Skopje, 4 June 2022 (MIA) – No one can predict for certain what will happen this winter in terms of energy, says Marko Bislimoski, President of the Energy and Water Regulatory Commission. “The price was the problem before, and the termination of gas supply to Bulgaria and Poland could happen as well again, so it’s hard to predict. The second thing is not knowing whether or not our economy can withstand the current prices of natural gas. There is also the question of what will happen if you don’t have gas buyers. Right now gas prices on the market in the Netherlands is EUR 96.6 per megawatt hour. Multiply that by 10.5 and you get a price of around 1,000 euros, and that’s just the price of getting gas. There are also transport expenses and merchant expenses. The course of the dollar is also affecting it negatively, because it keeps going up and it’s almost become a 1:1 ratio with the euro. No one can predict what will happen,” Bislimoski tells MIA. He points out that the Vienna stock market’s projections for gas prices are EUR 103 per megawatt hour for June, 104 for July, August and September, 103 in the third quarter of the year, 105 for the fourth, 104 for the first quarter of 2023 and 88 for the second quarter. All of that has to be multiplied by 10.5 and other expenses need to be added to it. “Gas is still coming to the country, and the prices are what they are, and no one can predict what’ll happen if Russia declares us a hostile country and cuts off our gas supply. It’ll be extremely difficult then. If Bulgaria finishes the connector on time, we could get gas from Azerbaijan. However, Makpetrol has secured enough gas until the end of the year unless something dramatic happens,” Bislimoski says. The current gas prices “are making even previously unattractive gas hotspots seem attractive, even if they previously weren’t worth the investment”. The key question is whether or not the European economies can withstand the current gas prices, and how long they can do it for. Also, can the governments withstand them with constant subsidies? Bislimoski pinpoints the Energy Terminal in Alexandroupolis in Greece as a good option. Its construction, however, is meant to be done in about two years, when our gas interconnector with Greece will be done as well. The Energy Terminal is “a platform to carry gas, and the merchants can buy it from the terminal”. “It’s like digging out gas from your own country. Our advantage to the Alexandroupolis terminal is that we will have a guaranteed amount of gas. This country is paying EUR 10 million towards the construction, and Greece already has its own gas line to Alexandroupolis,” Bislimoski says, adding that we need to build an interconnector with Greece to connect to their gas operator, DESFA. “Even if it weren’t for the Energy Terminal, we would’ve made the interconnector with Greece to join the TAP gas pipeline which transports gas from Azerbaijan. We need TAP so that we don’t only depend on Russian gas, which is only available to us through the interconnector with Bulgaria at the moment. We are one of the few countries which completely depend on Russian gas at the moment. Making this interconnector would diversify our sources,” Bislimoski points out. At the moment, “not even Germany can fully replace Russian gas”. The connector that Bulgaria is building with Greece which will connect to the TAP gas pipeline is in its final stages, and it’s another option for North Macedonia. “The cross-border transport capacities are the most important factors in gas supply. We should use the available gas capacity and to make it available to other merchants if we get gas from Bulgaria from someplace else,” Bislimoski says He also notes the set up of solar powered panels on the rooftops of homes and industrial capacities as a good option. “We get 10-15 requests from companies a week asking to set up solar powered panels on their rooftops. With the amendments to the rulebook on renewable sources of energy brought by the Ministry of Economy, photovoltaics will be set up in homes and they can sell the excess energy to the universal supplier, and up until now, they could only leave the regulated market and go to the liberalized market,” Bislimoski says. The max capacity of our gas pipeline is 800 million normal m3 and it can go up to 1.2 billion. Over the past heating season, we hit the max spending capacity of around 425 million normal m3 of natural gas due to TE-TO working 24 hours a day. Professor Konstantin Dimitrov of the MACEF Macedonian Center for Energy Efficiency expects for the energy prices to go up, and recommends that the government secures a sufficient amount of coal so that REK Bitola’s three blocks can work without interruption. He also believes it’s necessary for legal changes to be made so that the citizens can set photovoltaics on their rooftops and sell the excess electricity. This winter, this country might struggle to acquire natural gas from Russia, and it’s recommended for the amount of gas needed for the industry and power plants to work for a year. “It depends on us how we will spend the winter, regardless of it being hot or cold. There are two elements that the government must provide: in the summer period, REK Bitola must accumulate coal that will be enough for the three units to work for three months. This means that all three units in REK Bitola must be ready, and in winter they must be in good condition. Coal must be provided at the landfill and dug regularly. If necessary, it can be bought from abroad, but at the beginning of the winter the landfills should have coal for three months and also to dig during the winter. In addition, TPP Negotino should be brought to regular working condition and fuel oil needed for work for a certain period should be procured, although it is significantly more expensive than domestic coal. Coal should also be available at the landfills of TPP Oslomej, regardless of whether it will be bought from Kosovo or brought from Bitola so that it can work in case of an outage of one of the units in REK Bitola. It is necessary to use water from the reservoirs minimally and to fill the artificial lakes before the winter season so that the energy can be balanced in the winter period. If we do all that, there is an opportunity to reduce the import of electricity and bring it to 10%, instead of 30 or 40% as usual," Dimitrov tells MIA. According to estimates, he adds, the electricity on the stock