Energy Demand
Total primary energy consumption in Macedonia in 2006 was 115.78 TJ. 49.84 % of the country's primary energy demand are covered by imports of, mostly, oil and coal (oil 38.01 %, coal 3.33 %, gas 2.38 %, electrical energy 5.99 %).
Demand per Sector
Energy consumption in industry is characterized by a high level of electricity use in metal processing industry and low efficiency in electricity generation, supply and consumption. As regards the residential sector, the practice of using electricity for heating by residential users during winter leads to very high electricity consumption in this sector, as shown in the graphs below.
[ ERC ]
Final Energy Consumption by Sector, 2007
Final Energy Demand of the Residential Sector, Macedonia, 2007
Source: ENERDATA s.a. - WORLD ENERGY DATABASE [2009]
The residential sector has the highest share in end use consumption of the country. 71 % of the energy consumed by this sector is used for space cooling and heating.
Final Energy Demand of the Residential Sector in Macedonia, as compared to that of other CEEC, Austria, and the EU 15, 2006
Demand per Capita
Primary energy consumption per capita was 56.52 GJ in 2003 – it has decreased from around 65 GJ/cap in the early 1990s. Final energy consumption per capita in Macedonia in 2003 was 28 GJ. Electricity consumption per capita decreased slightly in the same period. However, an increase of electricity demand is projected for the future.
[ First National Communication ]
Primary energy consumption per capita was 1.33 toe in 2004. Electricity consumption per capita was 3184 kWh.
[ Key World Energy Statistics, IEA, 2006 ]
Energy Intensity
Total primary energy consumption per dollar of gross domestic product in 2002 was 22,857 Btu (24 MJ).
[ EIA ]
Primary energy intensity per GDP at purchase power parity Macedonia, other CEEC, Austria, and the EU 15, 2006
Source: ENERDATA s.a. - WORLD ENERGY DATABASE [2009]
Primary energy intensity is an indicator to show how much energy is needed to produce one quantity of economic output. Macedonia's primary energy intensity is 40 % above the average of the EU 15. The reason for the high-energy intensity can be traced to:
- heavy use of energy in metal processing industry;
- low-efficiency power generation, supply and consumption;
- the prevalence of using electric energy for residential heating during the winter.
Demand of electricity per GDP (MWh/M$05) and capita (kWh/hab) for FYR Macedonia, other CEEC, Austria, and the EU 15, 2006
Source: ENERDATA s.a. - WORLD ENERGY DATABASE [2009]
The deviation of electricity demand per GDP of a country from that of Austria or the EU average indicates, how efficiently electricity is utilised in the respective economy in comparison to the EU or to Austria. If the electricity demand per GDP decreases - which is expected in the future in CEE countries - more national income in the form of GDP will be produced with the same amount of electricity (the black bars in the figure will decrease in this case).
Prospects for Energy Saving
Macedonia has a considerable untapped energy conservation potential, unlocking of which would help to maintain energy balance. The strongest indication of this potential is the high energy intensity (see above).
The Energy Strategy states, that the adoption of well-proven and readily available technologies including efficient appliances, controls and insulation will ensure the reduction of energy consumption, allow to postpone investment in new facilities and the reduction of emissions.
The World Bank in its 2004 Energy Policy Paper for Macedonia states the following barriers hampering the investment in energy efficiency (EE) projects, most notably:
- lack of awareness, information, and confidence on the part of Small and Medium Enterprises (SMEs), Government/budget entities, and residential consumers, on the efficiency of EE investments and technology,
- lack of capacity in EE project development, including engineering, installation, and monitoring of energy efficiency measurers,
- lack of understanding and capital available through Financial Institutions (FIs) for EE investments,
- perceived risks of EE investments by FIs,
- low price of electrical energy,
- weak economical condition of companies and householders.
The thrust of the realization of the measures foreseen Energy Strategy would be to improve the investments climate for EE and RE. The World Bank is providing support through a new GEF grant project, with the objective to remove barriers for investments in sustainable energy, defined as energy efficiency and renewable energy. The GEF project will support development of the Energy Efficiency and Renewable Energy Strategy.
[ World Bank ]
The implementation of the energy programmes foreseen in the Energy Strategy could achieve savings of a total of 128,780 MWh (low scenario) or up to 232,448 MWh (high scenario). The highest savings potential is given in the residential sector (59,883 MWh in the low scenario). In industry and agriculture, 34,771 MWh could be saved, whereas 4,508 MWh could be saved through improvements in street lighting.
