Investigative storiesEnergy

Municipalities Abandon Biomass Projects, Government Has No Plan

20. Nov 2020.
Beogradske Elektrane public utility company’s Novi Beograd heading plant; photo:
Even though it is cheaper and less harmful to the environment, biomass remote heating has not reached Serbian citizens’ homes yet. Six out of 10 municipalities have dropped plans to build a heating plant with funding from a German Development Bank (KfW) loan, while the loan agreement is being kept from the public. Experts say there is no national strategy for utilizing our biggest renewable energy source and that the problem is that local self-government units decide for themselves.

Radiators in Priboj citizens’ homes should as of the next heating season be heated by the biomass that will be used by a new heating plant. That would make Priboj one of the first cities in Serbia to use fuel that is cheaper and less harmful than fuel oil for remote heating. Carbon dioxide emissions will be reduced by 87%, while sulfur dioxide emissions will be cut by a whopping 98%.

The city expects that in this way it will also slash its fuel expenses in half, while four other municipalities in Serbia share a similar fate. All this is in line with the official Energy Development Strategy, which envisages 11.2% of the total energy for heating being generated precisely by biomass heating plants by 2020.

However, it does not seem like there will be a significant increase in the use of biomass relative to inefficient remote heating which, according to earlier research, is used by about a third of the Serbian population, because existing projects will have a small range, the Center for Investigative Journalism of Serbia (CINS) has discovered. There is no plan for switching to biomass as the ideal renewable energy source, but rather everything has been left to the local self-governments to deal with, which is not a good solution according to CINS’ interlocutors. The 2019 Energy Balance shows that radiator heat obtained from biomass accounted for less than 1%. This fuel can be used to generate heat and electricity, but in Serbia its importance is the greatest in solving the problem of costly remote heating.

“Biomass heating is cheaper and healthier than fuel oil heating, by about 20% in the part pertaining to the price of the fuel,” Ministry of Mining and Energy officials say.

 

Besides being cheaper and less of a pollutant, biomass is also the most widespread renewable fuel in Serbia. It officially accounts for 61% of the total potential of renewable energy sources, and one of CINS’ interlocutors estimates that there is even more of it than that. It is made from plant and animal waste, i.e. leftovers from agriculture, forestry and the wood industry, as well as biodegradable parts of communal and industrial waste.

Energy expert Aleksandar Kovačević told CINS that the last inventory of agriculture and forestry had registered a large surface area of land on the use of which there were no data, including land that had been ruined or neglected.

“For example, the untended rows of trees along roads and canals in Vojvodina alone, if used like they were in the 1980s, could produce enough biomass to heat the entire city of Novi Sad,” says Kovačević.

Municipalities Abandoning Plans for Biomass Residential Heating

Aside from Priboj, nine other local self-government units were supposed to switch to this type of remote heating. Fossil fuel heating was to become a thing of the past thanks to a loan worth 20 million euros from the German Development Bank (KfW) and two donations of seven million euros in total from Germany and Switzerland, in Mali Zvornik, Nova Varoš, Novi Pazar, Prijepolje, Bajina Bašta, Valjevo, Priboj, Kladovo, Majdanpek, and Bečej. According to KfW’s information, the deadline is March 2024.

However, the municipalities’ transfer to biomass is not running smoothly.

Ministry officials say that six out of the 10 municipalities have given up on the KfW loan for the construction heating plants, whereas one has joined the project.

“In the meantime, Majdanpek, Nova Varoš, Bečej, Valjevo, Kladovo, and Bajina Bašta have dropped out of the program, while Knjaževac has joined [the program],” the officials say.

KfW representatives told CINS that some municipalities “took the opportunity to only build biomass boilers” with the help of another project financed by the Public Investment Management Office. The Office project entails the reconstruction of public institutions’ buildings, which includes the construction of biomass boilers, for making those buildings more economical and energy efficient.

That was also the case with the municipality of Nova Varoš, whose chief Radosav Vasiljević says they did not want to push the municipality into debt by a loan in order to take part in the German bank’s project. The Office, on the other hand, gave them grants for the construction of a biomass boiler at a local elementary school. Thanks to that boiler room, Vasiljević claims, they will be able to heat the entire public sector – all the schools, a school hall and the municipal administration building.

Bajina Bašta switched to the other project for the same reason, and Majdanpek and Kladovo introduced biomass in the same way. Valjevo city officials cited borrowing and an underdeveloped biomass market as reasons for quitting this project.

