How energy transition will affect electricity prices in Serbia?

  • Ivan Nikolic Economics Institute, Belgrade
  • Sanja Filipović Ekonomski institut
Keywords: electricity price, costs, CO2 emission, power plants.

Abstract


The aim of this paper is to give an answer on question does it energy transition will have an effect on electricity prices in Serbia. As a part of the Energy Community, Serbia is oblidged to harmonize its energy regulation with the Europan Union. Even though electricity price in Serbia is the lowest in Europe, it has a high share in the household consumer basket. However, electricity price does not include the cost of CO2 emissions. The recent adoption of National Emission Reduction Plan implies Serbia's obligation to reduce emissions from large combustion plants by 2028. This commitment will entail significant investments and will influence the further development of the electricity sector. Accession of the Republic of Serbia to the EU and consequent implementation of EU ETS in the period 2023-2028, will have a significant impact on the EPS electricity cost production. At the moment, rough estimates show that this amount goes up to 2.5 euro cents per kWh produced by thermal power plants.

References

Berghmans, N., Chèze, E., Alberola, B., Chevallier, J. (2014) The CO2 emissions of the European power sector: economic drivers and the climate-energy policies' contribution. CDC Climat Research, Working Paper No. 2014–17, CDC Climat Research.
Cucurachi, S., Sala, S., Laurent, A., Heijungs, R. (2014) Building and characterizing regional and global emission inventories of toxic pollutants. Environ. Sci. Technol., 48, 5674-5682.
Eurostat database available at: https://ec.europa.eu/eurostat/data/database
Energy Community Secretariat (2019a) Analyses on system adequacy and capacity mechanisms in the Western Balkans.
Energy Community Secretariat (2019b) Rocking the boat: what is keeping the energy community’s coal sector afloat? Analysis of direct and selected hidden subsidies to coal electricity production in the Energy Community Contracting Parties.
EPS Action Plan for the Protection of Environment for the period 2016-2025. Available at: http://www.eps.rs/lat/Stranice/Sredina.aspx
European Commission (2001) Directive 2001/80/EC on the limitation of emissions of certain pollutants into the air from large combustion plants.
European Commission (2018) A clean planet for all – A European strategic long-term vision for a prosperous, modern, competitive and climate neutral economy, COM/2018/773 final. European Commission, Brussels 2018.
Florides, G. A., Christodoulides, P. (2009) Global warming and carbon dioxide through sciences. Environment International 35 (2009) 390–401.
Hoffmann, V., Trautmann, T., Schneider, M. (2008) A taxonomy for regulatory uncertainty - application to the European Emission Trading Scheme. Environmental science and policy 11, 712–722.
RERI (2020) available at https://www.reri.org.rs/en/not-great-not-terrible-review-of-the-secretariat-of-the-energy-community-annual-implementation-report-with-particular-focus-on-national-emission-reduction-plan/
Schmidt, T. S., Schneider M., Rogge, K. S., Schuetz, M. J. A., Hoffmann, V. H. (2012) The effects of climate policy on the rate and direction of innovation: A survey of the EU ETS and the electricity sector. Environmental Innovation and Societal Transitions, Volume 2, March 2012, 23-48.
Teixsido, J., Verde, S. F., Nicolli, F. (2019) The impact of the EU Emissions Trading System on low-carbon technological change: The empirical evidence. Ecological Economics, Volume 164, October 2019, 106347.
Venmans, F.M.J. (2016) The effect of allocation above emissions and price uncertainty on abatement investments under the EU ETS, Journal of Cleaner Production, 126 (2016), 595-606.
Verde, Stefano F. (2018) The Impact of the EU Emissions Trading System on Competitiveness and Carbon Leakage (November 2018). Robert Schuman Centre for Advanced Studies Research Paper No. RSCAS 2018/53. Available at SSRN: https://ssrn.com/abstract=3293767 or http://dx.doi.org/10.2139/ssrn.3293767.
Wagner, U., Muûls, M., Martin, R., Colmer, J. (2014) The Causal Effects of the European Union Emissions Trading Scheme: Evidence From French Manufacturing Plants, Mimeo.
Published
2020/04/02
Section
Original Scientific Paper