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Energy Community contracting parties provide 2.4 bln euro in coal subsidies annually - study

Energy Community contracting parties provide 2.4 bln euro in coal subsidies annually - study Author: Mrs. Gemstone. License: Creative Commons, Attribution-ShareAlike 2.0 Generic.

PRISTINA (Kosovo), March 25 (SeeNews) – The Energy Community contracting parties support electricity generated from coal with some 2.4 billion euro ($2.72 billion) of direct and indirect subsidies annually, as not a single coal power plant in these countries would be able to operate without significant losses if state aid was scrapped, the organisation's Secretariat said on Monday.

The Energy Community is an international organisation consisting of the EU, represented by the European Commission, and the countries of Albania, Bosnia and Herzegovina, Georgia, North Macedonia, Kosovo, Moldova, Montenegro, Serbia, and Ukraine - these countries are known as the 'contracting parties'. It aims to extend the EU's internal energy market to southeastern Europe and the Black Sea region.

Without direct and indirect subsidization of electricity generated from coal and other market distortions, in particular cross-subsidization between industry and households, the price of electricity to supply households would need to be increased by some 23% in Kosovo, 29% in North Macedonia, 31% in Bosnia and Herzegovina, 37% in Montenegro and 49% in Serbia, the Secretariat said, citing the preliminary results of a study.

Under such conditions, prices for industrial consumers would have to be increased by 36% in Montenegro, 34% in North Macedonia, 30% in Bosnia and Herzegovina, 18% in Serbia, while in Kosovo they would be decreased by 9%, the statement noted.

“The Energy Community Contracting Parties can no longer look away from the consequences of maintaining an unprofitable, inefficient and unsustainable coal-based energy system,” Janez Kopac, Energy Community director and co-author of the study, said. On top of the damage done to health, environment and climate, favouring coal distorts the electricity market and raises serious questions when it comes to compliance with state aid rules, he added.

“It is high time for serious thoughts to be given to at least gradually introducing a carbon pricing mechanism in the Energy Community for the benefit of energy efficiency measures and enhanced renewables deployment,” Kopac also said.

($=0.8872 euro)