Promotion of Renewable Energies:
Development of the Biomass market in the Republic of Serbia
The Project Development of the Biomass market in
the Republic of Serbia aims to enable a secure,
efficient and climate-friendly supply of consumers connected to district
heating networks. This is the second phase of the programme, whereas the first
one, € 27 million worth, is
expected to end in 2024.
The funds allocated
for the project, which is to start in 2024 and is supposed to be finished by
2029, amount to €
31.925 million in total. German development bank KfW is providing a € 20 million loan and up to € 2 million grant on behalf of the German Government. Additional
grant of € 0.925 million by the
EU Instrument for Pre-accession Assistance (IPA)[IB(1] and € 9 million grant of the EU Regional Energy Efficiency
Programme (REEP) under the Western Balkan Investment Framework (“WBIF”) is
provided through KfW as well.
The
programme would provide financing of biomass district heating systems in 4-6
municipalities to construct new boiler houses with biomass boilers
and with new or existing and relocated gas boilers. If the existing boilers are
coal-fired, which is mainly the case, they will be completely shut down and
replaced with biomass-fired boilers. All heating plants would have backup gas
boilers for maintenance purposes, or in case of failure on biomass boilers. In
general, 90% of energy should be produced from sustainable sources, i.e., from
biomass, wood chips.
When using
wood chips, sustainability of forest resource management is critical. Different
problems appear in such cases, like e.g., illegal forestry or thefts of wood,
and if there is no adequate management of forest resources in place, wood chips
are unsustainable source. Therefore, the project will have an additional
related component. Technical assistance for policy dialogue will be provided as
part of the project, focused on the transposition of the EU Directives to
achieve sustainable forest resources management.
The project is
open for participation, with minimum of requirements including readiness,
commitment to the project, clear legal status of the land, etc. Technical
assistance will be available to develop necessary studies and economic
analysis, which will bring the maturity of individual projects to the level
necessary for tendering and implementation. Municipalities will be identified soon, out of which Prijepolje and Novi
Pazar (adding additional capacities following successful phase one) are already
known.
The following
measures will be included in the programme:
·
Main investments concerning boilers on wood
chips biomass and /or similar biomass fuel, as well as secondary equipment,
civil works;
·
Measures associated with network, substations,
and other accompanying equipment;
·
Consulting services, including supervision and
institutional measures.
Expected
results include significant reduction of CO2 emissions, and an SO2
reduction of 100%. Additionally, a considerable increase in the share of
renewable energy is expected.
Serbia is characterized by a large district heating sector. There are over 60 municipal district heating companies supplying heat to about 19% of the 3 million households in Serbia, as well as to commercial and public clients. The DHCs mainly operate heat-only plants using natural gas (67%), heavy fuel oil (19%) and lignite (14%) with a capacity totalling 7,000 MW (almost as much as total electrical capacity – 7,700 MW)