We are continuing with the company's energy transition


The last years are very challenging for the energy sector and our industry is affected by numerous global developments on which we have little or no influence, but certainly the share of renewable energy sources in the energy mix will grow in the coming period, Sergey Fominykh, Director of the Energy Block in NIS (Naftna industrija Srbije – Oil Industry of Serbia), said in an interview with the Quarterly Bulletin of the National Petroleum Committee of Serbia (NPCS). We discussed with Sergey Fominykh on the current situation in the energy sector of Serbia and the region, but also on the current projects in the field of renewable energy sources developed by NIS.

The Energy Block was recently formed in NIS in order to integrate a large part of “green” projects. What are the goals and ideas of this new organizational unit?

We are witnessing that the energy market has changed significantly in recent years. It is not only about changes in energy prices, but also about substantial changes brought by the energy transition, accelerated development of alternative energy, and the green agenda of different countries, which also means significant changes in legal regulations. Serbia is no exception here, because last year a set of laws was adopted that additionally regulate the field of mining and energy and that regulate in detail the issue of using renewable energy sources and energy efficiency and further improve the legal framework. Therefore, there are many changes in the energy sector, and we in NIS see them as new opportunities for the development of our projects and contribution to energy stability not only of NIS and Serbia, but also of the region.

Also, our company has strengthened the energy sector, which is being developed in all directions, especially in the field of energy generation. The basic idea of forming the Energy Block in NIS is to accelerate the energy transition, because for our company it is not a new project, but something that we have been dealing with for more than eight years. The Energy Block, as a unique competence centre in NIS, will manage the fields of thermal and electric energy within our company. In the coming period, the main focus will be on expanding the scope of work in the field of generation and trade of electricity, solar energy, as well as the management of energy resources in NIS, including CCPP Pančevo and HIP Petrohemija. By being continuously developed, our company also improves the energy sector of Serbia. And our primary goal is decarbonisation through the energy transition process. We plan that by 2030, half of our consumption come from alternative energy sources, and we are taking significant steps in this direction.

What are the key projects you will be working on?

First of all, we are considering the projects of the generation of electricity from solar and wind energy, and here we have already taken quite concrete steps. Also, we are analysing potential projects for the use of biomass, biogas as well as small hydro power plants. In any case, in the coming period there will be an intensification of projects in the field of energy efficiency, renewable energy sources, CO2 extraction and storage, development of pilot projects for non-commercial technologies. It is a new stage in the development of NIS. At the same time, we have defined a large number of measures and possibilities for reducing various types of emissions, primarily greenhouse gas emissions. For example, we are already “injecting” CO2 into our reservoirs in order to prevent emissions into the atmosphere and to increase the production of oil and gas. Thus we have double gain – we have business benefits, but certainly environmental benefits, too.

When it comes to concrete projects, I would like to point out that we made a step forward in energy back in 2013 when we started the realization of the electricity generation programme in oil and gas fields. This means that we built small power plants on our oil and gas fields in Serbia, in which electricity and heat are generated from the associated gas from oil fields and non-commercial gas from gas fields, which has not been used before. So far, NIS has invested over 20 million euros in this programme, and the total maximum electric power of power plants is 14 MW. This method of energy generation prevents uncontrolled combustion on the flare or even the release of unburned associated gas into the air on oil fields, and NIS achieves significant financial benefits. In addition to Serbia, NIS started generating electricity from gas at the Jimbolia well in Romania. The kilowatt hours produced at this plant are sold by NIS on the Romanian market.

When it comes to solar energy, we conducted a pilot project for the installation of solar photovoltaic power plants at eight petrol stations in Serbia. The electricity generated in them will mostly be used for the needs of these petrol stations with the exchange with the electricity distribution network. In this way, it is planned to save almost 300 MWh annually by delivering about 40 MWh to the distribution network and reducing carbon dioxide emissions by 375 tonnes annually. We plan to expand the project to 30 more petrol stations in the next two years. Also, we plan to build solar photovoltaic power plants within the Pančevo Oil Refinery and petroleum products storage in Novi Sad. These two projects should be completed by the autumn of 2023, with a total installed power of the panel of 8.3 MW and a total annual generation of 11200 MWh of electricity.

