Energy

ZORAN MANASIJEVIĆ, EPS GENERAL MANAGER ASSISTANT
Demagogy Destroys Electrical Power Industry
”Wisdom is not to cover the growth of unreasonable consumption with new power plants, but first to focus the consumption of electric power on what is justified; to become, as a society, energy aware, conscientious and efficient. New power plants are certainly necessary, but even dozen of them would not help us if we continue with such uncontrollable spending. We have increased the power of old power plants by 1,270 megawatts, which is equal to construction of new TENT B3 and almost entire ‘Kolubara B’. However, even that will not be sufficient if electric power should remain as impaired as it is now, and used again to buy social peace”

By: Zoran Plavšić

Over previous months, especially during the icy days of the past winter, ”Electric Power Industry of Serbia” showed all its power and vitality. Its experts and workers overcame everything successfully with great efforts. The driving efficiency of power plants was almost 97%, which hardly anyone in the world can boast about.
– Hydrological and metrological conditions, objectively, were quite unfavorable. The draught lasted too long. It started in May last year, so we were unable to produce cheap electricity in hydro plants – says Zoran Manasijević, EPS General Manager Assistant for Technical Systems for the National Review. – Nevertheless, if we look from another angle, what we from EPS have been saying for years, the price of electricity in Serbia is unrealistically low. The lowest in Europe. This is the main reason why this superior energy is used for heating. The fact was disputed by various experts. They claimed that the price would be lower if they were to decide on that. Certain ministers also joined them, saying that the price was not the problem, but it was our unrealism and inefficiency, that what was stated in the report of the World Bank was not true (where it is clearly said the same we have claimed: that the price of electricity is meaninglessly low, that it represents a social category and is used to artificially maintain the social peace in Serbia).
In this report by the World Bank, recalls Manasijević, the ”tradition of not paying electricity bills” is mentioned, which indicates a chronic bad relation towards electric power industry and energetics in general. The exhaustion of energy systems, unfortunately, has started transferring to gas as well, and it is a trend that does not exist in the European Union, nor in the IMF or the World Bank.
– We have declared electricity a heritage of civilization, and we have forgotten that it has to be produced; that there are costs and that they are the most complex technological processes that exist. We do not admit that we have been consuming that product irrationally, the product that we obtain at unrealistically low prices, and we even do not pay such a small charge. The data are irrefutable and disturbing. If we compare the index from 1990, being a benchmark for all those years before all those tragic events in Serbia and in the region, we find that the industrial production is presently 50% lower than before. In addition, the total electricity consumption increased for 44%, which indicates that it has been transferred to households. Undoubtedly, this manner of electricity utilization is inappropriate in the entire world, for all those who realize its real value. At the same time, electric power industry is the only branch that has seriously increased its production (for 20%).

NOT TO BE TOO LATE

Zoran Manasijević also reminds us that the power plants were 20 years younger in the 90’s. EPS experts have managed to account for the increasing and irrational consumption of electricity with hydro plants which are 37 years old on the average, and with power plants which are 33 years old on the average. It was not easy to keep such pace, but they managed, says Manasijević, to do what no one expected. New plants were not made because they should have restored what was already there. Moreover, in order to deicide on an investment, one must know how much capital is available. And, the electric power industry has never decided on the price of electricity.
– Despite all this, if we compare the production from 2001 and that which has been accomplished for the last ten years, as well as annual hourly utilization which was due from the beginning of power plants’ operations until 2001, it seems that we from EPS have produced the increase in the last decade as if we built a new power plant with the capacity greater than 1,270 megawatts. As if we built new TENT B3 and almost entire ”Kolubara B.” We extracted that much extra energy from old power plants. If we had money for new power plants, perhaps the old ones would not have been operating today, and they certainly would not have been operating this well.
Nevertheless, even with the new power extracted from old power plants, it is difficult to deal with the dramatically increasing consumption of electricity, as well as with substitution of other fuels with electricity. ”Electric Power Industry of Serbia” – says Manasijević – deals with precise calculations, exact and rational, and it is constantly being confronted with demagogical and irrational conceptions which are systematically boosted. And no one puts an end to it.
– We all have to start to think and to act in a different way. We constantly urged people to save. However, saving may not be the most adequate term. This is not about some temporary crisis, so we have to tighten our consumption a bit, to save some resources, and then to continue in the same manner. The correct term is the usage of electricity for normal proposes. We cannot ignore the following facts: numerous relevant international entities warn that we waste all types of energy, especially of the electrical one. We are positioned at the bottom of all such charts. Unlike us, Danmark is positioned at the top of the chart in terms of electricity price, as well as in terms of rational consumption. The objective price of electricity represents one of the routers to rational consumption. Someone has to gather strength, to undertake the political risk and say the following basics: that what is consumed must be paid. Everything must have its price, even electricity.
There is a saying: ”Pay now or you will pay later.” The same goes for electricity. Problems are just piling up now. Once they become so heavy that we will not be able to bear them, it will be too late.

