elaboration of technical project concept of the fuel ... · srps en iso 17225-4..... 32 table 18 -...
TRANSCRIPT
ELABORATION OF TECHNICAL PROJECT CONCEPT OF THE
FUEL SWITCH TO BIOMASS IN MEDVEĐA
INCLUDING ECONOMICAL EVALUATION AND
RECOMMENDATIONS FOR IMPLEMENTATION STRUCTURE OF
DISTRICT HEATING GRID
Prepared for:
Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH
Dag Hammarskjöld Weg 1-5
Postfach/ P.O.Box 5180
65760 Eschborn
Prepared by:
K.R.B. Consulting & agency
Starovlaška 89
32250 Ivanjica
September 2017
2
Table of Contents
1. EXECUTIVE SUMMARY ........................................................................................................... 7
2. INTRODUCTION .................................................................................................................... 10
3. PROJECT LOCATION ............................................................................................................ 12
4. EXISTING HEATING SYSTEMS............................................................................................. 15
5. BIOMASS MARKET ANALYSIS.............................................................................................. 32
6. TECHNICAL DESIGN CONCEPT ............................................................................................ 37
6.1 TECHNICAL SOLUTIONS AND SIZING THE BOILER .......................................................... 37
6.2 HEATING PLANT, LOCATION AND FACILITIES .................................................................. 42
6.3 CONCEPT OF DISTRICT HEATING NETWORK................................................................... 44
6.3.1 CONCEPT OF DISTRICT HEATING NETWORK……….. ................................................... 44
6.3.2 SCHEME OF DISTRICT HEATING NETWORK…… ..................................................... …...45
6.3.3 CONCEPT OF HEATING SUBSTATIONS .......................................................................... 55
7. PRELIMINARY COST ESTIMATES ........................................................................................ 57
8. PRELIMINARY FINANCIAL ANALYSIS .................................................................................. 61
9. PROJECT EVALUATION ........................................................................................................ 63
10. LEGAL FRAMEWORK ........................................................................................................... 64
11. ENVIRONMENTAL IMPACT .................................................................................................. 65
12. ENERGY EFFICIENCY MEASURES AND CONCLUSION .................................................... 68
13. ANNEX .................................................................................................................................. 70
3
List of tables Table 1 - Public buildings in Medveđa .......................................................................................... 7
Table 2 -The structure of fertile land ........................................................................................... 13
Table 3 - Data on population of Medveđa from 1961 to 2011 ..................................................... 14
Table 4 - Data on population of the town of Medveđa from 1961 to 2011 ................................... 14
Table 5 - Microclimate data for the City of Medveđa .................................................................. 15
Table 6 - Data on premises of the Technical school and the Sports hall .................................... 16
Table 7 - Data on premises of the Medveđa Police station ......................................................... 18
Table 8 - Data on the facility of primary school ‘Gornja Jablanica’ .............................................. 19
Table 9 - Data on the premises of Health center ‘Medveđa’ ....................................................... 21
Table 10 - Data on the premises of the Cultural center ‘Medveđa’ ............................................... 23
Table 11 - Data on the facility of Social welfare center ................................................................. 24
Table 12 - Data on the facility of the Kindergarten ‘Mladost’ ......................................................... 24
Table 13 - Data on the facility of the Municipality ......................................................................... 26
Table 14 - Overview of data on the analyzed facilities and consumption ...................................... 28
Table 15 - Current situation, energy and fuel consumption, price, CO2 emission ......................... 29
Table 16 - Requirements for wood chips according to SRPS EN ISO 17225-4:2015 ................... 32
Table 17 - The classification of wood chips based on the moisture content according to
SRPS EN ISO 17225-4 .............................................................................................. 32
Table 18 - Requirements for wood chips according to SRPS EN ISO 17225-4:2015 ................... 33
Table 19 - Data on forests provided by SE ‘Srbijašume’, FE ‘Šuma’, Leskovac ........................... 33
Table 20 - The energy potential of green chips from forestry, with wood waste from sawmill
industry, in the municipalities of Nova Varos, Priboj and Prijepolje............................. 35
Table 21 - The energy potential of biomass from FE ‘Šuma’, Leskovac ....................................... 35
Table 22 - Characteristics of wood chips depending on the percentage of moisture .................... 36
Table 23 - Unit price of wood chips depending on the type of wood quality wood ........................ 37
Table 24 - Comparative analysis of the costs of currently used fuels in Medveđa and costs of
biomass ..................................................................................................................... 37
Table 25 - Calculated capacity of future heating plant .................................................................. 39
Table 26 - Sizing the pipe network by routes ................................................................................ 53
Table 27 - Calculation of operation point of network pump ........................................................... 54
Table 28 - Selection of substations in the facilities ....................................................................... 56
Table 29 - Investment costs ......................................................................................................... 57
Table 30 - Operational costs ........................................................................................................ 59
Table 31 - Costs of energy production ......................................................................................... 61
Table 32 - Unit costs of heating energy ........................................................................................ 63
4
List of figures
Figure 1 - Location of the Jablanica District ................................................................................ 12
Figure 2 - Municipalities of the Jablanica District in the territory of the Republic of Serbia .......... 12
Figure 3 - Energy consumption per fuel types– current situation ................................................ 29
Figure 4 - CO2 emission per fuel types– current situation ........................................................... 30
Figure 5 - Annual energy costs per fuel types– current situation ................................................ 30
Figure 6 - Unit price of energy per fuel type– current situation ................................................... 31
Figure 7 - Share of forest’s area in the total area of the Serbian municipalities .......................... 34
Figure 8 - State and private forests per Municipalities and Districts............................................ 34
Figure 9 - Annual energy costs per fuel types- comparison with biomass................................... 38
Figure 10 - Unit price of energy per fuel type- comparison with biomass ...................................... 38
Figure 11 - Diagram of the annual distribution of the heat capacity of the heating plant ............... 40
Figure 12 - Situation plan of heating plant .................................................................................... 42
Figure 13 - Disposition of drawings of the heating network per numbers ...................................... 45
Figure 14 - Drawing No 1 of the heating network ......................................................................... 46
