Report: Serb side fulfilled its obligations from the roadmap, a contract to be signed for Elektrosever to become operational

struja, dalekovod

Progress has been made on the implementation of the 2013 and 2015 Energy Agreements’ Implementation Roadmap, the Kosovo Office states in its report on the negotiation process with Pristina for the period from September 2022 to January 15th of this year. The report states that Elektrosever had completed the process related to the required standard technical contracts with KOSTT, noting that only two contracts with KEDS remain to be concluded, but also that the signing of one of them was delayed due to „obstructions from Pristina“. They expressed the expectation that KEDS will submit a draft of the commercial contract to Elektrosever in the upcoming period, and that the company will become operational soon after its conclusion.

On the 21st of June 2022, Belgrade and Pristina reached a “roadmap” agreement in Brussels with the aim of implementing the previously signed energy agreements. This nine-point document defines the obligations of Belgrade and Pristina regarding the energy issue in the north of Kosovo.

Both sides presented what was agreed in Brussels as their own victory. Pristina claimed that the agreement would finally allow for the invoicing of electricity in four municipalities in the north of Kosovo in accordance with Kosovo’s laws and regulatory system, while Belgrade presented it as a confirmation that „no one will occupy the Valac substation,“ claiming the newly founded company – Elektrosever had thus gained independence.

Since the agreement was signed to date, however, officials from Pristina and Belgrade accused each other of failing to implement all obligations from this document within the stipulated period of 100 days. As time passed, there was less information about the process of implementation of obligations.

In its previous report covering the period from June 15th, 2021 to September 1st, 2022, the Kosovo Office confirmed that a supply license was issued to Elektrosever on June 27th, 2022, i.e. six days after the adoption of the energy roadmap.

The same report stated that the Serbian side is waiting for KEDS to submit the Draft Commercial Agreement on Business Cooperation, as the remaining steps for the implementation of the roadmap depend on it.

In the new report, which covers the period from September of last year until January 15th, it is stated that „despite the Pristina’s obstructions“ progress has been made in the implementation of the roadmap.

They declared that Elektrosever completed the process related to the required standard technical contracts with the transmission system operator KOSTT, which was agreed upon within the roadmap, but also, as they claim, a technically necessary step for the establishment of full operation of the Elektrosever company.

They announced that to overcome the problems that arose in this process, a meeting of representatives of the Elektrosever company with representatives of ERO, KEDS and the Energy Community was organized in Brussels on October 10th.

The report highlights that, at the meeting, they exchanged views on the text of the documents, and Elektrosever sent the signed contracts.

„Although the Pristina side publicly claimed on several occasions that Belgrade and the Elektrosever company have no intention of implementing what was agreed within the roadmap, the Elektrosever company sent the relevant signed contracts on October 18th, 2022, via an EU intermediary.“

The report reads that these standard contracts are one of the necessary elements for Elektrosever to start operating at full capacity, and that, according to the roadmap, it is defined in such a way that it enables the full energy independence of the north of Kosovo in the field of energy supply and distribution.

The Kosovo Office specified that only two contracts with KEDS remain to be signed.

„In addition, in the past period, the Serb side fulfilled all other obligations stemming from the roadmap, and the only thing left to do until the full operation and the start of functioning of the company Elektrosever in full capacity is the signing of two contracts with the Turkish company KEDS, which dominates the distribution of electric energy in Kosovo.“

They added that the contracts in question include a standard market agreement – the so-called connection agreement, while the other is a classic Commercial Agreement on the cooperation of companies, which should be jointly signed.

On the other hand, when it comes to the Commercial Cooperation Agreement between the company Elektrosever and KEDS, the report underscores that its signing was initially delayed by KEDS „due to Pristina’s obstructions“ for several months.

„Instead of the contract being signed as foreseen by the roadmap in July of 2022, the KEDS company only sent the draft of this contract to the Elektrosever company on October 26th, 2022. This agreement is of fundamental essence because in practice it enables the company Elektrosever in the north of the province to provide unhindered distribution services in four Serb-majority municipalities in the north of Kosovo (billing, collection, maintenance and physical connection of new customers) – and thus independently supply the north of Kosovo with electricity,“ the report states.

They add that Elektrosever responded to the received Draft Commercial Agreement on December 10th, 2022, pointing out that the submitted document „significantly deviates“ from the „Draft Proposal of the Commercial Agreement“ agreed at the meeting held on June 9th, 2022 with representatives of the Limak-Calik consortium, owners of KEDS.

„The agreement of June 9th, 2022, became part of the Roadmap package, the full validity of which was confirmed by specially written guarantees by the EU Special Representative for the Belgrade-Pristina Dialogue and the Energy Community,“ the report reads.

This body of the government of Serbia said it expects KEDS to soon deliver to the draft of the commercial contract in question to Elektrosever, one that is in line with the June 9th agreement.

„After the conclusion of that contract, it is expected that the company Elektrosever will become operational in a very short period of time, which means that it will start concluding contracts with consumers and operate in the full agreed capacity.“

KOSTT did not fulfill the conditions of the connection agreement with ENTSO-E

The Kosovo Office stated that in addition to the problems related to the start of the operation of Elektrosever, during the period covered by the report, a problem arose in the functioning of the „separate control area in the electricity transmission system in Kosovo.“

„The reason behind this is that the provincial electricity transmission system operator KOSTT did not fulfill the prescribed technical conditions from the Connection Agreement with the operator organization ENTSO-E. Despite this, the Regional Group Continental Europe ENTSO-E confirmed on August 25th a new contract with KOSTT with a validity period of two years (until September 29, 2024),“ the report states.

They indicated that problems with the stability of the energy system in Kosovo continued and „spilled over to the energy system of continental Europe.“

„For this reason, in December 2022, ENTSO-E warned KOSTT that its irresponsible behavior violates the Connection Agreement and thus risks exclusion from the Continental Europe Synchronous Area and a fine in the amount of five million euros. In this sense, KOSTT was asked to solve the problems that cause this instability in the shortest possible timeframe.“

The report states that as early as August 2022, it was observed that the authorities in Pristina „cannot maintain“ a separate control area of the electricity transmission system.

„During that period, electricity restrictions began in Kosovo, primarily due to insufficient electricity production due to severe drought and problems with the production capacity at the Obilic Thermal Power Plant. The problem was resolved on September 1st by restarting the production capacities of the Obilic Thermal Power Plant, but after the temporary stabilization of the supply, on September 16, 2022, the operation of this thermal power plant was again interrupted due to a failure of one of the blocks.“

They also add that this situation has caused the continuation of power outages in the majority of municipalities in Kosovo.

Finally, they concluded that in the coming period, Belgrade will primarily insist on the fastest possible conclusion of the Commercial Agreement by which the company Elektrosever will achieve full operation and enable the energy independence of northern Kosovo.

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