Serbia-Energy.Eu South East Europe Energy Market

Digest Monthly Report

January 2015 -Energy.Eu

Serbia Energy Market 1 Monitoring Service www.serbia-energy.eu

Serbia Energy Market Report Digest regulations. According to evaluations, adjustment in this field will cost Serbia even 10, 6 billion euro by 2030.

http://serbia-energy.eu/serbia-exclusive-report-eps-power-utility -prepares-for-implementation-of-eu-environment-directives-proj ects-underway-and-new-plans-to-secure-financing-on-facilities-r efurbishment/

SERBIA ENERGY 3. Serbia-West Balkans (Serb,Cro,BiH,MNE, MK) exclusive re- port: The Balkans power generation systems ,Challenges along 1. Serbia: State budget 2015, Bank loan guarantees for public the European road enterprises go up to 350 MEUR Energy systems in countries of West Balkans ( Serbia, Croatia, As previously announced by the proposal of the state budget, Bosnia, Macedonia, Montenegro) rely dominantly on the fact the Government of Serbia will provide a guarantee in the that its two thirds of total electricity quantity are being produced amount of 350 MEUR for public companies in the energy sector from , specifically for Serbia where 70% of electricity is be- in 2015. ing produced from coal while the electricity from the renewable http://serbia-energy.eu/serbia-state-budget-2015-bank-loan-gua sources makes only a little bit over 20 percent of the total con- rantees-for-public-enterprises-go-up-to-350-meur/ sumption.

2. Serbia exclusive report: EPS Power utility prepares for imple- http://serbia-energy.eu/serbia-west-balkans-serbcrobihmne-mk- mentation of EU environment directives, projects underway and exclusive-report-the-balkans-power-generation-systems-challen new plans to secure financing on facilities refurbishment ges-along-the-european-road/

Harmonization with European regulations in the field of environ- 4. Serbia exclusive report: Harsh reality of serbian energy bal- ment, because of its volume and interconnections is very com- ance relying on 33% of electricity imports, too late or last mo- plex and expensive process. Accessing negotiations in this field ment for new power generation units are referring to 200 legal acts that make even third of European

2 It is imperative that we enter a new period of construction, be- 6. Serbia: With New Energy Law towards Harmonization with cause soon, the revitalized plants will also demand new invest- EU Rules ments. It is necessary that we build new 1.000 megawatts New Energy Law should enable Serbia to reach the highest de- within the following period, because, according to the strategy, gree in the EU accession process within the energy sector so it has been envisaged that 1.200 megawatts of capacities, their far. By the adoption of this Law, all the measures from the EU degree of utilization having dropped below 30 percent, should Third Energy Package within the field of gas and electric power be withdrawn from production by 2025, and these capacities sector [were] fully applied, whereas renewable energy re- will be more than 40 years old at that moment. sources [were] encompassed by this package only indirectly http://serbia-energy.eu/serbia-exclusive-report-harsh-reality-of-s due to the changes in the manner of functioning of the electric erbian-energy-balance-relying-on-33-of-electricity-imports-too-l power sector, the Minister of Mining and Energy Aleksandar An- ate-or-last-moment-for-new-power-generation-units/ tić said earlier.

5. Serbia: Households retail electricity market opens, traders http://serbia-energy.eu/serbia-with-new-energy-law-towards-har awaiting for new increased regulated price monization-with-eu-rules/

The electricity market in Serbia is completely open from Janu- 7. Serbia: HPP “Đerdap 2“, production plan exceeded by 15 per- ary 1st, which means that households will be able to choose the cent electricity supplier. Households will have the right to supply the Despite encountering many problems in this year, hydro power free market with electricity, if they assess that it is more pay- plant “Đerdap 2″ is completely ready for the upcoming winter able, but not the obligation, namely they will be able to remain days. All planned and unplanned works have been completed, on public supply also after January 1st, said in the Electric said Ljiljana Milicanović, the director of HPP “Đerdap 2. Every- Power Industry of Serbia EPS. thing is ready for the upcoming cold days – says director Mili- http://serbia-energy.eu/serbia-households-retail-electricity-mark canović. et-opens-traders-awaiting-for-new-increased-regulated-price/ http://serbia-energy.eu/serbia-hpp-derdap-2-production-plan-ex ceeded-by-15-percent/

3 8. Serbia: New delay in starting Serbian regional energy ex- In the history of “Electric Power Industry of Serbia”, 2014 will be change SEEPEX remembered as the year when the catastrophic weather condi- tions have left the huge consequences in the operation of EPS. Due to the delay in adopting the new Energy Law, the begin- However, there have been very good results as well. We have ning of establishing an organized SPOT electricity market in managed to maintain a dominant position in the second wave of Serbia has also been postponed, with an adequate platform for the liberalization of the electricity market, although everyone ex- the envisaged establishment of a regional day-ahead market pected that we would be “destroyed” by the competition, says having been provided, and this for the third quarter of 2015. Mr. Aleksandar Obradovic, the director of EPS, Serbian power http://serbia-energy.eu/serbia-new-delay-in-starting-serbian-regi utility company. onal-energy-exchange-seepex/ http://serbia-energy.eu/serbia-exclusive-power-utility-eps-restru 9. Serbia exclusive: Electricity Market in Serbia, the EU Require- cturing-under-imf-monitoring-interview-with-eps-ceo-aleksandar ments and power market liberalization -obradovic/