Figure 15 - Drawing No 2 of the heating network ......................................................................... 47
Figure 16 - Drawing No 3 of the heating network ......................................................................... 48
Figure 17 - Drawing No 4 of the heating network ......................................................................... 49
Figure 18 - Drawing No 5 of the heating network ......................................................................... 50
Figure 19 - Drawing No 6 of the heating network ......................................................................... 51
Figure 20 - Drawing No 7 of the heating network ......................................................................... 52
Figure 21 - Scheme of compact substation DSA 1 Mini Danfoss .................................................. 55
Figure 22 - Substation DSA 1 Mini Danfoss…………………………………………………………….56
Figure 23 - Substation DSP-MAXI Danfoss .................................................................................. 56
Figure 24 - Emission of CO2 per a fuel type ................................................................................. 67
Figure 25 - Comparative analysis of costs of heating energy and savings ................................... 71
Figure 26 - Savings from fuel switch ............................................................................................ 72
Figure 27 - Operational costs and depreciation ............................................................................ 73
Figure 28 - Comparison of total costs of the existing system, new heating system and
new system supported by KfW Credit ........................................................................ 74
Figure 29 - Cash flow balance...................................................................................................... 75
5
List of photos Photo 1 - Sports hall .................................................................................................................. 16
Photo 2 - Wood log storage beside the Sports hall ..................................................................... 16
Photo 3 - Sports hall, back yard view ......................................................................................... 16
Photo 4 - Solid fuel boiler, 2x750kW .......................................................................................... 17
Photo 5 - Hot water collector ...................................................................................................... 17
Photo 6 - Technical school ‘Nikola Tesla’ ................................................................................... 17
Photo 7 - Damaged radiator, reduced power .............................................................................. 17
Photo 8 - Police station, central facility ....................................................................................... 18
Photo 9 - Facility with classrooms .............................................................................................. 18
Photo 10 - Facility with service workshop and garage .................................................................. 18
Photo 11 - Primary school ‘Gornja Jablanica’ ............................................................................... 19
Photo 12 - Entrance to the boiler room ......................................................................................... 19
Photo 13 - Wood log storage of the Primary school ..................................................................... 19
Photo 14 - Solid fuel boiler, 2x500kW .......................................................................................... 20
Photo 15 - Valves and equipment behind the boilers ................................................................... 20
Photo 16 - Cleaning pit and non-insulated chimney connection ................................................... 20
Photo 17 - Health center ‘Medveđa’ ............................................................................................. 21
Photo 18 - Light oil fuel boiler, 465-580kW ................................................................................... 21
Photo 19 - Hot water collector with damaged insulation ............................................................... 22
Photo 20 - Old circulation pumps ................................................................................................. 22
Photo 21 - Hot water tank with additional electric heater .............................................................. 22
Photo 22 - Facility of the Cultural center ...................................................................................... 23
Photo 23 - Theater hall in the Cultural center ............................................................................... 23
Photo 24 - Oil radiator heater ....................................................................................................... 23
Photo 25 - Facility of Social welfare center................................................................................... 24
Photo 26 - Facility of Kindergarten ‘Mladost’ ................................................................................ 25
Photo 27 - Light oil fuel boiler, 90-120kW ..................................................................................... 25
Photo 28 - Prefabricated chimney with damaged insulation ......................................................... 25
Photo 29 - Hot water collector in a good condition ....................................................................... 25
Photo 30 - The building of the Medveđa Municipality ................................................................... 26
Photo 31 - Boiler room in the building of the Municipality ............................................................. 26
Photo 32 - Solid fuel boiler ........................................................................................................... 27
Photo 33 - Wood log storage for the building of the Municipality .................................................. 27
Photo 34 - Local sawmill and wood drying company .................................................................... 35
Photo 35 - Cadastral parcel No 2341/2 ........................................................................................ 42
Photo 36 - Pre-insulated pipes for the district heating network ..................................................... 44
6
List of abbreviations
AMSL - above mean sea level
CAPEX - Capital Expenditure
CO2 - Carbon Dioxide
€ - Euro (currency)
(E) IRR - (Economy) Internal Rate of Return
(E) NV - (Economy) Net Present Value
FE - Forest enterprise
(F) IRR - (Financial) Internal Rate of Return
(F) NPV - (Financial) Net Present Value
LUC - Levelled Unit Costs
OPEX - Operating Expenditure
RS - Republic of Serbia
SE - State enterprise
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1. EXECUTIVE SUMMARY
This study elaborates technical concept of a fuel switch in public buildings in Medveđa municipality
and introduction of biomass as a fuel, as well as the installation of a biomass boiler and construction
of district heating network.
Table 1 shows public buildings in Medveđa and heating related data:
No Institution
Type of Heating
fuel area
estimated capacity
m2 kW
1 Technical school ‘Nikola Tesla’ Wood
3,464 719
2 Sports hall 1,828 474
3 Police station, Medveđa Heavy oil 1,510 259
4 Primary school ‘Gornja Jablanica’ Wood 3,380 723
5 Health centre ‘Medveđa’ Light fuel oil 1,600 256
6 Cultural centre Electric heaters 1,320 227
7 Social welfare centre Electric heaters 50 8
8 Kindergarten ‘Mladost’ Light fuel oil 700 120
9 Building of the Medveđa municipality Wood 1,000 190
Total: 14,852 2,976
Table 1 - Public buildings in Medveđa
As shown in Table 1, public buildings currently have various heating systems and use different types
of fuel to obtain thermal energy. All of these heating systems and boilers are functional, but in a poor
condition. These systems are economically and energy inefficient, expensive to maintaining and
servicing. Furthermore, they are big pollutants.
Offered technical solution envisages construction of following:
- Central boiler room with biomass (wood chips) heated boilers
- District heating network
- Heating substations, where delivered heating energy would be measured, and which would
serve to managing consumption of heating energy in particular buildings.
