Unprecedented droughts are hampering hydropower production all over Europe and jeopardizing energy stability. Power plants are struggling to meet demand, particularly after the disruptions in pipeline gas deliveries related to Russia’s invasion of Ukraine, which worsened the energy crisis. Faced with energy shortages, which are set to become severe over the next several winters, the leaders of the Western Balkan countries promised today at an event in Belgrade to close ranks in getting the region through the energy transition.
They gathered at the Norway – Western Balkans Business Conference: Investment Opportunities in the Western Balkans, organized by the Nordic Business Alliance. The keynote speakers agreed that the energy sector should take center stage as the main driver for developing a stronger, more cohesive and more resilient and integrated region.
Norway’s Deputy Prime Minister and Special Envoy on Energy Andreas Eriksen said the efforts to mitigate climate change must continue regardless of the energy crisis and especially with the deployment of renewable energy. He stressed that his country offers cooperation and highlighted the need for developing power exchanges, adding that they are crucial for energy security and access to affordable energy as well as for climate goals.
The Western Balkan leaders spoke to representatives of Norwegian companies and acknowledged that the transformation implies a closely coordinated approach within the region, together with foreign investments and the latest technologies such as hydrogen and floating solar power plants.
Serbia’s energy sector must change substantively and structurally, President Aleksandar Vučić said and pointed out that citizens and companies, starting with state-owned enterprises, must alter their habits. Norway-based Rystad Energy has produced proposals for short, medium and long-term reforms for the country. “There are no easy decisions on our side, but we have to make them as soon as possible. Otherwise we are facing a disaster,” he stated.
For the next ten to 20 years, the consulting firm estimated necessary investments in the energy sector at between EUR 16 billion and EUR 33 billion, Vučić revealed. He emphasized renewables, the electricity grid and interconnections as the most important segment.
On the bright side, the renewables potential in Serbia is vast, Partner at Rystad Energy Tim Bjerkelund asserted. Solar and wind resources exceed what the country can consume, he said.
“Where technology moves fast, regulation needs to keep up. Not only because you want to be in control of the development of your most vital resource, but also because you want to maximize its value. That takes a new approach. We’re no longer done in terms of regulation. Adaptability is the name of the game,” Bjerkelund underscored.
He explained that the system must be made flexible and able to cope with the unknowns, keeping options open to leverage new technologies.
Emergy, one of the Norwegian companies that presented their operations in the region, has developed more than 400 MW in wind projects around the world. Executive Vice President in charge of electricity offtake Magnus Johansen said it is focused on expansion in Southeast Europe.
The firm has partnered with WV-International in Serbia on a 800 MW portfolio, dominated by wind power, compared to 2 GW overall. “We really did the right move,” Johansen said and explained the projects are mature with regard to permitting and grid development. Emergy would consider adding storage capacities if it is necessary, he added.
The heads of government of other Western Balkan countries expressed support for closer integration in the energy sphere. With the exception of Bosnia and Herzegovina, public finances and fiscal stability are under extreme pressure from the high prices of imported electricity. They also fuel inflation and weaken the scope for capital investments.
“The only viable defense is a common defense,” Albania’s Prime Minister Edi Rama said. He suggested that joint projects and joint financing could bring improvements and enable stronger partnerships with private companies.
“I strongly believe that a regional market of energy is our only safe future, not only economically but also politically. This would prevent the region from going back to difficult times”, Rama said.
The only way for the Western Balkans through the energy transition is to go together, Prime Minister of North Macedonia Dimitar Kovačevski stated.
“We are all coming from the consolidated energy system of Yugoslavia. So when Yugoslavia broke up, the system was deconsolidated… For me it’s utopism if somebody thinks that a country with a level of GDP which we have, with a level of fiscal space which we have, in terms of the possibility to engage additional financing, can do the energy transition by itself. So, can start, can try, will do nothing. Building 40 MW of solar, 50 MW of wind, 60 MW of again solar somewhere – this does not solve the problem. This only solves the problem of window dressing, that we can talk something nice in conferences,” Kovačevski said.
Outgoing Prime Minister of Montenegro Dritan Abazović said his country is focusing on solar power. The country lacks electricity in the summer, which is unbelievable given that most locations have more than 250 sunny days per year, he noted.
One of the panel discussions brought together another group of top decision makers in the energy sector in the Western Balkans.