Seminar paper

Energy Utilization of Biomass in Serbia

Executive summary

Energy intensity against national product in Serbia is about three times the World average and almost four time the OECD average. Serbia is relatively poor in conventional energy resources. Domestic production of crude oil and natural gas declines while the cost coal production increases as mines are entering more difficult deposits. Most of the exports are energy intensive industrial products. Exports, employment, industrial and agriculture outputs, social stability and moderate poverty level are maintained by subsidized energy prices. There is massive consumption of energy for space heating and domestic hot water that facilitates considerable seasonal differences in energy demand. Winter peaks are met with reserve capacity in natural gas network, power generation capacity and district heating boiler plants that idled during summer period. For example, average utilization of district heating systems is below 1000 hours per year. Energy economy of Serbia is carbon intensive (two times the World average) and intensive in sulfur dioxide. There is massive consumption of fuel wood for residential space heating means of inefficient heating /cooking stoves that causes considerable indoor and outdoor pollution. Total consumption of furl wood of 11 - 12 million cubic meters is largely unregistered in official statistics as are indigenous forest resources that provide bulk of low quality fuel wood. Municipal and industrial waste is not used as sources of energy. There is minor use of biomass for heat generation in the industry. Although there are no appropriate official estimations it is to be considered that Serbia is endowed with massive biomass resource that almost equals current energy consumption of conventional fuels. Available biomass resources include agriculture biomass, wood residues after harvesting, fuel wood, waste from wood industry, waste from agriculture industry and biomass from municipal waste. These resources match in availability, costs and potential efficiency domestic lignite that is now dominant source of energy in the country. Domestic biomass resources are suitable from the point of view of seasonality and geographical dispersion: most of biomass is available in densely populated areas served by extensive network of navigable channels, railways and roads at the beginning of winter heating season. Furthermore, existing lignite power plants that could use biomass for burning with lignite and that dispose waste amounts of waste heat suitable for drying of biomass are located on major waterways in proximity of major biomass production areas.

The most promising uses of biomass are: cogeneration of biomass in existing lignite fired power plants, improved residential biomass stoves, district heating served by biomass based cogeneration plants and bio-fuel production. Biomass use for heat and power generation is of exceptional importance to improve sustainability of existing energy systems in the country, provide employment opportunities and improve economics of agriculture, forestry and waste management activities as well as improve energy efficiency and reduce pollution. It is to be considered that massive utilization of biomass is precondition for poverty reduction and economic development in Serbia. There are no national strategies for increase of biomass availability (watering in agriculture, forestation), biomass use in energy production or support to energy generation from renewable resources.

Review of the Energy Industry

The Government owned Electricity Power Industry of Serbia (EPS) conducts power generation and distribution in Serbia. EPS operates open pit lignite mines in Kostolac and Lazarevac that supply about 35 million tons of lignite a year to power plants, residential consumers, institutions and industry. Power plants are government owned and operated by EPS that also comprises ten regional electricity distributions of various size and coverage. Electricity Networks of Serbia (EMS) is recently separated from EPS to become an independent transmission operator.
Structure of the primary energy production in 2003 and 2004 (M TOE) in Serbia 1 Primary energy production Coal (including lignite) Crude Natural Gas Hydro potential Other (Biomass, Geothermal, Solar, Wind) 2002

2003 8.01 6.18 0.68 0.27 0.87 0.00

2004 8.21 6.34 0.67 0.24 0.96 0.00

7.84 5.98 0.67 0.27 0.93 0.00

Oil Industry of Serbia (NIS) is vertically integrated oil and gas company that conducts activities from oil and gas exploration, refining, transmission, distribution and retailing. It covers approximately 2/3 of domestic retail market in oil products and 100% of natural gas production, imports and transmission. There are 34 local gas distribution companies that are state, municipally or privately owned. In addition to about 600 filing stations owned by NIS there are another 600 stations owned by some 240 private companies including some foreign investors such as LukOil of Russia, OMV of Austria, Helenic Petroleum of Greece, etc. NIS operates two oil refineries in Novi Sad and Pancevo with about 4 million tons of available annual processing capacity. Coal production in underground coal mines is conducted by national mining company. Total production is about 500 000 tons per year. There are 44 district heating companies in Serbia with 6600 MW installed boiler capacity, 1600 km of double pipe main heating networks with about 12 000 substations distributing heat to about 400 000 households. These companies municipally owned. Serbia Forests is the state owned and vertically integrated company to operate about 50% of available forest resources in the country. Remaining resources are operated and / or owned by national parks and private owners.

