State of compliance
Amendments to the Energy Law adopted in April 2021 continued energy market reforms in Serbia.
The unbundling of the distribution system operator from the vertically integrated company Elektroprivreda Srbije (EPS) started with the transfer of EPS’ shares in the distribution company EPS Distribucija to the Republic of Serbia. In January 2021, the Government established the new distribution company Elektrodistribucija Srbije. The company was licenced by the regulator on 1 April 2021. According to the amendments to the Law, a compliance programme should have been adopted by 30 August 2021, along with the appointment of a compliance officer. This has not happened.
The decision-making rights for the transmission system operator Elektromreza Srbije (EMS), and for public enterprises responsible for production and supply of electricity and gas remain with the same public body, the Government. Legislative changes are necessary to achieve the ownership unbundling of EMS.
The 2021 amendments to the Energy Law require the transposition of the Connection Network Codes. Accordingly, network codes were adapted by the system operators and approved by the regulator on 26 August 2021. The approved codes should be submitted by the system operators to the Ministry, and then by the Ministry to the Government for adoption.
The transmission system operator is publishing data on the ENTSO- E Platform in line with the Transparency Regulation, except for the generation data, whose publication was enabled by the amendments to the Energy Law and will take place following adaptations of the existing transparency rules and software. Draft rules transposing the REMIT Regulation are currently in public consultation.
The volume of electricity traded in the day-ahead market operated by the power exchange SEEPEX reached a level of 10% of total electricity supplied to final customers in 2020. The legal basis for the coupling of the day-ahead market was introduced by the 2021 amendments to the Energy Law. In particular, the Energy Law defines a procedure and requirements for the designation of the nominated electricity market operator, the responsibilities with regard to the coupling of the day-ahead and intraday markets and the principles of cost sharing. Detailed conditions, principles and responsibilities with regard to market coupling are to be further defined by a governmental act. An intraday market is not yet in place, and no deadline exists.
The dominance of the universal supplier and low, regulated prices continue to impede the development of competition in the retail market and supplier switching, with the switching rate even decreasing in 2020. The deregulation of prices for universal supply, provided by the incumbent supplier, and appointment of the universal supplier in a market-based procedure has not been achieved. As in previous years, the regulator’s report for 2020 concluded that deregulation would be premature given the wide gap between the regulated universal service price and market prices. The universal service supply price was slightly increased on 1 February 2021.
Cross-border capacity on the interconnections with Croatia and Bulgaria are allocated through the Joint Auction Office (JAO). On other interconnectors, joint auctions still apply, except with Albania where split allocations are implemented. Rules for the allocation of capacities on the interconnections with the control area of Kosovo* have not yet been published and no auctions have been organised. The Secretariat has received complaints.
The agreement on grid control cooperation in the control block of Serbia, Montenegro and North Macedonia is expected to commence with imbalance netting between Serbia and Montenegro in the first phase. The transmission system operator has joined the European platform for imbalance netting, for the time being as a non-operational member.