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Final Conference of the Project “Reducing Barriers to Accelerate the Development of Biomass Markets in Serbia”

Final Conference of the Project “Reducing Barriers to Accelerate the Development of Biomass Markets in Serbia”

Ministry of Mining and Energy (MME), the United Nations Development Programme (UNDP) and United Nations Economic Commission for Europe (UNECE) organised on March 21st and 22nd a two-day event in the big conference hall of the Chamber of Commerce and Industry of Serbia. The event consisted of the final conference of the project “Reducing Barriers to Accelerate the Development of Biomass Markets in Serbia” and “Hard Talk: New Possibilities for Developing Renewable Energy Sustainably in Serbia”.

Opening remarks at the conference were delivered by Miloš Banjac, Assistant Minister of Mining and Energy and National Project Director, and by Steliana Nedera, acting UNDP Resident Representative in Serbia.

It is the completion of a five-year project funded by the Global Environment Facility (GEF) and implemented jointly by UNDP and MME in cooperation with the Ministry of Agriculture, Forestry and Water Management. The Project was financed by the Global Environmental Fund (GEF) and UNDP in the amount of USD 3.15 million. The project started towards the end of 2014. The objective of the project was to increase the share of RES or biomass in the energy balance of Serbia.

The project had several components but the most important one was related to grants awarded to investors in facilities for combined heat and power (CHP) production from biogas. The projects were selected through a public call that MME announced in 2015. Six investors have received grants up to 15% of the value of the investment, or a maximum of 275,000 USD. The total installed capacity of facilities is 6.32 MW, which compared to the installed capacity of biogas plants in the reference year of 2015 represents an increase of 130%. The total value of investments in these facilities was 22.7 million USD. All facilities have been built within the set time frame, connected to the grid and obtained the status of privileged power producers for RES.

After the construction of facilities, a detailed Cost Benefit Analysis of supported CHP plants was conducted in accordance with the EU methodology for investment projects. The most important externalities of the project, as well as price distortions and disruptions which characterize the underdeveloped market, such as ours, have been taken into account. Economic analysis is accompanied by the sensitivity analysis of key operating parameters. Economic analysis has shown that all supported projects contribute to the growth of GDP and tax base, and have significant impact on the environmental protection and improvement of the quality of the local electricity distribution network. The most important finding of the studies is that the projects have opened a total of 100 new jobs (expressed as the number of full-time equivalents).

In addition to direct financial support, the project has provided extensive technical assistance to other interested investors in order to improve their ability to identify, prepare, provide financing and implement bankable projects for the use of biomass for energy generation. Guides for investors, model contracts on long-term supply of biomass, biomass catalogues with technical specifications, prefeasibility studies for identified projects, etc. have been developed. A series of training courses for investors has been delivered.

Apart from the direct support to investments, the project activities also included all segments in the biomass supply chain, starting from the agricultural and forest biomass resources, through logistics, quality systems, development of security instruments and continuity of supply, cooperation with banks and relevant institutions, as well as the use of energy from biomass. Programmes for the use of locally available biomass for energy generation have been developed for 29 local self-government units.

The project also had innovative components. Green Energy web portal with online platform for biomass trading has been developed in cooperation with the CCIS. Additionally, on the resource side, the project has been intensively dealing with issues around energy crops, which is an utterly new topic in Serbia. Available land areas that can be used for this purpose have been estimated, detailed instructions for the selection and cultivation of short-rotation energy crops with recommendations to investors and policy makers have been produced, trainings for interested investors and agricultural services conducted, and a draft support programme for energy plantations in Serbia prepared.

Within the educational component, through a very successful cooperation with the Universities of Belgrade and Novi Sad, students of the respective faculties have been given practical lessons in the latest technologies on the sites of CHP facilities. Furthermore, two study tours, one to Finland and another one to Lithuania for experts from Serbia have been organized.