dkti development of a sustainable bioenergy market in serbia€¦ · verušić, selenča,...

Mar 2018

DKTI Development of a Sustainable Bioenergy

Market in Serbia

Current biomass projects in Serbia20.03.2018

Mar 2018

Facts about the GIZ DKTI programme

Objective: To strengthen capacities and create an enabling

environment for sustainable use of bioenergy in Serbia

Funded by: German Federal Ministry for Economic Cooperation and

Development (BMZ) under the German Climate Technology

Initiative (DKTI)

In Cooperation with:

Public Investment Management Office

Ministry of Agriculture, Forestry and Water Management

Ministry of Mining and Energy

Ministry of Environmental Protection

Duration: January 2018 – December 2020 (2nd phase)

(1st phase from 2013 till 2017)

Rainer Schellhaas

Mar 2018

Policy advice Project

development

Biomass supply

KfW: Advise to

investments in

district heating

companies.

GIZ: Support to the

creation of a

sustainable

supply with bio-

resources

Structure of the programme:

GIZ: Support to

harmonization of

laws and

regulations to EU

standards

Support to policy

definition and

strategy

implementation

GIZ:Advise to the

implementation

of cost efficient

and innovative

bioenergy

projects

Technology and

knowlege

transfer

Cross-cutting theme: Sustainability

KeepWarm

GIZ:Improvement of

efficiency in

district heating

systems

co-financed by

EU under

Horizon 2020

programme

Rainer Schellhaas

Mar 2018

• Supporting political partners in realization of additional biomass

utilization projects as best practice examples

• Building capacities to implement bioenergy projects at different

levels from implementing institutions to operators

• Developing sustainable biomass utilization concepts customized

to the Serbian context, like BLTCs, utilization of roadside vegetation,

wood processing residues etc.

• Environmental aspects (reduction of emissions and ground water

pollution)

• Rural economic development by creation of new local jobs along the

supply chains, in the biogas sector and supporting services

• Macroeconomic effects on local income and trade balance

GIZ contribution to the development of the bioenergy

market in Serbia in the medium term

Rainer Schellhaas

Mar 2018 Rainer Schellhaas

for district heating companies (DHC) to switch from fossil fuel to biomass

• 18 active municipalities

• first projects are going into realization in 2019

• combined heat and power projects and heat only boilers

• financed by KfW, commercial banks or private/PPP

• utilisation of woody and agricultural biomass

• Public Investment Management Office is requesting support for

additional DHCs

• KfW offers 2nd tranche of credit for additional 15-20 DHCs

• negotiations ongoing

• additional pre-feasibility studies are planned

Development of sustainable supply chains

Mar 2018

Developing sustainable supply chains

location and development status

of DHCs to switch to biomass

start of construction in 2018/19?KfW financed

Valjevo, Mali Zvornik, Bajina Bašta, Priboj,

Prijepolje, Nova Varoš, Novi Pazar,

Majdanpek, Kladovo

start of construction in 2019commercial credit or PPP

Kruševac, Boljevac

start of construction in 2019commercial credit, state fund or PPP

Šabac, Knjaževac , Bor, Mionica, Svilajnac,

Medvedja, Prokuplje, Smederevo

next potential DHCs

Vranje, Pirot, Gornji Milanovac, Senta

Rainer Schellhaas


for municipalities, schools and hospitals, partly with local heat network

• 35 active municipalities

• first projects are going into realization in 2018

• most cases wood chip boilers

• financed by state funds

• Technical concepts published

• ESCO-PPP-project realized

Fuel switch in public buildings

Mar 2018

Fuel switch in public buildings

location and development statusfinanced by state funds

start of construction in 2018Priboj, Svilajnac, Despotovac, Mali Zvornik,

Mionica, Arilje, Prijepolje, Nova Varos,

Sokobanja

start of construction in 2019Osečina, Pirot, Kosjeric, Losnica, Smederevo,

Aleksinac, Senta, Valjevo, Surdulica, Vranje,

Gornji Milanovac

start of construction in 2020Lajkovac, Vrbas, Sremska Kamenica,

Žagubina, Jagodina, Čačak, Vršac, Razanj,

Velika Plana, Petrovac na Mlavi ….