Since 2006, when the Law on establishment on European Com- 11. Serbia: Alstom Grid Turkey delivers new transfer to TPP Nik- munity has become effective, Serbia is a step closer to the Euro- ola Tesla pean Union: through the legal entity of the European Commu- Alstom Grid Turkey successfully delivered the generator trans- nity, the harmonization of the prescriptions in the field of energy former for installation at Nikola Tesla Power plant Tent-B for with the legal achievement of the EU is being followed and re- Public Enterprise- Electric Power Industry of Serbia (PE ported continuously. The Contract on EC establishment is con- EPS).The 725MVA, 21/410kV generator step-up transformer firmed by the Stability and Joining Agreement, which pointed can supply electricity from the generator to the point of con- out the necessity of regional cooperation in this field. sumption by means of high voltage transmission line. http://serbia-energy.eu/serbia-exclusive-electricity-market-in-ser http://serbia-energy.eu/serbia-alstom-grid-turkey-delivers-new-tr bia-the-eu-requirements-and-power-market-liberalization/ ansfer-to-tpp-nikola-tesla/ 10. Serbia exclusive Power utility EPS restructuring under IMF monitoring interview with EPS CEO Aleksandar Obradovic 4 12. Serbia: Power utility EPS to start investing in new power http://serbia-energy.eu/serbia-kostolac-b3-lignite-plant-loan-agr generation facilities, conventional and RES eement-bypasses-public-debate-and-contains-unacceptable-co nditions/ Electric Power Industry of Serbia (EPS) in 2015 will begin to in- vest in new thermal power plant after more than 25 years, and 14. Serbia exclusive: Privatization of Power utility company, sce- change the organization in order to save at least 36 MEUR per narios and benefits, the analysis year said Aleksandar Obradovic CEO of EPS. He explained Possible privatization of Serbia Power Utility Company EPS that the Serbian Government adopted a plan of reorganization would provide short-term “lank” financial benefit for the budget, in which the idea was to classify the production and distribution while at the same time would bring great risks. The risks are – companies. the risk of a gradual EPS transition in the majority ownership of http://serbia-energy.eu/serbia-power-utility-eps-to-start-investin foreign partner and the possibility of a substantial increase in g-in-new-power-generation-facilities-conventional-and-res/ the electricity price.

13. Serbia: Kostolac B3 lignite plant loan agreement bypasses http://serbia-energy.eu/serbia-exclusive-privatization-of-power-u public debate and contains unacceptable conditions tility-company-scenarios-and-benefits-the-analysis/

The Serbian parliament will on Monday vote on the ratification 15. Serbia: Power Purchase Agreement – a problem for all RES of a USD 608 million loan agreement from the China ExIm developers Bank for the construction of the 350 MW Kostolac B3 lignite Serbian Wind Energy Association (SEWEA) says that 3-4 inves- power plant by Chinese company CMEC. Serbia’s latest addi- tors already have building permits and agreements with banks, tion to its huge debt burden is being presented as a great suc- but they are waiting for the Power Purchase Agreement for Re- cess, but a new lignite plant is more likely to end up as a weight newable Energy. In July last year, the Ministry of Energy around our necks as we move towards the EU and apply EU cli- adopted the Draft Power Purchase Agreement, but it was not mate policies. acceptable to banks so that investors could not been able to close deals on financing of their projects.

5 http://serbia-energy.eu/serbia-power-purchase-agreement-a-pro 830 MEUR. Start of the project was planned for 2014th, and blem-for-all-res-developers/ completion is scheduled for the period from 2020th to 2023rd.

16. Serbia exclusive: Bidders for new TPP Kolubara 2 and http://serbia-energy.eu/serbia-exclusive-energy-projects-at-the- TENT B3, China vs others, report beginning-hpps-middle-drina-and-hpps-upper-drina/

The development of electric power system is a key link in the 18. Serbia: State power monopolies EPS and “Srbijagas” will development of the entire electric power system of Serbia and not lose the market share due to the low prices about nine billion EUR should be invested in this area by Small customers and households may or may not have to 2030th, according to the new Energy Development Strategy choose their electricity and natural gas supplier starting from Draft. It was estimated that the demands for electricity until New Year, while all the others are obliged to do so, says Ljiljana 2025 would increase by 10.5 percent, and 16.6 percent by Hadzibabic from the Energy Agency. She added that the market 2030th. No power plant was built in Serbia more than twenty opening will not affect state monopolies Power utility EPS and years. “Srbijagas” which will not lose the market. http://serbia-energy.eu/serbia-exclusive-bidders-for-new-tpp-kol http://serbia-energy.eu/serbia-state-power-monopolies-eps-and- ubara-2-and-tent-b3-china-vs-others-report/ srbijagas-will-not-lose-the-market-share-due-to-the-low-prices/ 17. Serbia exclusive: Energy projects at the beginning – HPPs 19. Serbia: RES Wind developers satisfied with new Energy law “Middle Drina” and HPPs “Upper Drina” As say investors in renewable energy sources, a new Law on “Power Utility Company of Republika Srpska ERS” and “Serbia Energy has made significant progress in terms of the legal Power Utility Company EPS” concluded in September 2010th framework for investment in RES. As Ana Brnabic, director of an agreement on a joint draft of the feasibility study for HPPs “Continental Wind Serbia” and representative of Serbian Wind “Middle Drina” with a concept design, after which a preliminary Energy Association (SEWEA) stated three significant improve- agreement on cooperation in the project entered into EPS and ments have been made by the new Law. Italian “Secci energia”. The investment value is estimated at

6 http://serbia-energy.eu/serbia-res-wind-developers-satisfied-wit http://serbia-energy.eu/serbia-energy-minister-claim-china-exim h-new-energy-law/ -bank-608musd-loan-extremely-favorable/

20. Serbia: New energy law to boost RES projects, 700MW cap 22. Serbia: Power utility EPS published tender for TPP TENT for wind developers unit A4 308MW; Feasibility study with reconstruction project for extension of operational life and increase of power The extent to which solar has fallen out of favor in Serbia since ambitious plans for a 1 GW solar farm fell through has been “The Feasibility study with the Conceptual reconstruction pro- spelled out by the government’s announcement that its PV am- ject in order to extend the operational life and increase the bitions amount to 10 MW of new capacity up to 2020. Although power of the block 4 (current power 308.5 MW) of TPP Nikola the government rushed through the adoption of an EU Tesla A” measure last month to liberalize its electricity market, the chief http://serbia-energy.eu/serbia-power-utility-eps-published-tende beneficiaries are likely to be wind developers, with national r-for-tpp-tent-unit-a4-308mw-feasibility-study-with-reconstructio policy-makers aiming for 700 MW of new capacity by 2020. n-project-for-extension-of-operational-life-and-increase-of-powe http://serbia-energy.eu/serbia-new-energy-law-to-boost-res-proj r/ ects-700mw-cap-for-wind-developers/ 23. Serbia exclusive report: NIS and Gazprom – privatization, 21. Serbia: Energy minister claim China Exim Bank 608MUSD expansion across the region, power generation loan extremely favorable Oil Industry of Serbia company NIS has been the largest and China Exim Bank’s USD 608.3 million, 20-year loan with a the most profitable company in Serbia meeting 75% of market grace period of seven years is “extremely favorable,” Energy demand for petroleum products and provides, on average, Minister Aleksandar Antic has said. The loan, granted for the around 12% of the Republic budget. NIS has been among the construction of a new unit at Serbia’s Kostolac B coal-fired biggest vertically integrated energy companies in the southeast- power plant, “will ensure the stability of the country’s energy sys- ern Europe. Retail network of the company includes over 500 tem,” he added. service stations, fuel filling points and oil depots located in the Balkan countries.

