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Obrad Tadić, CEO of Smart Energy Investment Kft

Saved Energy Is The Best Energy

Serbia consumes 2.5 times more electricity than the world average per unit of social product, which should serve as an argument for us to make reducing energy consumption the number one imperative among our priorities

Projects for reconstruction of public lighting that were implemented in local self-governments by the Smart Energy Investment Kft confirmed that it is more justified to invest in energy efficiency than in renewable energy.

One of the first associations with the central topic of this Green Serbia special edition, “Thinking Green and Living Clean”, is energy, and the energy in question is the kind that’s obtained from renewable, green sources.

The term “energy” associates us with the current war in Ukraine, the energy crisis in Europe, the financial market crisis that emerged with the raising of reference interest rates, as well as the whole economy. In such a situation, it is justified to make efforts to solve energy challenges. The impression that one gets is that a primary solution in attempts to overcome this challenge is the production of renewables, or “green” energy.

Were the laws, namely the natural laws of physics and the laws in terms of legal norms, ignored when determining the priorities in this case?

The first law of thermodynamics states that “energy can neither be created nor destroyed, only altered in form”. Whether the “green” transition from one form of energy to another will disturb some other balances in nature, just as non-renewable sources disturbed our balances, may be known in the future. The legal framework in Serbia considers energy efficiency as a new source of energy, as is the case in the EU and probably most countries around the world.

The legal framework in Serbia considers energy efficiency as a new source of energy

A question arises as to whether these two different laws are sufficient for energy efficiency to be ranked first among the priorities in the fight for energy stability. The fact that Serbia consumes 2.5 times more electricity than the world average per unit of social product should serve as an argument for us to make reducing energy consumption the number one imperative among our priorities. Are we more satisfied with new energy transformed from some other energy or happier and more successful because we need less energy? This is not only a philosophical question, because it isn’t difficult to simulate the effects of a scenario for our society where we would reduce consumption per unit of social product.

Based on the experience of our projects for the reconstruction of public lighting in local self-governments, we confirmed that it is more justified to invest in energy efficiency than in renewable energy. The benefits of the investment are more quickly achievable for both parties (public and private) because investment and construction operations are simpler and the “new” saved energy is available more quickly. The economic effects on society are more significant. Apart from energy and financial savings, long-term qualitative effects are also achieved, such as increased quality, comfort, and safety. As such, methodologies that function according to the “value for money” principle are moving to a more advanced “value for people” principle, which is better at achieving the Sustainable Development Goals (SDGs).

The average price that our public partners pay for directly saved MWh is fixed at slightly less than 90 euros for the entire duration of the project, and that includes all costs (excise duties and fees).

That is the value that they will pay less to the supplier, assuming that investment and maintenance costs are ignored, which he received free of charge as part of that price. This value is equivalent to the spot market price, less than 70 euros/MWh. The excess energy generated is a new social product, obtained with less energy consumption, which can be sold at a higher price.

We believe that these are sufficient reasons that the slogan “Thinking green and living clean” has energy saving in its essence, because saved energy is the best energy, according to all parameters.

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