Electricity, gas markets to be liberalized

Electricity, gas markets to be liberalized

Despite the market liberalization, small electricity consumers will retain the right to guaranteed supplies from the Serbian electric power company EPS at regulated prices set by the Energy Agency of the Republic of Serbia (AERS).

EPS Director Aleksandar Obradovic has said that he does not expect rival companies to win over household consumers as the EPS electricity price is 30 percent lower than the market price in the region.

The liberalization of the Serbian electricity market began in 2012 for high-voltage consumers and in 2013 for medium-voltage consumers.

In the first two stages of the liberalization of the electricity market, around 97 percent of consumers chose to remain with the EPS, with the results of the third stage to depend on the activities of rival companies.

Aside from the liberalization of the electricity market, the liberalization of the gas market for large consumers is also set to start from 2015.

Households and small gas consumers will still have the right to guaranteed supplies, to be provided pursuant to existing contracts.

From 2016, they, too, will be able to choose their suppliers on an open market.

Natural gas distributors in Serbia will also lose the right to guaranteed supplies from January 2015.

Serbia currently has around 260,000 natural gas consumers, 250,000 of whom are households and small consumers.

Under the energy law, small consumers are defined as legal persons and entrepreneurs whose facilities are connected to the distribution system and who have less than 50 employees and profits below EUR 10 million.

The new energy law, which took effect on December 29, retains protection for underprivileged energy consumers, for whom RSD 700,000 million worth of subsidies will be set aside next year as well, with all of them to receive a monthly 120-240 kWh of electricity free of charge.

In addition, the monthly gas bills for January, February, March, October, November and December will be reduced by 40-75 cubic metres of gas, depending on the number of household members.

The new, reformist energy law greatly improves the investment climate in the energy sector.

Under the new energy law, all measures stipulated in the EU Third Energy Package for the gas and electric power sectors and renewables will take full effect in Serbia from January 1, 2015, making it the first country in the region to implement all those provisions.