Improving energy efficiency and decarbonization in three Serbian municipalities through public-private partnership

During 2024, a total of 64 boiler rooms burning fuel oil, heating oil, or coal were shut down in Serbia’s municipalities of Apatin, Odžaci, and Šid. As part of a public-private partnership project with Negawatt Solutions and B&S Immobilien, members of the EnergyNet group, boiler rooms using high-emission energy sources switched to a cleaner energy source – natural gas – greatly contributing to lower emissions, better air quality, and improved efficiency in the heating systems of public buildings in these municipalities.

The collaboration with the consortium of Negawatt Solutions and B&S Immobilien (members of the EnergyNet group) resulted in the implementation of a major project to improve energy efficiency and decarbonize heating systems at public buildings in the municipalities of Apatin, Odžaci, and Šid.

Over just 14 months, as many as 64 boiler rooms that were using fuel oil, heating oil, or coal were shut down, and new heating systems fueled by a much cleaner energy source – natural gas – were introduced at 29 elementary and high schools, 8 kindergartens, as well as other important public institutions, such as libraries, cultural centers, sports halls, and local community centers.

In just 14 months, 64 boiler rooms that used fuel oil, heating oil, and coal were shut down

Representatives of Negawatt Solutions and EnergyNet, the companies that implemented the project in partnership with the three municipalities, stated: “Thanks to the synergy we achieved by recognizing the importance of this project, obtaining more than 450 permits for connecting all these facilities to the gas distribution network and installing gas boilers was not an impossible mission. On the contrary, through our joint efforts, we accomplished it in just 14 months, sending 64 heating oil and coal boilers into history and making both society and the environment a better place.”

The project to boost energy efficiency and decarbonization was implemented through three separate public-private partnership projects with each of these municipalities. As the private partner in the projects, the Negawatt Solutions – Energy Net consortium undertook the financing, design, and construction of the infrastructure, including installing the gas generators and connecting the facilities to the gas network.

The private partner is responsible for implementing all agreed energy efficiency measures

Ankica Barbulov, co-founder and director of Negawatt Solutions, explains that in addition to financing and performing the works, the private partner also had the obligation to prepare all project and technical documentation, as well as to carry out all the procedures for obtaining the necessary permits and approvals, which numbered in the hundreds given the nature and scope of the project.

Barbulov stated: “That is one of the advantages of a public-private partnership. While the private partner assumes full responsibility for the implementation of all agreed energy efficiency measures, municipalities, as the public partner, can more easily focus on their other strategic goals.”

The private partner will be responsible for the long-term management of the project

After the first phase of the project’s implementation, the private partner will be responsible for the long-term management of the project. This includes handling fuel procurement, producing thermal energy, and supplying public buildings with thermal energy based on the public partner’s needs over the next 15 years, which is the duration of the contract. During this period, the private partner will also be fully responsible for the proper functioning of the gas generators and related equipment.

Vladimir Nikolić, co-founder and technical director at Negawatt Solutions, described the undertaking as “a project to improve energy efficiency and conserve energy, which has helped save as much as 20% of energy in each of these three municipalities. This is particularly significant in terms of conserving natural resources. However, what is perhaps even more important for the local community is its contribution to environmental protection and cleaner air.”

Local contribution to national goals

One of the key benefits of this project is its contribution to achieving both local and national climate goals. According to its Nationally Determined Contributions (NDCs) – targets for reducing harmful emissions submitted to the United Nations Framework Convention on Climate Change (UNFCCC) every five years – Serbia aims to reduce greenhouse gas emissions by 33.33% compared to the 1990 levels. Undoubtedly, the results of this project support the UN Sustainable Development Goals within the 2030 Agenda and serve as a good example to be followed.

The shutdown of heating oil boilers reduces emissions of CO2 and other harmful gases

Thanks to this project, CO2 emissions have been reduced by about 15% (116 tons per year) in public facilities in the municipality of Apatin, by about 36% (540 tons per year) in facilities in the municipality of Odžaci, and by about 13% (83 tons per year) in facilities in the municipality of Šid. In addition to cutting CO2 emissions, the shutdown of heating oil boilers has also led to reduced emissions of other harmful gases (NOx by 27% and SOx by 100%), as well as lower emissions of PM10 particles, by 85%, and PM2.5 particles, by 85%, in all three municipalities.

Negawatt Solutions supports efficient energy production for clients

Negawatt Solutions is an energy service company (ESCO) established in 2021, which aims to utilize its expertise and commitment to contribute to more efficient and sustainable energy generation and consumption for its clients. By applying innovative ESCO and PPP financing models, the company stands out as a leader in the development of energy efficiency projects. To date, Negawatt Solutions has helped numerous clients cut their energy costs, decarbonize operations, deploy renewable energy sources, and significantly reduce their environmental footprint, while offering a full range of consulting and engineering services.

EnergyNet provides the market with top-quality equipment

EnergyNet is a company with more than 30 years of experience, boasting a line of top-quality, energy-efficient equipment for heating, cooling, ventilation, electric charging, and energy storage. With reliable products and comprehensive solutions, the company offers tailor-made systems for heating, cooling, ventilation, and energy generation from renewable sources, catering to both homes and businesses. In addition to offering consulting and installation services, EnergyNet handles the commissioning of equipment and provides support through preventive maintenance and repairs, ensuring maximum efficiency and long-term customer satisfaction.

Benefits of public-private partnerships

A public-private partnership is an exceptional opportunity for municipalities to mobilize private capital for the development of public infrastructure and investments of public interest. In addition to private capital, this model brings valuable know-how and experience of private-sector employees, making them available to the public sector. While preventing additional public debt, this concept also addresses the shortage of sufficiently qualified professional staff by facilitating continuous education for the involved parties and the exchange of know-how.

This project confirms that good teamwork is key to success: public-private partnerships and companies like EnergyNet and Negawatt Solutions offer an innovative financing model, where the private partner finances the entire investment, which is then repaid over the contractual period from savings on the cost of the new energy source compared to the previous, more expensive one. This financing model is therefore not treated as public debt, making it a particularly attractive way of addressing financing challenges, with all debt to the private partner repaid from achieved savings.