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Dubravka Đedović Serbian Minister Of Mining & Energy

Common Energy Future

Cooperation with the EU in the area of energy is important independently of the energy crisis. It was important prior to the crisis and will still be important when the crisis abates

At the recent summit of Western Balkan countries, held within the scope of the Berlin Process, the EU promised assistance to the region worth a billion euros, which represents a continuation of the process of shaping our common energy future. That’s why we first requested that Serbian Mining and Energy Minister Dubravka Đedović comment on the importance of this announcement for Serbia.

“The costs paid by the state to purchase electricity and energy products over recent months, under conditions of record prices on the stock exchanges, are extremely high, and any financial support that makes it easier for us to endure this winter is important for Serbia. We are grateful that the EU, even under the conditions of a worldwide energy crisis, recognised the importance of supporting the Western Balkan countries. That support is important not only when it comes to dealing with short-term rises in costs, but also when it comes to continuing to provide support to projects that will boost our energy security over the long term, as is the case with diversification of gas supplies,” says Minister Đedović.

EU support during this period is important because it shows solidarity with candidate countries that aren’t yet EU members, but that are on the road to European integration, adds the minister.

“With the signing of the Sofia Declaration on the Green Agenda for the Western Balkans, Serbia, together with the region’s other countries, has accepted to work together with the EU to achieve European targets in the domain of climate change, which is a serious challenge for us,” explains our interlocutor. “Countries enter the energy transition process from different positions, in the sense of their energy mix, the potential economic and social costs associated with the transition process, as well as unequal opportunities to access European funds. Among other things, countries that aren’t EU member states are at a disadvantage compared to EU countries that have similar levels of coal in their energy mix when it comes to the kind of support they can receive through European funds. That’s why adequate support from the EU and financial institutions – for the implementation of targets in the areas of climate, energy and energy transition – is important not only for Serbia, but also for the other countries of our region, in order for this transition to be financially sustainable and socially equitable.

What are the implications of this process of building a common energy future when it comes to Serbia’s sources of energy supplies and the country’s energy independence?

– The energy crisis has caused problems that have extended beyond the scope of the energy sector and individual member states, which is why many of the measures implemented during the previous period were adopted at the EU level. Moreover, in crisis situations, energy security doesn’t depend only on what each country can do for itself, but rather also depends on cooperation with other countries to a large extent, and on the existence of infrastructure that enables the transport of energy and energy products. That’s why one of Serbia’s main responses to the energy crisis, apart from strengthening its own capacities and increasing its reserves of all energy sources, has been to connect with other countries and participate in initiatives that can ensure our increased energy security.

Hungary is supplied with Russian gas via Serbia, as a transit country, and part of our gas reserves have recently been held in storage facilities in that country, which provides Serbia with additional security in more easily traversing the winter period. It is also planned to begin construction of an oil pipeline to Hungary, with which we will also ensure the greater security of crude oil supplies. Public company EPS, together with Elektroprivreda Republika Srpska [Bosnia-Herzegovina], is building the Buk Bijela hydroelectric power station, which will bring an additional capacity of 115 MW to our power system. With EU support, a gas interconnector is being built with Bulgaria, which will enable gas from Azerbaijan and the region of the Caspian Sea to reach Serbia, as well as gas from the LNG terminal in Greece, while we are also planning to build a gas interconnector with North Macedonia.

These projects are all important to increasing Serbia’s energy security and strengthening its resilience against possible supply disruptions, but also to strengthening our country’s role in the broader context of ensuring energy security across the region.

When it comes to the implementation of targets in the areas of climate, energy and energy transition, adequate support from the EU and financial institutions is important not only for Serbia, but also for the other countries of our region, in order for this transition to be financially sustainable and socially equitable

Despite strong challenges, the EU is sticking to the stance that there is no alternative to Green Transition. How capable is Serbia, which in the sphere of energy is still dependent on coal to a large extent, of conducting this transition at such a sensitive economic juncture?

– The road to green transition is a long-term commitment of Serbia and the reality is that we will increase the share of renewables in the energy mix over the coming decades. However, we must be aware that our basic energy comes from thermal power plants, i.e., almost two-thirds of our energy is currently produced from coal. We unequivocally need to decarbonise our energy system, because that’s the only way it can be sustainable over the long term. The decarbonisation plan must be realistic and sustainable, in order for Serbia to preserve its energy stability at all times. Wind and solar energy are important from the perspective of environmental protection and potential capacities that can be built, but we must take into account that this production is variable, and that the needs of consumption are constant.

That’s why priority projects in the field of electricity generation include the construction of reversible hydroelectric power plants Bistrica and Đerdap 3, which also serve as energy storage facilities. The construction of new capacities should also be harmonised with the development of the power transmission and distribution network, in order for the development of the energy sector to be sustainable, efficient and economical, and for this all to result in us having a higher degree of energy security and safety.

