Serbia's energy crisis looms as Danube water levels hit historic lows

Serbia is navigating a critical energy situation as the Danube River experiences its lowest recorded water levels, a direct consequence of a severe drought. At the entry point near Bezdan, the river's level dropped another four centimeters overnight. Despite assurances from President Vučić that there is no danger of water or electricity shortages, concerns are mounting over the nation's preparedness.

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Of course, that affects both plants at Đerdap producing only a quarter of the electricity. However, all units are ready for operation and every drop of water is being converted into electricity.

Experts and opposition figures argue that Serbia failed to adequately prepare for such a scenario, despite years of warnings. Goran Đukić, from the SRCE party's energy committee, stated that the government could have done more, even in the current situation. He expressed doubt about whether the current government had even considered such a scenario, questioning the existence of a concrete action plan following a recent emergency staff meeting.

Meanwhile, Minister of Mining and Energy Dubravka Đedović Handanović acknowledged that the low water levels at the Đerdap hydroelectric plants are affecting production, with both plants operating at only a quarter of their capacity. However, she asserted that all units are operational and maximizing energy generation from available water.

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But even for the current situation, the current government could have done more than what we heard yesterday after the session of the emergency staff, because we expected at least a set of measures. However, that practically did not happen, and then the question arises whether this government has even thought about such a scenario and whether such a set of measures even exists.

The situation is compounded by regional energy market dynamics. Neighboring Hungary narrowly avoided shutting down its only nuclear power plant due to low river levels. Climate change consultants warn that if Serbia needs to import electricity, prices could be significantly higher due to a lack of pre-arranged contracts. Đukić also criticized the lack of investment in the energy sector over recent decades, advocating for the construction of both thermal and hydroelectric capacities, including the long-discussed Bistrica and Đerdap 3 projects.

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If you haven't planned in advance and expected something like this to happen and made a significant advance energy import contract, then you buy energy on the market, and the market price in situations like this can be very high.