Energy resources are at the heart of the global geopolitical conflict between Russia and Ukraine, which has already had a dramatic impact on the energy sector worldwide, especially in Europe. There is ongoing speculation about whether the conclusion of the conflict will positively affect energy supply stability and contribute to lower energy prices in Serbia’s market. Furthermore, has the use of renewable energy sources (RES) worldwide confirmed or refuted the thesis that energy development cannot be sustained without gas, and will fossil fuels continue to dominate?
Slobodan Ružić, PhD in Electrical Engineering, shares his views in an interview with Politika. He firmly believes that significant changes in energy security strategies, which are already evident in the United States, will extend to European countries and, consequently, to Serbia.
“The energy crisis that has been affecting EU countries for the past three years will lead to a massive re-evaluation of societal priorities and the real effects of the free energy market. The rules governing natural gas and electricity markets in the EU will undergo significant changes, and the ideological rhetoric surrounding climate change and the subsequent harmful pressures regarding fossil fuel usage will significantly weaken,” says Ružić. “Let’s be clear, I do not expect the fight against climate change to completely end, nor would I want that. However, I expect a shift in the current ideologically imposed paradigm of energy development, as it will become clear to the general public—not just shadowy geopolitical strategists—that energy development is a matter of survival for every country. As a result, nations will focus more on the rational use of their own fossil fuels, including coal, while nuclear energy will experience a significant rise. Increasing energy efficiency and utilizing RES will remain, as they should, a priority.”
Ružić argues that the question of whether wind and solar can replace fossil fuels was never a hypothesis freely discussed in scientific and technical circles in search of the correct conclusion. Instead, it was a political decision that a large number of smart and well-educated people worldwide, drawn by the potential for easy expertise, prestigious research positions, and material gain, naively attempted to prove and justify. However, energy needs, natural laws and technological limitations are stronger than political decisions.
“For this reason, China, the world’s largest producer of electricity from RES, started building 94,500 megawatts of coal-fired power plants last year. In other words, solar and wind power plants must be combined with base-load plants and reversible power plants to ensure the security of energy supply for the population and industry. Base-load plants can be coal-fired, gas-fired, or hydroelectric power plants,” he explains.
When asked which base-load power plants are best for each country, Ružić says it depends on the country’s mineral resources and geopolitical influence. “For Serbia, the best option is coal-fired power plants as long as we have enough domestic coal.”
The growing role of energy producers and consumers in Serbia’s system
Regarding the increasing number of prosumers (consumers who also produce energy), Ružić explains that there are currently 4,402 prosumers in Serbia, including 3,174 households, four residential communities, and 1,224 other legal entities, with a total installed capacity of about 85 megawatts.
“It is very positive that regulations have allowed for the emergence of prosumers in our energy sector, and many consumers have found it in their interest to build their own power plants and obtain this status. They help themselves, but also contribute to solving energy development problems in the country. Additionally, the connection of prosumers helps relieve existing capacities in the distribution network and reduces losses,” Ružić says. “Theoretically, a large number of prosumers on the same low-voltage circuit could lead to overloads during months when household solar power production exceeds consumption. However, we are a long way from such problems because the total number of prosumers in households is less than one thousandth of the total number of consumers in this category.”
Thus, he emphasizes, prosumers are very welcome and the existing legal framework is quite favorable in this regard.
Regarding the low number of prosumers in residential communities, Ružić says that, unfortunately, the prosumer status is not attractive enough for them as it doesn’t reduce their costs of accessing the system, and it requires the consent of residents who may have very different financial capabilities and interests. As a result, rooftops on multi-apartment buildings remain unused.
“A similar situation exists with rooftops of public buildings like schools, hospitals, kindergartens, and sports halls. According to research we conducted last year for the needs of EPS (Serbia’s Electric Power Industry), solar power plants with a capacity of about 1,100 megawatts could be installed on the roofs of these buildings. This represents about half of the total solar power capacity needed by EPS. On the other hand, this capacity is much greater than the energy needs of these buildings, meaning that applying the prosumer concept to these buildings would result in very little use of available rooftop space. Our conclusion and proposal to EPS management and relevant state bodies is to include the concept of renting rooftops on suitable public and multi-apartment buildings and constructing solar power plants that would be owned by EPS in their development strategy,” he suggests.
He emphasizes that both these institutions and residential communities would benefit from renting out their rooftops, while EPS would gain locations for its development needs, and the wider society would benefit from reducing the use of fertile land for solar power plants.
The flaws of the auction system for energy producers
Should Serbia maintain auctions as an incentive system for building solar and wind power plants in private ownership? And, in general, should the incentive system still exist?
Ružić argues that auctions as an incentive system were designed to strengthen the institution of the organized market, namely the electricity exchange. “This system is a praise for madness, as it puts the state in a position where it guarantees prices for large private producers who don’t even supply their energy to the state-owned company but sell it to traders on the exchange. True, last year, the Ministry introduced an additional criterion for auction winners: a portion of the energy that must be delivered to the guaranteed supplier. This is a useful change that was not present in previous auctions, but it’s essentially just ‘cosmetic surgery.’”
He criticizes the auction system as poorly designed, administratively complicated, and entirely discouraging private initiative from small producers. For the state, it is useless, and therefore, Ružić believes it should be abolished. With rising energy prices, the incentive system for large producers has become completely unnecessary. “Independent producers should be allowed to invest their own capital and build their power plants, as long as they take responsibility for selling their energy and balancing obligations,” he concludes.