Rainer Schellhaas


for farmers and cooperatives

• 8 projects

• 5 projects are realized

• 3 in planning phase

• Technical concepts published

• support of Serbian Biogas association

Development of biogas projects

Mar 2018

Biogas projects

location and development statusfinanced by commercial banks

in operationSombor, Žabalj, Čestereg, Potaje, Aleksinac

start of operation 2019Verušić, Selenča, Botoš (extension and heat

usage),

Rainer Schellhaas


Further considerations

• expected investments in the bioenergy arena is huge

• up to 50 million EUR for biomass supply

• up to 140 million EUR for district heating systems

• 80-100 million EUR for biomass heating systems in public buildings

• up to 80 million EUR for biogas plants

• domestic mazut production will stop this year (July 2018)

• restrictions following the EU directive on medium sized combustion

plant will hit most of industrial boiler, requiring desulphurization,

DeNOx and dedusting equipment


well then, easy going ….. ?


How to proceed?

• technical documentation for 9 DHCs in preparation

• Europe-wide tender starting end of 2018

• technical documentation for (some) public buildings available

• technical concepts for local heat networks available

• e.g. see GIZ website

• an example …

Mar 2018

Implemented by:

Concept of the fuel switch to biomass in Mionica

including economical evaluation and recommendations for district

heating grid

Mar 2018

Implemented by:

Task of the study

Assignment of the study is to establish:

• Technical concept for fuel switch to biomass heating for public buildings,

Phase I

• Designing the system for future connection of residential buildings,

Phase II

• Installation of a wood chip heating plant

• Installation of distribution system including grid and substations

• Reduction of CO2 emissions

Mar 2018

Implemented by:

Evaluation of current situation Public buildings

Public buildings and buildings with public institutions of Mionica are

located around the town at a great distance.

Technical parameters of public buildings are:

• heated area 13,426 m2

• capacity 1,931 kW

Mar 2018

Implemented by:

Evaluation of current situation Residential buildings

By type in Mionica there are residential buildings:

• with more apartments

• family houses

Reserve provided for residential buildings are:

• heated area 12,917 m2

• capacity 1,615 kW

Mar 2018

Implemented by:

Evaluation of current situation Existing heating systems

Existing heating systems

Crude oil

boilers

Coal

boilers

Electric

boilersLocal electric

heaters

Public

buildingsPublic and

residential

Public and

residentialPublic and

residential

Mar 2018

Implemented by:

Technical design conceptHeating plant - capacity

New heating plant contain biomass boiler assisted by the existing

boilers with fuel oil during periods of high consumption. This would

reduce the investment costs

The existing boilers and their installation would be relocate from main

municipality building. The existing boilers with fuel oil have a power of

750 and 900 kW

Phase

Biomass Oil Oil

(kW) (kW) (kW) (kW) (kW)

I 2.217 60% 1.400 750 900 3.050

I+II 4.071 60% 2.500 750 900 4.150

Calculate

Heating Plant

capacity

participation

biomass

boiler

Heating

Plant

capacity

Capacity of boiler

Mar 2018

Implemented by:

Technical design conceptHeating plant - location

Location intended for the

construction of new power plant

located on cadastral plot 115/1 KO

town Mionica, surface 1,950m2. The

location is in the central town area

and an existing access road.

Mar 2018

Implemented by:

Technical design conceptDistrict heating network

Heating network is designed to connect

objects in first and second phase, and to

enable the connection of new users. Since

new users will later be added, pipe network

is designed for larger capacity than needed

in phase I and II

The network of pipes consists of pre-

insulated steel pipes that direct the flow at

pre-prepared soil

Temperature regime of heating network is

110/70oC

Mar 2018

Implemented by:

Technical design conceptHeat substations

District heating transfer stations provide the link

between district heating suppliers and customers’

systems

Substations are designed for installation in areas

which are currently housing boiler rooms

The operating pressure in the primary part of the

substation will amount to a maximum of 6 bar

and will correspond to the parameters of the

heating network, while the temperature range will

be 110/70℃ in the primary part and 80/60℃ in

the secondary part

Danfoss substations

Mar 2018

Implemented by:

Preliminary investment analysis Three scenarios

In order to find the best solutions and determine the viability of the

investment, the preliminary cost analysis consists of three scenarios:

Scenario 1; Scenario is conditioned by the assumption that there is a

heating grid on which the related facilities of public administration of the

municipality Mionica are connected to.

Scenario 2; Scenario includes the construction of the heating grid that

would be dimensioned only for public administration of the municipality

Mionica (Phase I).

Scenario 3; This scenario includes the construction of the heating grid

that would have been dimensioned for connection of public administration

of the municipality Mionica and subsequent connection of residential and

commercial buildings (Phase I + II).

Mar 2018

Implemented by:

Preliminary investment analysis Preliminary cost investment by scenarios

Investment expenses would include the purchase of equipment and

boilers, necessary civil works, mechanical works and electrical works on

the construction of a new boiler, the heating grid, the relocation of the

existing boiler with fuel oil, and connecting objects to a new distribution

system.

