The energy sector in Serbia

Serbia is mostly an energy importer of oil and natural gas which, along with coal products constitute around 90% of its yearly energy consumption. Although the country has produced oil and gas in small quantities since the mid-50s, it is heavily reliant on imports, mostly from Russia. In March 2013 a long-term deal was signed with Gazprom to extend gas imports of more than 2.5 billion cubic meters up to 2021 with a 13 per cent reduction for current prices.

Electricity production in Serbia relies over 70 per cent on coal, while the remaining approximately 30 per cent is produced in large hydropower plants.

The electricity market in Serbia is dominated by the national power utility EPS (Elektroprivreda Srbije – Power Industry of Serbia), which owns all large generation capacities and supplies all the consumers in the residential and commercial sectors, and most eligible consumers - these are industrial facilities with high electricity consumption which have the freedom of choosing their supplier because they are directly connected to the transmission system.

Coal and lignite mining

Serbia has a large amount of coal reserves, with 4 billion tonnes of proven lignite deposits. The reserves are located in two main coal basins, Kolubara and Kostolac. The coal mines in Serbia are owned and managed by subsidiaries of EPS.

The Kolubara Mining Basin provides around 75 per cent of the lignite used for EPS' thermal generation. It produces over 30 million tonnes of lignite annually, which is supplied to the Nikola Tesla and Morava power plants, together producing more than 50% of Serbian electricity.

Plans for new coal

In spite of its commitments to increase the share of renewables under the Energy Community as well as those to reduce greenhouse gas emissions within the process of EU accession, the Serbian government seems determined to remain locked-in to a carbon intensive energy system, with several dirty coal projects planned:

• Kolubara B - 2x350 MW - read more >>
• Kostolac B3 - 350 MW - read more >>
• Nikola Tesla B3 700 MW
• Expansion of Drmno mine in the Kostolac region (production will increase from 9 million up to 12 million tonnes annually)
• Opening of a new mine, Radljevo, in the Kolubara region.

As Serbia intends to join the EU, it will most likely be subject to an 80 percent greenhouse gas emission reduction target by 2050 in line with EU policy. However the country is so far showing few signs of interest in decarbonising its economy.

Renewables

Planning to reach a 27.3% renewables target in the country’s final consumption by 2020 under Energy Community Treaty commitments, Serbia currently operates 44 MW in small hydro power plants, 2 MW in biogas power plants, 0.5 MW installed in wind and 2.4 MW in solar PV.

Potentials

Serbia has a promising potential for renewable energy, including a largely untapped hydro potential, mainly for medium-sized and small HPPs, of about 4.6 GW, as well as 2.3 TWh/y for wind, 50 MW for geothermal and 33 MW for solar energy.

Biomass from wood and agricultural waste has arguably the highest potential in Serbia among all renewable sources, as long as it is locally and sustainably sourced and used efficiently.

Serbia has a significant potential for energy efficiency. Inefficient use of energy represents a major concern in the country. Consumption of primary energy per every unit of GDP is significantly higher than that in the EU (13 times higher than in Germany, 10 times higher than in France, five times that in Slovenia and almost twice that of Romania).