7 http://serbia-energy.eu/serbia-exclusive-report-nis-and-gazprom 26. Serbia: The real costs of RES projects, consumers associa- -privatization-expansion-across-the-region-power-generation/ tion against the investors interest

24. Serbia: GazpromNeft NIS invests 326 MEUR in 2015th Expensive undertaking: Green electricity will cost us 1, 3 billion EUR. In the next five years, Serbia will have to increase the par- Serbian Oil company NIS, owned by GazpromNeft, plans to in- ticipation of solar parks and wind farms, as well as other eco- vest 325 MEUR this year, the same as in 2014th, it was an- energy sources from 21.2 to 27 per cent. Serbia is the only nounced from company. This year the company plans to begin country in Europe that doesn’t have a wind farm and hasn’t pro- the second phase of processing facilities modernization in the duced a single green watt so far, although it has all the natural oil refinery in Pancevo, by the complex construction for deep oil conditions to be a leading producer of electricity from wind refining. The company still considerably reduces the investment power in Europe. compared to the previously announced. NIS’s results for last year will not be great compared to 2013th due to an unexpect- http://serbia-energy.eu/serbia-the-real-costs-of-res-projects-con edly high fall in oil and gas, higher depreciation and benefits, sumers-association-against-the-investors-interest/ and tax increases from 10% to 15%. 27. Serbia: TPP Morava 20MEUR overhaul to extend operation http://serbia-energy.eu/serbia-gazpromneft-nis-invests-326-meu life span for 10years r-in-2015th/ Thermal power plant (TE) “Morava” from , part of Pub- 25. Serbia: Gov approves financing deal with China Exim Bank lic Enterprise TPP “Nikola Tesla” , this year will have for new TPP Kostolac B a capital repair that will extend its life for the next ten years. The repair will begin on June 1st and will run until 27 November and The Serbian government adopted on Monday the Bill on ratifica- it will “cost” more than 20 million euros, stated director of “Mo- tion of the preferential buyer loan agreement for the realization rava” Marija Stevanovic. of the second phase of Kostolac B power plant project, which was concluded with China’s Export-Import Bank (Exim Bank). http://serbia-energy.eu/serbia-tpp-morava-20meur-overhaul-to- extend-operation-life-span-for-10years/ http://serbia-energy.eu/serbia-gov-approves-financing-deal-with -china-exim-bank-for-new-tpp-kostolac-b/ 8 28. Serbia: Direction shift for Serbian power utility EPS, inter- http://serbia-energy.eu/serbia-gazpromneft-manages-reserves- view with PhD. Branko Kovačević Chairman of the Supervisory of-50-million-tons-of-oil/ Board of PE EPS 30. Serbia: Reservoir Capital Canada and Inergia Italy signed a The status of the “Electric Power Industry of Serbia“ as a public letter of intentions for HPPs Brodarevo enterprise must be changed and it is necessary that the EPS The Company Reservoir Capital and Inergia signed a letter on adapt to the modern time requirements. The EPS has to be- intentions in October last year to initiate the procedure for the come a joint stock company and a profitable company, it has to construction of HPP Brodarevo in southern Serbia. In 2012th, earn for itself and for the state – Professor Dr. Branko Kovače- Reservoir Capital made positive feasibility study for hydropower vić, dean of the Faculty of Electrical Engineering and Chairman project Brodarevo. The company has worked for years in order of the Supervisory Board of the PE EPS says in the interview to conclude an agreement with the Government of Serbia for for our paper. the land use owned by the state, which is affected by the pro- http://serbia-energy.eu/serbia-direction-shift-for-serbian-power- ject. utility-eps-interview-with-phd-branko-kovacevic-chairman-of-the http://serbia-energy.eu/serbia-reservoir-capital-canada-and-iner -supervisory-board-of-pe-eps/ gia-italy-signed-a-letter-of-intentions-for-hpps-brodarevo/ 29. Serbia: GazpromNeft manages reserves of 50 million tons 31. Serbia, SEE: SEE region & Energy community, introduction of oil of National Emission Reduction Plans for TPPs The natural reservoirs in Serbia have reserves of 14 million On 24th October 2013, the Ministerial Council of the Energy tons of oil and gas, but it is estimated that Serbia has “black Community adopted two decisions containing the rules for the gold” four times more. Oil stocks grow every year, but also the design and operation of large combustion plants. In the first de- annual production. So we drew 650,000 tons from the land four cision, the Council adopted the Large Combustion Plants Direc- years ago, and in 2014th – nearly twice more. However, the tive, whereas the other decision incorporates the Chapter III state of Serbia “does not outburst” “black gold” directly in the and the Annex V of the Industrial Emissions Directive and sets money. All oil deposits held by Oil Industry of Serbia in the coun- try and the world belong to Russian “Gazpromneft”.

