Skopje, 10 November 2023 (MIA) - North Macedonia is moderately prepared in the area of energy. Some progress was made in regional gas interconnectors and on renewable energy, with investments in solar power plants, however last year’s recommendations were not fully implemented, the European Commission (EC) notes in its 2023 Progress Report on North Macedonia. 

EC points out the energy crisis has demonstrated that North Macedonia needs to accelerate its transition towards green energy and reduce its dependence on gas and coal. 

The report recommends that in the coming year the country should ensure coherent energy policy, improve governance and institutional capacity in the energy sector and improve strategic investment programming and accelerate the transition towards green energy in accordance with the Green Agenda for the Western Balkans and the national energy strategy. In addition, the country should update and implement the national energy and climate plan-NECP), in line with the 2030 Energy Community climate and energy targets, adopt and implement the energy efficiency implementing legislation, complete the unbundling (certification) of the gas transmission systems operators and foster market development and regional market integration. 

The EC mentions that construction of a new 400kV electricity transmission interconnector line with Albania is
under way, an electricity day ahead market has been established while the establishment of the intra-day market is still pending. The share of RES in the gross final energy consumption for 2022 was 18.8%, whereas investments in hydropower should be compliant with the relevant environmental acquis. On gas interconnections, the government has finalised the initial design phase for the construction of an interconnection line with Greece and has drawn up feasibility studies for a line to Serbia and to Kosovo. Oil stocks correspond to at least 53 days of average daily consumption, and wholesale gas prices are fully deregulated. In terms of energy efficiency, the EC notes that the structure of the energy efficiency fund is being set up. Municipalities are encouraged to take steps to fully respect their obligations to develop and implement energy efficiency programmes.

"The need for a coherent and coordinated energy policy became even more evident with the energy crises. The government should increase its administrative capacity for dealing with energy policy, strategic planning and investments in the energy sector," reads the report. 

It underlines that the energy crises have demonstrated the country's dependence on coal and the need to accelerate the transition towards green energy. 

"Both Bitola and Oslomej thermal power plants were operating on coal from limited domestic resources and imports. The lack of availability of coal for the Bitola thermal power plant still needs to be urgently addressed, by investment in new renewable resources. Concerning the internal energy market, the national framework legislation is in line with the EU’s third energy package in gas and electricity, and the country's electricity and gas markets are open for competition. However, the transposition and implementation of the newly adopted electricity integration package is pending. The electricity transmission and distribution network operators have been unbundled, in accordance with the EU acquis. The gas transmission system operator has not yet been certified as required by the third energy package," says the EC. 

The Commission adds that Amendments to the Energy Law were adopted, transposing the Regulation on wholesale energy market integrity and transparency (REMIT) and the TEN-E regulations. 

"Optimising balancing services and investments in energy transmission and energy storage should be promoted to improve the integration of renewable energy sources into the grid. An upgrade of the grid system is necessary. The capacity cap per type of renewable energy technology has to be removed to enable the achievement of the 2025 renewable energy targets. An electronic system for issuing, transferring and cancelling guarantees of origin is not in place. Electricity prosumers are supported by the rulebook on renewables, and implementation should be enhanced. The procedures for the installation of photovoltaics on buildings is complicated and an obstacle to new investments. The Government adopted a Just Transition roadmap and a coordination mechanism for governing and monitoring, in June 2023," the report notes. 

The transition towards clean energy, it adds, should include measures mitigating the negative social and economic impacts of the planned phase-out of coal-fired power plants in the concerned regions.

"Third-party access to the natural gas infrastructure is in line with the EU acquis, but transparency needs to be improved. Works to build the gas transmission pipeline between Skopje, Tetovo, and Gostivar are progressing. The tendering process for awarding a publicprivate partnership for gas distribution system is ongoing," the report says. 

It points out that the Energy Regulatory Commission is functional and has continued to demonstrate
regulatory independence.

"The Commission for the Protection of Competition carried out an investigation concerning the sales of electricity to the universal supply company. The State Audit Office has conducted several audits in relation to the energy crises and the operators. The electricity transmission system operator must address the findings of the 2016 and 2023 audit reports and improve their operations," reads the report. 

In the area of hydrocarbons, the Law on mineral resources remains to be aligned with the Hydrocarbon-Licensing Directive.

"The Law on energy efficiency is aligned with the Directive on energy efficiency and the Directive on the energy performance of buildings. Following the latest amendments to the Energy Efficiency Directive, the update of the Law on energy efficiency is under way. The implementation of the current legislation has not improved. Energy performance certification requirements for buildings are not applied according to the legislation," says the EC. 

The European Commission notes that for nuclear energy, nuclear safety and radiation protection, North Macedonia has ratified the relevant international conventions and is a full member of the European Community Urgent Radiological Information Exchange system (ECURIE).

However, it adds that there is still no long-term and safe radioactive waste storage facility in place and the capacity of the Radiation Safety Directorate needs to be strengthened.

The report also notes that the adoption of implementing legislation remains a challenge due to the limited human and technical capacity at the Energy Department of the Ministry of Economy and the Energy Efficiency Agency. 

The EU energy policy covers energy supply, infrastructure, the internal energy market, consumers, renewable energy, energy efficiency, nuclear energy and nuclear safety, radiation protection and nuclear safeguards. 

Photo: MIA archive