However, RES Foundation Program Director and biomass expert Aleksandar Macura explains that the Office project is not an alternative to the KfW loan. The latter primarily encompasses the biggest heat consumers – apartments.

Aleksandar Macura; photo: Miomira Marković

“Those are two different things. Here (in the Office project, journalist’s note) some block-type local heating is dealt with, of one, two, three public buildings which are now running on fuel oil or coal, and there is a switch to wood chips or pellets, while this (the KfW loan, journalist’s note) is a whole other matter where an entire remote heating system, which runs on fuel or coal, is dealt with,” Macura underscores.

The Ministry officials confirm that a number of heating plants have opted for the Office project, but add that they too will have some energy left over for households.

“In Majdanpek, a 7 MW biomass boiler has been installed for the health center, while it needs 1–1.5 MW. The rest of the generated heat is delivered to the heating plant’s system. It is the same in Kladovo and Nova Varoš,” the officials say.

Macura explains that such a system, generally, is still a small source for a remote heating system. He sees the municipal administrations’ potential fear of the “daunting project” because of which, if they make a mistake, they could lose the next election, as the reason for their pulling out of the KfW project.

He believes that the decision on biomass heating should not have been left to the local self-government units in the first place and proposes a different strategy – a centralized company that will contract public procurements for all:

“Now when you switch to biomass you are leaving small local self-government units to negotiate the procurement of wood in a weak position. Ten simultaneously (together, journalist’s note) negotiate in a better position. Those are very important things. Consolidation in that sense brings many benefits.”

Aleksandar Kovačević adds that there was talk back in 2012 of standardizing equipment in all the municipalities in which boilers were to be built – which would reduce the individual investment cost, with the use of the most effective technical solutions.

“For example, the untended rows of trees along roads and canals in Vojvodina alone, if used like they were in the 1980s, could produce enough biomass to heat the entire city of Novi Sad “

Besides the need for municipalities to unite, he recognizes other problems related to the implementation of remote biomass heating. Apart from a lack of major investment initiatives that would stimulate biomass production, current producers do not need to look for other consumers, like heating plants. The use of firewood for heating in houses, as Kovačević puts it, has resulted in the forming of a firewood market with very high prices.

“In addition, and perhaps most importantly, remote heating users do not demand that the heating service be cheaper, cleaner or more reliable. Remote heating companies easily transfer their big expenses to the consumers,” he adds.

When asked what the strategy or plan is regarding a switch to biomass remote heating in Serbia, the Ministry of Mining and Energy officials reply that there is no such thing, but that “the new Government of Serbia will certainly conduct certain analyses and propose appropriate solutions in this area.”

Some Run Away from It, Others See It as Salvation

Knjaževac has entered into the KfW project instead of Kladovo. The director of public utility company JKP Toplane Knjaževac, Ljubodrag Tričković, says that they have been in talks with the Ministry for three years now and that this would be “salvation” for them because their heating plant had been producing nothing but losses until 2013.

“We are awaiting a pre-investment study, when that study is delivered to the Municipality of Knjaževac and Toplane, then we will see from it what the terms are (…) but we have no official offer yet,” said Tričković.

The Ministry officials did not wish to talk about the details of implementation of the KfW project titled Promotion of Renewable Energies – Developing the Biomass Market in Serbia. They did not give journalists the contracts with KfW either, which CINS had asked for through an official request for access to information of public importance. The reason for their silence, they say, is that according to the agreement only the German Development Bank may disclose information.

According to the latest Energy Community Report, in 2017 Serbia reached a share of just 20.6% of renewables in the gross final energy consumption, which is far below the 25% for that year and for 2018, as envisaged by the National Renewable Energy Action Plan of the Republic of Serbia, and even below the 21% share of renewable energy in the base year, 2009. The next promise is 27% of renewable energy in 2020.

However, former commissioner for information of public importance and lawyer Rodoljub Šabić says that it is inadmissible and irresponsible for our governing bodies to even contract such provisions.

“The contract provisions which envisage that the right to access to information is practically eliminated, that all the information on the legal affairs it pertains to is confidential, and that our public cannot get a single piece of information without the permission of the foreign partners, are obviously contrary to the Constitution and, of course, to the Law on Free Access to Information. It is unacceptable that the contract provisions dispute the provisions of the domestic public and legal order, i.e. their implementation is made dependent on the will of foreign partners. (…) I have reiterated that principled position as the Commissioner several times (Horgoš–Požega highway, FIAT, Morava Canal),” Šabić explains.

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