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We Can’t Do Without European Support

Dubravka Đedović Handanović, Serbian Minister of Mining and Energy

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As they navigate the energy transition process, EU member states have been able to count on generous financial support from the EU. And our region requires that same kind of support

Acountry’s green energy transition success depends on its ability to replace fossil fuels in a sustainable way, thereby ensuring a secure and continuous supply of energy while simultaneously reducing greenhouse gas emissions until achieving climate neutrality, explains Serbian Mining and Energy Minister Dubravka Đedović Handanović in this Connecting the Region interview.

“Studies show that Serbia has significantly higher solar and wind potential than many EU member states, which is why we will make renewable energy sources our main domestic source of electricity in the coming years,” says our interlocutor. “This is a complex and challenging process for Serbia, given that lignite [brown coal] remains our primary source of electricity, with a contribution exceeding 60 per cent.

“The Government of the Republic of Serbia and the Ministry of Mining and Energy have defined concrete targets in this process, through the Integrated National Energy and Climate Plan until 2030 with projections until 2050, and the new Energy Development Strategy until 2040 with projections until 2050, set to be adopted this year. The main goals in the period until 2030 include raising the share of renewables in electricity production to 45 per cent, reducing emissions of harmful gases by 40.3% compared to 1990 levels, as well as improving energy efficiency significantly.

We are working to better connect energy infrastructure within the region, such as with the Trans-Balkan Electricity Corridor or the Serbia-Bulgaria gas interconnector

“Both the Energy Community and the European Commission recognised Serbia as a reform implementation leader in 2023, thanks largely to progress in the area of the green energy transition. Amendments to the Law on the Use of Renewable Energy Sources and its set of bylaws enabled us to conduct the first auctions for market premiums, with which we secured 715 green megawatts from solar and wind power installations, with 90 MW of that total expected to be on the grid as soon as this year, alongside total investments that exceed a billion euros. That is a clear indicator that Serbia has created an excellent environment and regulatory framework for RES development. We will organise a second round of auctions for a new 400 green megawatts during this year and, through this mechanism, we will secure a total of 1,300 MW within the market premium system by 2025.

“Our decarbonisation process goals can’t be achieved without public investments and an increase in the RES share of the production capacity of EPS [Serbia’s electric utility power company, Elektroprivreda Srbije]. The largest current project is the construction of 1 GW of self-balancing solar power plants, through a partnership with a consortium led by Korea’s Hyundai Engineering, which upon completion will come fully under the ownership of EPS, i.e. the state. With the implementation of current and planned public and private sector investments, 3.4 GW of new power plants that utilise solar and wind energy should be on the grid by the end of the decade.

Citizens, but also the business sector, are expressing great interest in installing solar panels on their homes or production plants and becoming prosumers of electricity from renewables. And in doing so they also have the support of the state, which – together with local government units – provides subsidies amounting to 50 per cent of the total value of the investment to install solar panels.

Serbia has huge potential with regard to its mineral resources, some of which are even on the EU Critical Raw Materials List and are crucial to accelerating the energy transition process

Our ambition to increase production capacities from variable renewables, i.e., energy sources that produce electricity intermittently, must be accompanied by investments in balancing capacities that serve to safeguard supply stability. The Bistrica pumped-storage hydropower plant was recognised in the “Leap into the future – Serbia 2027” programme as the most important project in the country’s energy sector. The Đerdap 3 PSHPP would serve the same purpose, but with an even greater capacity, and would position Serbia as one of the region’s energy transition leaders. Preparation of the Preliminary Feasibility Study is underway and should determine the technical and economic basis to implement this project.

We also plan to adopt a Strategy for the Management of Minerals and Other Geological Resources. Serbia has huge potential with regard to mineral resources, as it has a wealth of, primarily, copper, gold, silver, lead and zinc, but also borate and lithium. Some of the minerals that Serbia has in abundance are even on the EU Critical Raw Materials List. Speeding up the energy transition process also depends on them, because producing more green energy means mining more mineral resources to produce solar panels, wind farms etc. And the priority in all of this is preserving the environment, in accordance with the standards applied in the most developed countries, because that’s a precondition for mining to be modern, sustainable and efficient, and for us as a country to develop and create better conditions for our citizens and the economy.

Where do you identify the most significant need for cooperation with regional partners in achieving the goals of the EU’s Green Agenda for the Western Balkans?

― The Western Balkan region relies predominantly on fossil fuels to generate electricity and heat. As a country that’s striving towards EU membership, Serbia shares Europe’s vision when it comes to the way it sees the future of the energy sector, primarily in the sense of striving towards its decarbonisation. Serbia’s starting position when it comes to coal’s participation in the energy mix is closest to that of Poland, while similar challenges confront other Western Balkan partners. No country has completed the energy transition process overnight, and EU member states began the process earlier and can count on generous financial support from the EU. Our region requires that same kind of support if we are to ensure that the transition is financially sustainable and socially just.

Our will and readiness to work to achieve the stated energy and climate goals are strong and indisputable, but a sustainable transition to cleaner energy sources also requires strong and continuous cooperation and international partnerships.

LEADER

The Energy Community and the European Commission recognised Serbia as a reform implementation leader in 2023, thanks largely to progress in the area of the green energy transition.

POTENTIAL

As a region with extremely favourable conditions for producing electricity from renewables, the Western Balkans could be an important partner of the EU in the decarbonisation process.

INVESTMENT

Investments are the key to what we need to do in the coming years if we are to gain energy independence and secure supplies, as well as a healthy environment.

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