We currently have more than 500 MW of energy generated by renewable sources. The plan is to launch long-delayed auctions next year, which will secure a new 400 MW of electricity from Renewables in our system. We are simultaneously working to improve the regulatory framework, so that over the medium term the network will be able to receive eight times the current capacity. One important question is whether this RES-generated electricity will be exported, or whether the new capacities will contribute to electricity being beneficial to citizens and the economy. I believe we will find a model that’s in the best interest of citizens, but that is also sustainable for investors.

The process of improving energy efficiency is unfolding in parallel, through various projects that have received financial assistance from the state, including a programme of subsidies for households to replace windows and doors, improve insulation and install solar panels. Under the auspices of the National Programme for the Energy Rehabilitation of Residential Buildings, Family Houses and Apartments, subsidies were secured for approximately 25,000 households, with the Ministry of Mining and Energy, together with local self-government units, allocating 2.66 billion dinars. In cooperation with the World Bank and the EBRD, conditions have been secured for the continuation of this project, with which more than 100,000 households will be covered.

You stated recently that, thanks to its mineral resources, Serbia will be an important country in the period ahead, on both the European and world markets of rare minerals. What does that mean in practical terms?

– Serbia is a country that is extremely rich in mineral resources, in comparison to its size, including those mineral resources defined by the European Union as being critical. That list, which since 2020 has contained a total of 30 raw materials and minerals, includes mineral raw materials and materials that are able to meet the needs of new, environmentally friendly technologies aimed at developing renewable energy sources, storing electricity and new “smart” technologies that are important for economic development both today and in the future.

I believe that the least we can do when it comes to the mineral wealth of our country, which also belongs to future generations, is to know precisely what we have available and what our potential is like when it comes to mining

I believe it is a great advantage for Serbia that it has at its disposal some of those critical raw materials, which also includes lithium – a substance that’s unevenly distributed around the world and possessed by only a few countries. When you have potential, you also have possibilities to consider whether you will take advantage of that potential and in what way, while considering the opinions of everyone – from experts to ordinary citizens – and having all the relevant information, including studies, analyses and experiences from around the world. I believe that the least we can do when it comes to the mineral wealth of our country, which also belongs to future generations, is to know precisely what we have available and what our potential is like when it comes to mining.

Our reserves of lithium, or lithium carbonate that can be obtained through the processing of ore, amount to 10% of the world’s needs or 60% of the needs of the EU. If we were to utilise the entire value chain in production, we could produce around a million electric vehicles, which would mean more than 10 billion euros for our GDP. That’s the responsibility we’re talking about, but protecting biodiversity, the quality of human life and the environment are also our responsibilities.

In your opinion, what is essential for these kinds of major mining endeavours to be carried out with full adherence to high environmental standards?

– The state’s task is to work in cooperation with the mining profession to enable us to utilise the wealth that we have in a rational, responsible and efficient way, preserving nature and taking care of the community. A lot has changed in mining, in terms of the technologies that are used and enable much better control and the reducing of risks to the environment caused by mining. Mining plays an irreplaceable role, not only when it comes to its contribution to GDP and the huge number of people working in mining companies, but also in the broader context of energy independence and further economic and business development. In this sense, the key point containing the greatest possibility to influence the situation is for mining activities to be carried out in a sustainable way. Our goal should not only be to preserve mining, but rather to enable further development and modernisation, in which one of the most important things is to constantly raise requirements and criteria when it comes to environmental impact.

The lithium issue is politicised to the extent that we forget to dive down to the essence of the problem, and that is whether we can exploit it while adhering to all environmental standards. An environmental impact assessment study hasn’t even been done yet; we haven’t even started dealing with that, because the project has been halted. Geological research is important because it shows just what mineral raw materials we have and in what quantities, but that’s just the first in a series of steps and conditions that must be fulfilled in order to achieve the exploitation of a resource from confirmed reserves. It is precisely due to the fact that these are such sensitive decisions that we must be open to dialogue, at the very least, to hearing all the facts, checking out the studies and world experiences, and first and foremost to hearing the opinion of experts from the profession, which is the most authoritative in this case.

PARTNERSHIP

We are grateful that the EU, even under the conditions of a worldwide energy crisis, recognised the importance of supporting the Western Balkan countries

TRANSITION

The road to green transition is a long-term commitment of Serbia and the reality is that we will increase the share of renewables in the energy mix over the coming decades

COOPERATION

One of Serbia’s main responses to the energy crisis, apart from strengthening its own capacities and increasing its reserves of all energy sources, has been to connect with other countries