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The reference development pathway of the Macedonian energy sector highlights   the important role that lignite and hydro power play in the power sector,   each accounting for 40% of total capacity in 2021. In 2030, this dominance   continues, although hydro has a higher share due to the retirement of some of   the existing lignite plants. Three sensitivity runs of the MARKAL-Macedonia   energy system model have been undertaken to explore the importance of these   technologies to the system, considering that their resource may be reduced   with time: (1) Reducing the availability of lignite from domestic mines by   50% in 2030 (with limited capacity of imports), (2) Removing three large   hydro options, which account for 310 MW in the business-as-usual case, and   (3) Both of the above restrictions. The reduction in lignite availability is   estimated to lead to additional overall system costs of 0.7%, compared to   hydro restrictions at only 0.1%. With both restrictions applied, the   additional costs rise to over 1%, amounting to 348 M€ over the 25 year   planning horizon. In particular, costs are driven up by an increasing   reliance on electricity imports. In all cases, the total electricity   generation decreases, but import increases, which leads to a drop in capacity   requirements. In both, the lignite and the hydro restricted cases, it is   primarily gas-fired generation and imports that “fill the gap”. This   highlights the importance of an increasingly diversified and efficient   supply, which should be promoted through initiatives on renewables, energy   efficiency, and lower carbon emissions

Exploring the impact of reduced hydro capacity and lignite resources on the Macedonian power sector development