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• |Macedonia
• |Energy Market Actors

Electricity Market

Structure of power sector

The former national power utility Elektrostopanstvo na Makedonija (ESM) has been split in separate companies for generation and distribution:

• AD ESM is the distribution company which also owns 11 mini- and small hydro power plants with a total capacity of 35 MW.
• ELEM is the largest generation company
• TEC Negotino is a one-plant generation company
• MEPSO is the owner of high voltage transmission greed

In December, 2005, a tender for the sale of 90% of the capital share of AD ESM has been issued. In spring 2006, the Austrian utility EVN won the tender to buy 90 % Elektrostopanstvo na Makedonija (ESM) for 225 million Euro. ELEM is to be privatized after parliamentary elections in autumn 2006.

The largest production capacity is the lignite-fired Bitola complex with 3 units of 225 MW each and net production of about 1,434 GWh per unit (HARZA 2003). Peak demand is met by hydropower. ESM has about 0.5 GW of hydro capacity, which includes pumped storage, run of river and small hydroelectric plants. The biggest hydro power plant in the basin of Crn Drim is HPP Spilje, which generates one third of the total energy production (380 GWh) generated by hydro resources in the country.

The main transmission network consists of 400kV, 220kV and 110kV lines. The 400kV system is the backbone of the transmission network. It connects the Bitola thermal plant to the main load centre at Skopje, and connects Macedonia to the European UCTE system.

Macedonia has twenty-eight distribution districts, with a distribution network of 35kV, 10kV and 0.4kV lines. Electricity coverage is extended to almost all populated Macedonian regions. Skopje's consumption dwarfs that of the other distribution districts, accounting for 37% of the total household consumption in Macedonia. Only four other distribution districts account for more than 5% of consumption: Tetovo (8.1%), Bitola (6.7%) and Kumanovo (5.9%). On average, electricity consumption in each of the 24 other distribution regions is around 2% of the total electricity consumption.

Oil and Gas Market

Oil

The OKTA Refinery, including the bulk of the gasoline and diesel and almost all of the heavy fuel oil, produces most of petroleum products. The OKTA Refinery is owned by the Greek firm Hellenic Petroleum, following privatization in 1999. Built between 1978 and 1982 using primarily Russian equipment, the refinery is small and adds little value. The refinery is currently fundamentally uneconomic when compared to the alternative of importing petroleum products to Macedonia. The country’s domestic demand for petroleum products is relatively stable at around 700,000-900,000 tons per year. The main products are gasoline (20% of cons.), diesel fuel (40% of cons.) and heavy fuel oil (30% of cons.). In addition there are miscellaneous products (LPG, jet fuel, lubricants), which account for the remaining 10% of consumption.

The biggest oil derivates and gas distributor in Macedonia is MAKPETROL, established in 1947, since 1998 a totally private joint-stock company. The Company has 1,895 employees, of which 242 have university education. MAKPETROL is the owner of 114 petrol stations and 12 warehouses for oil derivatives. It makes over 60% of the oil derivatives turnover in Macedonia. In 2002 the Company placed approximately 410,000 tons of oil derivatives on the market.

Gas

Macedonia produces no natural gas, importing all its requirements. Gas is imported from Russia since 1997, via pipeline from Ukraine-Moldavia-Romania-Bulgaria.

In 1989, Macedonia's state oil and gas company MAKPETROL agreed to take part in financing a new import gas pipeline from nearby Bulgaria. Part of a wider Russian gas export pipeline network in the region, this link to Skopje was designed to transfer over 800 million m³ per annum. Regionally, the new Trans-Macedonian gas pipeline may be extended to Albania and Kosovo in due course, as well as to connect Nis in Serbia, forming a closed loop. Expected to cost over US$100 million by the time it reaches full capacity, this is potentially the largest energy infrastructure project in Macedonia to date.

The demand for LPG is covered by filling station for cylinders located near Skopje. The cylinders are also used by small businesses that are growing up. Direct delivery to homes and businesses increases sales demand. The application of LPG in the transport sector grows each year.

The Government of Macedonia established GA-MA as a public enterprise for the supply, transport and distribution of natural gas in October 1996. Since MAKPETROL (as a private company) is a shareholder in this enterprise, the enterprise (according to the Law on Trade Companies and the Law on Public Enterprises) has been approached with an offer to be transformed into a joint stock company.

Coal Market

Current production is at 7.2 Mt, concentrated in 4 mines: Suvodol (6 mil. tons); Oslomej (1.1 mil. tons); Brik (0.1 mil. tons) and Priskupstina (0.1 mil. tons). 2 of them are state-owned, 2 privately owned. The two bigger ones supply lignite to nearby power plants owned by the national utility – ELEM.. ELEM owns the mines it is supplied from.

Four lignite power plants account for about 70% of power generating capacity of 1.44 GW. There is also one district-heating scheme. Two more State-owned mines supply big industrial consumers and households. While prices of heat, electricity, gas and oil are regulated by the State Regulatory Commission coal prices are liberalized. The coal industry does not receive any direct or indirect subsidies, as it operates profitably.

Table: Main coal industry indicators Indicators (Source: WEC)