Overview of Energy Sector

in Balkan region

Damir Pešut

Energy institute Hrvoje Pozar

Croatia

Croatia

Bosnia and

HerzegovinaSerbia

Monte

negro

MacedoniaAlbania

Balkan region

Kosovo

Political – Energy Context of the Region

•In the strictest sense, the region consists of the countriesincluded into Energy Community, which did not reach thenecessary administrative and economic level required by EU dueto its objective and subjective reasons

•Countries are currently in the various EU membership joiningstatus

•Energy characteristics of the region are not closed within itsborders, but there is a need and interest in marketingcommunications with other regional markets

The Main Regional Energy Features and its

Links Toward the EU

•Energy demand is constantly increasing

•The SEE region is a great importer of the natural gas and oil,while in some countries and electricity too

•Some countries have possibilities to exceed their electricityproduction demand needs

•Natural gas and oil sources are basically out of the Europeanand SEE Region territory

•The EU is importer of all energy forms and it is interested tocrossover electricity and other energy forms from or throughthe SEE region countries

•Questions on security of energy supply are highly expressed

BASIC INDICATORS

• For the most part, taken advantage of their hydroelectric potential

• Possess substantial reserves of coal or lignite. Studies on the

construction of thermoelectric plants in the region have given

priority to those plants using cheap coal or lignite.

• It is generally thought that the countries in the region will try to maintain

a high level of security and self-sufficiency in the production of

electricity and the application of environmental protection criteria

• Natural gas might have a significant role in electricity production

• The nuclear option has been considered as a means to

reduce CO2 emissions

- RESOURCES AND EL. PRODUCTION

BASIC INDICATORS

- TOTAL PRIMARY ENERGY SUPPLYo In TPES the structure of energy consumption is somewhat more unfavorable as

compared to the EU-27. Coal has a 2,3 times higher share than in EU-27, while the consumption of natural gas is 50 percent lower than in the EU-27. The EU Member States make up for the lower share of coal with higher shares of crude oil, natural gas and nuclear energy.

Hydro

7%

Coal

40%

Crude Oil

25%

Petroleum

Products

10%

Gas

12%

Combust.Ren

ew. Waste

5%

Electricity

1%

EU-27

Crude Oil

37,3%

Gas

23,1%

Petroleum

Products

1,8%

Electricity

0,02%

Heat

0,2%

Combust.Ren

ew. Waste

4,7%

Nuclear

13,5%

Coal

17,2%

Geoth. Solar

etc.

0,7%

Hydro

1,4%

BASIC INDICATORS

- TOTAL FINAL ENERGY CONSUMPTIONo In TFEC energy shares are similar as to that of the EU-27, the shares of coal,

and biomas, almost double than in the EU-27. The share of gas in EU-27 isalmost double than in region. It can be assumed that the share of conventional biomass and coal will decrease as the standard of living increases, and that the share of consumption of the more favorable energy sources (natural gas or petroleum products) will in turn increase.

Coal

7,3%

Heat

5,6%

Petroleum

Products

44,5%Combust.Ren

ew. Waste

7,9%

Gas

12,7%

Electricity

22,0%

EU-27Coal

4,3%

Petroleum

Products

46,1%

Electricity

18,9%

Combust.Ren

ew. Waste

4,5%

Gas

22,7%

Heat

3,3%

BASIC INDICATORS

TPES

Albania

6%Kosovo

6%

Montenegro

3%

Macedonia

7%

Croatia

22%

Bosnia and

Herzegovina

14%

Serbia

42%

TFC

Kosovo

4,9%

Montenegro

2,8%

Croatia

27,7%

Serbia

39,9%

Albania

7,4%

Macedonia

6,6%

Bosnia and

Herzegovina

10,7%

The Main Electricity Features of the Region

•Continuous growth of electricity consumption

•Old age of existing power plants, lack of investments, low energy efficiency

•A huge technical and non technical losses in particular utilities

•Low rate on delivered electricity payment

•Non realistic low prices of the energy – social aspect of the prices

•Security of energy Supply problems, import increase and reduction

•Significant dependence on hydrology – 30% of production is hydro power

•There are plans but problems is implementation

•A huge cola reserves (Kosovo, Srbija, B&H)

•Unused hydro potential

•There are ongoing nuclear programs (Romania, Bulgaria) and underdevelopment

•Significant potential for wind, solar and biomass energy, apart of potential toincrease energy efficiency

ELECTRICITY PRODUCTION

o In the production of electricity, coal is the dominant energy source, accounting for 73 percent, followed by hydropower with a share of 14 percent. Though those countries with a predominant share of coal have large reserves of this energy resource, an increase in the use of natural gas can be expected in the future, due to ecological requirements and the need to reduce CO2 emissions.

