As the world moves towards decarbonisation and green energy,
Lignite, which is used for more than a half of the country’s power generation, has been responsible for huge air pollution in the country in the last decade, particularly in winter. With the new energy strategy until 2040 the Balkan country, with a population of 2mn, is now aiming at phasing out coal, to focus on renewable energy sources and gasification projects.
According to a
At the end of 2019, the government led by Social Democrat Prime Minister
Then this April, “the government adopted the revised national contribution to the Paris Agreement, which states that by 2030 greenhouse gas emissions from the energy sector should be reduced by 66%,” the government said in a statement emailed to bne IntelliNews.
There are several renewables projects underway in
Zaev also said that in the field of energy transition and procedures for closing coal-fired power plants,
In the second strand of the transition away from coal, in March the country signed three documents with
Energy generation after REK Bitola
The country’s biggest thermal power plant complex REK Bitola, which uses coal from the adjacent mine, has been the most important energy producer in the country for the last 40 years. However, it already reached the final years of its life, while the available quantities of lignite in the mines are decreasing gradually. Additionally, the quality of lignite is getting worse.
“Given the lifespan of REK Bitola, as well as reduced exploitation opportunities of lignite, it is clear that we can expect the closure of REK Bitola’s units, one by one by around 2030. The closure of the first block can be expected in 2025,” the government said.
The government and the state-run power producer ESM are already taking concrete steps to find a solution to replace the electricity production from REK Bitola thermal power plant.
At the moment, technical documentation is being drafted for the construction of several photovoltaic power plants at the site of the old mine in REK Bitola, with an installed capacity of 200 MW to 300 MW, the government told bne IntelliNews.
Construction of a gas-fuelled power plant with capacity of 200 MW to 450 MW is also planned, taking into account that the construction of the gas network in the country is advancing at an accelerated pace. The planned investment is expected to be implemented in the next two to five years.
“We should be aware that the energy transition and decarbonisation of the Macedonian economy is a process with financial implications. The implementation of the strategy’s programme, which is in the final phase of preparation, envisages investments in the energy sector of approximately €4.7bn in the first five years,” the government said.
The projects will be implemented through various models, including budget funding, private investment, concessions and public-private partnerships, as well as through grants and donations by international financial institutions. Government investments would range from 10% to 15%.
As in other parts of the Central and
“The process of energy transition in
The project will last one year and should provide a complete overview and plan on how to make a fair transition in the affected regions, the costs of the transition, as well as sources of funding.
Preparation of strategic and legal documents has been supported by the
Renewable energy sources
One of the biggest projects contracted lately is that of two photovoltaic plants at the former TPP Oslomej coal mine. In April,
The project, the first solar park to be built by ESM, is estimated to cost €80mn. Located in the western part of the country, the park is expected to supply 20,000 families with electricity.
The public-private partnership (PPP) agreement will be granted for a period of 35 years, after which the private partner will be obliged to transfer the ownership rights of the photovoltaic (PV) power plants to ESM.
This is the second significant investment by Bulgaria’s Solarpro in
In March,
This will be the second wind park developed in
ESM is currently implementing the second stage of the Bogdanci wind park by adding 13.2 MW capacity with installation of four new windmills, a project worth €21mn.
The first stage of the Bogdanci wind park, worth €55mn, was completed in 2014 with the installation of 16 wind turbines and capacity of 36.8 MW. It launched operations in summer 2015.
The government announced in February that
The projects do not stop here. Zaev recently announced that Germany’s WPD plans to develop a major wind park project in the country’s northeast with installed capacity of 400MW, a potential investment of €500mn. The project has not yet been approved.
According to the
With this growth,
The energy transition plan envisages an increase of renewable sources to 43% of total energy production until 2040, and a 55% reduction of greenhouse gas emissions compared to the 1990 level.
There are a total of 276 power plants in
According to the energy strategy, energy produced from renewable energy sources (RES) is mostly used for the heating and cooling sector, while the largest greenhouse gas emission savings are in the electricity sector. The county has a technical potential of 7.3 GW for the use of RES for electricity, especially from solar and wind power sources.
The positive scenario foresees an increased use of RES will lead to a reduction of North Macedonia’s dependence on energy imports, a less negative impact on the environment and greater participation of local population in the energy sector. This would also have a positive impact on the health of the population as a result of a reduction of air pollution and proper waste management.
Gas projects in
The gas projects in
Zaev said recently that the country will invest around €400mn in the LNG terminal to gain a 10% share in this project and €370mn in the 800-MW Alexandroupolis gas-fired plant equal to a 25% participation.
The floating LNG terminal approximately 17.6km southwest of Alexandroupoli,
Currently
The projects are of geostrategic interest, as they will make
Three memorandums of understanding were signed by North Macedonia’s National Energy Resources (NER) and ESM with Greek companies
The gas interconnector with
The interconnector with
Revision of energy strategy sets more ambitious goals
The revised Strategy for
The aim of the strategy is to reduce dependence on imports and increase energy security.
In comparison, the EU’s energy strategy sets more ambitious goals — at least 27% of of total energy generation to be from RES by 2030, which in
These include reducing greenhouse gas emissions, improving energy efficiency and increasing the share of renewables.
North Macedonia’s target for renewable energy sources for 2020 was 23% of gross final energy consumption, according to the strategy.
The energy sector accounts for about 70% of total greenhouse gas emissions. Greenhouse gas emissions from the energy sector include emissions from fuel combustion in energy transformations, transport, industrial, residential, commercial and agricultural subsectors, as well as fugitive emissions (from mines). Other contributing sectors include waste, industrial processes and agriculture.
Forestry is the main purifier of CO2 emissions. Out of the country’s total area of about 2.5mn hectares, forests and forest land cover about 1.3mn hectares. Due to intensified forest fires, significant fluctuations in net emissions are evident.
North Macedonia’s greenhouse gas emissions per capita are approximately 30% lower compared to the EU. Most of the SOx and NOx emissions in the energy sector came from REK Bitola.
Putting a price on carbon
Coal-fired and hydropower plants are the main power generation facilities in
State-run power producer ESM accounts for approximately 70% of the total installed capacity. ESM owns two large coal-fired power plants, REK Bitola and Oslomej. Suvodol and Brod Gneotino are the largest mines, responsible for 98% of the total coal produced for electricity production.
Electricity produced by coal-fired power plants accounts for approximately 60% of the total domestic production.
Average electricity prices in
Costs for natural gas in
ESM recently informed the
For ESM’s internal needs, the price of electricity produced by thermal power plants will be taken into account with an additional calculated price of carbon, which will show what the real price of electricity produced by coal is and how the price will look in future following the imposition of payment of the so-called carbon credits per tonne of CO2 emitted into the atmosphere by manufacturers.
The purpose of the internal calculation of the carbon price (which will not be included in the sale price), is for the company to have a realistic picture of the profitability of certain investments in new facilities or reconstructions of existing production plants, as well as to be an indicator in which direction the production portfolio should be developed based on the calculated prices.
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