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Several Contracting Parties to the Treaty establishing the Energy Community   of the South East Europe, currently in energy transition, have electricity   production dominantly based on lignite which contrasts their new reality.   Planning approach to designing a new feasible energy policy is presented in   this paper. This novel approach in using EnergyPLAN tool stems from analysis   of market operation of lignite thermal power plants on hourly basis, and   quantification of the feasibility of the energy policy and its alignment with   EU vision, and is presented in few scenarios. It was found out that the   Serbian energy system is highly sensitive to the electricity market and CO2   tax increase, because the marginal costs for lignite generation will increase   to more than 50€/MWh. Shifting in the merit order will be observed even at   lower CO2 tax levels, because of the intensity of the emission of the   electricity sector (calculated to be higher than 700gCO2/kWhel, according to   current energy policy). Based on the increased use of renewable energy   sources and more efficient energy conversion technologies, socio-economic and   energy policy feasibility would be increased, while long-term marginal costs   would be improved by 2€/MWh and emission intensity by 258 gCO2/kWhel,   compared to the current energy policy. These contributions, shown in the   Serbian case, are of general importance for other lignite dominated   Contracting Parties to Treaty establishing the Energy Community. [Projekat   Ministartsva nauke Republike Srbije, br. 42009

A realistic EU vision of a lignite-based energy system in transition: Case study of Serbia