Energy Demand and Consumption

In Serbia as well as in all energy modes there are enormous seasonal differences as most of energy is actually consumed for space heating. As winter peaks could exceed summer consumption for several times large parts of the energy infrastructure are idled for extended periods of time. As capital costs are not included into prices and capacity charges are not introduced, consumers are not aware of real costs of their behavior.

Structure of the primary energy consumption in 2003 and 2004 in Serbia Total consumption of the primary energy Coal Crude Natural Gas Electricity Renewable sources (including Hydro)

2002

2003 12.75 6.51 3.58 1.77 0.02 0.87

2004 13.56 6.71 3.95 2.00 -0.07 0.96

12.44 6.30 3.36 1.69 0.17 0.93

Institutional Set Up

State Union Government has no jurisdiction in the energy sector. However, Union Ministry of International Economic Relations serve as facilitator for accession to major international treaties and conventions applicable to the energy sector such as the UNFCCC and the Kyoto Protocol while the Union Statistical Office have to integrate energy statistics prepared by the republic institutes. The Ministry of Mining and Energy is responsible for overall governance in the energy sector. However, it shares responsibilities in setting energy prices with the Ministry of Trade and Tourism and the Ministry of Finance. Both the Ministry of Mining and Energy and the Ministry of Finance and the Ministry of Economy are active in the process of restructuring the energy industry. The Energy Law adopted in September 2004 establishes the Serbian Energy Regulatory Agency and the Serbian Energy Efficiency Agency. The Ministry of Agriculture, Water Management and Forestry with its departments is responsible for the governance in agriculture and forestry. The Ministry of Capital Investments is governs spatial planning, transport and urban planning as well as major infrastructure developments. Housing standards and energy efficiency in housing are responsibilities of this Ministry. The Ministry of Science and Environment provides governance in research activities (including major program on energy efficiency, renewable energy and industrial development) and environment protection. The Serbian Chamber of Commerce is active in the energy sector through its sector associations for energy, renewable energy and district heating. There is reasonable inter- sector activity within the Chamber between the energy, industry, forestry and agriculture sectors. Various professional organizations are active in the energy sector including about 40 engineering associations of different specialties, association for energy efficiency and some others. National Association of Cities and Municipalities is active in municipal / urban energy planning and energy efficiency.

Environmental Impact of the Energy Cycle

Energy sector in Serbia generates more than 40 million tons of carbon dioxide and over 300 000 tons of sulfur dioxide per year. Taking into consideration relative lack of wind and location of major energy facilities, the environmental impacts of these emissions are focused to distinctive areas in the country: City of Belgrade, Macva region in Serbia and Kostolac region in Serbia. The agriculture land acidification and outdoor pollution by burning products correspond with indoor pollution in many poor households that predominantly use solid fuels for space heating and cooking and whose main income is from agriculture. These people are affected both by declining agriculture income, diminished yields and health consequences of environmental pollution as well as lack of employment opportunities in agriculture and forestry. Based on recent UNDP study it could be considered that about one half of population is affected.

Availability of Biomass Resources

There is a need to distinct volumes of biomass available at regular pace of biomass generation and volumes that could be produced with reasonably possible improvements in the agriculture and forestry. At this point of time available forest resources are not sufficient to provide appropriate land coverage, water conservation and protection from erosion throughout territory of Serbia. Existing forests coverage is estimated to be about 65 percent of optimal forest cover. Both density and yield of existing forests are considered to be too small for available soil quality and geographical position. It is to be considered that improvement of coverage, density and quality of forests is priority for the country in which case available wood residues and wood waste suitable for energy generation is likely to increase. Particular problem is re-cultivation / reforestation of land devastated by lignite exploitation that is to be considered suitable for high yield energy plantations. As agriculture biomass is mostly produced in northern part of Serbia it is worth noted that navigable channels and water resources very well serve this area while actual use of watering systems is limited to only 1% of available agriculture land while use of greenhouses is only occasional. In case of widespread use of watering, second harvest and greenhouses, agriculture output is likely to grow while biomass resources could increase both in volume and density. The FAO Report describes forest resources as follows: "Forests cover 2 412 940 hectares, or 26.7 percent of the total area of Serbia. This is estimated to be about 65 percent of optimal forest cover. The standing volume is about 235 631 600 cubic metres. The average standing volume is 101.6 cubic metres per hectare. The average annual increment is 2.67cubic metres per hectare and total annual increment 6.18 million cubic metres. Broadleaved trees represent 91 percent, conifers 6 percent and mixed stands 3 percent of the forest. The State owns 51.5 percent (1 243 407 hectares) of the forests. The remaining 48.5 percent (1 169 940 hectares) is in private ownership. Beech is the main broadleaved species followed by oak. In terms of area, natural high forests cover 438 117 hectares (39.5 percent), coppice forests 382 146 hectares (34.4 percent), shrubs 123 644 hectares (11.1 percent) and reserves 1 344 hectares (0.1 percent).The area of plantations is 164 331 hectares.

