
-Informing and education of the public
Current State
- Share of RES in gross final
consumption is 20.1%
- Dominant share in
consumption has
traditional biomass use
and large HPPs
- Feed/in tariff was
introduced
Priority Actions:
Realization of National renewable
energy action plan until 2020
Renewable Energy Sources
Projection of new capacities
for electricity production using RES
Wind power plants
Hydro power plants (<10 MW)
Solar power plants
Geothermal power plants
Hydro power plants (>10 MW)
Biogas power plants
Biomass power plants
Existing Hydro power plants
New RES power plants
Final consumption
Projection of energy
consumption from RES
District heating plants
thousand toe
Coal
Strategic Objectives
- Secure and reliable supply of thermal
power plants
- Ensuring necessary amounts of coal
for final consumption and heat
production
Current State
- Old facilities and equipment,
revitalization needs
- Problems with expropriation of land
necessary for opening new open pit
mines
-Underground coal mining is
unprofitable and its operation
depends of state suport
Priority Actions:
Strategic Activities
- Intensification coal deposits
exploration on the territory of Serbia
-Opening of new open pit mines for
the replacement of the existing ones
and for operation of new TPPs
- Optimization and concentration of
underground coal production in
profitable mines
- Introduction of systems for coal
quality control
Opening of new open pit mines in
Kolubara basain
Increase of Drmno open pit mine
capacity
Coal
Thermal power plants
District heating plants
Final consumption
thousand toe




Basin Kolubara
 Tamnava - West Field, Fields C and D, displacement of Vreoce - 470 mil. €
 Field E opening (replacement of Field D) - 532 million €
 Field G opening (replacement of Veliki Crljeni) - 161 million €
 Opening Radljevo open pit mine - 600/1.232 million €
Basin Kostolac
 Open pit mine Drmno 100/230 million €
Basin Kovin - € 500 million
Underground coal mining - € 330 million
Oil
Strategic Objectives
- Security of supply with oil
derivatives with quality that
matches EU standards
Strategic Activities
-Provision of required reserves of oil and
oil products (reconstruction of existing
and building of new storages)
- Decrease of import dependence
- Exploration aimed at finding new
deposits
- Ensure of new directions for
crude oil supply
- Refineries modernization
Current State
- High import dependence
- The dominant import from one
direction
- Oil Industry of Serbia is joint stock
company with majority share of
foreign partner
Priority Actions:
- Maintaining the high level of crude oil
production in the country
- Ensuring of more efficient oil product
transport by pipelines
- Competition in the sector for ensuring
the most favorable prices for the
consumers
Reconstruction of existing
and building of new storages
The increase in refinery
processing depth
Oil
Sub-sector
Activities
Exploration
and
production of
oil and natural
gas
Exploration in the country and
in the region aimed at finding
new deposits
Application of new technologies
and methods of exploitation
The increase in processing
depth and further
modernization of refinery in
Pancevo and Novi Sad
Modernization of gas stations
and building of new ones
Construction of storage
capacities
Modernization of filling stations
Procurement of new transport
facilities
Refinery
processing
Oil and oil
derivatives
Biofuels
Trade of oil
derivatives
Thousands toe
Transport of
crude oil and
oil products
Construction of pipeline network
for oil product transport
Investments
(mill. €)
800
750
160
170
Natural Gas
Strategic Objectives
- Ensuring security of supply of
domestic market
- Establishment of national and
regional natural gas market
Current State
- Single supply route with
technical import limits
- Underground storage meets the
current consumption
- Inadequate natural gas prices of
public supply
Priority Actions:
Strategic Activities
- Research in the country with the aim of
discovering new deposits of natural gas,
(including unconventional gas)
- The use of natural gas as a substitution
for electrical energy consumption for
heating purposes
- The use for the combined production of
electric and heat energy in industry and
cities
- Participation in international projects for
natural gas supply
- Regional interconnection
South Stream pipeline
construction
Establishment of at least two regional
interconnections up to 2020
Completion of the gasification of Serbia
Natural Gas
Until
2020
Until
2025
Until
2030
1700
-
-
Regional interconnection
120
60
20
New gas storages
100
100
100
Completion of the gasification of
Serbia and rehabilitation of
existing system
500
500
200
2420
3080
3400
Project
South Stream pipeline
Cumulative investment
(million €)
Efficiency of Energy Use
Strategic Objectives
Enhancing energy efficiency in all
consumption sectors
Current State
Energy indicators in 2010:
- energy intensity
0,452 kg oe/€2005
- ratio of primary energy
consumption and GDP,
adjusted to the purchasing
power parity
0,223 kg oe/$2005
- Primary energy consumption
per capita 2.140 kg oe
Priority Actions:
Strategic Activities
- Consistent implementation of the
Law on efficient energy use
- Adoption and implementation of the
National Action Plans for Energy
Efficiency - definition of national
energy saving targets, total and by
sector, and monitoring of realization
- The use of combined electric and
Heat energy production in industry
- Introduction of energy management
- Capacity building of energy statistics
- Informing and public education
Energy reconstruction
in the building sector
Introduction of energy management in
the public sector
Energy intensity
Ratio of primary energy
consumption and GDP,
adjusted to the PPP
Primary energy
consumption
per capita
Serbia
EUindex= 100
VII Legal, institutional and socio-economic framework

The impact of international obligations

Development of institutional framework

Legal and market framework of energy sector

Social and economic aspects of planned development

Energy and related sectors – horizontal harmonization
The impact of international obligations

The Energy Community Treaty

The Stabilization and Association Agreement

Agreement with Russian Federation on cooperation in the oil
and gas sector

United Nations Framework Convention on Climate Change

Other regulations
Development of institutional framework

Capacity building of the Ministry in charge for energy sector

Establishment of the Institute for Energy in Serbia

Coordination with the Ministry in charge for Science and
Education

Capacity building of Energy Agency

Co-ordination with the Statistical Office of Serbia
Legal and market framework of energy sector

Electric Power sector

Natural gas sector

Oil and oil derivates sector

Heat energy sector

RES

Energy efficiency
Social and economic aspects of planned development

Energy development in the function of social growth




Faster development of existing branches of economy
New economic and service activities
Employment increase
Energy sector based on market principles



Prices of energy
Influence on the budget deficit reduction
Reductions in material and energy intensity of the economy

Local Economic Development

Social aspect


Social dialogue
Delicate and socially vulnerable groups of consumers
Energy sector and related sectors
– horizontal harmonization

Environment and climate change

Participation of the public in decision-making

The concept of "public goods"

The principle of competitiveness and state aid
Energy sector in Serbia after 2030

“Energy Roadmap 2050”

Energy efficiency

Renewable Energy Sources

“Clean coal” technologies
Thank you!