Heat and power generation in Serbia is fundamentally based on the usage of fossil fuels in outdated and inefficient generation plants. While low quality lignite dominates in power generation, natural gas, heavy and light fuel oil, and lignite are dominant in the generation of thermal energy for the district heating and industrial processes. The consequences are high CO2 emissions and local environmental pollution.
At the same time, Serbia has a large district heating sector covering more than 20% of all households, as well as many businesses and public institutions.
Serbia also has a very large potential for use of biomass from agriculture and forestry in energy production, especially by using residual materials, which have so far been used very little.
District heating companies, industrial companies and farmers are increasingly interested in using bioenergy to generate heat and electricity. Wood chips are already being used by several municipalities (Priboj, Mali Zvornik, Novi Pazar and Majdanpek) while (both economically and environmentally) sustainable sourcing remains the main challenge.
It is estimated that a total of 8.3 million m3woody biomass can be made available annually in Serbia until 2030. This comprises of 6 million m3roadside biomass and 0.83 million m3agricultural pruning. These amounts can be exploited sustainably only with the introduction of appropriate management and logistics practices and high environmental standards preserving sustainability of the forests.
Switching to biomass from electricity, coal and oil has immediate impact on the local economy. It would provide more savings, decrease energy import and generate additional income along the supply chains of locally produced wood fuels. Most importantly, using biomass for heat generation also reduces fossil fuel consumption and therefore harmful emissions of the newly installed heating systems.
The EU encourages Serbia to move faster with green transition of the heating sector, and stand ready for further support. Meanwhile, the EU is supporting such transition together with KfW, and upcoming Renewable District Heating Program.
Preparation of Biomass District Heating Investments in Serbia aims at preparing biomass investments that may be financed as part of KfW’s envisaged Renewable District Heating Program.
The overall objective of the action is for residents and consumers, as well as the environment to benefit from a climate-friendly, efficient and reliable district heating.
The EU is providing 1 million EUR grant from IPA funds aiming at development of technical documentation needed for investments in district heating switch to biomass, and possible coupling with other renewable energy sources, such as solar energy.
Preparation of investments is expected to be completed by end of 2024 when the investments in new district heating systems could start.