Also, we successfully completed the project for the construction of the Combined Cycle Power Plant Pančevo in cooperation with our partner, the company “Gazprom Energoholding”. This project is worth about 180 million euros and has an installed electric capacity of up to 200 MW. The new gas power plant, whose technology is currently the best in terms of energy efficiency and ecology, will generate thermal energy for the needs of the Pančevo Oil Refinery, while the generated electricity will mostly be directed into the electricity system of Serbia. This is not about alternative energy, but the CCPP Pančevo is the first combined gas-steam power plant in Serbia, designed for the combined generation of electricity and heat, which burns natural gas, and gas is the most environmentally-friendly fossil fuel. We are also continuing our work on the wind farm project.

In addition, we continue to develop the trade of electricity. In addition to the Serbian market, we are also present in this field on regional markets, such as Romania, Bulgaria, Bosnia and Herzegovina, etc. Although we would earn more by trading outside Serbia, in these challenging times everything we generate currently remains on the domestic market because we want to contribute to Serbia’s energy stability.

How do you assess the perspective for the development of “green” projects in Serbia and what are the directions of NIS in this regard?

I think that the moment is right for the further development of such projects. Serbia’s electricity market is developing very successfully. Here I also see a chance for households that want to start their own electricity generation through solar panels, and it would be good for as many of them as possible to get into that business. Also, technologies are changing and allowing more electricity to be generated. In addition, more and more manufacturers of solar panels from all over the world are trying to enter the Serbian market, which means that there is certainly a perspective. As for NIS, I have already listed in detail the projects that we are implementing and that we plan to carry out. The most important thing for NIS is stable electricity supply, because our company has operating plants that are of special importance for the Republic of Serbia and its energy stability and security. It is enough to give an example of the Oil Refinery in Pančevo. Also, I would like to point out that NIS gives great importance to its green agenda and has been implementing it for years. This is evidenced by the fact that since 2009 we have invested about 900 million euros in environmental projects and projects that significantly contribute to the improvement of the environmental image. Therefore, NIS is ready to provide and already makes its contribution to the reduction of climate change, the development of green energy in Serbia and the achievement of the goals of the Republic of Serbia in terms of climate change.

How do you assess the current state and further development of the green transition and investment in renewable energy sources?

I have already said that the last years are very challenging for the energy sector and that our industry is affected by numerous global developments on which we have little or no influence. These events have somewhat slowed down the process of energy transition, but it is, in my belief, irreversible. We are now witnessing that some countries temporarily return to the generation of electricity from coal, but this is a consequence of the energy crisis and the desire to ensure energy stability in the coming period, especially before the coming winter. Also, the reactivation of nuclear power plants is mentioned for the same reasons I have stated. But, in any case, I think the long-term perspective is to reduce the generation of electricity from coal in favour of renewable energy sources, primarily, solar and wind energy. I believe that the share of renewable energy sources in the energy mix will only grow in the coming period. If in the next five to seven years the share of solar and wind energy reaches a third of the total generated energy, we can say that the process of energy transition is proceeding very successfully.

What do you think are the main challenges of the current global energy market?

The current state of the energy market is a challenge for all big players. This, above all, is true because there is instability in the market over a long period of time, then there is a burden due to a large number of different market interests, and, finally, there is currently a significant impact of the politics on the global energy market. I believe that we can overcome these challenges by carefully monitoring market needs and global trends and being prepared to respond in a timely manner to changes that are expected or taking place. Also, I believe that responsibility is our key value – responsibility to people, resources, the community and the environment, and it is the foundation for building partnership relations with all stakeholders.

  • Curriculum Vitae:

    Sergey Fominykh, Director of the Energy Block of NIS, was born in 1979 in the Russian Federation. He graduated from the Faculty of Law at the Mari State University and Central European University in Budapest in the field of jurisprudence. He continued his professional development at the Moscow School of Management Skolkovo, Cambridge Business School and IMD Business School in Switzerland where he obtained an MBA degree.

    He has many years of experience in the field of law acquired by working in international consulting companies. He started working in NIS in 2009, as Director of Legal Monitoring Department, and he became Director of the Function for Legal and Corporate Affairs in November 2010. Since 2018, he has been a member of the Board of Directors of “Gazprom Energoholding”, with which NIS is implementing a partnership project of the Combined Cycle Power Plant Pančevo. He is also one of the key associates to the partnership project with HIP Petrohemija.

    In 2022, he was appointed Director of the newly formed “Energy Block”.

    In addition to Russian, he speaks Serbian and English.


Milentija Popovića 1
11070 Belgrade