This is a best prospect industry sector for this country. Includes a market overview and trade data.

Overview

Energy market developments in North Macedonia in 2018 included further construction of an internal gas distribution network, continued liberalization of the electricity market, and increased regional cooperation for electricity and gas interconnections.  North Macedonia adopted a new Energy Law in June 2018, harmonizing its energy legislation with the EU Energy Community’s Third Energy Package.

North Macedonia’s state-owned power company was unbundled and partially privatized in the 2000s.   Austrian utility company EVN has been responsible for electricity distribution in North Macedonia since entering the market in 2006.  State-owned MEPSO is the country’s electricity transmission system operator.  ESM (Elektrani na Severna Makedonija/Powergeneration Plants of North Macedonia; formerly ELEM) is North Macedonia’s state-owned electricity producer.

The electric power production system in North Macedonia consists of two thermal power plants with a total installed capacity of 800 MW, several hydro power plants with an installed capacity of 650 MW.  The two thermal plants produce 70 percent of the country’s total electricity.  The smaller thermal power plant “REK Oslomej” is not in operation and its obsolete equipment is in urgent need of modernization.  The government intends to convert its boiler to be able to burn high-caloric coal.  Modernization of the “REK Bitola” thermal plant was performed in 2017, but its equipment is still largely obsolete.   There are two open pitch lignite mines with a total capacity of 7 million tons/year and estimated deposits for the next 15 - 20 years.  Domestic lignite has low-caloric value and the government has announced plans to import coal.  Despite some investments in modernization, domestic production of electricity decreased by about 25 percent in the last ten years, and electricity imports have risen to 36 percent of total consumption.  The total annual production of electricity in 2018 was 5,447 GWh, which provided 69 percent of the total domestic electricity needs.  North Macedonia is a full member of the Union for the Coordination of Production and Transmission of Electricity European Interconnection (UCPTE), which ensures interconnection compatibility with European electric power systems.

There are about 20 licensed energy suppliers in the country, but only five of them are active.  They supply electricity at free market prices to the eligible companies who have chosen that option, reducing their electricity cost by about 20-30 percent. 

The government will offer a concession to private investors for a public-private-partnership with the state owned electricity producer ESM for construction of a 440 MW capacity hydro power plant.  The feasibility study has been completed but a call for bidders has not yet been issued.

ESM owns and operates the only wind power capacity, a 36.5 MW wind park in the southern part of the country.  It plans to increase capacity to 50 MW, and add a separate 14 MW capacity park.
A natural gas transportation pipeline operated by GA-MA, jointly owned by the government and the largest oil distributor in North Macedonia “Makpetrol,” carries Russian gas from the Bulgarian border to Skopje.  Gazprom provides 100 percent of the capacity within the pipeline.  This pipeline primarily supplies industrial users in the cities of Skopje, Kumanovo, and Kriva Palanka.  The government has established Macedonian Energy Resources (MER) to oversee construction of an internal gas distribution network.  The government continues its efforts to build natural gas interconnections with Greece and Bulgaria to diversify its sources of natural gas.

ESM has issued an international tender for construction of a 10 MW photovoltaic power station next to TPP Oslomej.  EBRD has approved a loan of EUR 5.9 million, and ESM wil finance the remaining EUR 1.1 million. 

A 213-km oil pipeline with a capacity of 2.5 million tons per year connects oil storage facilities at the Greek port of Thessaloniki with OKTA’s aging oil refinery outside Skopje.  The pipeline and refinery are not in use.  The governments of North Macedonia and Greece are discussing re-opening the dormant oil pipeline.  OKTA primarily operates as an oil trader in North Macedonia.

Leading Sub-Sectors

Following privatization of the electricity distribution system, the government has liberalized part of the electricity generation market.  The government is offering limited concessions for investment in small hydropower facilities.

Renewable energy generation project opportunities, such as investments in electricity generation from wind and solar, and in thermal power generation systems are subject to quotas.  There are also opportunities to promote more efficient use of electricity through home insulation and installation of more efficient heaters and electromechanical devices.

Opportunities

North Macedonia welcomes investments in the energy sector.  The government invites companies to design, build, and operate new large and small hydro power plants.  Companies can also apply for tenders to construct sections of the national gas distribution network.  ESM is interested in upgrading the existing thermal power plants of “REK Oslomej” and “REK Bitola.”   In addition, the government is exploring the possibility of extending concessions for building small-scale hydro power plants along rivers in the country. 

The government wants to increase installed solar energy capacity from the current 20 MW to 200 MW.  However, it plans to switch from offering a feed-in tariff to a premium tariff, while also offering free land and free connection to the electricity grid.  In addition, the government intends to introduce a net metering system, allowing for households to install solar panels on their residences and produce electricity.

In addition to installing a new 14 MW to the existing wind park, the government plans to increase the country’s wind power capacity to 100 MW by tendering projects to interested private investors. 

The government is considering converting the mothballed heavy oil-fired “TEC Negotino” power plant to natural gas, as well as constructing new gas-fired power plants.  To improve air quality, the government is subsidizing households’ purchases of cleaner wood pellet stoves for home heating.

The government has negotiated a loan with EBRD to finance the construction of a gas distribution network in the ten largest cities in the country.  A few of those cities, including the city of

Skopje, have established public enterprises in charge of gasification at the local level.  The city of Strumica already has a basic gas network, importing compressed gas from Bulgaria by truck.  The government is also looking at options to connect the domestic network to alternative supply sources such as TAP and the LNG terminal in Greece.

Web Resources

Ministry of Economy
Energy Agency of the Republic of North Macedonia
Energy Regulatory Commission
ELEM (State-owned Power Plants of North Macedonia)
MEPSO (State-owned Electricity Transmission System Operator of North Macedonia)
EVN (Electricity Distribution and Supply Company)
GA-MA – Natural Gas Transmission System Operator
Macedonian Energy Resources
Macedonian Center for Energy Efficiency (MACEF)

 

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Macedonia Energy Trade Development and Promotion