[ ERC ]
Prices
The price of electrical energy consist: production part (ELEM – Electrical Power Plants of Macedonia), transportation (MEPSO – transport, import of electrical energy) and ESM-EVN (distribution and billing of consumed low voltage electrical energy). First two are 100% owned by the State, the third one is a 90% private company.
The present tariff structure differentiates costs of service by voltage levels (110 kV, 35kV, 10kV and 0.4kV); by consumer types (industrial, commercial, household and municipality/street lighting); by time of day; and by demand characteristics (Active Power, Reactive Power, Maximum Demand Charges).
From an economic point of view, there are two notable features of the tariff scheme:
- Households are subsidised by other consumers, particularly other distribution tariff classes
- Direct customers may be subsidised by 10kV and 35kV consumers.
Such cross-subsidies are difficult to sustain in a competitive electricity market, when customers are free to choose their supplier. Tariffs will therefore have to be "rebalanced", i.e. adjusted to reflect the true cost of service, starting at supply voltages where customers are eligible to contract freely. This also implies that household tariffs will need to increase by more than the average tariff required to cover the utility revenue requirement.
From January 1999 to the present, electricity pricing has, in theory, been set in accordance with the Pricing Methodology for Different Types of Energy. The Methodology sets out a cost-plus type of tariff, composed of various allowed ("normalised") costs (e.g. cost of energy, cost of maintenance, cost of salaries, cost of equipment insurance, etc), corporate taxes and a profit element of 8%. Tariff revisions can be triggered by a +/- 5% change in these "supervised costs" in any three-month period. ESM can request upward price revisions. The authorised Ministry can request downward price revisions. In fact, the price setting is more a negotiated mixture of operational pragmatism and public acceptability. For example, in order to boost Macedonia’s budgetary inflows, the IMF recently encouraged ESM to increase the level of VAT on electricity sales from 5% to the general level of VAT of 18%. This 13% increase was passed through to industrial and commercial consumers but not to residential consumers, as it was deemed to be too much of a shock. Instead, a compromise residential tariff increase of 7% increase was levied from 1st of July 2003. Nowadays the level of VAT is equal for all consumers (18%). More pragmatically, ESM has maintained the level of the high season (winter) tariff throughout the low season to residential customers, perhaps hoping that consumers would not notice.
In addition to electricity costs, a flat fee for the state TV and radio channels was rolled into each monthly bill. The fee is calculated as 2.5% of the average worker’s wage. This can account for a significant proportion of the electricity bill for subsistence electricity users. There is a fee for each consumer for public lighting. This participation is now separated from the electricity billing.
Prices for Oil Products and Natural Gas
The prices of oil are regulated by the Independent Regulation Commission, and are in a very strong correlation with the crude oil price at the world market. They can be changed each 2 weeks, if the difference of prices is higher of few percents.
The prices of natural gas are more constant , and they can be changed 4 times per year.
Prices for oil products, Dezember 2006 (incl. VAT, in euro/liter) | |
|---|---|
Lead-free motor gasoline – LFMG 95 | 0,99 |
Diesel fuel – DF EURO | 0,83 |
Extra light fuel oil - LUEL | 0,65 |
The natural gas prices for industrial sector are varying. These prices are not available for public purpose because the small use of the gas line system is a result of the undefined ownership rights between the Government of Macedonia and MAKPETROL. The biggest consumers of natural gas in 2006 were: AD ELEM ENERGETIKA (14 Mmn³/yr), CELICANA (12 Mmn³/yr), MITAL STILL-Skopje (12 Mmn³/yr), MAKSTIL AD Skopje (14 Mmn³/yr), TOPLIFIKACIJA-Skopje (7.8 Mmn³/yr), PIVARA-Skopje (4 Mmn³/yr),. The price of propane gas and butane gas is 0.94 euro/kg as the bottle, and 0.46 euro/litre as the vehicle fuel.
Heat Prices
According to the methodology for heat price determination the Independent Regulation Commission is announcing heat prices depending to the movement of crude oil price on world market. The price for production, transportation and distribution of heating energy in December 2006 were: 39 EURO/MWh for householders paying on the basis of measurement of consumption, 0.46 Euro/m² for flat rate households (12 months payments), 1.58 euro/m² for services sector and 72 Euro/kW for industrial facilities and spaces.
