Due to decarbonization, the electricity deficit will be more pronounced in the coming years - Investing in RES has no alternativ

- We want to see in which way are investors selected to participate in the market and what are their objective criteria, all in order to choose the best offer. That is why the auction system is good, because everything is transparent.

As she pointed out, in the future, the EBRD will demand even stronger cooperation of public and private actors in the energy field, in order to use all the potentials that this sector has in the countries of the region.

It was recently announced that the EBRD will support the construction of the first solar power plant in Trebinje, an investment by Elektroprivreda RS (ERS).

Darko Milunovic, the Executive Director of Finances at ERS, said that back in 2018 the company created an investment plan for the next 10 years, "not knowing what awaits us". Now, three years after that plan, they do not want to stop investing, because, as he says, investing in energy has no alternative.

- There are several reasons why we need investments. First, power consumption. On a yearly basis, electricity consumption in RS is increasing by around 3%. Today we have a deficit of electricity in the region and there are realistic estimates that due to the process of decarbonization, the deficit will become even more pronounced. In the next 10 years, we want to build new facilities with a total capacity of 1,000 MW, which is ambitious, but we must set a high goal. Most will be financed by borrowing, and the rest by ERS money. How much we will allocate from our money also depends on the price of electricity, which is unrealistically low in Republic of Srpska. This limits our income.

Sasa Scekic, head of the Sector for Licenses and Technical Affairs in the State Regulatory Commission for Electricity in BiH, believes that we should not boast of a low price of electricity, without having facilities that would consume that energy. As he says, the reduction is the consumption on the transmission network, and it will be additionally reduced with the appearance of prosumers.

- During 2019, we had a reduction in consumption in BiH by 7%, the same in 2020; so, in 2019 we were at the same level as 1990 in terms of consumption in BiH, and in 2020 at the level of 1991. So, there will be a reduction in consumption and we must attract investment in quality consumption, one that will be energy efficient.

Scekic stated that in 2019, the reserves for solar and wind capacities in BiH were 460 MW for wind and 400 MW of solar, and last year they were raised to 840 MW for wind power plants and 825 MW for solar.

- We are one step ahead regarding the investors' needs - said Scekic.

Milka Mumovic from the Energy Community reiterated that it is necessary to include experts in this whole process of energy transition, because "investing in knowledge is the right thing to do."

- Companies that want to invest in energy must have experts - she pointed out, and regarding the inclusion of citizens in electricity production, she stated that it is necessary to have a price incentive, because otherwise citizens will not have a motive to get involved and be prosumers.

- The artificially low price will not motivate them and maintaining low prices is inadmissible. These low prices also have to do with the maintenance of our depreciated power plants, including thermal power plants, as if they are the basis for that low price. That is not a good policy - Mumovic repeated.

Investors to prepare for market competition

Maja Turkovic, vice president of CWP Global for Serbia, a company that develops wind and solar parks in Serbia, praised the laws the country adopted this spring.

- Investors now have modern technologies and lower capital costs at their disposal, both for solar and wind power plants, so our leveled production costs are such that we do not need incentives. All investors need to prepare for market competition. Our company is working on large projects on the transmission network and we are preparing for the market. I do not believe in the long-term incentives, because it is difficult to justify the request for operational assistance from the state at a time when you can produce a megawatt hour below or at the market price level - said Turkovic.

As she pointed out, the Ministry of Energy of Serbia has provided financial agreements on the purchase of electricity with the new laws, so that producers from RES will be generators of liquidity in the electricity market. Also, the most important thing is to establish an offtake arrangement and a structured purchase of electricity.

- It is a win-win for all participants, because it reduces the scope of state's operational assistance. The participation in the capacity can be as much as it is needed to settle the obligation to the creditors, in terms of debt service, and that reduces the help of the state, and the construction capacity can be higher. Also, we have a specific balancing arrangement, which implies a period until the establishment of a liquid intraday market, when we have a tolerance for deviations for which costs are borne by the guaranteed supplier, and through that a fixed fee is paid - concluded Turkovic.

The Trebinje Energy Summit SET 2021 was organized by Elektroprivreda RS and SET company, held on May 20 and 21, under the aegis of the Ministry of Foreign Trade and Economic Relations of BiH, the Government of the Republic of Srpska and the Koncar company, with the general sponsorship by Elnos Group and the support of Infinity Group and Dwelt.

The eKapija portal is the media sponsor of the 2021 Trebinje Energy Summit.