Investment costs by scenario (€)

1. SCENARIO 1 285.000

2. SCENARIO 2 725.400

3. SCENARIO 3 905.400

Mar 2018

Implemented by:

Preliminary financial analysis

Cost estimate is for the period of 20 years

Annual costs include costs for biomass, heavy fuel oil, ashes, electricity,

water, labor costs, maintenance, insurance, depreciation

Scenario 3 is different from the scenarios 1 and 2, due to the larger heating

capacity which users of district heating systems have

It is expected that the connection of facilities in Phase II (residential

buildings) will be achieved in a period of 7 years. In the first year since of

project it is not expected to join any object. It is expected that the largest

number of buildings is connected in the fourth and fifth year of the

commencement of work

Mar 2018

Implemented by:

Preliminary financial analysisOverview of investments and costs according to the scenario

Existing systems New biomass system

a b c d=(b-c) e d+e-a

Scenario 1 285.000 1.421.360 957.336 0 672.336

Scenario 2 725.400 1.969.735 408.962 0 -316.438

Scenario 3 905.400 2.955.617 -576.921 1.547.741 65.420

InvestnentTotal operating and fuel costs for

2.378.696

SavingEarnings from

Phase IITotal

For period of 20 years

Mar 2018

Implemented by:

Preliminary financial analysis

Within the scenario 3, financial benefits are savings from replacing the

existing fuel and sales of thermal energy to future users

After the construction of the distribution of heating systems,

assumption is that the price of heating unit will remain the same as the

current price for a residential area that is heated by coal furnace

Scenario 3 assumes that in the period of 7 years all objects from the

phase II will be connected, which would create additional financial

income

The advantage of this scenario is that the municipality formed a

sustainable infrastructure system for district heating, which

increases the quality of life and a creates a positive effect on the

environment.

(€/m2a) Coal Heavy fuel

Resident space 7,24 9,96

Buisniess space 10,85 16,42

Mar 2018

Implemented by:

Project evaluation

Based on the analysis of three proposed scenarios, the construction of

a biomass boiler and district heating system would be justified under the

condition that with the connection of public facilities make the connection

of a large number of residential and commercial buildings possible in the

shortest time frame.

SCENARIO 3 - Unit cost heat energy Unit Value

The investment value - Capex € 905.400

Annual production of heat energy (first year of operation) MWh / a 1.931

Total heat production (20 years) MWh 75.365

The operation value (20 years) - Opex € 2.955.617

LUC - Levelized Unit Costs € / MWh 51,2

Mar 2018

Implemented by:

Conclusion

Scenario 1: This scenario assumes that there is heating grid only for

public buildings (Phase 1). Scenario 1 shows that the switch fuel to

biomass generate financial savings

Scenario 2: This scenario considers the construction of the biomass

boiler and heating grid, only for public institutions of Mionica.

Considering that public institutions are located in buildings spread

throughout the town, the construction of a biomass boiler and pipe

systems for district heating needs of public institutions is financially

unsustainable because of the large investment costs

Scenario 3 with the construction of a biomass boiler and pipe

systems for district heating and dimensioned for future connection

of residential buildings, is the only viable solution to reduce the

costs of heating public institutions. This investment is the largest

but the connection of new users has made additional financial

profit that this system has made sustainable.


How to proceed?

• technical documentation for 9 DHCs in preparation

• Europe-wide tender starting end of 2018

• technical documentation for (some) public buildings available

• technical concepts for local heat networks available

• e.g. see GIZ website

• contacting TOPS (association of district heating companies in

Serbia)

• contacting Serbian Biogas association

Mar 2018

As a public-benefit federal enterprise service

provider with worldwide operations in the field of

international cooperation for sustainable

development, GIZ works together with its partners

to develop effective and sustainable solutions.

Publisher:

Deutsche Gesellschaft für

Internationale Zusammenarbeit (GIZ) GmbH

Registered Offices: Bonn and Eschborn, Germany

DKTI Programme – Development of a Sustainable

Bioenergy Market in Serbia

Bože Jankovića 39

11000 Belgrade

Serbia

Rainer Schellhaas

Component Leader Biomass Supply

[email protected]

www.bioenergy-serbia.rs

In Cooperation with

Public Investment Management Office

Ministry of Agriculture, Forestry and Water Management

Ministry of Mining and Energy

Ministry of Environmental Protection

mailto:[email protected]

http://www.bioenergy-serbia.rs/

dkti development of a sustainable bioenergy market in serbia€¦ · verušić, selenča,...

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