Energy Community Annual Implementation Report for 2019

As the end of the year approaches, it is time to recapitulate what we have achieved, where we have not been so successful, and accordingly, to make a plan for next year. The Energy Community Implementation Annual Report, released in mid-November, gives us the opportunity to find answers to all of these energy-related questions. One of the main conclusions is that we do not have time to waste if we want to follow the European Union (EU) in adopting the 2030 targets for renewable energy, energy efficiency and reducing greenhouse gas emissions.

Energy and Environmental Community

As the end of the year approaches, it is time to recapitulate what we have achieved, where we have not been so successful, and accordingly, to make a plan for next year. The Energy Community Annual Implementation Report (hereinafter: EnZ Report), released in mid-November, gives us the opportunity to find answers to all these questions in the energy field. One of the main conclusions is that we do not have time to waste if we want to follow the EU in adopting the 2030 targets for renewable energy, energy efficiency and reducing greenhouse gas emissions. This reminds us on the conclusion of our interview with Peter Vaida, Senior Environmental Expert at the Energy Community Secretariat, that the Energy Community has evolved from an Energy Community to an Energy and Environmental Community in recent years, and that the growing focus is precisely on green themes that ensure a healthy environment for citizens. 

Climate change: Can climate and energy policies go hand in hand?

When it comes to climate policy, it is noticeable that the content of this year's EnZ Report is largely reminiscent of last year's. The Climate Change Law, whose draft public debate was held in April last year, has not yet found its way to the National Assembly. An overview of the draft Climate Change Law can be found in this article. The draft Climate Change Strategy and Action Plan has also been finalized, so that, according to the new timeframe set out in the EnZ Report, both documents, which should lay the foundations for climate policy in Serbia, are expected to be adopted by the end of this year (Law) and early next year (Strategy). 

The key challenge is the fact that Serbia has not yet begun to develop a National Energy and Climate Plan (NECP). The Energy Community has adopted a Recommendation and Guidelines on the drafting of National Energy and Climate Plans for the signatories of the Energy Community Treaty, with a view to better coordinating climate and energy policies and aligning the objectives with the European Union's 2030 targets. The work on this document has practically not even begun in Serbia, so the first step should be the formation of a working group to draft this document.

In addition to the fact that the development of a document that should "reconcile" climate and energy ambitions and plans has not even begun, national plans for the development of the Serbian energy sector are further discouraging. Specifically, the planned expansion of the capacity of coal-based thermal power plants, envisaged in the Energy Development Strategy by 2025 and the Strategy Implementation Program by 2023, does not respond to the challenges of climate change. Without transformation of Serbia's energy sector, there is no climate policy, since 80% of greenhouse gas emissions come from this sector. You can read more about it in this article.

What is a new cause for concern is the fact that, in a year when some countries in the region - such as Greece and Hungary - have announced that they are giving up coal as an energy resource by the end of this decade, a year when institutions such as the European Investment Bank and European Bank for Reconstruction and Development, announcing to give up fossil fuel financing, Electric Power Industry of Serbia announces a new return to its old and realization of the project of construction of Kolubara B thermal power plant, presenting it as a project that will bring energy stability to Serbia.

Energy efficiency - Waiting for a new Action Plan

In the area of ​​energy efficiency, the adoption of a new, fourth Energy Efficiency Action Plan is considered as one of the most important steps for Serbia. The adoption of this document will also be a good opportunity to evaluate what has been done in the previous period, as Serbia, through the adoption of the First Action Plan, anticipated a 9% reduction in energy consumption in 2018, compared to the reference consumption in 2008. The answer to the question what have been done  - will only be found in a new Action Plan, since we cannot find information on this in the EnZ Report or in the Annual Report under the Energy Efficiency Directive, which Serbia submits to the Energy Community.

In this area, full compliance with two key directives - the Energy Efficiency Directive and the Building Energy Performance Directive - is equally important. Serbia expects to amend the Energy Efficiency Law - either by adopting amendments or by adopting a new law. What is striking is that the formulations in this year's EnZ Report, on the necessary alignment with these two key Directives, are virtually identical to the Report from the previous year. One of the key instruments in the field of energy efficiency is the energy management system, introduced by the Law on Energy Efficiency. The situation and challenges in the field of energy management in cities and municipalities in Serbia were addressed through a survey conducted during the previous year and this year, which you can read more about here.

Amendments to legislation necessary to harmonize the acquis in the field of renewable sources

Even in the field of renewable energy, no progress has been made since the last EnZ Report. With the new report, it is certain that Serbia will not reach its 2020 target for renewables, even though as many as 246 MW of wind farms are connected in 2018. Also, there is no indication of the introduction of auctions that would replace the existing feed-in tariffs. In addition to the fact that the Law on Energy [1] does not leave the possibility of own production that would encourage and enable the so-called prosumers (consumer + consumer = prosumer), electricity or gas producers from renewable energy sources are not guaranteed access to the grid.

