“Biomass in South-East Europe”

Berlin, 29 October 2009.

Republic of Serbia - Ministry of Mining and Energy

Dejan Stojadinovic, Assistant Minister

Serbia

Biomass

For

Energy

2

Potentials

(Mtoe)

Biomass 2.40

SHPP 0.40

Solar 0.64

Geothermal 0.20

Wind 0.19

TOTAL 3.83

Serbia’s endowment of renewable energy resources is substantial

- realization of these potentials require Government action

Biomass

63%SHPP

10%

Solar

17%

Geothermal

5%

Wind

5%

RES Technical Potential

Clear technical potential of renewable energy - insufficient information

about the economic potential

3

Biomass Resources

Agricultural land (ha) 5,701,000

Arable land (ha) 4,867,000

Number of farms 778,000

Average size of farm (ha) 3

Serbia covers 8,836,000 ha

Forest area (ha)

2,252,400

29.1% (target

41%)

Annual increment of wood

biomass (mil m³)9.08

Annual increment per hectare

(m³ /per ha)4

PRIVATELY OWNED 47%

STATE OWNED 53%

AGRICULTURE FORESTRY

4

Agricultural Biomass

Fruit growing residues

Biomass residues

(1,000 tones)

Plum 393.5

Apple 36.2

Cherries 55.0

Pear 14.0

Peach 35.1

Apricot 15.5

Walnuts 55.0

Grapes 515.0

TOTAL 1,119.3

Crop farming residues

1/3 available for Energy Use

Total residues

(1,000 tones)

Residues for

Energy Use

(1,000 tones)

Wheat 2,905 1,365

Barley 295 180

Rye 15.5 4.4

Corn 5,310 1,140

Sunflower 705 240

Soybean 320 130

Rapeseed 7.8 1.6

TOTAL 9,560 3,060

Agriculture biomass 1.4 Mtoe

Most promising utilization options for agricultural biomass

•Co-generation utilizing agricultural wastes

5

Biogas Potentials

•Livestock farming and crop production – traditional

•Farms: large scale pig farm and dairy operations (about 80%)

•Medium and small scale pig farms

•No operational facilities for biogas production

Farm Type of

Animals

Headcount Methane

emissions

tCH4/yr

GHG

Emissions

tCO2e/yrNeoplanta Pigs 150,000 2,577 54,119

PKB Cattle 22,000 3,023 63,500

Napredak Pigs 30,000 150 10,824

Dragan Markovic Pigs 22,469 386 8,107

Vizelj Pigs 17,109 293 6,137

Pantomarket Stocar Cattle 1,700 233 4,907

Kovacevic Cattle 1,200 164 3,469

Kuc Company Cattle 1,000 137 2,886

Klanica Divci Cattle 2,000 274 5,773

Pepu Pork Pigs 9,650 165 3,482

PIK Bicej Pigs 56,000 280 5,880

Estimated total potential for production of biogas from manure – 220,000 m³/day

6

Biofuels

Considered 350,000 ha of marginal land

suitable for production of raw materials

Sowing structure

Potential

production of

biodiesel (t)

100% rapeseed 212,800

70% rapeseed

30% sunflower224,140

50% rapeseed

50% sunflower231,700

30% rapeseed

70% sunflower239,260

100% sunflower 250,600

100% soya 141,750

10,000 t/year of waste oils

Market excess of 1,000,000 t of corn and wheat

could be considered for the production of bio-

ethanol

Potential production of bio-ethanol – 300,000 t

BIODIESEL BIOETHANOL

Largest facility for production of biodiesel

VICTORIA OIL – Sid

www.biodizel.rs

www.victoriagroup.rs

Capacity of 100,000 t

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Wood Biomass

• Potential wood harvest in Serbian forests is 4.6 million m3 annually

•Available amount of forest wood residue is 572,000 m³ annually

•In wood processing companies – 35% of the total amount of wood residue is used for heating and drying of wood,

while the rest is sold on the market

•Main buyers of wood residue from sawmill wood processing are producers of wood based panels and pellets

