My dear Deputy Prime Minister,
Dear Mr. Lorkowski,
Ladies and Gentlemen,
I would like to thank the Balkan Green Energy News for hosting this important conference, which will allow us to discuss different dimensions of the changing power market and its impact on the economy. Switzerland is well aware of the relevance of this topic and we are pleased to support the organization of this event.
Our interest in the conference is linked to our commitment to the energy transition process in Serbia. As Minister Mihajlovic may confirm, we support this process through a number of projects aimed at improving energy management at the local level, increasing energy efficiency and fostering the use of renewable energy sources. Our ongoing projects currently total EUR 25 mio.
In that sense, our support to the energy sector in Serbia is part of the well-established, bilateral cooperation program, which started already 30 years ago and has gradually expanded to become one of the most significant bilateral assistance platforms in Serbia with an accumulated investment of more than EUR 400 mio.
Why is Switzerland supporting the energy sector?
Energy is more relevant than ever, as countries need to match two key objectives: to provide a reliable and affordable power supply for economic and social development while ensuring a climate friendly energy production and use. The challenge remains similar to all countries: there is a growing demand for energy, specifically for electricity, but there is a lack of reliable and clean energy infrastructure.
This is a serious shortcoming. About two-thirds of global greenhouse gas emissions are associated with the production and consumption of energy, making energy sector interventions critical for mitigating global warming. Energy is therefore high on the international policy agenda as an essential part of the Sustainable Development Goals and a critical element of the Paris Agreement.
Switzerland’s policy in supporting the energy sector consists of four key objectives: accelerating the transition to renewable energy, increasing energy efficiency, fostering inclusive and affordable access to electricity and upscaling the financing from the private sector, as the public sector alone cannot cover the needs.
Challenges of the energy sectors in Switzerland and Serbia
Both Switzerland and Serbia are facing the challenge to decarbonize the economy to meet the obligations under the "Paris Agreement on Climate Change". For both our countries, this means to considerably increase the share of renewable energies in the years to come.
While the objectives are similar, the energy sector in Switzerland looks quite different from the one in Serbia: In Switzerland around half of the total energy mix is fossil fuels, mainly oil, which is used for heating and transport, the other half is electricity, which is generated primarily by hydropower and nuclear plants. In Serbia, as you know, fossil fuels, mainly coal, are dominant and they are used for heating as well as electricity production.
Switzerland aims at halving the emissions of greenhouse gases until 2030 and it has a net zero carbon emission goal for 2050 in line with the Paris Agreement to limit global warming to 1.5 degrees Celsius. To halve the greenhouse gas emissions by 2030, a quadrupling of the current level of renewable energy is required. And, to fully achieve the zero net carbon goal, Switzerland would need to invest annually 2% of GDP in green energy, primarily in the building and transport sector.
Meeting such ambitious goals requires efficient policy support that facilitates and incentivizes a shift away from fossil fuels to renewables. Switzerland is currently trying to reduce the level of carbon emissions with a market-based instrument, a carbon-dioxide tax. However, considerable opposition by citizens sets limits to a more ambitious implementation of this tax. Complementary measures are therefore currently under consideration, e.g. stronger economic incentives for renewable energy, like tax deductions for investments in photovoltaic, or facilitating investments in wind parks and hydropower.
How is Switzerland supporting the green energy transition in Serbia?
Our partnership with the Serbian Ministry of Mining and Energy is primarily focusing on decarbonisation of the district heating sector.
I can mention our Biomass project with KfW (representing a grant of EUR 4.75 mio), which consists of replacing fossil fuel fired boilers in several Serbian municipalities with boilers working on biomass. Also, we contribute EUR 8.6 mio to the EBRD’s Program on Renewable District Energy in the Western Balkans, which supports implementation of innovative district energy solutions in Serbia based on solar thermal, geothermal, and different heat pump technologies. Switzerland also assists the EBRD with the implementation of Renewable Energy Auctions in Serbia. We are glad to note that the system of auctions has been introduced in the new national legislation on renewable energy sources.
A huge potential for achieving low carbon economy lies in improving energy efficiency, in particular in the building sector, e.g. through better isolation of buildings. This is true for Switzerland and even more so for Serbia. It is important to note in this regard that the Serbian government has declared energy efficiency a top priority, backed by the national law on the efficient use of energy. Switzerland is contributing to the enforcement of this law with the Municipal Energy Efficiency and Energy Management project (MEEMP) in partnership with the Ministry and with the support of the Standing Conference of Towns and Municipalities. Indeed, focusing on energy efficiency has proofed to be a very effective instrument to meet emissions targets. As it curbs energy consumption, it facilitates energy transition.
Ladies and gentlemen, let me conclude with two remarks:
First, the transition to green energy is urgent and without alternative if we want to preserve a livable planet for our children and grandchildren. It is a challenging task and it can only be achieved by joint efforts.
Second, I am delighted to announce that in the years to come Switzerland intends to continue supporting energy transition in Serbia. My government has decided to invest another EUR 22 mio in grants to accelerate the green energy transition with catalytic investments. We intend to continue building up capabilities in cities and municipalities and contributing to a more conducive framework conditions so that commitments under the Paris Agreement on Climate Change and for the EU Green Deal can be met.
On this positive note, let me thank you for your attention.