Major Macedonian Power Consumers to Buy Electricity at Market Price

Text of report in English by Macedonian state news agency MIA

["Big Consumers - Solo Players at Electricity Market From Next Year - MIA Economic Press Review" - MIA headline]

Starting from 1 January next year, big domestic electricity consumers have to enter the liberalized market and provide energy by market price.

Nine biggest electricity consumers are involved: Feni, Silmak, Makstil, Skopski Leguri, Mittal Steel, Bucim, Macedonian Railways, OKTA, and Titan-Usje, Utrinski Vesnik reads.

These companies, which gradually entered the free market in April, supply 55 per cent from the free market, and the rest from transmission company MEPSO [Macedonian Transmission System Operator] with regular price of 29.6 euros per megawatt. Market price is over 2.5 times higher than regular domestic price.

At the latest meeting with the Economic Chamber, representatives from these companies had been firm that were not ready to incorporate at the liberalized market and would ask the government to prolong the timeframe stipulated by the Energy Law.

It is still uncertain whether the government will make any concessions, although Minister of Economy Vera Rafajlovska stated that, starting from 2008, they definitely would enter the free electricity market.

On the other side, Macedonia is obliged to respect the signed documents for liberalization with EU, according to which all consumers have to enter the free energy market by 2014.

The big companies warned that would collapse financially if they buy electricity by market prices, which are much higher than domestic.

That will cause a significant impact on domestic economy, as these companies, particularly ones from the black metallurgy, being the carrier of domestic industry, participate with 25-35 per cent in the GDP [gross domestic product], they said.

Their participation in total export amounts to about $1 billion. Some companies forecast their liquidation. Silmak Director Zvonko Stojanovski has such opinion, according to which the company cannot work profitably and cover the costs for import of expensive electricity.

The region in the last years is facing lack of electricity, particularly this year, after closure of [Bulgarian] nuclear plant Kozloduj. Serbia recently halved electricity export to Macedonia, because has lack of planned quantities, Utrinski Vesnik reads.

The government announced other changes of the Energy Law starting from 2008, which determine how much electricity industrial consumers would buy at the domestic stock exchange, which is to be established by the end of next year according to most optimistic prognosis.

Originally published by MIA news agency, Skopje, in English 1122 18 Oct 07.

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