Petroleum

Products

7,0%

Gas

6,4%

Hydro

13,8%

Coal

72,8%

EU-27 Petroleum

Products

3,7%

Combust.Re

new. Waste

4,0%

Gas

18,6%

Coal

36,9%

Hydro

3,4%

Nuclear

32,9%

0%

20%

40%

60%

80%

100%

Alb

an

ia (

2007)

Ko

so

vo

**

Maced

on

ia

Mo

nte

neg

ro

Cro

ati

a

Bo

sn

ia a

nd

Herz

eg

ovin

a

Serb

ia (

2007)

Ro

man

ia

Bu

lgari

a

Italy

Gre

ece

Au

str

ia

Hu

ng

ari

a

Slo

ven

ia

Other

Nuclear

Thermal

Hydro

Source: Energy Institute Hrvoje Požar

Generation Structure

thermal

hydro

-5

0

5

10

15

20

25

30

35

40

Albania Kosovo Macedonia Montenegro Croatia BIH Serbia

TW

h

Export-Import

Other

NPP

TPP

HPP

Total consumption*

Generation , Export –import

(2009)

Source: Energy Institute Hrvoje Požar

Electricity

gap

Region With the Electricity Gap

Source: Energy Institute Hrvoje Požar

400 kV Interconnections

Existing

Under construction

Planned

Electricity Transmission Network of the Region

Population

0

5 000

10 000

15 000

20 000

25 000

30 000

1950. 1955. 1960. 1965. 1970. 1975. 1980. 1985. 1990. 1995. 2000. 2005. 2010. 2015. 2020. 2025. 2030.

x1

03

Albanija Srbija i Crna Gora Hrvatska Bosna i Hercegovina Makedonija UKUPNO

GDP

GDP per capita

0

5000

10000

15000

20000

25000

30000

1960 1970 1980 1990 2000 2010 2020 2030 2040

US

D2000/c

ap

Austria

Estonia

France

Germany

Greece

Hungary

Ireland

Italy

Malta

Netherlands

Portugal

Russian Federation

Spain

United Kingdom

Albania

Macedonia

Monte Negro

Kosovo

Srbija

Hrvatska

Bosna i Hercegovina

Electricity demand and supplay

0

20

40

60

80

100

120

140

160

2015 2020 2025 2030

TW

h

Uvoz-Izvoz

NE

TE plin

TE lož ulje

TE ugljen

OIE

HE

Ukupna potrošnja

import-export

nuclear

natural gas

fuel oil

coal

Total consumption

Natural gas for electricity

production

0

1000

2000

3000

4000

5000

6000

7000

8000

2015 2020 2025 2030

mil

iju

na m

3

Potrošnja plina (s novim NE) Potrošnja plina (bez novih NE)without new nuclearwith new nuclear

The Main Features of the Region

Natural Gas

•Natural gas network is developed only in some countries and

regions

•Reduction of domestic production while increasing dependence

on import (mainly from Russia)

•Transit corridor of natural gas supply form Russia and Caspian

region toward EU countries

•Possibilities and needs for LNG terminals development,

storages and interconnection pipelines

Heat market

27 760

TOTAL – FINAL GAS CONSUMPTION

12 004

TOTAL - TOTAL GAS CONSUMPTION

21 053 9 000 - el. and heat, refinery and non-energy

in excess of 160 billion m3/year

TAP

IGI

PEOP

+ 18 Bcm

LNG

Italy:

56 billion m3

Croatia:

14 billion m3

Albania:

?-10 billion m3

80 billion m3

West Balkan Gas Ring Proposal

Source: The World Bank

Existing and new transmision

pipelines

existingplanned

South Stream

year of construction

The Main Energy Features of the Region

Crude Oil and Oil Products - Refineries

•Total installed capacity in the region equates to 203 milliontons in 36 refineries

•Loading factor of the total installed capacities is ~ 85% whilein Croatia, Serbia, Albany and Macedonia is significantlylower

•Modernization of the refineries in last decade has strivedtoward final product quality improvement, energy efficiencyenhancement and diesel production yield increase