Construction of a new boiler room is envisaged in the industrial zone on the right bank of the
Jablanica River. Total capacity of the boilers is 3.5 MW: capacity of one boiler is 1,500kW, and of
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the other is 2,000kW. It is planned to place boilers, equipment, daily wood chips storage in the
building with area of 400m2. Wood chips storage planned in 750m2 area building with capacity of
1,470m3 or 440t, sufficient for 8 weeks in the coldest period of a year of operations. It is also planned
construction of a storage for wood chips with capacity sufficient for supply during two coldest months
in a year.
Considering workforce requirements, it is planned engagement of one highly technically educated
employed. Workers with lower qualifications would be replaced from existing assignments in the
facilities that will be included in a fuel switch project.
Planned capacity of district heating network is sufficient for the public buildings, as well as for
potential connection to additional, smaller consumers.
Full load hours in public buildings in Medveđa are low (719 kWh/kW) due to the heating during
working hours only. The fuel switch project would enable better utilization of the facilities of the
Sports hall and of Cultural centre in terms of providing commercial services, such as renting, thus
generating additional income.
There are forests at territory of the Municipality of Medveđa and the Jablanica District sufficient to
provide biomass for district heating plant. In addition, biomass can be purchased as residues from
orchards and private forests. In such way, local community could close the circle of production and
consumption of heating energy.
Estimated investment value for implementation of this project is 1,217,800 €. Expected period of
return of investment is 14 years from the start of operations.
If the investment were financed from KfW Bank's program, with grant of 20%, grace period of 5
years and a repayment period of 10 years, the positive business results would be achieved after 12
years from the start of operations.
Prerequisites for successful operations of the plant are following:
‒ Selection of an appropriate financing model (from own funds, credit line or public-private
partnership)
‒ Enter into long-term contracts for the supply of the biomass
‒ Ensuring sufficient fuel storage supply covering consumption in the coldest month of the year
‒ During the construction phase, train personnel who would take over management and
maintenance of the boiler plant
‒ Ensure high quality maintenance of the specific equipment in cooperation with the supplier
of the equipment.
This investment will achieve the following benefits:
‒ Lower costs of heating energy
‒ Low emission of harmful substances in the exhaust gases
‒ Reduction of CO2 emissions – combustion of wood biomass releases CO2 ‘neutral’
‒ Raising the comfort of all future consumers of the Medveđa district heating
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Techno-economic indicators of the future energy system with wood chips are as follows:
Heat capacity of boilers Woodchips boiler 1,500 + 2,000 kW
Fuel
Woodchips
M30 according to
SRPS EN ISO 17225-1:2015, and
SRPS EN ISO 17225-4:2015
Annual production of thermal energy 2,140 MWhth /a
Annual fuel consumption Woodchips 885 t/a
Efficiency on the threshold of the heat plant 0.90 x 0.92
Annual reduction in CO2 emission 227.53 t/a
CAPEX 1,217,800 €
OPEX (the amortization period) 1,962,532 €
LUC 74.60 EUR/MWh
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2. INTRODUCTION
The program ‘Development of a Sustainable Bioenergy Market in Serbia’ (GIZ DKTI) is implemented
jointly by the KfW (financing component) and GIZ (technical assistance component). It is funded by
the German Federal Ministry for Economic Cooperation and Development (BMZ) under the German
Climate Technology Initiative (DKTI). The main implementing partner and beneficiary of the
technical assistance (TA) component is the Serbian Ministry of Agriculture, Forestry and Water
Management (MAFWM). The general objective of the project is to strengthen capacities and create
an enabling environment for the sustainable use of bioenergy in Serbia. The TA component includes
the following five activity areas:
1) Policy advice: Assessment of bioenergy potentials and regulatory framework for creating and
enabling environment for private sector investment in bioenergy projects etc.
2) Biomass supply: Accompany investments in biomass-fired district heating plants in up to
three pilot regions with TA to secure a reliable and cost-effective supply of biomass in a
sustainable manner.
3) Efficient firewood utilization at household level: Increase the efficiency of firewood
consumption for heating at household level through the promotion of firewood drying and
efficient stoves/ovens.
4) Project development: Support in cooperation with the national and international private sector
the development and the implementation of feasible bioenergy projects – from biogas or straw
combustion plants in the industry sector to wood based heating boilers in private and public
buildings.
5) EU-Project BioRES – Regional Supply Chains for Woody Bioenergy: BioRES aims at
introducing the innovative concept of Biomass Logistic and Trade Centres (BLTCs) in Serbia,
Croatia, and Bulgaria based on cooperation with technology leaders from Austria, Slovenia,
Germany, and Finland. The BLTCs as regional hubs will help increasing local supply and
demand for wood bioenergy products in these countries.
The development of a biomass supply is required only if there are liable regional consumers of
biomass. As a supporting institution, GIZ DKTI has received a Letter of Expression of Interest signed
by the mayor of Serbian municipality Medveđa to declare their demand for guidance, legal and
technical assistance in the process of the development of a fuel switch of public buildings in
Medveđa to biomass. Heating grid will have to be planned.
This fuel switch from existing fuels (electricity, wood, light fuel oil, heavy fuel oil) to biomass should
provide savings in the budget of the municipality by strengthening local incomes with local produced
wood fuel and should reduce emissions of the renewed heating system.
The aim of this study is to establish technical concept for switching to biomass heating, the
installation of a wood chip heating plant including storage recipient and design of the distribution
system including grid and substations.
In addition, it is necessary to estimate the investment costs of the plant, distribution system, perform
financial evaluation of savings from woodchip heating system (compared to current situation)
regarding fuel costs, efficiency, investment and operation costs, cash-flow analysis through savings
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and sensitivity analysis regarding fuel prices, investment cost and boiler efficiency.
The study includes the following:
- Assessment of the current energy situation in public buildings in Medveđa regarding
heated area, boiler capacity and current performance, energy consumption and cost
efficiency, condition of distribution system and connections.