PROBLEM OF PRICES AND BILLING

In early 2009, daily consumption of electricity in Serbia amounted approximately 157 million kilowatt-hours. There was almost no gas, and power plants operated irregularly. During last winter, we had the maximum consumption of gas (14 to 16 million cubic meters per day) and distant heating systems that operated well. Thirty of them were working around the clock and others in twenty-hour mode. However, electricity consumption was even greater for days, and even up to 163 million kilowatt-hours. Despite the fact that the consumption in industrial objects was reduced for more than 50% compared to the 90’s. How do they solve such problems in the European Union?
– They do not have such problems, because, they simply do not allow the abnormal parities of prices. We cannot solve that unless we correct the parities. Electricity cannot be a catalyst of social peace. We must create the environment in which people will be able to pay the full price. New power plants are certainly needed, but not even ten of them will help us if we continue to behave in such a wasteful manner. It is not wisdom to account for the increase of irrational consumption by building new power plants, but rather to limit it and direct it towards useful matters – says Zoran Manasijević.
The good link in ”Electric Power Industry of Serbia” is its maintenance system, says General Manager Assistant for Technical Systems. We have received public recognition of European and world’s institutions for it. They have also understood that old techno-park of EPS still achieves excellent results. Experts from this company pride themselves with it.
– Nevertheless, the key lays in the rationalization of electricity consumption. We have severely disturbed the relation between consumption in households and in industry. The heating consumption swallowed the entire production from previous years. And, we are producing six billion kilowatt-hours more than in 2001! The second key, which is also not in the hands of EPS, is the financial one: the percentage of electricity billing. The issue is whether we will be able to implement the new cycle of maintenance under such conditions, which could jeopardize the production. It is illusory to speak of a potential investment component under such conditions. That is why we initiated the search for a strategic partner years ago, which could represent an adequate solution.

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Personnel
– There is a problem of personnel. There are young and qualified experts, they are willing to work. But, as soon as foreigners spot them, when we perform certain repairs in cooperation with them, they offer better salary, for example 2,500 euros, to those who are good, and they leave then. Here, even Manging Directors are not paid that much, and young experts are aware that they will never get a salary of two or three thousand euros a month. Their salary here amounts 700, 800, and even 1,000 euros, but not more. That issue of salaries just crashes EPS. We can say that such salaries are enormously high in comparison to the rest salaries in Serbia. But the production of electricity is a process that is the same in other countries as well, and they pay their employees that much. Under such conditions, we are unable to preserve our young experts.

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Energy Security
The first big liberalization of energy market is contrary to the concept of energy safety.
– Not everything can be left to the market. Anyway, in order for the market to exist at first place, it is necessary to have surplus, and our entire region has been having deficit of electric power for quite some time. The state must often intervene even in much more benign situations, as well as in market disturbances. We see such situations when merchants and certain manufacturers, chasing profit, reach an esay agreement and increase the prices of certain products unrealistically high (sugar, milk, oil, meat…), And what will the government do if this happens to electric power one day? How will it intervene if it does not have resources to do so? There is no independence where we are import dependent. There is no independence of Serbia if we become fully energy dependent.

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Signals
– Electric power industry remains the golden resource of our country, but we must not forget that natural and physical laws do not obey political desires. In order to obtain a long-term stability, we need plans and measures that exceed the mandate of a government. Someone must start, and someone else will finish the building of a power plant. Unfortunately, we do have continuity only in poor approach to EPS. There is no systematic support from the state, the irrational consumption is encouraged, we even lost the Ministry of Energy, and we are worth more than 10 billion euros. This represents a signal to the people that ”Electric Power Industry of Serbia” is not taken good care of.