FAO Study on Wood Biomass in Serbia

•More than 1,500 saw mills in Serbia

• Annual production of wood pellets – 80,000 t

•Annual production of wood briquettes – 90,000 t

•Annual production of fuel wood – 4 mil m³

Current production of wood biomass products

Most promising utilization options for biomass

•Space heating in households and buildings using biomass pellets

or briquettes

•Co-firing or total replacement in district heating plants firing heavy

oil or coal in south Serbia, where natural gas is not available yet

8

Wood Biomass Producers

•DRVOPROMET - Leskovac

•VAROTECH - Mladenovo

•BRIKO – Nova Varos

•KANCOM – Nova Pazova (www.eurokancom.com)

WOOD BRIQUETTES

•ZELENA DRINA – Bajina Basta (www.crabo.it)

•BIOENERGY POINT – Boljevac (www.point-group.com)

•BIOTHERM – Guca (www.bio-therm.net)

•O3 – Bajina Basta

•FOREST ENTERPRISE - Doljevac

WOOD PELLETS

•SRBIJASUME

Public Enterprise, state-owned, manage 965,000 ha of

forests (www.srbijasume.rs)

•VOJVODINASUME

Public Enterprise, state-owned, manage 130,000 ha of

forests (www.vojvodinasume.rs)

FUEL WOOD

•KIRKA-SURI – Beograd (www.kirka-suri.com)

•RADIJATOR – Kraljevo (www.radijator.rs)

•ALFAPLAM – Vranje (www.alfaplam.rs)

WOOD BIOMASS BOILERS

9

Wood Biomass Market

•Consumption of briquettes is growing

•Production cost of wood briquettes is 60 – 70 EUR/t

•Retail price of domestically produced briquettes from sawdust is 105 - 125 EUR/t

•Retail price of imported briquettes is around 210 EUR/t

•Retail price of boilers for biomass briquettes of German production for households is 770 EUR (25kW) – 1,200 EUR (45kw)

•Price of locally produced biomass boiler of power is 770 EUR (25 kW) - 1,200 EUR (40kW)

Wood Briquettes Market

•Retail price of coniferous pellets is around 160 EUR/t, while beech pellets are around 130 EUR/t

•Retail price of pellet stove of German production is 2,700 (2.2 kW) – 4,250 EUR (9,3 kW)

•Retail price of locally produced pellet stove is around 960 EUR

Wood Pellets Market

•Wood is mostly used by rural households - burnt in open fireboxes or inadequate stoves with poor energy efficiency

•It is estimated that 778,000 rural households in Serbia use wood for heating during winter months

•Price of wood residues by Srbijasume is 25 EUR/t

•Private forest owners sell firewood by the price of 41 EUR/prm including transport (prm - space meter; 1m³ = 1.45 prm)

•Retail price of firewood including VAT (8%) in Belgrade is 49 EUR/prm including transport and up to 54 EUR/prm including

transport and cutting of wood

Fuel Wood Market

10

Biomass Policy

GOALS OF BIOMASS POLICY IN SERBIA

Efficient use of available resources for the production of energy

Reduction of GHG emissions

Decrease of import dependance

Creation of new jobs

Development of

biomass market

Increased

production and

consumption of

energy from

biomass

11

Institutional Stakeholders

MINISTRY OF

SCIENCE AND

TECHNOLOGY

MINISTRY OF

MINING AND

ENERGY

MINISTRY OF

ENVIRONMENT AND

SPATIAL PLANNING

Renewable energy and

energy efficiency policy

development and

implementation

Technology dissemination

and demonstration facilities

Building standards

Some energy efficiency

provisions

Implementation of the

Strategy of Sustainable

Development

COUNCIL FOR

SUSTAINABLE

DEVELOPMENT –

Office of the Deputy

Prime Minister for EU

Integration

ENERGY

EFFICIENCY

AGENCY AND

REGIONAL CENTRES

Sectoral energy efficiency

programs

Training and public

awareness campaigns

Belgrade, Novi Sad, Nis,

Kragujevac, Kraljevo

ENVIRONMENTAL

PROTECTION FUND

Financing some energy

efficiency and renewable

energy programs

Grants and loans

MINISTRY OF

AGRICULTURE,

FORESTRY AND

WATER

RESOURCES

Building standards

Some energy efficiency

provisions

Council for Biomass use

Implementation of the RES

policy in Vojvodina

PROVINCIAL

SECRETARIAT FOR

ENERGY AND

MINERAL

RESOURCES

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Legal Framework for biomass use