9 1st January 2018 as the implementation deadline for new 34. Serbia, SEE: Guidelines for Determining VAT for Transac- plants. tions Related to Cross-Border Electricity Exchange in Energy Community http://serbia-energy.eu/serbiasee-see-region-energy-community -introduction-of-national-emission-reduction-plans-for-tpps/ In January, the Energy Community Secretariat announced the guidelines for determining the VAT rate for cross-border electric- 32. Serbia: Tender for electricity billing raises fierce investiga- ity trade between the contracting parties within the Energy Com- tion of EPS power utility munity (EnC), aimed at harmonizing the approach for overcom- Electric Power Industry of Serbia (EPS) announced a tender for ing tax obstacles in cross-border electricity trade which is rele- a contract worth 15 million euros in which contains conditions vant to the implementation of the Treaty Establishing the EnC. suitable only to foreign companies while domestic companies http://serbia-energy.eu/serbia-see-guidelines-for-determining-va are eliminated as they claim from domestic producers assoca- t-for-transactions-related-to-cross-border-electricity-exchange-i tion. n-energy-community/ http://serbia-energy.eu/serbia-tender-for-electricity-billing-raises 35. Power utility EPS, tender: Preparation of design study “Use -fierce-investigation-of-eps-power-utility/ of ash produced in TPP PE EPS for the construction and recon- 33. Serbia: Power utility EPS tender for IT system for electricity struction of hydro-technical structures” billing under public investigation Public Enterprise “Electric Power Industry of Serbia” (EPS) has EPS has announced the tender for a job worth around 15 mil- announced an open procedure for public procurement whose lion euros in which such conditions have been set that they suit subject is the preparation of design study entitled “Use of ash only one foreign company whereas domestic companies are produced in TPP PE EPS for the construction and reconstruc- thereby eliminated, ”Blic“ daily claimed tion of hydro-technical structures (river embankments, dams, etc.).” http://serbia-energy.eu/serbiapower-utility-eps-tender-for-it-syst em-for-electricity-billing-under-public-investigation/

10 http://serbia-energy.eu/power-utility-eps-tender-preparation-of-d selection of the company that will pump out water from the Kolu- esign-study-use-of-ash-produced-in-tpp-pe-eps-for-the-construc bara which poured in Tamnava “West field” during last year’s tion-and-reconstruction-of-hydro-technical-structures/ floods. Why did BIRN omit the role of the World Bank in its analysis of transferring water from the open pit mine in the Kolu- 36. EPS TPP Kostolac, tender: Design and Consulting Services bara? “The drafting of hydro-construction conceptual design of water drainage from the Mlava and Danube coast, northwest of the http://serbia-energy.eu/serbia-world-bank-claim-tamnava-open- contours of the Drmno open mine pit mine-pit-water-pumping-financed-project-is-clean-story-reveale d/ The company “Thermal Power Plants and Mines Kostolac” (TE – KO Kostolac) announced a public procurement for design and 38. Serbia: TPP Morava overhaul project 20MEUR to extend op- consulting services ” The drafting of hydro-construction concep- eration cycle tual design of water drainage from the Mlava and Danube Thermal power plant (TPP) “Morava” from Svilajnac which work coast, northwest of the contours of the Drmno open mine pit “. within the Public Enterprise “Nikola Tesla” Obrenovac will have http://serbia-energy.eu/eps-tpp-kostolac-tender-design-and-con capital repairs this year that will extend its life for the next ten sulting-services-the-drafting-of-hydro-construction-conceptual-d years. esign-of-water-drainage-from-the-mlava-and-danube-coast-nort The overhaul will begin on June 1st and will it run until Novem- hwest-of-the-contours-of-the-drmn/ ber 27th and it “will cost” more than 20 MEUR, told Marija Steva- novic director of “Morava”. 37. Serbia: World Bank claim Tamnava open mine pit water pumping financed project is clean, story revealed http://serbia-energy.eu/serbia-tpp-morava-overhaul-project-20m eur-to-extend-operation-cycle/ World Bank financed projects such as water draining of open mine pit Tamnava – “West field”, prescribes mandatory tender 39. Serbia: GazpromNeft NIS delays mining rent fees pay- announcement. Thus Vesna Kostic, advisor for public relations ments? of this international financial institution, commented on the rea- GazpromNeft managed Oil Industry of Serbia (NIS) pays less sons why Power utility EPS had to announce a tender for the and less on behalf of mining rents to Vojvodina and local gov- 11 ernments, although official reports indicate that the company si- multaneously increases the volume of domestic oil and gas pro- duction , writes Vojvodjansko-istrazivacki centar (VOICE), refer- ring to the documents. http://serbia-energy.eu/serbia-gazpromneft-nis-delays-mining-re nt-fees-payments/

12 SEE Energy Market

South East Europe • Hungary • Croatia • Bosnia • Bulgaria • Montenegro • Slovenia • Macedonia • Romania 2 • Albania www.serbia-energy.eu

South East Europe Energy Market As of 1st January, the citizens of Bosnia and Herzegovina can choose among 24 electricity suppliers possessing the buyer supply licenses of regulatory bodies. In addition to the three ex- isting electric power industries, that will continue to dominate the market, some of the strong regional, but also European, companies appear as suppliers.

http://serbia-energy.eu/bosnia-who-are-the-new-players-on-the- bih-electricity-market/ 1. Romania: Challenges on energy market, chance for Inves- 3. Montenegro: The Power utility EPCG joint venture with A2A, tors Italians to decide on agreement renewal by april 2015 On the global level, the energy sector is under great pressure: A2A published a note on its official website stating that the deci- the discovery and exploitation of oil shale, the encouragement sion to remain in EPCG could be made by April, and that obliga- of renewable energy resources development and the recent tions and requirements under the existing agreement with the drop in the oil price, represent a pressure on the companies in Montenegrin government will be effected by then. In the state- the energy sector. Only the companies from the field of public ment writes that during “intense negotiations” with representa- services – energy and gas transmission and distribution – have tives of the Montenegrin government during a meeting with Mon- not been affected by this. The situation is still not favorable for tenegrin Prime Minister on December 20th and 21st, discussed producers and suppliers, but opportunities for long-term inves- the conditions for the renewal of the agreement. tors are starting to appear. http://serbia-energy.eu/montenegro-the-power-utility-epcg-joint- http://serbia-energy.eu/romania-challenges-on-energy-market-c venture-with-a2a-italians-to-decide-on-agreement-renewal-by-a hance-for-investors/ pril-2015/ 2. Bosnia exclusive: Who are the new “Players” on the BiH elec- tricity market?