- Techno-economic analysis of the proposed system for the production of thermal energy
by burning biomass (wood chips), and distribution system with heating grid and
substations which should include:
Proposal of a technical concept for central woodchip heating system including
boiler, feeding system, storage unit and grid installation taking into consideration
future efficiency measures in the buildings.
Financial evaluation of savings from woodchip heating system (compared to
current situation) regarding fuel costs, efficiency, investment and operation
costs, cash-flow analysis through savings and sensitivity analysis regarding fuel
prices, investment cost and boiler efficiency.
An assessment of CO2 emissions reduction.
The recommendation concerning the quality and availability of wood chips to
supply the plant in the future, taking into account the prices and local suppliers
of wood chips.
Technical concept and preliminary design for heating grid in Medveđa,
substations and further necessary equipment, including losses, connected to
planned biomass plant.
Estimation of overall investment costs for the heating grid, substations and
further necessary equipment.
Financial evaluation of heat prices compared to current situation taking into
account fuel costs, efficiency, investment and operation costs
12
Figure 1 - Location of the Jablanica District
Figure 2 - Municipalities of the Jablanica District in the territory of the Republic of Serbia
in the territory of the Republic
3. PROJECT LOCATION
The Jablanica District expands in the south-eastern parts of Serbia at the area of 2,769 km2. It
borders the Pčinja District to the South; the Republic of Bulgaria to the East; the Kosovo to the West;
and the Districts of Toplica, Nišava, and Pirot to the North. The Jablanica District is named after the
River Jablanica, which flows throughout the District. The largest city and administrative centre is
Leskovac. The Jablanica District consists of the City of Leskovac, and the Municipalities of: Bojnik,
Lebane, Medveđa, Vlasotince, and Crna Trava.
1 2
The Municipality of Medveđa has the area of 524 km², with 34 local communities at 42 settlements
covered by 39 cadastre municipalities. Average population density is 20.52 inhabitants/ km². There
are 7,382 people living in the villages of this municipality, while 3,378 people live at the urban area.
Most of the settlements are suffering of inadequate road connection to the centre of the municipality.
Main road between Leskovac and Priština runs through Medveđa.
Medveđa Municipality is one of the least developed municipalities in the Republic of Serbia. The
most promising industry is mining. There are lead, zinc, and a gold mine ‘Lece’.
There are big potentials for the development of cattle breeding and of fruit growing. Beside primary
agricultural production, there are developed wood processing and food processing industries. There
is particular potential in the processing of products of nature, such as: mushrooms, forest fruits, fruit
and vegetable, as well as in the processing of milk.
1 http://jablanicki.okrug.gov.rs/?lang=sr 2 Ibid
13
Main tourist potential of the Medveđa municipality is Sijarinska Banja, located at 10 km from
Medveđa, 50 km from Leskovac, and 90 km from Niš. Sijarinska Banja is situated at riverbanks of
the River Jablanica, at foothill of the Mountain Goljak, at 520 m above sea level. Healthy
environment and 18 springheads rich with minerals are greatest tourist potentials. Each of the
springheads has different physicochemical composition and temperature; and they are all spreading
at a length of 800 m.
The Municipality of Medveđa belongs to the group of hilly-mountainous municipalities, due to 95%
of such type of terrain. Forests are covering large part of the municipal territory. State owned forests
are covering 6,227 ha, with dominant beech and oak forests.
Surface area of Fertile land ha 33,279
Arable land ha 9,189
Orchards ha 1,209
Forests ha 7,090
Meadows and pastures ha 15,791
Table 2 -The structure of fertile land
in the Medveđa municipality3
Medveđa belongs to hilly-mountainous area (95% of the area is between 400- 1,000 m above sea
level), with distinct deep river basins. The lowest elevation points of the terrain are below 400 m
AMSL in the basin of the River Jablanica; the highest elevation points are on the mountains Radan
and Majdan (1,376 m AMSL); and the most widespread are altitudinal areas in interval 600- 800 m
AMSL (44% of total area). Beside dominant lower and medium mountainous areas (mountains
Goljak, Radan, Majdan), the municipal territory is characterized by ramified basins of rivers
Jablanica, Lepaštica, Banjska, and Tulov. Climate is moderate continental with cold winters. Basic
meteorological data (average annual values) of the Jablanica District are following:
- Insolation: 160.9 hours/month, i.e. 1,930.7 hours/year
- The amount of rainfall: 752 mm/year
- Air temperature: 11.1°C, Relative humidity: 72.4 %
- Daily solar radiation on a horizontal surface: 3.75 kWh/m² day
- Atmospheric pressure: 93.2 kPa
- Wind speed: 1.4 m/s (measured at 10 m from the ground)
- Ground temperature: 10.6°C
- Degree day heating: 2,625
- Heating days: 181
- Average temperature during heating days: 5.5°C
Medveđa is oriented north-south. Right bank of the Jablanica River is designed as industrial zone.
Within the zone, there is electric power station, deserted facility of the factory ‘Termovent’, and the
3 http://www.medvedja.org.rs/images/stories/download/Medvedja_profil_SRB.pdf
14
location of once planned boiler room for the needs of the Medveđa. Between rivers of Jablanica
and Lepaštica, there is a part of urban core with storey or multi-storey houses, and public buildings.
On the left bank of River Lepaštica, there is residential part with maximum five-storey buildings.
Population of the administrative municipality Medveđa
Number Census year
of 1961 1971 1981 1991 2002 2011
Inhabitants: 24,244 20,792 17,219 13,368 10,760 7,438
Households: 4,390 4,134 4,033 3,650 3,500 2,608
Table 3 - Data on population of Medveđa from 1961 to 20114
Population of the town of Medveđa
Number Census year
of 1961 1971 1981 1991 2002 2011
Inhabitants: 2,443 2,928 3,070 3,587 3,378 3,236
Table 4 - Data on population of the town of Medveđa from 1961 to 20115
Residential buildings are heated by wood stoves or by electricity. Most of public buildings are heated
by own boiler rooms, and smaller buildings are heated by electricity.