Analyses of private forests and wood resources require particular attention. According to surveys conducted by UNDP (UNDP, 2004) population in Serbia consumes 11-12 million cubic meters of fuel wood during average winter season. This finding is consistent with professional sources cited in FAO report that many private owners are actually managing low quality wood resources that are below standards to be registered as a forest area, for sole purpose of residential heating. Forest coverage in Serbia is only 27%. A common device for using fuel wood in households throughout the country is very light cooking stove. The stove achieves energy efficiency of only 20-23%, and has average age of 18 years while its use for space heating, domestic hot water and cooking is common between households in Serbia. More than 65% of households own at least one of these stoves that also include some households connected to district heating or natural gas networks who keep the stove for energy security. At the given level of national product and organized collection / disposal Serbia produces about 2 million tons of municipal and industrial waste that could be used for energy purposes. Separation and gasification of organic component could be considered as a suitable technology for energy use of these renewable resources. The World Bank estimates that about 50% of solid waste in Serbia is covered by collection/ disposal system. At this point of time municipal waste management is organized as simple collection and disposal of waste to local land-fields that are more or less suitable for purpose. However, during several years of neglect, most land-fields in the country are used beyond their designated life. There are neither sewage water treatment plants nor use of biogas byproducts. As country approaches accession to EU appropriate waste disposal and water treatment are to be arranged as envisaged by the World Bank Environmental Assessment. Most of agriculture biomass and municipal waste originate in Vojvodina (northern part of Serbia) and the Belgrade metropolitan area. This area is well covered by navigational waterways, shipping infrastructure and biomass handling capabilities as well as shipbuilding, transport vehicles and agriculture machinery industries. It is to be considered that most of biomass from the area is suitable for bulk collection and transport for drying and use within large thermal power plant complexes in Obrenovac or Kostolac, co-burning with lignite and providing combine heat and power outputs. Such large production of biomass in considerable density and served with cheap and large capacity water transport is to be considered as unique comparative advantage that could facilitate development of the Serbian energy industry.
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Identification of Priorities to Enhance Use of Biomass Energy

National strategy to increase production and utilization of biomass energy emerges as priority enabling activity in Serbia. Within such development framework following projects could be considered: 1.Replacement of light cooking stoves as a principal biomass burning devices in poor households with down-burning and / or masonry stoves for space heating in order to decrease fuel wood consumption, improve living standards and relax pressures on local fuel wood prices. 2. Introduction of efficient biomass based central heating systems to public buildings in remote areas. 3. Introduce standardized gasification of municipal waste as a base load cogeneration technology to facilitate distributed electricity generation and support existing district heating systems in Serbia. 4. Consider co firing of biomass with lignite in major existing thermal power plants. 5. Promote waste biomass use to cover energy needs in food industry. 6. Promote re forestation and agricultural productivity.

Conclusions
Biomass resources are to be considered as the most important national energy resource in the Serbia. At current level of economic development these resources are to be considered indispensable to foster economic growth, poverty reduction and use of wasted economic resources in infrastructure, agriculture, industry and tourism as well as to facilitate new employment.

Density of population that use solid fuels as main source of space heating per settlement area

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References

1. Dakic, Dr Dragoljub, Simeon Oka, Milijana Paprika, Vinca Institute, Belgrade, Serbia, "Possibilities of extensive biomass use in Serbia", presentation 2. Djevic, Milan, "Use of Crop Residues for Fuel", faculty of Agriculture, University of Belgrade, 3. European Agency for Reconstruction, Least Cost Investment Plan for Serbia Electricity generation, various presentations 4. llic, Mladen "Renewable Energy Sources", presentation, Serbian Energy EfficiencyAgency, Belgrade 5. Kovacevic, Aleksandar, "Re-Thinking Obrenovac Lignite Complex" 6. UNDP Serbia"Stuck in the Past - Energy, Environment and Poverty in Serbia

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