14 4. Romania: Oltenia energy holding complains at regulator deci- All investigations for hydropower plant (HPP) on the Moraca sion to change tariffs (ova vest je stavljena dva puta u istom River are completed; the preliminary design and construction danu) could begin as soon as they find a suitable offer. If the govern- ment wants to restore the tender process, the documentation is Tariffs for medium and high voltage power introduced by the Na- done and the procedure can begin immediately, according to tional Authority for Energy Regulation affects large industrial the proposal of the Energy Development Strategy of Montene- customers, including Oltenia Energy Complex. On 15 Decem- gro by 2030th, which the government adopted recently. ber 2014, the National Regulatory Authority for Energy (ANRE) issued for each distribution operator, which amended the order http://serbia-energy.eu/montenegro-exclusive-the-new-governm distribution tariffs high / medium / low voltage. ent-strategy-the-large-power-plants-on-the-moraca-and-komarn ica-rivers/ http://serbia-energy.eu/romania-oltenia-energy-holding-complai ns-at-regulator-decision-to-change-tariffs/ 7. Albania exclusive: Energy investment plan 2014-2016; TSO and Power gen investments, gas and electricity interconnec- 5. Bulgaria: Ministry of Energy considering sale of Bulgarian En- tions projects ergy Holding shares During 2014 Albania is expected to adopt a new law on the elec- The sale of shares of the Bulgarian Energy Holding (BEH) is en- tricity sector.With the adoption of this law further liberalization of visaged in the mid-term period. The envisaged plan is still in the the energy market will be enabled, with a goal to reach full mar- design phase. The idea of listing a portion of shares of the state ket opening by 1 January 2015in accordance with the objec- energy companies on the market appeared in 2009, but it faded tives of the Energy Community Treaty, according to the govern- afterwards. ment program.In accordance with the scenario envisaged with http://serbia-energy.eu/bulgaria-ministry-of-energy-considering- the adoption of the new law for electricity sector, provided the sale-of-bulgarian-energy-holding-shares/ preparation of the new model of the electricity market.

6. Montenegro exclusive: The new Government Strategy, The http://serbia-energy.eu/albania-exclusive-energy-investment-pla Large power plants on the Moraca and Komarnica Rivers n-2014-2016-tso-and-power-gen-investments-gas-and-electricit y-interconnections-projects/

15 10. Turkey: Soma B TPP 900MW sold for 685MUSD

8. Macedonia exclusive: Restructuring of Macedonian Electric Soma B Thermal Power Plant, in the Manisa province of Tur- Power Industry key, was privatized on Tuesday through a tender which was won by Konya Seker Sanayi ve Ticaret, Konya Sugar Industry During 2005, significant changes occurred in the electric power and Trade, for $685.5 million. The power plant, which is a sector in Macedonia. Since 1st January 2005, there have been lignite-fired production plant, has a capacity of 900 megawatts two new, mutually independent electric power companies cre- with six power units. ated by the demerger of the former vertically integrated com- pany ESM (Electric Power Industry of Macedonia). One of them http://serbia-energy.eu/turkey-soma-b-tpp-900mw-sold-for-685 performs the activities of electricity generation, distribution and musd/ supply and it has retained the old name ESM. 11. Romania: Hidroelectrica sells 33,000 megawatt-hours of http://serbia-energy.eu/macedonia-exclusive-restructuring-of-m electricity acedonian-electric-power-industry/ After breaking the ice on the new trading platform PCCB-LE 9. Romania: Electricity Export to Serbia, Hungary and Bulgaria two days ago, Hidreoelctrica announced a tender for sale of – 7.28 TWh 33,600 megawatt-hours of electricity. The sale can be partial, and the delivery is scheduled for January, with a starting price In accordance with the data registered by the European Net- of 42 Euros per megawatt-hour. The auction will be held on work of Transmission System Operators (ENTSO-E), Romania January 20th. PCCB-LE platform which is being managed by exported 7.28 TWh of electricity last year. This is by 54 percent OPCOM, requires extended form of auctions, which does not more in comparison with the year 2013. The fact that the import allow price contracting and variable quantity. is higher even with respect to the year 2008, when 7 TWh were exported, is surprising. Around 12 percent of the Romanian elec- http://serbia-energy.eu/romania-hidroelectrica-sells-33000-meg tricity production was exported to Serbia, Bulgaria and Hungary. awatt-hours-of-electricity/ http://serbia-energy.eu/romania-electricity-export-to-serbia-hung 12. Hungary: Energy trading connections of MET & Hungary, A ary-and-bulgaria-7-28-twh/ network of companies that shares an address in Zug 16 The opposition Democratic Coalition is calling on Prime Minister 14. Croatia: Power utility HEP to invest 218MEUR in NPP Viktor Orban to cancel all contracts between Hungary and MET, Krsko extension of operating span until 2043 a Swiss-based energy trader. As FreeHungary reported earlier NPP Krško will not stop its operation in 2023 because its operat- the Swiss newspaper Basler Zeitung published Berhard ing life is extended until 2043, meaning that Croatian power sys- Odehnal’s article titled ‘A network of companies that shares an tem will have another 28 years of electricity from this fundamen- address in Zug and a loyalty to Hungrian prime miniser Vikor tal, stable and reliable source. Based on the results of the study Orbán’. The article states, that Hungarian oligarchs want to par- on economic justification of extension of Nuclear Power Plant ticipate in the international exchange of commodities. This is operating life, created by PricewaterhouseCoopers from Lon- why the network of companies was formed in the canton of don, the members of the Supervisory Board of NPP Krško Zug. agreed on late November 2014 to extend its operating life until http://serbia-energy.eu/hungary-energy-trading-connections-of- 2043. Regular operating lifetime of NPP Krško was supposed to met-hungary-a-network-of-companies-that-shares-an-address-i end in 2023. n-zug/ http://serbia-energy.eu/croatia-power-utility-hep-to-invest-218m 13. Bulgaria: 1600MW TPP Maritsa East 2 extends life span for eur-in-npp-krsko-extension-of-operating-span-until-2043/ another 20years after overhaul

