photo: marija janković; illustration: i. hrasovecRenewable energy sources (RES) are so popular with tycoons because the state guarantees the purchase of "green" but expensive electricity according to predetermined quotas and tariffs. Profit is guaranteed, and there is no business risk. It is enough to provide a small part of the funds for the investment, since banks easily provide loans for the construction of RES with such conditions
Wind farms have changed the landscape in Banat. In recent years, travelers between Pančevo and Vršac have been able to watch dozens and even hundreds of wind turbines appear. Somewhere in the second part of last year, the turbines started turning - wind power plants with a capacity of over 300 MW were brought online.
Of course, someone has to pay for the satisfaction of producing "green" energy in Serbia. The production of electricity from RES is expensive and is subsidized through "feed-in" tariffs. Producers of electricity from renewable energy sources receive the status of "privileged" from the relevant ministry and thereby acquire the right to purchase their electricity for twelve years at a price that is two to three times higher than the market price (for wind farms) and five to six times for electricity obtained from power plants on biogas.
In order to pay incentives to RES producers, a fee for RES was introduced a few years ago in the amount of 9,3 pars/KWh, which consumers in Serbia pay through their electricity bill. For an average household, it amounts to 30-60 dinars (if it is not heated with electricity) per month, but with the excise tax of 7,5 percent and VAT, this pleasure ends up costing 40-80 dinars.
GROWTH OF RES PRODUCTION
The story of wind power plants would have a "happy ending" - citizens (and the economy) would contribute to the development of RES and the environment by allocating symbolic amounts - if it were not for the illusion created by the government by transferring costs to the EPS account. About 2,7 billion dinars are collected annually from the fee for RES, and in 2018 alone, as much as 7,4 billion dinars were paid to producers. Purchase costs are growing with great progression as new producers are intensively connected to the grid: since the summer of 2019, several large wind farms with a capacity of 305MW have been activated, and by the end of 2020, wind farms with a capacity of 170MW are expected to be activated.
EPS will soon have to pay more than 150 million euros per year just for the purchase of electricity produced from wind energy. That amount is dramatically higher than the incentives paid to the producers of the notorious mini-hydroelectric plants, which are slightly more than ten million euros.
Although it is clear to the uninitiated observer that due to the sudden growth of electricity production from RES, the fee paid by consumers must also increase proportionally, the Government of Serbia decided at the end of January that the fee for RES will remain at the level of five years ago. With this, the state practically drove EPS into a loss based on the purchase of RES of about 100 million euros (the loss is in the difference between the price it pays to privileged producers and the price on the regional market).
FALSE SOCIAL PEACE
In the business plans of EPS, it is estimated that it is necessary for the fee for RES to be increased six times, to 55 para/KWh, in order to cover the losses so far (in 2018 alone, EPS lost three billion dinars on the purchase of electricity from RES) . Taking into account the expected increase in production from RES in the coming years, the fee should already be 2021-80 para/KWh in 90.
Increasing the fee to a sustainable level would increase the bill for households that do not heat with electricity by 350 to 700 dinars (the average household consumes 300 to 600 KWh per month).
EPS made a decision last fall to increase electricity prices (only for citizens) by 3,9 percent due to the adjustment of electricity prices to inflation, since electricity for households has not risen in price for several years (and is otherwise far below European prices). EPS sells electricity to businesses at market prices similar to those in the region, while they are free to buy energy from private suppliers as well. An increase in the fee for RES would also affect the economy and increase bills by 5-7 percent, which would also cause a general increase in prices.
WIND POWER PLANTS AND SHPPS
Ownership of the largest number of wind power plants is concentrated in the hands of three companies. The exact origin of the capital cannot be easily determined from the register, since it is a question of foreign legal entities, but there is also Arab and Israeli capital. High-power wind power plants require serious capital, in the order of several hundred million euros, while incomparably less money is needed for mini-hydro power plants. That's how local "small tycoons", including a number of people close to the authorities such as Nikola Petrović, set their sights on MHE (but also on biomass and biogas power plants), where investments range from several hundred thousand to several million euros.
Why are RES so "popular" with tycoons? First of all, the state practically guaranteed a large profit in advance with the policy of feed-in tariffs, as well as power purchase contracts, which provide a whole range of benefits to RES producers. There is no business risk - all produced electricity must be purchased by EPS at prices and quotas that are determined in advance. It is enough to provide a small part of the funds for the investment, since banks easily provide loans for the construction of RES with such conditions.
The return on investment in RES is usually 3 to 5 years, and EPS has the obligation to purchase electricity at "feed-in" tariffs for as long as 12 years. After that period, electricity is paid at market prices. It is not difficult to conclude that it is a fantastic business - the investment returns after a few years, and everything after that is pure profit. To make things even nicer, wind farms require virtually no labor and lifetime maintenance costs are nominal (as with MHE).
