Focus on Energy, 2010 - Karanovic & Nikolic

The vast majority of the Serbian energy infrastructure is state-owned and is operated by the public enterprisesthat were established by the state to manage the various domestic energy sectors. The Serbianenergy infrastructure is generally old and outdated, often in a very bad condition due to more than 10years of neglect, a lack of investment, and the severe damage it took during the NATO bombing in 1999.The repair process started in 2000 with the assistance of international funds. However, the process is farfrom being finished, and much of the existing infrastructure is awaiting modernization which will requiresignificant investments by both the public and private sector.Electric Power SubsectorOVERVIEWThe Serbian production of electric power includes power plants with a total power of 7,120 MW, including8 lignite-operated thermal power plants (“TPPs”) with an installed power of 3,936 MW (two ofthese are located in Kosovo), 9 hydro power plants (“HPPs”) with a total installed power of 2,831 MW.In addition to this there are mazute and natural gas operated thermal power plants operated by districtheating companies with an installed power of 353 MW. Almost the entire production of electricity isconcentrated in the Public Enterprise Elektroprivreda Srbije” (“EPS”), which is currently the only producerof electricity in Serbia.18The Serbian power transmission system is consists of 9,500 km of power lines of 400, 220 and 110 kVand accompanying transformer stations, and is interconnected with all the neighbouring countries. Theentire Serbian transmission system is operated by the Public Enterprise “Elektromreža Srbije” (“EMS”).The distribution network consists of the low-voltage network that is located in all major consumer centresand is operated by EPS through its fully-owned subsidiaries for five regional centres including Belgrade,Novi Sad, Kragujevac, Kraljevo and Niš.FOCUS ON ENERGYThe consumption of electricity in Serbia is very high. According to the Energy Balance for 2009, theestimated consumption of electricity in Serbia for 2009 was to be 28,854 GWh. The high consumptionof electricity is due to the fact that the majority of Serbian households use electricity for heatingpurposes. In addition, there is a very low level of energy efficiency and the price of electricity charged tothe consumer is still not sufficient to satisfy the cost of its production. The average annual production ofelectricity is still for the most part sufficient to satisfy the national consumption, but certain quantitiesstill have to be imported every year, usually during the winter when demand is at its highest.DEVELOPMENT PRIORITIESThe modernization and revitalization of the Serbian power plants is seen as an urgent priority. Serbianinfrastructure for the production of electricity is old and outdated (for example, according to the EnergyProgram, some 60% of the total installed power infrastructure belonging to Serbian hydro electricpower plants is more than 40 years old, whilst the average age of Serbia’s thermal power plants is 30years). In the period 2000-2005, significant improvements were made, but there is still much to be donein this respect. In addition to the revitalization and modernization of the existing production capacities,the Energy Program sets out ambitious plans for the construction of new power plants, including thefollowing:harvesting the hydro electric potential of the river Drina (on the Bosnian border), the River Sava, theDanube and the river Morava.currently not active), and the construction of new smaller HPPs (with estimated plans includingsome 856 locations with a total power of 500 MW).