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Development of a Sustainable Bioenergy Market in Serbia

May 27, 2015 | Comments: 0Author:

Project summary

A series of round tables on sustainable use of biomass was held from October 2014 to April 2015 by the Belgrade Fund for Political Excellence (BFPE) with support from Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ). The aim of the project was to establish dialogue for decision makers at the national and local level and have experts in the field and other interested parties present studies, best practices and know-how  in order to identify the major challenges, obstacles and possibilities  for development of a sustainable biomass market in Serbia from economic, environmental and social perspectives. Another objective was to help raise awareness about efficient, sustainable and rational use of both forest and agricultural biomass, Serbia’s biggest, yet, almost untapped renewable energy potential. Public debates focusing on issues relevant for local communities were organized in cooperation with the project ’Mapping the spatial, infrastructural, resource and logistics preconditions for production of electric or/and heat energy out of biomass in Srem County’, which is implemented by the Standing Conference of Towns and Municipalities (SKGO) and supported by the Embassy of Finland in Serbia. The events in Belgrade, Užice, Bor, Niš and Novi Sad were covered by local and national media. The conclusions were presented at the project’s closing conference on April 28 in Belgrade.

Major challenges for sustainable bioenergy market

The final conference, held in Belgrade on April 28, rounded and presented the conclusions from previous five round tables. Over 60 people from business sector, state administration, local authorities, and scientific and professional environment attended the event and participated in one of four working groups. One of the most important conclusions of the series of events is the need for the legal framework to be brought in line with public policies in order to enable the most efficient use of available biomass capacities and develop the potential for growing additional quantities of this energy source through energy crops.

The working groups recognized there was room for biomass market to expand in Serbia and for wider inclusion of private landowners and forest owners. Participants underlined the need to overcome the obstacles in mutual communication and to establish better cooperation between local authorities, regional and state administration, and potential investors in the field. Officials and experts suggested introducing several instruments in the system, including standards for heating devices, mapping of arable land, and stimulation and subsidizing measures.

There is room for wider inclusion of private landowners and forest owners.

The working groups presented conclusions on the following four topics identified as the major problems in sustainable development of bioenergy market in Serbia: 

Using biomass for heating in households and district heating systems – economic and energy efficiency

The working group responsible for heating and energy efficiency concluded there is not enough interest in the subject neither in various institutions responsible for it nor in financial organizations. It was suggested that a sustainable development policy needs to be established to improve the biomass market.

The first round table was organized in Belgrade on October 17 and it was focused on the possibility to use biomass in Serbian capital’s district heating and development of sustainable biomass supply. Thomas Michel, DKTI – Development of Sustainable Bioenergy Market in Serbia project’s leader said one of important aspects of biomass market, especially one including a sustainable supply chain, is independence from energy imports, while there is also rural development and creation of jobs.

First round table_web_730
Photo 1: Working group covering benefits of using biomass for heating
A photo by: Ana Dokucevic, Media Centar

Other participants expressed concern for the stability of the district heating system in Belgrade and overall low efficiency across the land. They stressed the lack of motivation in local authorities to introduce biomass facilities because of fear from taking loans and due to the fact that procedure and construction take at least four years.

The quantity of biomass used in heating in Serbia is about one million tons of oil equivalent, says Slobodan Cvetković, adviser in Serbia’s Ministry of Agriculture and Environment. At the second round table, held on November 7 in the town of Užice in the west of the country, he stated most of this energy source is utilized in individual fireboxes rather than in big systems. The share of biomass from agriculture is only about 36 thousand tons of oil equivalent and it is used mostly in Vojvodina, he said. Cvetković told participants that about a quarter of agricultural biomass is planned for generating energy and underscored a European Union rule that 10% of arable land must lay idle.

Level of energy efficiency in Serbia is very low and heating expenses in the housing sector are 3.5 times higher than in Scandinavian countries, experts said, stressing the ratio is even increasing due to measures of improvement in the continent’s north, where this is seen as being in public interest.

Biomass market with a sustainable supply chain means independence from energy imports, rural development and creation of jobs.

On the other hand, energy efficiency enhancement measures in Serbia remain uncoordinated, participants concluded. They suggested incentives such as tax breaks for owners of buildings who invest in it. Meanwhile, it was said, there are still 1.3 million buildings not yet registered in accordance with the law, thus they remain out of the system for permits for works on energy efficiency improvement. There are also simpler and cheaper moves for households, such as replacing wood-fired stoves in rooms with advanced devices.

Availability and potentials of sustainable forest biomass utilization in the future

Forest-biomass residue is seen as an underdeveloped resource, while there is forest management capacity for increasing its use as well as for significant reforestation and growing energy crops, experts say. Among the conclusions from the working group covering the topic at the project’s final conference, participants said a set of legal, financial and information tools is necessary, parallel to better forest ecosystems control.