Will the Large Combustion Plants Directive endanger coal power plants?

The EnZ report bring the most novelties in the assessment of the implementation of the Energy Community environmental acquis, bearing in mind that this is the first year when the Large Combustion Plants Directive (LCPD) is reported [2]. It is important to note that this Directive has been part of the acquis communautaire from the date of signature of the Energy Community Treaty in 2005, until its entry into force on 1 January 2018. Despite the Energy Community's insistence on last year's report, Serbia has not adopted a National Emission Reduciton Plan (NERP), which implies that each installation that falls under the scope of this Directive must individually align its emission limit values ​​with the Directive. Data on total emissions from large combustion plants in 2018 indicate that this will be a major challenge, which in the case of Serbia is of particular concern when it comes to sulfur dioxide emissions.

What is it and why is this Directive so important? What are the mechanisms for reaching the objectives of the Directive? What is NERP? You can find the answers in a summary of the most important decisions of the 11th Session of the Ministerial Council of the Energy Community.

As for the plants that opted for the opt-out version, which are four plants from Serbia, the report showed how long more we can count on them. Specifically, opt-out is the ability to operate a total of 20,000 operating hours between January 1, 2018 and December 31, 2023. It is up to the plants to decide whether they will be operating at full capacity during this period, reaching 20,000 working hours after 2 to 3 years, or adjusting the working hours so that the said 20,000 hours will expire on December 31, 2023 at the latest. In the first case after exhaustion of allowed working hours or otherwise when the deadline expires, plants have the ability to align technology with standards or to cease operations. Below is a spreadsheet from the Energy Community Report, which shows the expected time when the opt-out expire, remaining hours and hours spent in 2018 for all four plants.

Source: Energy Community Annual Implementation Report 2019, Energy Community Secretariat.

If they continue to operate the way they currently do, blocks 3, 4 and 5 of Kolubara A3 thermal power plant can work until 2021, block 1 of Kolubara A3 thermal power plant and Morava TPP by 2022, and Kolubara A5 opt-out thermal power plants expire in 2023. With this report, the energy community has sent a strong message to states that the clock is leaking for coal-fired power plants and that it is essential to take a long-term approach to sustainable energy policy planning.

Cases against Serbia

The legal mechanism available to the Energy Community in case the provisions of the Energy Community Treaty are not respected is to initiate cases to the Council of Ministers. At the moment, as far as Serbia is concerned, 5 cases have been opened, one of which is in the environmental field (ECS-4 / 13S), one in the field of electricity (ECS-3 / 08S) and three related to the gas field (ECS 10/17, ECS-13/17 and ECS-9/13S).

The Secretariat of the Energy Community has requested that at this year's meeting scheduled for December 13 in Moldova, the Ministerial Council decide on the case in the field of electricity (ECS-3 / 08S), as well as on two cases in the field of gas (ECS10/17) and (ECS-9/13S) relating to unbundling in the gas sector and to certification by Yugorosgas Transport as an independent operator. Last year we wrote about the challenges in the field of gas, in the context of Serbia's accession to the European Union and membership of the Energy Community.

Already seen...

The report also reiterates the allegations in the European Commission Report concerning the delay in transposing the Law on Impact Assessment in accordance with Directive 2014/52 / EU, reiterates its appeal to the competent institutions to stop inadequate planning and impact assessment in the case of small hydropower plants in protected areas, and reiterates that there is a discrepancy with the Council of Ministers decision regarding the sulfur presence in fuels. But it seems as, on the other hand, there is no one to hear or do not want to hear the messages coming from Vienna and Brussels.

You can read more about this year's European Commission Report in our chapter Chapter 15: Trotting towards cleaner energy.

How much will passivity in 2019 cost us?

As you can see from the Report itself, there is a lot of work ahead of us in 2020. One of the most important messages from Vienna is that 2019 will not be remembered as a year in which we tackle the challenges that are piling up, we have not even started, while next year will show how much it will actually cost us to recoup the time we lost.

Varvara Aleksic, Belgrade Open School

Ognjan Pantic, Belgrade Open School

 Photo source: Belgrade Open School

[1] Energy Law ("Sl. glasnik RS", br. 145/2014 i 95/2018 - dr. zakon)

[2] Directive no. 2001/80 / EC of the European Parliament and of the Council of 23 October 2001 on the limitation of emissions of certain pollutants from large combustion plants into the air (https://www.energy-community.org/dam/jcr:5e192ac5-b370-48b3-9eaa-d5bf3f93349f/Directive_2001_80_ENV.pdf