Serbia is currently confronting significant energy challenges as its primary fuel for power generation – coal – diminishes in quality and availability while its main gas supply sources are located in conflict-affected regions.

Energy expert Aleksandar Kovačević spoke at a webinar addressing energy challenges in Serbia and the Western Balkans, organized by a responsible society foundation with support from an open society foundation focused on the region.

Kovačević highlighted that Serbia not only faces the aforementioned challenges, but also experiences the impacts of floods and droughts detrimental to hydroelectric operations, as well as the urgency to align with European standards through the commitments under the Paris Agreement and the Carbon Border Adjustment Mechanism (CBAM).

In terms of gas supply, Kovačević noted that Serbia heavily relies on imports from Russia, which are transported via the TurkStream pipeline.

The main compressor station for TurkStream, located in Anapa, Russia, has been attacked twice in recent months by drones and missiles.

While these attacks were intercepted successfully without major damage, Kovačević emphasized the precariousness of gas infrastructure in a conflict zone.

Additionally, battles near Kuruska have rendered the compressor station in Sudža non-operational.

This has resulted in political obstacles, as Ukraine obstructs the transit of Russian gas through its territory.

Compounding the reliability issue, equipment necessary for gas transmission has been subjected to U.S. sanctions since February of the previous year.

Kovačević pointed out that, regardless of Serbia's political or commercial arrangements regarding gas supply from Russia, the current situation does not assure complete reliability for gas procurement.

However, he mentioned that Serbia also has the potential to receive gas from Western Europe through Hungary, recalling previous instances of gas imports during the 2009 gas crisis between Ukraine and Russia.

He noted that Western Europe's gas supply system has since deteriorated, particularly due to significant reductions in output from the Groningen gas field in the Netherlands, which has affected overall reliability.

Kovačević warned that while gas supply from Western Europe could serve as a backup, it would likely come at a higher cost and different procurement terms.

He urged a reduction in Serbia's dependence on gas, citing rising import dependence as a vulnerability, especially for a landlocked country.

Another pressing challenge for Serbia is the diminishing quality of coal resources.

Kovačević pointed out that the productivity in lignite mines in the Balkans is notably low compared to European standards, exacerbated by low calorific value and inefficiencies in power plants.

He explained that European coal from surface mines offers twice the calorific value per ton compared to Serbian lignite.

Factors such as geological conditions and mining technology also contribute to this disparity, making alteration in mining practices impractical amid current coal shortages.

Among the operational risks, Kovačević highlighted that poor coal quality frequently leads to failures in thermal power plants, citing a complete shutdown of all six blocks at the Nikola Tesla Power Plant in Obrenovac on December 12, 2021.

Serbia's commitment to the Paris Agreement necessitates a shift away from coal, aiming for carbon neutrality by 2050, while compliance with CBAM introduces further incentives to do so.

Presently, up to 60% of Serbia's energy is derived from coal.

Additionally, climate-related risks such as floods pose further threats to Serbia's energy infrastructure.

Historical floods, like those in May 2014, severely impacted operations at the Nikola Tesla Power Plant when coal mines were inundated.

Hydroelectric power generation is also compromised by droughts during summer months, which impedes water flow necessary for electricity production.

Kovačević linked the flooding issue to extensive deforestation, noting a continuous loss of forest cover over the past three decades.

In light of these mounting challenges, Kovačević indicated that achieving energy security in Serbia will necessitate a transition towards decarbonization, focusing on renewable energy investments.

He advocated for the development of new hydroelectric, wind, and solar energy projects, emphasizing the potential of biomass as a pivotal resource for economic growth.