The purpose of this paper is to calculate the unit costs of abated CO2 emissions from Serbian power sector in 2014.

54 different unit costs have been calculated as results of different assumptions on the values of certain parameters. 27 unit costs have been calculated based on the actual 2014. set of parameters, while other 27 have been calculated assuming the values that parameters would have if 2014. hydro power production has been equal to average 2008.-2013. production.

Under these assumptions calculated unit costs fall in the range between -76 ( when avoided externalities are also taken into consideration) and 9 Euros, per ton of CO2 abated. For example, price of EU emission allowances for Germany achieved during the 30.10.2015. auction has reached 8.59 Euros per allowance.

The calculation in this analyses has not taken into consideration any damage to the assets of the utilities. Focus was to calculate financial and material effects of the consequences, not to calculate costs of the  damage caused by floods and associated events that have caused reduced electricity production and reduced CO2 emissions.

Total abatement costs have been calculated based on the differences between realized parameters in the power sector in 2014 (and adjusted realized parameters) and parameters from the counterfactual scenario. This counterfactual scenario is based on “average year”. “Average year” parameters have been calculated as average values of a selected set of data in the period from 2008. till 2013.  Different sources of data have been consulted for the creation of both “average year” and counterfactual scenario. These sources are: Statistical office of Serbia (RZS), Transmission system operator (EMS)., Electric power utility of Serbia (EPS), and Regulatory Energy Agency (AERS).

It is interesting to note that the reduction in coal consumption ( in terms of quantities) in both analyzed utilities was larger than the reduction in energy produced which may indicate either improved efficiency or better coal quality. Anyhow productivity was increased in both utilities.

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