The most significant energy potential, which ensures sustainable development, is the use of
biomass. As agriculture and forestry are primary industries, they represent a good basis for the
collection of biomass with the purpose of solving the energy needs of public and residential buildings
in the town. Solution for energy requirements of buildings is based on the development of district
heating network and installation of the biomass boiler.
The problem is the fact that the planning acts do not include the construction of a central heating
source using forest biomass as a fuel, and thus as the part of energy efficiency measures. The
planning acts do not include the heating network, so the first step in establishing the heating system
and using biomass is the modification of the planning acts, the development strategy and general
regulation plan of Medveđa.
4 The Census of Population, Households and Dwellings in the Republic of Serbia, 2011 http://popis2011.stat.rs/?page_id=2134 5 Ibid.
15
4. EXISTING HEATING SYSTEMS
Institutions of the Medveđa municipality and other public institutions those are of the importance to
the residents of the municipality are located in separate buildings in the town. In these buildings,
heating is enabled through individual radiator systems with existing individual boilers using wood,
heavy oil, and light fuel oil. The management of the boiler rooms is carried out by qualified personnel
in each of the institutions with an individual boiler room. In some of the objects, electric heaters are
used.
Particular problem is the use of the heavy and light fuel oil, which combustion produces negative
environmental effects. Under certain microclimate conditions, the allowed emission limits would
certainly be exceeded, which could lead to a closure of the heat source.
In all of the buildings, radiator heating systems are designed for temperature regime of 80/60°C and
the outdoor design temperature for the town of Medveđa is -17.4°C.
Microclimate data
Air temperature
Relative humidity
Daily insolation
Atmospheric pressure
Wind speed
Soil temperature
(°C) (%) (kWh/m2) (kPa) (m/s) (°C)
January -0.2 82.0 1.69 93.4 1.2 -2.1
February 1.4 75.4 2.49 93.2 1.4 -0.2
March 6.1 67.8 3.47 93.1 1.8 4.7
April 10.9 67.5 4.22 92.9 1.7 10.0
May 16.1 68.7 5.15 93.1 1.6 16.0
June 19.8 66.5 6.10 93.1 1.5 20.3
July 21.6 64.3 6.28 93.1 1.5 23.1
August 21.3 65.0 5.53 93.2 1.4 22.9
September 16.4 71.7 4.14 93.3 1.3 17.8
October 11.7 76.9 2.77 93.5 1.1 11.3
November 6.1 80.3 1.70 93.3 1.2 4.3
December 1.1 83.4 1.34 93.4 1.2 -1.0
Year 11.1 72.4 3.75 93.2 1.4 10.6
Table 5 - Microclimate data for the City of Medveđa6
6 RET Screen International & NASA Software, updated 2014
16
Analysis of heating system in Technical school and in the Sports hall
Technical school and the Sports hall are both heated from one boiler room.
No Institution Heated
area Heating capacity
Calculated consumption
(m2) (kW) (kWh/a)
1 Technical school ‘Nikola Tesla’ 3,464 719 432,188
2 Sports hall 1,828 379 126,631
Total 5,292 1,193 558,819
Table 6 - Data on premises of the Technical school and the Sports hall
Boiler room is located in the building of the Sports hall, which is connected to the building of the
Technical school by the hall. Space in front of the boiler room is used as wood storage. Open
expansion tanks are set on the sides of the chimney (see Photo 3). Equipment in the boiler room is
outdated, but functional. The system for chemical preparation of water does not work.
Photo 1 - Sports hall
Photo 3 - Sports hall, back yard view
Photo 2 - Wood log storage
beside the Sports hall
17
Photo 4 - Solid fuel boiler, 2x750kW
Photo 5 - Hot water collector
There are two boilers heated by solid fuel (wood) in the boiler room, with capacity of 2x750kW,
produced by ‘Eko-Star’, Knjaževac. There is hot water collector in the boiler room with connection
lines for the following: the radiator heating system in the school; radiator heating system in the sports
hall; the system for heating sanitary water; and air conditioner for air heating system of the Sports
hall.
Photo 6 - Technical school ‘Nikola Tesla’
Several years ago, there was the radiator heating system freeze failure in the Technical school.
After this failure, the radiator heating system was not fixed, but only repaired by dismantling
malfunctioning radiators, and replacing them with the radiators smaller than necessary. Since the
heating system had not been repaired after the failure, it is not possible to reach the designed air
temperatures in the School premises; therefore, new radiators should be installed where necessary.
Photo 7 - Damaged radiator, reduced power
18
Analysis of heating system in the Police station
No Institution Heated
area Heating capacity
Calculated consumption
(m2) (kW) (kWh/a)
1 Police station Medveđa 1,510 259 410,620
Total 1,510 259 410,520
Table 7 - Data on premises of the Medveđa Police station
Police station in Medveđa is located in three facilities. The boiler room is located in central facility.
Central facility, facility with classrooms, and facility with service workshop and the garage, are
heated from the boiler room with mazut-heated boilers. Heating system is two-pipe radiator system
without thermostatic valves.
Photo 1 - Police station, central facility
Photo 10 - Facility with service workshop and garage
Photo 9 - Facility with classrooms
19
Analysis of heating system in primary school
No Institution Heated
area Heating capacity
Calculated consumption
(m2) (kW) (kWh/a)
1 Primary school ‘Gornja Jablanica’ 3,380 723 434,592
Total 3,380 723 434,592
Table 8 - Data on the facility of primary school ‘Gornja Jablanica’
Primary school ‘Gornja Jablanica’ is heated from the boiler room located within the school building.
There are two solid fuel heated boilers with power of 2x500kW, produced by ‘Šukom’, Knjaževac.
Water circulates through circulation pumps, which are installed behind the boilers, at hardly
accessible place. There is an open expansion tank. Space in front of the boiler room is used as
wood storage.
