Dubravka Đedović Handanović, Serbian Minister of Mining and Energy

The strategic partnership with the European Union on critical mineral raw materials will contribute to Serbia’s long-term economic growth, speedier integration into the EU’s single market and accelerated EU accession

Energy sector reforms are currently underway in Serbia, and in this context company Elektroprivreda Srbije (EPS) has long been under public scrutiny. According to Serbian Mining and Energy Minister Dubravka Đedović Handanović, EPS reforms were launched with last year’s adoption of a new Statute and the appointment of a professional Supervisory Board, while a new general director who doesn’t have ’acting director’ status was selected in a competition. The Transformation Plan was adopted in June and implies specific structural, financial and operational changes that should improve the company.

“The goal is for EPS to be a guarantor of energy stability, a market-oriented company that advances its quality of service constantly. We’ve identified the parts of the system that require more intensive work, and that primarily means investments, because EPS has a long-awaited and significant investment cycle ahead of it, while more efficient project management is also essential,” says Minister Đedović Handanović.

According to her, one of the priorities is advancing the digitalisation of EPS’s processes and services, which – coupled with the more efficient directing of human resources potential and the more precise management of investments – will enable EPS to ready itself to satisfy goals related to the greater use of renewable energy sources, achieving carbon neutrality, profitability, and market orientation, as well as significantly improving its customer relations.

What do you see as the key strides that you want to achieve when it comes to restructuring other public companies in the energy domain?

— The reforms that we’ve launched at EPS should demonstrate how we can make state companies in the energy sector more efficient, stronger and more successful. I believe that, when it comes to reforming the largest company – where in previous years there was the most obstruction and resistance to change – other companies can follow the same path provided we show that this reform is in the best interests of EPS and its employees, as well as the state, as the company’s owner. And this will result in a stronger and more competitive electricity and gas sector.

Serbia recently received praise for its notable progress in the area of decarbonisation.

What can we expect on this front when it comes to improving the institutional framework and investment?

— Apart from stabilising the energy system in order for it to satisfy its main mission – of ensuring energy security and supply stability – the Ministry has been working at an accelerated pace over the past two years to lay the foundations for future development, which will ensure the energy sector’s greater sustainability and more energy for the needs of the economy.

The Law on the Use of Renewable Energy Sources laid the foundations to increase the share of RES in such a way that the integration of green megawatts is harmonised with our energy grid capacities. The results of the first auctions for market premiums show that investors have recognised the legislative framework as being stable and favourable. We’ve secured more than 700 megawatts of new RES capacities and investments worth more than a billion euros. We want to repeat that success in the second round of auctions, to be held in the second half of this year, which is why we are preparing seriously and analysing the market.

Each part of EPS will be analysed carefully, with clear procedures, in order to precisely determine the key points for the company’s further development

We’ve also prepared amendments to the Law on Energy, which will enable provisions included the latest package of EU energy legislation to be transferred to domestic legislation, thus contributing to binding our electricity market to that of the EU.

We will have the completed strategic framework this year, with goals that will track the energy sector’s development over the next three decades. The government adopted its Integrated National Energy and Climate Plan in June, which has been harmonised with Europe’s vision for the decarbonisation of the energy sector and represents a kind of roadmap for Serbia’s energy transition. The integrated plan places a focus on investments in renewable energy sources, with approximately 3.5 gigawatts of new solar and wind power plants set to be added to the grid by 2030, which will mean that almost every other megawatt-hour of electricity generated will come from clean sources. Public debate is underway on the new Energy Sector Development Strategy up to 2040 with Projections up to 2050, which should also be adopted during this year.

This also relates to the continuation of the ministry’s work to consider options for the use of nuclear energy. To what extent is this possible to implement operationally, given the lack of expert personnel, among other things?

— As we approach 2050, we will find it increasingly challenging to secure sufficient amounts of base energy, given the planned reduction of production at thermal power stations. Through the Integrated Plan, according to variations of one of the scenarios, we’ve already considered introducing nuclear power plants, with a total capacity of up to 1,000 MW, to the Serbian power system after the year 2040.

