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The opportunities of Serbia’s energy transition – interview with Minister of Mining and Energy, Zorana Mihajlovic

Serbia’s national energy target is to have by 2040 at least 40 per cent of the energy obtained from renewable energy sources (RES) and more than 50 per cent by 2050. In this regard, the Integrated National Energy and Climate Plan (NECP) until 2030, with a vision until 2050, along with the Energy Development Strategy for the period until 2040, with projections until 2050, are the most important documents to determine the path of the development of energy sector in the coming decades.

CEENERGYNEWS spoke with Deputy Prime Minister and Minister of Mining and Energy, Zorana Mihajlovic about the country’s NECP, the greatest opportunities of the energy transition in Serbia and the future coexistence of the mining industry and the green transition.

“The Integrated National Energy and Climate Plan will define the goals that will lead to greater participation of RES, the increase of energy efficiency, decarbonisation, including the reduction of greenhouse gas (GHG) emissions,” Minister Mihajlovic begins. “When we add to that the internal energy market, as well as the promotion of research, innovation and competitiveness, we come to the five basic dimensions of the Regulation on the governance of the Energy Union. The plan will also contain macroeconomic and energy projections and scenarios that assess the relevant impacts of such defined policies and proposed measures.”

She explains that both documents after finalisation will enter the procedure of public discussion, in which comments, suggestions and proposals will be given by all interested civil society organisations and all citizens, legal entities, universities and academies.

Regarding the most important aspects of the energy transition in Serbia, Minister Mihajlovic believes that energy matters do not only include production and consumption of electricity but also involve an economic and business image of a country since energy capacities are part of each country’s critical infrastructure without which it is impossible to plan and implement any economic activities.

“One-third of Serbia’s energy system currently relies on hydropower plants (HPPs) and two-thirds on low-quality coal (lignite which contains a high content of sulfur, moisture and ash), which is a great challenge for us in the energy transition,” she underlines. “The projections of the International Energy Agency indicate a 2.5-fold higher growth in electricity demand by 2050, the growth that will be met primarily from solar energy, wind energy, hydroelectric power plants, nuclear energy and natural gas. With the growth of energy efficiency and the constant fight against climate change, future energy will be structurally, developmentally and climatically completely different from today’s.”

In particular, she highlights the Ministry’s goals: sustainable and green development and the creation of conditions for the development of Serbia and a better quality of life for generations to come.

“We embrace changes because we want to be an active participant in the green energy revolution, which brings not only changes in energy infrastructure but also a completely new way of managing resources and a new growth model.”

“In addition to the promotion of rational use of energy, in order for Serbia to be independent in the electric power industry, it is necessary to build new electric power generation capacities that will use renewable energy sources,” she continues.

Minister Mihajlovic reveals that in the new investment plan, which includes planned and potential projects in the field of mining and energy, with a total value of more than 35 billion euros, RES make up more than half of the planned new energy capacities.

Zorana Mihajlovic
Minister of Mining and Energy, Zorana Mihajlovic. Courtesy of the Ministry.

“Among the priority projects is the construction of reversible hydropower plants, whose importance is reflected not only in increasing the total energy produced, but also in creating conditions for the integration of new capacities from RES with higher installed capacity,” she mentions. “The most important RHPP projects are Djerdap 3 (planned capacity 1,800 megawatts, MW) and Bistrica (628 MW). The construction of new capacities using renewable sources will take place in parallel with the development of the transmission and distribution electricity network so that the development of the energy sector is sustainable, efficient, economical and leads to a higher level of energy security and safety.”

Minister Mihajlovic has recently been in Bor, where she visited the Institute of Mining and Metallurgy and she tells CEENERGYNEWS that she doesn’t look at mining and the green transition as opposites, on the contrary.

“Every project in the field of mining in Serbia can be realised only if all the requirements concerning environmental protection are met,” she explains. “On the other hand, critical mineral resources such as lithium or copper are also key raw materials for the green energy transition. Mining has great development potential, considering that the value of confirmed mineral reserves in Serbia is more than 250 billion US dollars.”

“By adopting amendments to the Law on Mining and Geological Exploration, we have enabled the efficient and sustainable use of these resources, which implies the highest standards in environmental protection. I firmly believe that the future of Serbia is sustainable, green mining, which contributes to economic growth, but which necessarily implies the highest standards of environmental protection.”

Regarding the story of Rio Tinto, it has come to an end. But, what is the future for the use of critical mineral raw materials? Indeed, according to the Minister, Serbia is one of the few countries that is rich in lithium, copper and gold, which are critical mineral raw materials in the 21st century.

“Lithium is a mineral without which there is no green transition, electric vehicles and fight against climate change,” she underlines. “Lithium is very unevenly distributed in the world, few countries have it and Serbia is one of them and the estimated value of this mineral in the vicinity of Loznica is more than 56 billion US dollars.”

Thus, she reminds us that the Jadar project has been suspended at the request of citizens, primarily residents of the settlements around Loznica, but the dialogue is generally needed on how we will use our natural resources.

“The development of mining requires a strategic approach and we need to discuss everything with arguments and to make decisions based on studies and facts,” minister Mihajlovic says.

“[…] Regardless of what happens next, it is certain that mining in Serbia in the 21st century can develop and progress only with full compliance with all standards in the field of environmental protection and no project can be realised without that condition being met.”

As shown by the Jada” case, Minister Mihajlovic is putting a lot of emphasis on the fact that the citizens are always involved.

“The great response to the program launched by the Ministry of Mining and Energy last year in the field of energy efficiency, as well as the interest of citizens in installing solar panels, show that citizens are well aware of the fact that energy transition concerns them, that it gives them a chance to reduce their bills, or become prosumers of green energy, for example producing energy for their own needs,” she replies.

Among others, she mentions the National Program for Energy Rehabilitation of Residential Buildings, Family Houses and Households launched in 2021, which includes the allocation of subsidies to citizens up to 50 per cent in cooperation with local self-government units.

“[…] At the beginning of 2022, a new public call was announced for the energy rehabilitation program, with significantly larger funds, where we expect a much larger number of citizens to take part,” she says.

Finally, Serbia’s regulatory framework still needs to be aligned with the EU acquis, but progress has been made. Minister Mihajlovic recalls that in April 2021, a new legislative framework in the field of energy and mining was adopted, in order to provide conditions for energy independence and enable further harmonisation with the regulations of the Third Energy Package of EU energy legislation and certain provisions of the EU Clean Energy Package for all Europeans.

“[…] In the process of European integration, Serbia has made important steps and the harmonisation of the normative framework is just the beginning. We will make substantial progress when we take concrete steps in practice in all areas,” she concludes. “However, it is not just a question of international obligations or political decisions, but a question of our current and future security and independence in energy, economic and political terms. If we know that Serbia is currently among the leading countries in Europe in terms of economic growth, and the leader in the region in foreign direct investment, given the potential we have and the quality of the business environment, there is no reason for us not to become an energy leader in the region as well.”

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