Kilowatt price shapes business – From 2014 companies in Belgrade will pay 20% less for electricity than companies in south Serbia

(Photo: eps.rs)

Companies that operate in Belgrade will from next year be paying up to 20% less for electricity than companies in south Serbia. According to expert estimates, when 3,000 companies that use medium voltage kilowatts, become free to choose their supplier in 2014, distribution prices will change. Electricity will become cheapest in the most developed parts of Serbia.

Instead of promoting investment in economically devastated parts of the country that have an extinct economy, closed companies and ruined entrepreneurship, liberalisation of the energy market will further demotivate anyone from starting a business.

From 2014 about 3,000 companies will be able to choose their electricity supplier, which will liberalise another 30% of the energy market, explains Aleksandar Obradovic, acting director of EPS. Whichever supplier companies choose, EPS or any other supplier, they will have to pay distribution network user fees. This will be charged at the same rate to all players on the market, but will not be the same in all regions.

The distribution network price will be based on the available network capacity in a given part of the country. On this criterion, the cheapest regions are the most developed ones, i.e. those of the Belgrade and Vojvodina distribution companies.

Worst of all, the price of electricity will be higher in poorer regions which will adversely affect the opening of new companies, especially building new factories – adds Obradovic. In this way, the price of electricity in Surcin and Trgoviste could differ by up to 20%, in favour of the Belgrade municipality. To avoid this situation, a new entity should be established to integrate all five companies. In this way the distribution network price and the total cost of electricity would be the same in all parts of Serbia.

An additional problem appears for companies that operate over the entire country. The electricity bill in Belgrade would be significantly lower, for example, than for a branch in Nis.

This is one more example of how undeveloped parts of Serbia are further discouraged from setting up businesses - thinks Aleksandar Stevanovic, an economist. It would be more economically advantageous to move to a large city then to open something up in his village and invest in the local community.

Same quality

After opening the energy market for companies, the intention is to let households freely choose a supplier on the market from the beginning of 2015.

In fact the system will be such as to ensure the same quality whichever supplier users choose on the market . Delivery of kilowatts will be the responsibility of local electro-distribution companies.

Translation provided by: www.halifax-translation.com