Serbian energy producer EPS bans sale of coal to households, industry

By bne IntelliNews September 19, 2014

Serb energy producer EPS has banned the sale of coal to households and the industry until further notice in an attempt to secure adequate resources for the country's thermal power plants for the coming winter season in the aftermath of the mid-May floods, daily Blic reported.

State-owned EPS said in a statement to Blic it has recommended that the country's largest mining complex Kolubara and the Kostolac thermal power and mining complex suspend the delivery of all kind of coal to wholesale and retail clients. The move aims to allot as much coal as possible to the depots of Serbia's thermal plants, helping provide for their stable heating services to households and businesses  in the winter season.

All four mines of the Kolubara complex were turned into lakes by the mid-May floods that hit the Balkans. Typically, Kolubara mines some 30 million tonnes of coal a year, providing 75% of the lignite in the country. 

The complex is crucial for the country’s energy system since it provides coal to fuel the Kolubara, Nikola Tesla and Morava thermal power plants, which produce 52% of the total electricity. Yet, since the recovery of the mines is still under way, Serbia will have to opt for coal imports and higher electricity imports in the coming months in order to avoid a power crisis.

Serbia's Chamber of Commerce estimated earlier this month that the country will have to import around 3.0 million tonnes of coal and 1.0 billion kWh of electricity to prepare for the winter. It might also have to import certain amount of mazut (low quality fuel oil). The Chamber's energy and mining department pointed out that in November alone EPS will have to import 1.3 million tonnes of coal for the Serbian power plants and the needed 1.0 billion kWh of electricity for this year.

Ban seen lifting coal prices by at least 10%, pensioners threaten with strikes

Kolubara officials told Blic that each kilogramme of coal is now crucial for the power production. They explain that the complex is left with a 30% shortage in output following the floods, including the 3% which usually go for deliveries to households.

However, for many Serbs the domestic coal is the cheapest means of heating during the winter. In many places across the country, pensioners, trade unions and disabled people already paid in advance for the quantities of coal they will need in the coming winter season. Many pensioners now threaten with hunger strikes since they can hardly afford buying the more expensive imported coal.

From the Belgrade-based coal depot Iverak told Blic it is now impossible to find domestic coal, which costs up to RSD 6,000 (EUR 50.7) per tonnes. They have no charcoal left and only offer lignite at RSD 14,000 per tonne and Russian coal at RSD 18,000 per tonne. The depot representatives expect further shortages, saying the prices would jump by at least 10%.

The report also says that coal imports from Bosnia are increasing at prices of RSD 10,000-15,000 per tonne.

The news comes as the government just announced plans to cut public sector wages and pensions higher than RSD 25,0000 (EUR 211) by at least 10% as of October as the state fights to constrain the economic recession that hit Serbia this year as a result of high public spending and the mid-May devastating floods.

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