Bulgarian coal-fired thermal power plant (TPP) Maritsa East 2 15. Montenegro: TSO company CGES business results 2014 received a licence to operate its Unit 7 following an overhaul. successful says Head of Board of Directors The licence was granted on January 6 after the unit passed a 72-hour operational test, the TPP operator said in a notice pub- Montenegrin Transmission System (CGES) records the in- lished on its website. crease in the revenues on the basis of the transmission network use and rental of cross-border transmission capacity, which re- http://serbia-energy.eu/bulgaria-1600mw-tpp-maritsa-east-2-ext sults in lower tariffs for consumers in Montenegro, said the ends-life-span-for-another-20years-after-overhaul/ president of the Board of Directors of the company, Dragan Laketic. Laketic said that although they did not have all neces-

17 sary information, they expected that last year’s operating result http://serbia-energy.eu/bosniarepublika-srpska-power-generatio be good, maybe even excellent. n-results-for-2014/ http://serbia-energy.eu/montenegro-tso-company-cges-busines 18. Hungary: INA refineries reduce MOL’s profitability says MOL s-results-2014-successful-says-head-of-board-of-directors/ CEO Molnar

16. Croatia: Power utility HEP plans 468MEUR investment cy- INA refinery capacities greatly exceed demand in Croatia and cle into HPP modernization reduce the profitability of MOL’s refinery, said Jozsef Molnar, chief executive officer of the Hungarian oil and gas group MOL, Croatian state-owned power utility HEP announced it should in- which wants to retain its status as a strategic partner in INA. crease its hydro power capacity by an additional 111-124 MW “Before INA consolidation, the refineries of Hungarian MOL thanks to a 468.9 million euro investment cycle, it was con- were among the three most profitable in Europe, since INA’s re- firmed to Serbia Energy. The implementation of these hydro fineries have been associated to them, we can no longer claim power investments and upgrades should raise overall annual that”, said among other things Wirtschaftsblatt Molnar, who is production by around 300 GWh. also a member of INA Supervisory Board in an interview for Aus- http://serbia-energy.eu/croatia-power-utility-hep-plans-468meur- trian business daily. investment-cycle-into-hpp-modernization/ http://serbia-energy.eu/hungary-ina-refineries-reduce-mols-profi 17. Bosnia/Republika Srpska: Power generation results for tability-says-mol-ceo-molnar/ 2014 19. Romania: Hidroelectrica prepares to enter the stock ex- “Electric Power Industry of Republika Srpska” produced 5 mil- change in the first half of 2015th lion 655 gigawatt hours of electricity in 2014th , which is about The largest company for the electricity production in Romania, 40 gigawatt hours more than the planned amount and we can Hidroelectrica might come out on the stock exchange in the sec- be extremely pleased with this fact, stated Blagoje Supic, Ex- ond half of 2015th, after it had to postpone its (IPO) scheduled ecutive Director for Economic and Financial Affairs of that com- for June 2014th due to the return of the bankruptcy. Another of- pany.

18 fer that will be found in the stock exchange in mid-next year will owner of the Hungarian electricity transmission grid] says that be energy complex Oltenia. in the period until 2030 Hungary will need additional electric ca- pacity of 7300 MW, especially to replace old, decommissioned http://serbia-energy.eu/romania-hidroelectrica-prepares-to-enter power plants. -the-stock-exchange-in-the-first-half-of-2015th/ http://serbia-energy.eu/hungary-is-it-about-npp-paks-or-future-e 20. Hungary: Independent energy expert András Perger finds nergy-security/ secrecy about Paks 2 project “distressing”

This interview offers you everything you ever wished to know of Hungary’s proposed, major nuclear project. The in-depth inter- 22. Bosnia: Gazprom reduces price for importer view is like the transcript of a symposium about the pros and Price of Russian gas which Gazprom supplies to Bosnia and cons of Hungary’s planned life extension and expansion of the Herzegovina has been lowered by 10 percent since January 1st Paks nuclear power plant. The issues addressed are technical 2015th, and now stands at 340 dollars per 1,000 cubic meters. and financial but the language is for the general reader. A staf- The highest price of Russian gas was recorded two and a half fer of the Climate Policy Institute and Applied Communications years ago, when it stood at 540 dollars per 1,000 cubic meters. since 2002, the interviewee, environmental engineer András This means that gas is cheaper for about 200 dollars per 1,000 Perger specializes in nuclear energy, conventional energy re- cubic meters, or about 35 percent. sources and energy policy. http://serbia-energy.eu/bosnia-gazprom-reduces-price-for-impor http://serbia-energy.eu/hungary-independent-energy-expert-and ter/ ras-perger-finds-secrecy-about-paks-2-project-distressing/ 23. Hungary: TSO starts investment cycle to upgrade power 21. Hungary: Is it about NPP Paks or future energy security? line pillars and optical connections The question is not whether the two new reactors of Paks Transmission system operator MAVIR, part of the state-owned should be built but how other power plants will be built in the energy group MVM, will spend more than 12.5MEUR on the up- next decade so that Hungary’s electric power supply should re- grade of power line pillars and the optical connection of power main secure. MAVIR Pte. Ldt. [(the manager, operator and 19 lines under two tenders, the latest issue of the Public Procure- http://serbia-energy.eu/bosnia-power-company-epbih-delays-wi ment Gazette shows. nd-park-podvelezje-for-2016/ http://serbia-energy.eu/hungary-tso-starts-investment-cycle-to-u pgrade-power-line-pillars-and-optical-connections/ 26. Bosnia: Gov approves EIB loan for HPP Vranduk 24. Croatia: Market operator halts new purchase agreement BiH Federation Government approved a decision on accep- from RES tance of FBiH responsibilities under the Finance Contract be- Croatian energy market operator (HROTE) announced, that in tween European Investment Bank (EIB) and Bosnia and Herze- 2015 it will not continue concluding contracts on purchase of govina for the Project “Renewable Energy in HPP Vranduk” in electricity on the basis of existing tariff system for generation the amount of 37.5 MEUR for PE BiH Electric Power Industry from renewable energy sources and cogeneration, except con- j.s.c. Sarajevo. tracts on purchase of electricity generated from facilities using http://serbia-energy.eu/bosnia-gov-approves-eib-loan-for-hpp-vr solar energy and wind farms. anduk/ http://serbia-energy.eu/croatia-market-operator-halts-new-purch 27. Croatia: Famous consulting firms in race for Krk island gas ase-agreement-from-res/ terminal advisory services 25. Bosnia: Power company EPBiH delays Wind park Podve- Eight bids were submitted on the tender for legal, business and lezje for 2016 financial advisors of LNG Croatia Company for assisting in the Building Wind park Podvelezje was supposed to start in the implementation of the gas terminal on Krk island. Some offers last, and to be completed this year. However, work has not be- are not satisfactory because the bank guarantee was not sub- gun yet and it is not known when it will exactly start. Mostar mitted, and all received documents will be evaluated in the next Mayor Ljubo Beslic has recently warned BiH Electric Power In- 30 days. The crucial will not be the offers financial weight but dustry that if it does not start with the building in the first six the expertise to do the job and references, and the contract is months of this year, it could be left without the necessary per- estimated at 1, 7 MEUR excluding VAT. mits. 20 http://serbia-energy.eu/croatia-famous-consulting-firms-in-race-f most companies did not work, and accordingly, recorded a or-krk-island-gas-terminal-advisory-services/ lower consumption.