Photo 3 - Primary school ‘Gornja Jablanica’
Photo 4 - Wood log storage of the Primary school
Boiler room is small, which disables safe work. There is not enough space in front of the boilers for
loading wood and cleaning the boilers. Connection points of the boilers to the heating system are
located behind the boilers. Access to revision openings for the chimney cleaning, to the valves, and
to circulation pumps is difficult due to a lack of space. Heating system is two-pipe radiator system
without thermostatic valves.
Photo 2 - Entrance to the boiler room
20
Photo 6 - Solid fuel boiler, 2x500kW
Photo 7 - Cleaning pit and non-insulated chimney connection
Photo 5 - Valves and equipment behind the boilers
21
Analysis of heating system in Health centre ‘Medveđa’
No Institution Heated
area Heating capacity
Calculated consumption
(m2) (kW) (kWh/a)
1 Health centre ‘Medveđa’ 1,600 256 355,131
Total 1,600 256 355,131
Table 9 - Data on the premises of Health centre ‘Medveđa’
Health centre ‘Medveđa’ is heated by the boiler that uses light oil as a fuel. The boiler room is located
in the basement of the building, and this is the boiler room for the facilities of the Health centre, as
well as for the Cultural centre. There is one light oil-heated boiler, model Šukomaks 60, of 465-
580kW. There is an empty space in the boiler room at which there was second boiler, dismantled
after the failure.
Photo 8 - Health centre ‘Medveđa’
Photo 9 - Light oil fuel boiler, 465-580kW
There is the system for central preparation of hot water in the facility of Health centre, so heating
energy is used also for heating technical water during winter. Radiator heating systems of the Health
centre and Cultural centre, as well as the system of heating sanitary water are connected to the hot
water collector in the boiler room.
22
Photo 10 - Hot water collector with damaged insulation
Heating system in the facilities of the Health centre and the
Cultural centre is two-pipe radiator system without thermostatic
valves. Radiator heating system in the Cultural centre is not
working. Heating installations in the boiler room are functional,
but they are in a bad and neglected condition.
Photo 20 - Old circulation pumps
Photo 11 - Hot water tank with additional electric heater
23
Analysis of heating system in the Cultural centre
No Institution Heated
area Heating capacity
Calculated consumption
(m2) (kW) (kWh/a)
1 Cultural centre 1,320 227 173,606
Total 1,320 227 173,606
Table 10 - Data on the premises of the Cultural centre ‘Medveđa’
In the facility of the Cultural centre, there is radiator-heating system, which is connected to the boiler
room in the Health centre by hot water pipe. After the failure of the boiler, heating of the Cultural
centre had been turned off. The facility of the Cultural centre is used by several organizations, such
as the Office of the Ombudsman, Tourist organization ‘Medveđa’, Library, Radio station ‘Medveđa’.
Facility of the Cultural centre is heated with electric heaters according to the needs of each of these
organizations.
Photo 12 - Facility of the Cultural centre
Photo 24 - Oil radiator heater
Photo 23 - Theater hall in the Cultural center
24
Analysis of heating in system in the Social welfare centre
No Institution Heated
area Heating capacity
Calculated consumption
(m2) (kW) (kWh/a)
1 Social welfare centre 50 8 5,006
Total 50 8 5,006
Table 11 - Data on the facility of Social welfare centre
Facility of the Social welfare centre is a single
storey building without installation of the
heating system. It is heated by electric heaters.
The building has been recently reconstructed
and rehabilitated in a manner to become
energy efficient building.
Photo 25 - Facility of Social welfare centre
Analysis of heating system in the facility of Kindergarten ‘Mladost’
No Institution Heated
area Heating capacity
Calculated consumption
(m2) (kW) (kWh/a)
1 Kindergarten ‘Mladost’ 700 120 83,431
Total 700 120 83,431
Table 12 - Data on the facility of the Kindergarten ‘Mladost’
Kindergarten ‘Mladost’ has its own radiator heating system and the boiler room in the basement of
the facility. There is one boiler, model Šukom-Primula 99, using light heating oil as a fuel, with
capacity of 90-120kW. There is no system for automatic operations of the boiler. There is
prefabricated chimney with steel structure. The chimney is in a bad condition because there is no
insulation, which causes problems while the system is heated; furthermore, there is condensation
in exhaust gases. Condensation of exhaust gases damages the boiler and the chimney and shortens
their lifetime. System for maintenance of the pressure has two membrane expansion water tanks
with capacity of 2x35l.
25
Photo 14 - Facility of Kindergarten “Mladost”
Photo 28 - Prefabricated chimney with damaged insulation
The boiler is connected to the radiator heating system through
the hot water collector with connections. Installations in the boiler
room are insulated, outdated, functional, and in a good condition.
After recent reconstruction and adaptation of the facade, the
facility became energy efficient. There is two-pipe radiator
heating system without thermostatic valves in the facility.
Photo 29 - Hot water collector in a good condition
Photo 13 - Light oil fuel boiler, 90-120kW
26
Analysis of heating system in the building of the Medveđa Municipality
No Institution Heated area Heating capacity
Calculated consumption
(m2) (kW) (kWh/a)
1 Building of the Medveđa Municipality 1,000 190 118,889
Total 1,000 190 118,889
Table 13 - Data on the facility of the Municipality
The building of the Medveđa Municipality has its own radiator heating system connected to the boiler
room located in the building. There is one solid fuel (wood) heated boiler without technical data, in
the boiler room.
Photo 30 - The building of the Medveđa Municipality
The boiler is in extremely bad condition. During previous years,
there had been several boiler failures and discharges of water
from the system. Water circulation pump is set above the boiler.
Set in this way, the pump without division valves is
inappropriate for managing and servicing.
Photo 15 - Boiler room in the
building of the Municipality
27
Photo 16 - Solid fuel boiler
There is masonry chimney with numerous cracks, which causes
problems while the system is heated; furthermore, there is
condensation in exhaust gases. Condensation of exhaust gases
damages the boiler and the chimney and shortens their lifetime.