A Memorandum of Understanding on the application of nuclear energy development in the Republic of Serbia was recently signed with the professional and scientific community, with which we also launched a public debate that should encompass security, legal, organisational and scientific research, engineering and all other aspects related to the use of nuclear technology. We’ve brought together experts from the academic community, from universities and state institutions, in order to have a framework for institutional cooperation and to engage all experts able to help us connect as quickly as possible with countries that haven’t had a moratorium on nuclear energy, which we’ve had for 35 years.

I believe that, once we provide that impetus, we will motivate many of our experts, both in the country and abroad, to provide their own contributions in order for Serbia – on the basis of the comprehensive economic, technical and market analyses that will be carried out – to make the best decisions regarding the development direction of our nuclear programme, utilising the best experiences from around the world.

Likewise, the proposed amendments to the Law on Energy envisage reintroducing the field of nuclear energy, or the abolishing of the Law on the Prohibition of the Construction of Nuclear Power Plants, and the regulating of the main steps to take for the potential peacetime application of nuclear energy in Serbia, based on the International Atomic Energy Agency’s guidelines.

Your ministry has been in the spotlight over the Jadar project, both from the perspective of environmental protection and that of whether Serbia will be able to profit from the part of the lithium use value chain where significant added value is created. When it comes to the exploitation of mineral raw materials in general, what have we learnt from existing experiences?

— The vision of achieving carbon neutrality by 2050 implies energy systems undergoing enormous change over the next quarter of a century. Estimates suggest that demand for certain critical raw materials will increase 4.5-fold by 2030, while demand for lithium – as a key element of batteries for electric vehicles and devices – will increase 11-fold by 2030 and 57-fold by 2050, while a very small part of the required quantity will be sourced from European mines.

When it comes to critical and strategic raw materials, the Republic of Serbia has significant resources or potential, including lithium, as one of the key raw materials of the energy transition. The Memorandum of Understanding between the Republic of Serbia and the European Union that was signed recently represents an important step in forging a strategic partnership with the European Union in the field of critical mineral raw materials and the development of a value chain that includes the production of batteries and electric vehicles. Sustainably produced batteries, as well as the creating of the entire electric vehicle supply chain, will be crucial to decarbonising the transport and energy sectors, as well as to reducing CO2 emissions, both in our region and in the EU. This partnership will contribute to Serbia’s long-term economic growth, speedier integration into the EU’s single market and accelerated EU accession.

The strategic partnership with the European Union in the area of critical mineral raw materials will contribute to Serbia’s long-term economic growth, speedier integration into the EU’s single market and accelerated EU accession

The Jadar project’s potential can’t be merely boiled down to what’s brought by the mining and processing of lithium. This would be the largest greenfield investment in Serbia’s history and would lay the foundations for the development of an entire industry that has the potential for incredible economic, business and social development. The projected gains of concluding the entire value chain in Serbia could amount to more than 16 per cent of GDP annually.

Serbia really has an opportunity to become a significant player in the global lithium industry that we shouldn’t let pass us by – though only with a maximally responsible approach and the applying of environmental standards in mining that will guarantee human health and the environment are protected, as is the case in Europe’s most developed countries, so we should work according to the highest European standards, while adhering to all the laws and regulations of the Republic of Serbia.

You’ve announced the start of work on amendments to the Law on Mining and Geological Exploration. What should these changes bring in practical terms?

— Amendments to the Law on Mining and Geological Exploration should firstly recognise the importance of mineral resources in the part of the critical and strategic harmonisation of provisions with EU regulations, and provide for the greater participation of the Republic of Serbia in decision-making processes, which has not been the case to date. It will also contribute to defining potential strategic deposits, which will exclusively be the subject of various forms of contracts with the state, and which will lead to the overall protection of the interests of the Republic of Serbia, on the one hand, and predictability for new investments, on the other.

We are also currently developing the Strategy for the Management of Mineral and Other Geological Resources of the Republic of Serbia for the 2025 to 2040 Period, with Projection up to 2050. This document is being worked on by more than 50 professors and associates of the Faculty of Mining and Geology. Apart from comprehensively analysing the current state of mineral resources, this strategy should also show the kind of optimal role for the state in managing our mineral resources in the best possible way, ensuring that we gain the most benefits for our economic growth, with the least harmful impact on the environment.