28. Romania: E.ON merges two DSO companies to increase http://serbia-energy.eu/romania-regional-stock-exchange-does- market share not-affect-the-electricity-price-for-now/

According to press release E.ON Romania, completed the 30. Macedonia: Disputable cost of EBRD financed new HPP merger of two distribution companies in the first integrated gas Boskov Most, ELEM Power utility will be under critical financial and electricity distribution company on the Romanian market. burden The company started its operation on January 1, and operates he total costs of the Boskov Most hydropower plant project in with over 20,000 kilometers of natural gas distribution network Macedonia will possibly cost more than twice the projected and more than 80,000 kilometers of electricity distribution net- EUR 84 million, considering that many aspects have so far not work for around three million customers. been studied or remain unresolved, claim from Ecosvest NGO. http://serbia-energy.eu/romania-e-on-merges-two-dso-compani The project includes a dam of 33 metres height and a power es-to-increase-market-share/ plant with a total capacity of 68MW. In 2011 the European Bank for Reconstruction and Development (EBRD) approved a loan 29. Romania: Regional stock exchange does not affect the elec- over EUR 65 million plus a EUR 19 million equity share in the tricity price for now project company ELEM. According to the suppliers, after two months of regional electric- http://serbia-energy.eu/macedonia-disputable-cost-of-ebrd-finan ity market, there was no significant price fluctuation on the do- ced-new-hpp-boskov-most-elem-power-utility-will-be-under-criti mestic market. Active energy traders believe that trading on the cal-financial-burden/ regional stock exchanges led to lower prices on the SPOT mar- ket during December. Most operators consider that the effects 31. SEE: Guidelines for Determining VAT for Transactions Re- have come from the region and that local prices have tradition- lated to Cross-Border Electricity Exchange in Energy Commu- ally fallen during December due to the holiday season, when nity

21 In January, the Energy Community Secretariat announced the Adriatic oil storage Janaf signed an agreement on oil transporta- guidelines for determining the VAT rate for cross-border electric- tion in 2015th with GazpromNeft NIS, the largest Serbian com- ity trade between the contracting parties within the Energy Com- pany for oil and gas, referring to the 1.700.000 tons of oil. munity (EnC), aimed at harmonizing the approach for overcom- The value of the cash flows of this job was not disclosed, and ing tax obstacles in cross-border electricity trade which is rele- the amount was slightly lower than last year’s 1.750.000 tons vant to the implementation of the Treaty Establishing the EnC. and 1.800.000 tons contracted in 2013th. http://serbia-energy.eu/serbia-see-guidelines-for-determining-va http://serbia-energy.eu/croatia-oil-price-games-storage-and-for t-for-transactions-related-to-cross-border-electricity-exchange-i ward-contracts/ n-energy-community/ 34. Macedonia report: Draft Energy Strategy until 2035th, reduc- 32. Hungary: NIS GazpromNeft Serbia failed to fulfill its deal tion of the coal production & RES growth in the core of the en- with Falcon Oil & Gas ergy strategy

Falcon Oil & Gas co has announced the expiry of the extension Macedonian Energy Association MEA presented a detailed en- granted to its partner GazpromNeft Oil industry of Serbia NIS ergy strategy for Macedonia, drafted by the Academy of Sci- regarding their obligatory three-well drilling programme in Fal- ence and Arts, which is based on greater energy efficiency and con’s Makó Trough Licence in Hungary. In January 2013, Fal- greater use of renewable sources in energy production. The con and NIS agreed to complete a three-well drilling pro- strategy covers the period up to 2035th and provides an in- gramme targeting the relatively shallow Algyo Play, by July crease in the average energy consumption of 2.3 percent per 2014. year. http://serbia-energy.eu/hungary-nis-gazpromneft-serbia-failed-t http://serbia-energy.eu/macedonia-report-draft-energy-strategy- o-fulfill-its-deal-with-falcon-oil-gas/ until-2035th-reduction-of-the-coal-production-res-growth-in-the- core-of-the-energy-strategy/

35. Serbia: EU energy harmonization, progress report for power 33. Croatia: Oil price games, storage and forward contracts market and market framework