exchanges should fall from EUR 250 to 200 per megawatt hour by the end of the year, but, he emphasized, the price of electricity on the stock exchanges is always high in winter. He does not expect the country to have a problem with the supply of natural gas from Russia this winter and says that the only problem could be if we don’t have money. “The situation with electricity will affect the citizens more, while the situation with natural gas will be more related to the economy. Households can only be affected by the price of gas through heating systems in Skopje. TE-TO Skopje can work in the winter with acceptable prices if it works in a combined process - if it sells electricity at a high price, and to increase the price of heating by 20 to 30%, which will allow the heating system to stay afloat, says Dimitrov. The Skopje Sever plant has it worst right now, Dimitrov believes, because it has a small number of users and it works directly only through boilers which are too big for the small demand and they don’t work in an economically efficient way. “It depends on whether the state will help. We have been saying for years that the ESM works badly and that it uses outdated boilers which don’t turn right back on if they’re turned off. That is why they work at night, which is unacceptable and consumes energy unnecessarily. All other heating systems turn off the boilers at 10 pm and turn them on at 6 am, and ESM Energetika consumes energy all night, which is inadmissible, says Dimitrov. It's “necessary for Makpetrol to make agreements with the three major consumers – Makstil, Pivara and TIDZ and to sign a year’s worth of gas in advance and to pay for it. That’s how there will be an uninterrupted supply of gas, because Russia has economic interest in it,” Dimitrov says. He deems Macedonia’s participation in the construction of the Energy Terminal in Alexandroupolis as economically unviable. “Investing in the Energy Terminal in Alexandroupolis is not profitable at all. You pay only to have the right to buy gas from there. If its construction costs EUR 400 million, we participate with 10%, and we only get the right to buy expensive gas, because liquefied gas is much more expensive than natural gas that is transported through pipelines. Participation in the construction of the terminal is a political decision that has no economic logic. Gas supply diversification exists regardless. We have gas from Russia, if we pay for it, we will get it, we also have the opportunity to buy gas from Azerbaijan that goes through the TAP pipeline which is our second security for uninterrupted gas supply. For that, it will be necessary to build the interconnector with Greece, but it can also come through Bulgaria if their interconnector with Greece is ready soon,” emphasizes professor Konstantin Dimitrov from MACEF. The Ministry of Economy says that the Commission for monitoring the condition of the power supply is constantly tracking the supply situation. “The Commission is currently performing a risk assessment to determine whether the crisis will continue after June 9. During this period, the situation has significantly stabilized and the prospects indicate that we will have a stable summer. Regarding electricity, keeping in mind the data from the Commission for monitoring the situation on the electricity market due to the declared crisis situation, we report that from the reports on stock prices in the region prices by quarters tell us that next winter we will enter with average prices for a base-load of EUR 300 per megawatt hour (for basic energy), as well as prices of EUR 350 per megawatt hour for peak-load times,” according to the Ministry of Economy, adding that the operators of the heat distribution systems are making the projections for the heating season and that the calculations for the next season are in progress. It notes that the new regional gas platform for the EU was established at the meeting of the Minister of Energy in Sofia after Gazprom stopped supplying Bulgaria, which will include the countries of the Western Balkans. “The new regional platform within the comprehensive EU platform aims to address regional gas and electricity needs, infrastructure, prices and reduce dependence on Russian energy sources. The Sofia platform will coordinate the plans in the region, international procurement, stocks, connectivity and thus will contribute to energy security in the region,” according to the Ministry. They say that the main goal of these investments for regional connection of energy systems and diversification of energy sources is greater competitiveness of our economies and lower energy prices. “At the moment, the construction of the gas interconnector with Greece is in the final phase, and we are in negotiations with Bulgaria for the construction of another interconnector near Strumica. At the moment, we supply gas from only one gas pipeline to Bulgaria with gas from Gazprom. With the new interconnectors, we will reduce our gas dependence on Gazprom," the Ministry says. As they inform, the amendment of the rulebook on renewable energy sources is in the final phase. “This change will overcome the current barrier, and consumers supplied by the Universal Electricity Supplier will be able to be included in the concept of producers - consumers (prosumers), who will be able to transfer the excess power from photovoltaic plants to the grid,” they said. The government, at the proposal of the Ministry of Economy, they added, adopted the Program for promotion of renewable energy sources in households for 2022. “The funds of this program in the total amount of MKD 30 million will be used to reimburse part of the costs for the purchase and installation of photovoltaic panels for electricity production up to 4 kilowatts (with the proposed amendment to the Rulebook on renewable energy sources stipulates up to 6 kilowatts) for personal consumption for households, in a building which they own, up to 30%, but not more than MKD 62,000 per household for 2022,” the Ministry says. After the completion of the amendment to the Rulebook on renewable energy sources and its adoption, as announced, the Ministry of Economy will announce a public call for the implementation of the Program for promotion of renewable energy sources in households for 2022. In the coming period, the existing green loans will continue to support investment projects. Valentin Jankovski Translated by Dragana Knezhevikj