• Energy Law (OJ RS 84/04) provides the overall foundation

for development of renewable energy sources and energy

efficiency

• Energy Sector Development Strategy of Republic of Serbia

by 2015. (2005) emphasize importance of utilization of

renewable energy sources for distributed heat and power

generation and recognize Serbian Energy Efficiency Agency,

Energy Efficiency Fund and introduction of support schemes

as the main instruments for the achievement of these goals

• Programme for Implementation of Energy Sector

Development Strategy 2007-2012 (2007) elaborate Strategy

in more details and define priorities for utilization of

renewable energy sources. Programme is updated every two

year, and next update will be prepared for the period 2009-

2011

• Regulation on technical and other requirements of liquid

biofuels (OJ S&M 23/06) defines technical requirements for

biodiesel and biofuels

• Construction Law – Key for investing/construction

licence

• Law on Environmental Protection (2004)

• Law on Strategic Environmental Assessment

• Law on Environmental Impact Assessment

• Integrated Pollution Prevention and Control Law - IPPC

licence needed for the biomass intallations

• Law on Waste Management – Use of residue materials

for the production of biogas and biodiesel, landfills

• Law on Air Quality – limits emissions for the facilities

that use biomass as a fuel

• Kyoto Protocol - Non-Annex I country, eligible for CDM

projects

MINISTRY OF MINING AND ENERGY –

www.mre.gov.rs

MINISTRY OF ENVIRONMENT AND SPATIAL

PLANNING – www.ekoplan.gov.rs

NATIONAL ACTION PLAN FOR BIOMASS USE – in preparation

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Barriers for wider use of biomass

•Lack of experience

Absence of “first set” of projects

•Transition Issues

Many industrial companies are in transition – both with regard to structure and

ownership, and managements are not yet ready to consider measures to rationalize

energy activities

•Electricity tariff

Low electricity tariff does not stipulate domestic, commercial and industrial consumers

to use renewable energy - current average price is under 5 €cents/kWh

•Biomass market

No developed market for biomass fuel and biomass utilisation facilities

14

Proposed feed-in tariffs for production of electricity

a purchase price, expressed in c€/kWh, is guaranteed and fixed during the 12-year period.

The level of a purchase price is set to provide invested capital returned in 12 years, with

covering all operating costs incurred during the same period;

additional criteria for setting the feed-in tariff is to have the internal rate of return at least

14%, i.e. not below this percentage

Biomass CHP feed-in tariff (c€/kWh)

Installation up to 500 kW 13,6

Installation between 500 kW and 5 MW 13,845 – 0,489*Р

Installation larger than 5 MW 11,4

Biogas feed-in tariff(c€/kWh)

Installation up to 200 kW 16

Installation between 200 kW and 2 MW 16,444 – 2,222*Р

Installation larger than 2 MW 12

P – Installed Capacity in MW

15

Investment incentives applicable to RES projects

INVESTMENT INCENTIVES

In case of investments in production facility, Government approve grant between 2000 and 5000 euros per

new job creation, minimal investment value is within the range of 1 and 3 million euros, whereas the minimal

number of new jobs is 50

An investor that invests in fixed assets, i.e. in whose fixed assets other entity invests over 600 million RSD

(6.8 million EUR), and uses these assets for conducting business in Serba and during the investment period

additionally recruit at least 100 people - shall be exempted from corporate profit tax payments for the period

of 10 years proportionally with the investment made

TAX CREDITS

A tax payer that made profit in newly established business unit in an underdeveloped area will receive a

corporate profit tax reduction in the duration of two years, proportional to the share of such made profit in

total profit of the company

ACCELERATED DEPRECIATION OF FIXED ASSETS

This incentive is provided for fixed assets that are used for the prevention of air pollution, water and soil

pollution, noise reduction, energy savings, forestation, and collection and utilization of waste for industrial

raw materials and fuels

FOREIGN INVESTMENTS INCENTIVES

The law on foreign investments stipulates free import of goods that are the foreign investor’s nominal capital

(founding capital) – providing it fulfils acts regulating environment protection. Import of equipment as the

founding capital of a foreign investor, except for passenger motor vehicles and game & gambling machines,

is free from customs and other duties. Besides, a foreign investor and a company with foreign founding

capital are entitled to tax and customs related deductions in line with the law

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THANK YOU FOR YOUR ATTENTION!