22 In the annual Implementation Report, the Energy Community 37. Croatia: Power utility HEP plans CHP power plant in opera- noted that, in recent years, Serbia had shown a high level of tion by 2018 commitment and reliability in the energy sector reform, particu- Croatia power utility HEP reported it planned and put into opera- larly within the field of electricity. The market was opened within tion to build the new combined cycle cogeneration plant at the the deadline agreed with the Energy Community Secretariat. site EL-TO Zagreb by 2018th. As stated, the new power plant On this market, the creation of real competition will require fur- will have a net efficiency of 89.5% and will serve as the funda- ther deregulation of prices. Regarding its importance within the mental power, or will fully adapt to the requirements for the ther- region, the national transmission system operator EMS (The mal energy delivery (hot water and steam) and electricity pro- Power Grids of Serbia), cannot stay outside the regional initia- duction will be secondary. tives for capacity allocation any longer. http://serbia-energy.eu/croatia-power-utility-hep-plans-chp-pow http://serbia-energy.eu/serbia-eu-energy-harmonization-progres er-plant-in-operation-by-2018/ s-report-for-power-market-and-market-framework/ 38. Montenegro: Power utility company EPCG has successful electricity trading model, 2015 1Q 73,2 GWh of sold electricity

The first quarter is a period when the electricity is a competitive 36. Bosnia/Republika Srpska: HPPs Visegrad fulfilled 2014 pro- commodity, because in the winter the demand and consumption duction plan are at their peak. Power utility company Elektroprivreda (EPCG) in the tender for the first quarter of this year has al- Hydropower plant Visegrad produced 999.986 GWh of electric- ready sold 73.2 gigawatt hours (GWh) of peak profile electricity, ity in 2014th, by which the basic plan is shifted for about 10 per- at the average price of EUR 58.35 per megawatt hour (MWh), cent, said director of the Subsidiary “Hydropower plants on the based on which the company will generate the revenue of EUR Drina” Mile Lakic. 4.3 million. http://serbia-energy.eu/bosniarepublika-srpska-hpps-visegrad-f ulfilled-2014-production-plan/

23 http://serbia-energy.eu/montenegro-power-utility-company-epcg say to SDSM to stop the manipulation with thesis that the pro- -has-successful-electricity-trading-model-2015-1q-732-gwh-of-s duction is the only factor that determines the electricity price for old-electricity/ tariff customers.

39. Romania: E.ON Romania Distribution to continue investing http://serbia-energy.eu/macedonia-power-utility-elem-electricity- in grid networks generation-in-accordance-with-the-needs-of-the-tariff-consumer s/ According to the public release of the company, E.ON com- pleted the merger of two distribution companies in the first inte- 41. Croatia: The Testing of the unit C of TPP Sisak starts grated gas company and electricity distribution on the Roma- Croatia power utility HEP takes over the TPP Sisak unit C at the nian market. The company started its operation from January end of this year or early next year, it confirmed director of TPP 1st, and works with over 20,000 kilometers of natural gas distri- Sisak Matija Horžić . “All construction and assembly works are bution network and more than 80,000 kilometers of electricity completed. The construction lasted more than three years be- distribution network for around three million customers. cause of the public procurement, production equipment, har- http://serbia-energy.eu/romania-e-on-romania-distribution-to-co monization of domestic contractors and foreign supervisors. ntinue-investing-in-grid-networks/ http://serbia-energy.eu/croatia-the-testing-of-the-unit-c-of-tpp-si sak-starts/

40. Macedonia: Power utility ELEM Electricity generation in ac- 42. Hungary: MVM Energy trading gets electricity supply deal cordance with the needs of the tariff consumers for HU National asset management

Existing plants within power company ELEM supply electricity Hungarian National Asset Management (MNV) completed 6 bil- in accordance with the needs of tariff customers in Macedonia. lion EUR worth selection process of this year’s electricity sup- “The company fully delivers the announced electricity amount to plier. They will save more than 250 MEUR on the energy bills. the power system, based on energy consumption by house- http://serbia-energy.eu/hungary-mvm-energy-trading-gets-electr holds and small businesses”, it was announced from AD ELEM icity-supply-deal-for-hu-national-asset-management/ as response to Atanasko Tunevski from SDSM. From ELEM 24 43. Montenegro: Oil exploration concession advisory awarded total of 128 small hydropower plants in its property. The total ca- to Norway Advokatfirmaet Simonsen Vogt Wiig pacity of hydropower plants offered at auction is 26 megawatts. The initial selling price is 18.8 MEUR. The Montenegrin economy ministry said it has signed a con- tract with Norway’s Advokatfirmaet Simonsen Vogt Wiig for con- http://serbia-energy.eu/romania-hidroelectrica-sold-33-small-hy sulting services in the negotiating process for the award of a dropower-plants/ concession for offshore hydrocarbons production. The total 46. Slovenia: GEN Energija TPP Brestanica tender for 40MW value of the 12-month contract is 300,000 euro the contract gas turbines posted on Friday on the ministry’s website indicated. Slovenian thermal power plant (TPP) Brestanica published a http://serbia-energy.eu/montenegro-oil-exploration-concession- tender for the procurement of two gas turbines with capacity of advisory-awarded-to-norway-advokatfirmaet-simonsen-vogt-wii 40-70 MW. Bids should be sent by March 16, the notice is pub- g/ lished in the Tenders Electronic Daily (TED). 44. Montenegro: TERNA starts works on undersea power cable http://serbia-energy.eu/slovenia-gen-energija-tpp-brestanica-ten connection with Balkans der-for-40mw-gas-turbines/ The Italian transmission system operator Terna confirmed that 47. Bulgaria: Gov negotiate electricity supply from AES & Con- construction of the undersea cable connection with Balkans tour Global TPPs thru Montenegro is due to start in Italy on Thursday, although delays on the other side of the Adriatic Sea remain because of Bulgaria hopes that by the end of March will again negotiate on ongoing “expropriation processes”. the contract with AES Corporation and ContourGlobal to pur- http://serbia-energy.eu/montenegro-terna-starts-works-on-under chase electricity from thermal power plants AES Maritsa East 1 sea-power-cable-connection-with-balkans/ and ContourGlobal Maritsa 3.

45. Romania: Hidroelectrica sold 33 small hydropower plants http://serbia-energy.eu/bulgaria-gov-negotiate-electricity-supply- from-aes-contour-global-tpps/ Romania’s largest electricity producer, Hidroelectrica, will held auction in February for sale of 33 small hydropower plants, of a 25