Porto Marghera

4,0; 6,8Mantova

2,6; 8,4

Cremona

4,3; 7,5Sannazzaro

10,0; 7,2

Sarpom di

Trecate

9,0; 6,3

Livorno

4,2; 12,6

Falconara

3,9; 9,7

ISAB

15,7; 9,3

Rome

4,3; 7,7

Sarroch

14,8;8,2

Augusta

9,2; 11,5

Taranto

5,5; 10,2

Gela

4,9; 13,1

Milazzo

10,0; 5,5

Iplom

1,9; 3,5ITALIJA

BUGARSKA

RUMUNJSKA

HRVATSKA

AUSTRIJA

SLOVENIJA

SRBIJA

ALBANIJA

MAKEDONIJA

KOSOVOCRNA GORA

BOSNA I

HERCEGOVINA

GRČKA

MAĐARSKA

Rafinery name

Capcity; NCI

Sisak

4,0; 6,1Rijeka

5,0; 5,8 Bosanski Brod

4,2; -

Schwechat

9,6; 6,2

Duna

8,1; 10,6

Novi Sad

2,5; 2,5Pančevo

4,8; 4,9

Fier

0,5; 2,4

Ballsh

1,0; -

OKTA

2,5; 4,2

Petromidia

4,8; 10,7

Petrotel Lukoil

3,5; 9,9

Petrobrazi

4,5; 8,8

Vega

0,6; 1,9Arpechim

3,5; 8,3

Rafo

3,5; 9,5

Lukoil Burgas

7,5; 8,3

Thessaloniki

3,7; 6,7

Corinth

5,4; 11,9Elefsina

5,0; 1,5

Aspropyrgos

7,5; 10,6

Source: Energy Institute Hrvoje Požar

Refinery Capacities

Petroleum products flows

The Main Energy Features of the SEE

Region

Crude oil & oil products consumption•Total consumption of the oil products in SEE region is on the level of155 million of tones yearly, while most of them is consumed in Italy

•The future brings slightly decreasing or steady consumption incountries like Austria, Slovenia and Italy, while all other countriescould expect significant growth

•Extremely emerging markets regarding oil products consumptionare Bosnia & Herzegovina, Montenegro, Kosovo an Albany

•Consumption grater than 1000 kg/habitant in 2007 have achievedGreece, Austria, Italy, and Croatia, while consumption lower than500 kg/habitant is recorded in Bosnia and Herzegovina, Kosovo,Romania and Albany

•Biggest net exporter is Italy with around 16 millions of tone, whilebiggest importers are Austria with 5 and Slovenia with 2,7 millions oftones

•Threshold of net export equates to 15 millions of tones a year

Total consumption of petroleum products

(kg/inhabitant)

Total consumption of petroleum products

(1 000 t)

Total production of petroleum products (1

000 t)

The Main Regional Energy Features and its Links Toward the EU

•Energy demand is constantly increasing

•The SEE region is a great importer of the natural gas and oil,while in some countries and electricity too

•Some countries have possibilities to exceed their electricityproduction demand needs

•Natural gas and oil sources are basically out of the Europeanand SEE Region territory

•The EU is importer of all energy forms and it is interested tocrossover electricity and other energy forms from or throughthe SEE region countries

•Questions on security of energy supply are highly expressed

Security of Energy Supply

•The SEE region is in energy deficit and depends on energy

imports

•SEE countries are not enough connected especially when it

comes to natural gas utilities

•Security of energy supply firmly depends on forthcoming

electricity production capacities construction, transmission

networks connection and pursuing projects of oil and gas

supply in the region

What the Energy Community Can Do?

•Harmonisation of legislation

•Standardization of regulatory practice

•Cooperation and experience exchange on the energy efficiency

and RES projects

•Experiences and know how exchanges

What the Energy Community Can’t Do?

•EC can not take responsibilities of the SEE countries

•Energy community cannot resolve particular country problems

•Countries of the Energy Community cannot move on faster in

reform provision and institutional changes of energy sector

than EU

•Energy community cannot be investor

Possible Regional Cooperation Opportunities

•Transmission networks linkage (electricity, natural gas and oil) within region countries

•Harmonization of the legislative framework and institutional capacity building necessary for market development (Energy community goal)

•Development of the regional energy stock exchange

•Development of the regional security system

•Development of the regional stimulative energy investment environment

•Expert and scientific institutions linkage

View on Regional Cooperation in Energetics

•The SEE region has to be observed from its energy featurespoint of view, and not according to political needs andparticular interest

•Countries of the SEE regions have to take responsibilities formutual linkage and pursue transmission utilities development

•For each an every utility energy form type it is highlynecessary to develop appropriate plan and to take responsibilityfor their realization

•Perform linking according to the principle of an unknownbuyer, while the cost of connecting has to be calculated jointlyin the transmission price of the energy form for each country

•Develop mechanism for regulated transmission & transit tariffcalculations on real economic prices as a major premise ofconnecting transport networks

Thank you for your kind attention!