North Macedonia's electricity company, ESM (Elektrani na Severna Makedonija), and SOCAR (State Oil Company of Azerbaijan Republic) recently signed a memorandum of understanding (MoU) to collaborate in the energy sector. This agreement comes in a context marked by growing concerns about energy security and the transition to more sustainable solutions.
North Macedonia relies heavily on energy imports, including natural gas from Russia and neighboring countries such as Greece. This dependence exposes the country to geopolitical and economic fluctuations, creating significant energy vulnerability. The objective of this cooperation is to reduce these risks by diversifying sources of supply.
SOCAR’s ambitions and the role of the Southern Gas Corridor
SOCAR, a key player in the global energy sector, exploits strategic gas resources in the Caspian Sea. Its export network, notably via the Trans-Anatolian Gas Pipeline (TANAP) and the Trans-Adriatic Pipeline (TAP), allows a direct connection with European markets. By collaborating with SOCAR, North Macedonia hopes to access stable volumes of natural gas while stabilizing prices.
This approach is part of a broader strategy by the European Union to reduce dependence on Russian gas. For North Macedonia, integration into the Southern European Energy Corridor represents a strategic opportunity to improve its energy resilience.
Investing in cogeneration for increased efficiency
As part of this cooperation, North Macedonia plans an investment of one billion euros in a gas cogeneration system. This technology will make it possible to produce electricity and heat simultaneously, thus optimizing the use of fossil resources while reducing energy losses.
Cogeneration could meet domestic and industrial heating needs, which are particularly seasonal in the country. It would also contribute to the reduction of CO2 emissions, while improving overall energy efficiency.
Geopolitical and economic implications
This agreement has an important geopolitical dimension. By moving closer to partners like SOCAR, North Macedonia is strengthening its position on the regional energy scene. This partnership could also inspire other initiatives in the Balkans, where countries such as Serbia are also seeking to diversify their sources of energy supply.
Economically, predictability of gas supplies will reduce energy costs for local industries, thereby supporting business competitiveness. However, in the long term, the integration of renewable energy will remain essential to meeting the country's climate commitments.
An energy transition still under construction
Despite the short-term benefits of this partnership, dependence on natural gas persists. North Macedonia will need to step up its efforts to integrate more renewable sources into its energy mix, in line with its commitments in the Paris Agreement and the objectives of the European Green Deal. Energy diversification, although essential, will need to be balanced with sustainable investments to ensure an effective energy transition.