There is an open water expansion tank in the facility. Wood
storage is under the porch near the boiler room.
Photo 17 - Wood log storage for the building of the Municipality
28
Overall analysis
Based on the displayed, heating systems differ by fuel type and by the type and number of users.
Heating systems with electric heaters in buildings are not connected to a separate line of electricity.
Due to the complex heating system, it is not possible to collect data of energy consumption;
therefore, energy consumption is calculated according to the following:
yeHDDtt
QH
epi
C
24
H - Estimated consumption (kWh)
QC - Capacity of heating installation (kW)
ti - internal temperature (20°C)
tep - external project temperature (-15°C) HDD - Degree days of heating (2,599)
e - correction for the effect of wind and heating switch
y - correction for the effect of daily consumption profile
Based on these equations calculated values are shown in the following table:
No
Institution Boiler room
Time of
Day
s o
f
op
era
tio
n
Type of Operation A Q q
Calculated
Energy From to consumption
H h m2 kW W/m2 kWh/a
1 Technical school ‘Nikola Tesla’ In the building
of sport hall Wood
7 16 122 3,464 719 208 432,188
2 Sports hall 8 12 122 1,828 474 259 126,631
3 Police station Medveđa
In the building Heavy oil 6 20 181 1,510 259 172 410,620
4 Primary school ‘Gornja Jablanica’
In the building Wood 7 16 122 3,380 723 214 434,592
5 Health centre ‘Medveđa’ In the building
of health centre
Light fuel oil
6 20 181 1,600 256 160 355,131
6 Cultural centre Local el. Heaters
7 16 127 1,320 227 172 173,606
7 Social welfare centre
Local el. Heaters
7 16 127 50 8 160 5,006
8 Kindergarten ‘Mladost’
In the building Light fuel
oil 6 16 127 700 120 171 83,431
9 Building of the Municipality
In the building Wood 7 16 127 1,000 190 190 118,889
14,852 2,976 200 2,140,093
Table 14 - Overview of data on the analysed facilities and consumption
29
Current situation Unit Energy produce by
Total Heavy oil
Light Fuel oil Electricity Wood
Energy consumption
Annual (kWh) 410,620 438,561 178,611 1,112,300 2,140,093
Unit (kWh/m2) 272 191 130 115 144
Emission CO2 (kg) 114,152 122,797 58,942 23,358 319,250
Efficiency of system (%) 83% 85% 98% 63%
Consumption of fuel (t, m3) 43 45 1,681
Heated area (m2) 1,510 2,300 1,370 9,672 14,852
Unit fuel price (€/t, €/kWh, €/m3) 410 1,020 0.09 36
Annual energy cost (€) 17,638 45,763 16,075 60,533 140,009
Unit price of energy (€/m2) 11.68 19.90 11.73 6.26 9.43
(€/MWh) 42.95 104.35 90.00 54.42 65.42
Table 15 - Current situation, energy and fuel consumption, price, CO2 emission
Facilities of public institutions are very energy-inefficient. This is presented by power density, which
is 200 W/m2. Reasons to that are building structure and purpose of the facilities. Facilities with higher
floor-to-floor heights, such as the Municipal building and the Sports hall, bear bigger thermal load
(over 190 W/m2). Compact buildings with smaller heights, with glass surfaces, and smaller surface
of the facade, such as the Medveđa Health centre and Social welfare centre, bear thermal load of
160 W/m2.
Figure 1 - Energy consumption per fuel types– current situation
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
Heavy oil Light fuel oil Electricity Wood Total
410,620 438,561
178,611
1,112,300
2,140,093
Consumption of energy (kWh)
30
Figure 2 - CO2 emission per fuel types– current situation
Figure 3 - Annual energy costs per fuel types– current situation
Demand for heating energy in any facility is determined by working hours of the tenant of the facility.
Due to the heating during working hours only, the heating energy consumption of 144 kWh/m2 is
low. If the facilities would be used longer than during working hours, annual consumption of heating
energy would be over 200 kWh/m2, which is extremely high value.
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
Heavy oil Light fuel oil Electricity Wood Total
114,152 122,797
58,942
23,358
319,250
Emmision CO2 (kg)
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
Heavy oil Light fuel oil Electricity Wood Total
17,638
45,763
16,075
60,533
140,009
Annual energy cost (€)
31
Figure 4 - Unit price of energy per fuel type– current situation
According to energy efficiency indicators, local heating systems in Medveđa are very inefficient.
Energy efficiency of local heating systems depends on efficiency of following systems:
- System for production of heating energy- heating energy source
- Pipe systems for distribution of hot water
- Heating systems in the buildings
- Energy efficiency of the buildings
Systems for production of heating energy with boilers that use mazut, fuel oil, or electricity as a fuel,
are energy efficient, but economically unsustainable systems. Almost all of the buildings in
Medveđa, except for Kindergarten ‘Mladost’ and Social welfare centre, are not thermally insulated;
there is neither the control of the heating system, nor the control of the air temperature, which makes
all of these buildings and their heating systems inefficient. It is recommended the implementation of
energy efficiency measures aimed to reconstructing thermal insulation of the buildings, which would
certainly result in reduced consumption of heating energy.
Boilers using solid fuel, mazut, and oil as fuel, are inacceptable in central city area due to
environmental pollution and high CO2 emissions.
Increase of energy, economic, and environmental efficiencies of heating systems in public buildings
in Medveđa could be achieved through following activities:
- Installation of central boiler for the city, which will use cheaper fuel with low CO2 emissions
- Establishment of remote district heating system for all city zones
- Connection of larger number of residential buildings to the remote district heating system
aimed to better utilizing remote heating system used during longer working hours.
Using biomass as a fuel instead of mazut, fuel oil, and electricity, will result in higher economic
efficiency of the system, as well as in decrease of environmental pollution.
