Electricity shortages could force Serbia, Croatia to go nuclear

By bne IntelliNews April 24, 2008

Dejan Kozul in Belgrade -

For the first time since the Balkan wars in the 1990s, the Serbs and the Croats could be about to join forces on a large common project - the building of a nuclear power plant. But however willing the two sides may be to cooperate, the issue of nuclear power brings with it its own problems.

With Slovenia deciding to build the third block of the Krsko nuclear power plant without Croatia's help, Zagreb is looking at building a nuclear power plant on its own territory, judging from comments made by Economy Minister Damir Polancec in early March.

Analysts say the most likely site of the new nuclear power plant would be a place called Erdut, near the Croatian city of Osijek and close to the Serbian border. Situated by the river Danube, Erdut has been earmarked as a perfect place to build a nuclear plant for more than 30 years. Various feasibility studies were carried out during the 1970s and 1980s as the then-Yugoslavian state came close near to building a plant there. The government even formed a company to build the nuclear power plant. But everything changed after the explosion at the Chernobyl nuclear power plant in Ukraine in 1986; that disaster prompted the Yugoslavian government to sign a moratorium on building nuclear power plants, which is supposed to last until 2015. This moratorium is still applied in the former states of Yugoslavia states except Slovenia, where the Krsko plant was built after Chernobyl disaster.

Why is Croatia - and perhaps other former Yugoslav states - now so willing to overturn this moratorium?

Balkan brownouts

According to Zorana Mihajlovic Milanovic, a former energy advisor for the Serbian government, the region of Southeast Europe in general is facing electricity shortages, with Croatia's situation being particularly acute. "From 1980 until 2005, Croatia has raised its energy consumption more then 90% and every year it is raising it 3% more," she says.

Milanovic Mihajlovic estimates the region will need an extra 15,500 MW of new capacity in next five years. "Besides that, it is urgent to revitalize and reconstruct 11,500 MW of capacity that exists now. For all of that, more than €30bn is needed," she says.

But while Croatia is ready to shelve the moratorium, other problems arise. Firstly, the country would need permission from Serbia to build a power plant in Erdut. It is on Croatian soil, but only the Danube separates two countries and without Serbian permission it would be impossible to build. The problem with that is there remains enormous fear about nuclear power among Serbs since the Chernobyl disaster. In March, Serbian Vice Prime Minister Bozidar Djelic floated the possibility about ending the moratorium on building nuclear power plants, but public reaction was overwhelmingly negative. Indeed, on April 16, Serbia's outgoing government agreed to close the country's only nuclear reactor located at the Institute of the Nuclear Sciences in the Belgrade suburb of Vinca in a contract worth $8.6m agreed with the UN's top nuclear body, the International Atomic Energy Agency.

Professor Stanimir Putnik, from Belgrade's Geological Institute and a director of Yugoslavia's Electric Power Company during the 1980s, the predecessor of today's power monopoly EPS, remembers clearly the affect the Chernobyl disaster had on the Serb population. "Serbians are afraid of nuclear power plants. It will take us dozens of years to inform our citizens that nuclear energy is the cleanest and that those power plants have the longest lifetime."

Given this, it's is hard to see how Serbia could build a nuclear power plant in their own backyard. But Erdut in Croatia is close enough (just the Danube divides Croatia and Serbia) to be useful for Serbia, but far enough away to satisfy Serbian fears. It's very possible the Serbian government will give permission to Croatia to build the nuclear power plant and if that happens, Serbia could also take part in the building of the plant and taking a share of its electricity.

However, even if the two countries solve this problem, another major one remains. Erdut is situated in a rural area and most of the people in that part of Croatia are employed in the agricultural sector. Building a big nuclear plant would have a huge effect on the area's agriculture and, as such, protests over the plant have already been announced. In May, an environmental organisation plans to hold a meeting in Osijek, the city closest to Erdut, asking for the area and its agriculture to be protected.

However, critics of the plant will have to convince people in this poor area that not building the plant, and its attendant boost to the economy and employment, is in their interests. Croatia is also under huge pressure not only from its own industry but also the the EU, which it hopes to join, to sort out its looming power deficit. Knowing what kind of potential Erdut has, it's hard to believe that Croatia and Serbia won't grasp this opportunity. If they do - Putnik says that documentation from the 1980s has been saved and that the only thing that is needed is a decision to build it - it will be quite an accomplishment for two countries that less than 13 years ago were at war.

Send comments to The Editor

Related Articles

Macedonia kept on hold as Balkans edges towards EU goal

Clare Nuttall in Bucharest -   Macedonia’s EU accession progress remains stalled amid the country’s worst political crisis in 14 years, while most countries in the Southeast Europe region have ... more

Ruling SDP loses Croatia election but opposition HDZ fails to win it

Andrew MacDowall in Zagreb - Croatia’s conservative opposition has eked out a narrow victory in parliamentary elections on November 8, but having fallen well short of a majority after running a ... more

Croatia's HDZ takes lead in general election

bne IntelliNews -   Croatia’s opposition Patriotic Coalition, led by the Croatian Democrat Union (HDZ), looks to have won the general election, but the new government will be decided by the ... more

Register here to continue reading this article and 2 more for free or 12 months full access inc. Magazine and Weekly Newspaper for just $119/year.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

IntelliNews Pro subscribers click here

Thank you. Please complete your registration by confirming your email address. A confirmation email has been sent to the email address you provided.

Thank you for purchasing a bne IntelliNews subscription. We look forward to serving you as one of our paid subscribers. An email confirmation will be sent to the email address you have provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

IntelliNews Pro subscribers click here

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

Thank you. Please complete your registration by confirming your email address. The confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.