TO THE DEtriment of EPS a
The increase in the price of electricity due to the purchase of "green kilowatts" is inconvenient for the authorities before the elections. However, the impression is that the election is not the only reason for avoiding an increase in the RES fee. With an unrealistically low fee for RES, the impression is maintained among the population that RES plants are something beautiful and useful and that they do not cost anything in particular.
Both the prime minister and the ministers "like" to take pictures next to the wind farms and other facilities that are put into operation. An increase in the fee would demystify what is behind "green energy" among the population and it would no longer be a suitable subject for painting - on the contrary, people would protest that it is possible to enrich tycoons from their pockets.
On the other hand, EPS is the most powerful public company that has been exploited due to insufficient investment and years of mismanagement. One of the biggest problems of the EPS is ecology: in January, due to heavy pollution in the cities, President Vučić "promised" that filters worth 400 million euros would be installed in Obrenovac based on a loan from the Japanese agency JICA.
The general picture of EPS is worrisome and without costs from the purchase of RES - the loss according to the consolidated balance sheet in 2018 is 10 million euros. The results for 2019 can only be worse. The causes of EPS's poor performance are, in addition to the low price for the population, the structural weaknesses of the company: inadequate management, redundant employees, transmission losses, i.e. theft, and old technology. In addition to all that was mentioned, the purchase of electricity from RES represents an additional weight that will "sink" EPS balances deep into the red.
EPS can easily end up in the position of Srbijagas from a few years ago, that is, it will not be able to service loans guaranteed by the state. In that case, all EPS obligations will fall on the budget, as the Fiscal Council has repeatedly warned. Currently, EPS owes more than one billion euros in long-term loans (in addition to large short-term liabilities not covered by receivables). The investment only for filters in Obrenovac will increase debts by an additional 400 million, while not leading to an increase in income.
WIND COLLECTION
In this story, the worst part is that the state is gambling with the most valuable public enterprise due to cheap politics and subjugation of tycoons. And finally - we should not forget that wind energy is not a solution for electricity supply (except at the level of 5-6 percent of consumption), since Serbia does not have suitable winds like coastal countries, and what is worse, wind energy is of poor quality. Sometimes there is wind and often there is not, and EPS has to "cover" from conventional power plants the oscillations in the operation of wind power plants. The situation is not much better with mini-hydroelectric plants either - their power is symbolic, and other "renewable sources" are very limited.
It is high time to open a discussion in Serbia about what kind of energy we want in the future - and how much it will cost us (as consumers and society) favoring RES, especially wind power plants, that is, whether there are (and are) incomparably more rational ways to improve energy efficiency, environmental protection and energy security of the country.
Why is there nothing else between the overcome regime and the changes? What does the regime mean when it says it is defending Serbia? Why is the Student Movement indomitable? Who has the knowledge and real experience, and who leads without a day of work experience outside of politics? And why students win
After almost two years of protests, hundreds of kilometers walked, arrests, persecution and unprecedented social mobilization, Serbia is holding elections that could mark the end of a political era. Sociologist Marija Babović tells "Vreme" that the hope for change has not been so great since October 5, 2000, but she also warns of the danger that, if changes are not made, the country will face an even tougher authoritarian regime.
Their only weapon now is the media they control: like, we don't have an agenda, which is not true; as, we will betray the national interest, which is not true. One of their arguments is that we are afraid to go to the debate with Vučić. They do not understand that it is their punishment. This is a punishment for Aleksandar Vučić, who for 14 years conducted exclusively a monologue. For fourteen years he did not allow anyone any kind of dialogue, and now he would like to be rewarded or pardoned with the opportunity to talk to us. Well, he won't be able to. What he sowed is now reaping
These elections are not elections about Serbia's membership in the European Union, Kosovo and Metohija, gay marriage, tax policy or any other single political issue. Although parties on the fringes of political power try to impose these themes, at the heart of the upcoming political election is a much simpler dilemma: change or preserve the existing order. For more than a year now, surveys have shown that this is the primary dilemma on the ballot
In the RS, 19.800 people registered for the elections in Serbia, who will be able to vote at 28 polling stations. It remains unknown how many of them will cross the Drina on October 25 and vote in Serbia. In any case, I do not believe that the voters from Republika Srpska are the ones who will decide the winner of the elections in Serbia. Realistically, the voters from Republika Srpska can influence a little, but it seems that they are symbolically very important to both Vučić and the opposition.
There is, literally, no difference between the one who claims it is day in the middle of the night, or the one who claims to be a giraffe, from the claims we read on billboards: that Vučić is working to unify Serbs and that Serbia is doing better and better day by day.
The pre-election arrests due to the alleged "overthrow of the state" testify to the regime's panic. The bad news for them is - they can't arrest the whole people who decided to defend themselves from progressive beatings and election theft
The ring that tightens around Ćaciland Student list is getting narrower. Because there are more and more spoiled people who see the false prophet for what he is: a street obscener who is fighting Serbia
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