Serious electricity shortage hits the Balkans

22/12/2011

Due to several months of drought and insufficient production capacities, Southeast Europe is experiencing a dramatic deficit in electricity.

By Georgi Mitev Shantek for Southeast European Times in Belgrade -- 22/12/11

Most Balkan countries face electricity supply problems. [Nikola Barbutov/SETimes]

Following a month-long drought, the region-wide electricity shortage in the Balkans is now becoming acute. Suppliers responded to steady demand and reduced supply with a price increase of 6.5 to 11 eurocents per kilowatt hour.

The dramatic fall in water levels has impacted hydroelectric dams, while production from thermal power plants and -- in Bulgaria and Romania -- nuclear facilities is reaching full capacity.

"The situation is stable but very difficult," Momcilo Cebalovic, communications head at EPS, the Serbian state-owned energy provider, told SETimes. "Fortunately, we did regular maintenance on time and the system works flawlessly even at these loads."

According to EPS, thermal power plants are working at the same capacity as the top German thermal power plants. Nevertheless, a shortage remains for a number of reasons.

One is decreased water flow at hydroelectricity power plants which are producing around 10 kilowatt hours, the lowest production level since 1926.

At the same time, electricity in Serbia is relatively inexpensive, both for consumers and commercial use. Due to a low selling price of around 5.5 eurocents, heating with electricity is more cost-effective in winter.

Like many other Serbs, Nikola Žarković from Belgrade uses electric power to heat his house.

"My neighbourhood doesn't have gas or a central heating pipeline and I surely can't use wood or coal for heating in the centre of the city. Even if I could, I wouldn't because it's cheaper to pay 70 euros for electricity over three or four months in a season rather than 60 euros every month, like those with central heating systems do," Žarković told SETimes.

Current daily consumption is 118.3 million kilowatt hours and 16.6 million kilowatt hours are imported -- around 14% of total electricity demand.

However, the current situation may not change when the drought ends, as production capacity is lacking and energy infrastructure investments are expensive and yield results only in the long-term.

"When you have all the money you need and all the plans finished you still have 'to spend' two years to build a gas electric plant and four or five for a thermal power plant [coal]," energy consultant Dejan Stojadinović told SETimes. "Even when you want to replace the generator in an old electric plant you have to wait one year or more for the manufacturer to make one. You can't just buy it from store shelf."

After a decade of static growth in Serbia's energy sector, however, there are signs of forward momentum.

Aleksandar Jakovljević, the head of EPS Strategy Sector told SETimes that the TE Kolubara B EPS teams are working closely with the Italian energy firm Edison on a preliminary feasibility study, with a joint company expected to be established late February 2012. The Italians offered to build two 375 megawatt power plants.

Meanwhile, the European Bank for Reconstruction and Development will provide Serbia with a 45m euro loan for the reconstruction and development of a series of hydroelectric dams.

Chinese and Russian companies are also investing in a number of projects in the oil, gas and coal powered energy sector.

But Serbia is not the only country in the region grappling with energy shortages.

In Romania, for instance, production has dropped and power exports have declined. The leading producer, Hidroelektrika, was forced to terminate commercial contracts after an accident at one of its facilities in October.

All plants – including the Kozloduy nuclear facility -- are operating properly in Bulgaria, with 1,200 megawatts (MW) being exported. But the country is close to its maximum export transfer capacity of 1,230 MW per hour.

The situation is far worse in Montenegro and Albania, which are importing electricity due to drought conditions. The executive director of EP Montenegro, Zoran Đukanović, appealed to consumers to conserve energy.

The situation is no better in Macedonia, which imports 400 MW per hour, and is only slightly better in Greece, where approximately 250-300 MW per hour are transferred.

Croatia and Bosnia and Herzegovina are also importing electricity, 800 MW and 100-150 MW per hour, respectively.

Republika Srpska, a net electricity exporter, was forced to cancel sales contracts due to the difficult hydrological situation.