Analysis of Fiscal Council: EPS at a Turning Point, Requires Investments of EUR 5 to 6 Billion, Money to Be Secured by Electricity Price Increase

The president of the Fiscal Council, Pavle Petrovic, said yesterday that it had been obvious that there would be problems in Elektroprivreda Srbije (EPS) and that he had been warning of them since 2019, but that he still didn’t expect a collapse of the proportions that could be seen at the Thermal Power Plant Nikola Tesla (TENT) in Obrenovac.

He said that an analysis of the operations of EPS was done in 2019 and that recommendations for a reform and an increase in investments were made at the time.

On December 12, 2021, the production of electrical energy stopped at TENT, leaving around 130,000 citizens without power due to the low-quality, muddy coal that was used. The thermal power plant did not have in its stock sufficient quantities of mazut, which would boost the combustion of coal, either. Due to interventions in terms of the import of electricity, extraordinary costs were incurred, measuring in tens of millions of euros.

Petrovic said that the analysis in late 2019 had also shown that the quality of coal is “obviously” going down and that this should be taken into consideration when preparing the strategy of operations in line with the requirements of the EU in switching to non-fossil sources of electrical energy.

– Analyzing the operations in late 2019, we determined that the investments in EPS are insufficient and that they are at the level of amortization, in some cases even below that level – Petrovic said.

He added that the opening of new coal overburden layers had been late and that there was a “compression” of salaries, that is, that they were high on average, while being low for the professional, expert staff.

The Fiscal Council warned that EPS was at a turning point and that a decisive change was needed in the company’s operations, as well as an urgent launching of a new, large investment cycle of EUR 5-6 billion.

– Until the beginning of the 1990s, Serbia had a well set-up electrical energy system and EPS had a great surplus of production capacities relative to the country’s requirements at the time. That surplus has enabled it to respond to the growth of domestic consumption in the past thirty years, without major problems, even though in that period it has not invested enough money even to preserve the existing production capacities – the analysis said.

Fiskalni savet Republike Srbije

Elektroprivreda Srbije ad Beograd

EPS

Pavle Petrović

thermal power plants

coal

mazut

investments

pollution

environmental protection