Azerbaijani gas to enhance liquidity in N. Macedonia’s market – minister

By Trend

One of the goals of the Southern Gas Corridor was to diversify natural gas supply routes and reduce dependency from only one source of natural gas, North Macedonia’s Minister of Economy Kreshnik Bekteshi said in an exclusive interview with Trend.

He pointed out that with this project the Europe and the region has improved the security of supply bringing natural gas from different sources. In long term the project will strengthen the relations in the energy sector between the Parties and the European Union.

“Government of the Republic of North Macedonia is committed to develop more broaden strategy to get natural gas from variety routes and connection to the international gas corridor. Activities are underway for further construction of the existing gas pipeline system in the Republic of North Macedonia, its connection with the regional gas pipeline systems, especially with the southern corridor, the development of the gas distribution to be done through Public Private Partnership, as well as starting negotiations for providing additional quantities of natural gas,” added Bekteshi.

The minister recalled that at the last Ministerial Meeting of the Energy Community, the gas interconnection between North Macedonia and Greece was selected as a Project of Common Interest for 2020.

“It aims at gas connection of the country with Greece and the Southern Gas Corridor in order to supply the country with natural gas from diversified sources of supply and, inter alia, from the gas fields in Azerbaijan. Sides: NER AD Skopje and DESFA SA - The operator of the natural gas transmission system in Greece; - Signing of the Memorandum of Understanding, October 2016 (Annex to the Memorandum, April 2019); Environmental Impact Assessment Study has been prepared and all procedures related to it have been completed. We expect to receive a Decision by the Ministry of Environment and Physical Planning of the Republic of North Macedonia; the basic design is in the final phase. The design is submitted to the Ministry of transport and communication for approval,” North Macedonia’s economy minister explained.

Regarding the financing of the construction, the minister said in December 2021, the Finance Agreement and the Grant Agreement were signed with the European Investment Bank, which covers 70 percent of the Project. In 2022, a financing agreement will be signed with the EBRD for the remaining amount needed to build the entire project.

“During 2022, the tender documentation for Construction, Construction Supervision, Inspection Body and Management will be prepared in accordance with the EIB rules. It is planned that the contractors of the construction will be selected by the end of 2022,” he added.

Bekteshi noted that the Southern Gas Corridor will enhance liquidity in North Macedonia’s market.

He noted that one of the principal priorities of the Macedonian government in the energy sector is connected with need to ensure the national goal of security of energy supplies and to tackle any unexpected event, which might jeopardise the reliability and security of energy supplies.

“On Macedonian territory there are neither indigenous natural gas resources nor a gas storage facility and all gas is imported from Russia (via Bulgaria and Turkey) through a single transmission line that crosses the Bulgarian border at Deve Bair. According the Strategy for Energy Development the country has taken activities to ensure the long-term objectives on the development of particular energy activities, for the purpose of ensuring security in the supply of different types of energy. Also the connection of the Macedonian energy systems to the energy systems of other countries and the inclusion of the Macedonian energy markets in the regional and international energy markets is of crucial importance and the Southern Gas Corridor will have an important impact on our market and security of supply,” said the minister.

Bekteshi noted that for this purpose, the country has joined the CESEC Initiative which aims to promote the diversification of natural gas supply and security of supply in the region by enhancing the regional infrastructure and improving the integration of markets through joint engagement of all EU Member States and of the Parties to the Energy Community.

“By construction of the gas interconnector with Greece we will connect to the Trans Adriatic Pipeline (TAP) through Greece. This connection would have the advantage of providing an alternative supplier – that of Azerbaijani gas from the Shah Deniz field in the Caspian basin and bring the natural gas to the citizens of North Macedonia and to business. Bringing natural gas from different sources the citizens and businesses will have access to more reliable, secure and competitive natural gas. Also this will contribute for protection of environment and air quality,” he said.

The minister noted that This Southern gas corridor will have impact on facilitation of natural gas trade between two countries, enable further development of the gas transmission network of the Republic of North Macedonia in addition will enhance security of supply and liquidity of the gas market in the Republic of North Macedonia and increase the degree of utilization of the gas transmission infrastructure of the Republic of North Macedonia and other neighbouring countries.

As for the renewable energy sphere, he noted that North Macedonia’s Ministry of Economy competent of the energy policies, supports activities for promotion of renewable energy sources and stimulation of energy efficiency, for the purpose of achievement of the set goals for the participation of the renewable energy sources stipulated in the strategic documents into direction of achievement of the national goal of saving energy.

“In order to achieve the goals for renewable energy, especially taking to consideration that the energy market alone cannot provide the necessary investments to meet these goals and because of that there is need for intervention by the state, so support measures have been introduced. Namely, there is an opportunity for electricity producers from photovoltaic power plants that use premiums to sell electricity on the wholesale market, and for the sold quantities of electricity to receive a premium as an additional amount of the price achieved on the electricity market. The current feed-in tariffs remain and will be applied to the feed-in producer for electricity generated by certain types of power plant technologies,” he said.

Bekteshi noted that the electricity producer can acquire the status of a preferential producer using a premium if the installed capacity of the power plant does not exceed 30 MW for the photovoltaic plant.

“The authorized producer can use the premium only if it is selected in a tender procedure with auction for granting the right to use the premium. The premium is awarded to a preferential producer as additional fixed amount of the price realized by selling each produced kWh on the wholesale electricity market (fixed premium). If the preferential producer using premium does not conclude a contract for the sale of the generated electricity on the wholesale electricity market, they may conclude a contract for the sale of electricity on the wholesale electricity market, with the trader or electricity supplier selected by the ministry,” noted the minister.

He went on to add that the preferential producer has the right to use the electricity premium for the electricity generated by the photovoltaic plant for a period of 15 (fifteen) years.

“The amount of the premium does not change for the duration of the contract for the use of the premium. The Ministry of Economy has so far conducted three tender procedures for granting the right to use the premium, one on state land and two on private land for a total installed capacity of 140 MW. In accordance with the Program for Financial Support for Generation of Electricity from Preferential Producers that use Premium, the maximum reference amount of the fixed premium for generation of electricity from photovoltaic power plants is 15 €/MWh,” added Bekteshi.