Biomass is not only a complex issue, but sometimes also a controversial one, especially from the perspective of exploiting existing forests, which are scarce, if reforestation isn’t taken into account, Sonja Licht, BFPE president, said at the opening of the first round table. Energy and environment will clearly be challenging issues in Serbia’s negotiations about joining the European Union, so besides the pressure on decision makers to change policy, reaching out to the public to understand the importance of the topic is also exceptionally important, she added.

Existing forest management capacity has potential for significant reforestation and for growing energy crops.

Aleksandar Kovačević from the Oxford Institute for Energy Studies stated that biomass use may halve heating expenses. There is great difference, even when the energy source price is the same, if it is imported, ordered from a third party, or if the consumers produce it by themselves or they get it locally, from associates, he said at the March 11 event in the Chamber of Commerce and Industry of Vojvodina in the city of Novi Sad. Vojvodina is an agricultural area, so that sector has great potential as a source of biomass, experts said. Branislav Knežević, deputy provincial secretary for agriculture, water and forest management, stressed how forest expansion funds aren’t used enough by local authorities, due to lack of interest, while for effective biomass utilization forests should reach a minimum of around 14% of territory, in comparison to the current 6.5% in Vojvodina.

Public–private partnership and biomass utilization projects

The main subject of the round table in Niš on February 4 was public–private partnership and its ESCO (energy service-savings company) model, as the city hired a private investor for an overhaul of heating systems in kindergartens and schools. In the words of deputy mayor Ljubivoje Slavković, the municipal authority may save between EUR 400,000 and 600,000 a year from the switch to biomass starting next season. “We present ourselves as a community with a pioneer project for biomass. The City of Niš spends about one million euros for heating oil, which is the most expensive way to generate energy. The initial proposition came from the partners in Slovenia. We sent a request to the authorized Commission for Public–Private Partnership. This institution did its job perfectly. Still, after that point is reached, there is the discrepancy between laws on public–private partnership and public procurements, administrative obstacles as well. “If the state was more efficient, would have already saved EUR 200,000. ” he stated.

Municipal authority of Niš may save between EUR 400,000 and 600,000 a year from the switch to biomass for heating in schools and kindergartens.

Predrag Cvetković from the Faculty of Law in Niš said the law enables a private company to develop a draft project to present to a potential public partner and get a refund for it. This does not in any case mean the company would be hired, however the document may help the public partner to be better informed on the issue, he added. “It is good to start with smaller-scale projects. This way know-how is expanded as well as the professional capacity,” Cvetković claims.

Andrijana Jovanović, deputy head of the Commission for Public–Private Partnership, explained that institution’s role in establishing such projects, providing support in expertise and consultancy, adding it is no political body. “The model only covers public interest and there is no room for lucrative activity, since it is designed to be long term. The essence is in cooperation and risk spreading, not competition,” she said. Jovanović stressed that Serbia didn’t adopt an institutional type of partnership, but the contractual model of arrangements, where a concession is granted. The commission’s role is to determine if a project is efficient and sustainable in relation to its funding and classic finance, she concluded.

Nis round table_web_730Photo 2: Andrijana Jovanović: Essence in cooperation and risk spreading, not competition
A photo by: bfpe.org 

 

Energy poverty and population health

Užice event was organized on November 7. Its main topics were environmental impact of renewable energy sources utilization, and energy poverty and its gender aspect. Wider aspect of energy poverty calculates household expenses on energy including the cost of transport to work or for education, health care or cultural activity, says sociologist Ksenija Petovar. In her words, some of the main factors are debt for heating services, bad isolation and inability to reach necessary room temperature levels. In Serbia, poverty is threatening even the population covered by district heating, especially in the case of the price exceeding 10% of the household’s income, Petovar explained. Furthermore, inadequate, old fireboxes in rooms cause indoor pollution and are a health risk, she underlined.

Petovar: Poverty is threatening even the population covered by district heating.

Speakers at the round table agreed the population lacks information on alternative ways of heating and that systematic efforts in that field are necessary.

Višnja Baćanović, gender issues consultant, raised the women’s vulnerability issue. She laid out an example where lower tariffs for power at night cause women to lose sleep because they tend to save money by using electrical devices, such as stoves and washing machines, only after midnight. Data from different surveys showed women make up the majority of single parents in families in risk of poverty, she added, as well as the most single-person and remote households. They constitute the minority, on the other hand, of energy experts, for instance among local energy managers, and have lower income on average, Baćanović stated.

Uzice round table_media
Photo 3: Media interested in biomass potentials
A photo by: bfpe.org 

The round table in the town of Bor in eastern Serbia was held on December 16. Ljubinka Kaluđerović from SKGO’s environmental committee underscored there are numerous technologies that can be used to switch to renewables for energy. “We believe that in Bor and its surroundings many more entrepreneurs and small firms can be active in areas related to heating, such as pellet production,” she said at the panel.