0.00
20.00
40.00
60.00
80.00
100.00
120.00
Heavy oil Light fuel oil Electricity Wood Averge
11.6819.90
11.736.26 9.43
42.95
104.35
90
54.4265.42
Unit price of energy (€/m2),(€/MWh)
(€/m2) (€/MWh)
32
5. BIOMASS MARKET ANALYSIS
Biomass represents a renewable energy source, which is defined as the organic matter of vegetable
or animal origin (wood, straw, vegetable residues from agricultural production, manure, organic
fraction of communal solid waste). Biomass is used in combustion process and converted in power
plants into the heat, electricity, or both- heat and electricity. Biomass is used for the production of
liquid and gas fuels. Only the biomass of wood origin in the form of wood chips will be considered
as a part of this study.
Biomass is one of the renewable sources of energy and as such is considered as CO2 neutral. Since
biomass combustion emits exact amount of carbon dioxide as the plant binds during the process of
photosynthesis during growth, in that sense coefficient of carbon dioxide emissions of biomass
equals zero. However, this information is valid only when exploitation of biomass is accompanied
by a forestation, otherwise CO2 emissions should be taken into account.
Wood chips are intended as the biomass for combustion in heating plants. The quality of wood chips
is defined by the standard for solid fuel SRPS EN ISO 17225-1:2015, and SRPS EN ISO 17225-
4:2015 determines the fuel quality classes and specifications of graded wood chips. The following
table shows the requirements defined by the standards in Serbia:
Table 16 - Requirements for wood chips according to SRPS EN ISO 17225-4:2015
Table 17 - The classification of wood chips based on the moisture content according to
SRPS EN ISO 17225-4
Wood chips
Standard SRPS EN ISO 17225-1:2015
SRPS EN ISO 17225-4:2015
Particles size
Amax = 6 cm2
L = 10 cm (max 10% - 35cm)
Moisture content W10 – W60
suitable: 40% max
Bulk density < 350 kg/m3
Calorific value 2.80-3.40 kWh/kg
M10 M15 W20 W25 W30 W35 W40
Moisture content %
M<10 10<M≤15 15<M≤20 20<M≤25 25<M≤30 30<M≤35 35<M≤40
33
Dimensions (mm)
The fracture >60% by weight
Fine fracture Rough fracture Maximum particle length
P16 3.15 ≤ P ≤ 16 mm < 3.15 mm < 15% <6% > 31.5 mm < 45 mm
P31 3.15 ≤ P ≤ 31.5 mm < 3.15 mm < 10% <6% > 45 mm < 150mm
P45 3.15 ≤ P ≤ 45 mm < 3.15 mm < 10% <10% > 63 mm < 200mm
Moisture (%)
M10 ≤ 10%
Dried M15 ≤ 15% M20 ≤ 20% M25 ≤ 25%
Suitable for storage M30 ≤ 30%
M35 ≤ 35% Limited for storage
M40 ≤ 40%
M50 ≤ 50% Unsuitable for storage M55 ≤ 55%
M60 ≤ 60% Wet
Ash content (%)
A 0.5 ≤ 0.5%
A 0.7 ≤ 0.7%
A 1.0 ≤ 1.0%
A 1.5 ≤ 1.5%
A 2.0 ≤ 2.0%
A 3.0 ≤ 3.0%
Table 18 - Requirements for wood chips according to SRPS EN ISO 17225-4:2015
Total forest area in the municipality of Medveđa is 7,090 ha. The forest area covers 14% of the
territory of the municipality; the degree of utilization of resources is far below the national average.
State owned forests represent 71%, and privately owned forests are 29% of total forest area in the
municipality. Forest enterprise ‘Šuma’, Leskovac, manages following forest administration offices:
Vučje, Predejane, Vlasotince, Medveđa, Lebane, and Crna Trava, with total forest area of 37,026
ha.
Forest farm Forest area
Total volume of wood
Annual growth
Annual increment
Šuma-Leskovac ha m3 m3/ha m3
Vučje 6,225 1,595,439 6.3 25,864
Predejane 7,451 1,731,259 5.7 27,106
Vlasotince 4,176 618,613 4.6 7,447
Medveđa 6,227 941,291 3.7 12,695
Lebane 5,331 1,110,531 4.9 17,730
Crna Trava 7,616 1,439,458 4.9 17,996
Total 37,026 7,436,591 30.1 108,838
Table 19 - Data on forests provided by SE ‘Srbijašume’, FE ‘Šuma’, Leskovac7
7 http://www.srbijasume.rs/leskovac.html
34
Figure 7 - Share of forest’s area in the
total area of the Serbian municipalities
Figure 8 - State and private forests
per Municipalities and Districts
8 9
Calculation of the potential of forest waste in the municipality of Medveđa is based on the study
‘Potentials and Possibilities of Commercial Use of Wood Biomass for Energy Production and
Economic Development of the Municipalities Nova Varoš, Priboj and Prijepolje’10. This Study was
carried out as the analysis of the availability of wood waste from the sawmill industry and forestry in
the municipalities of Nova Varoš, Priboj and Prijepolje. The results showed that following amounts
are available to meet energy needs:
8 Statistical Yearbook of the Republic of Serbia 2012 9 Ibid. 10 ‘Potentials and Possibilities of Commercial Use of Wood Biomass for Energy Production and Economic Development of the Municipalities Nova Varoš, Priboj and Prijepolje’, 2009, author: Branko Glavonjić, PhD
35
Nova Varoš Priboj Prijepolje Total
Forest (ha) 22,400 30,400 44,000 96,800
Wood waste volume (m3)
Chips from forestry 3,100 4,300 5,400 12,800
Wood industry 9,364 1,194 11,739 22,297
Total 12,464 5,494 17,139 35,097
Wood waste mass (t)
Chips from forestry 1,813.5 2,515.5 3,159.0 7,488
Wood industry 5,477.9 1,137.2 6,867.3 13,482
Total 7,291 3,653 10,026 20,970
Annually available energy value (MWh/a)
Chips from forestry 4,003.2 5,532.2 6,950.0 16,485
Wood industry 15,901.6 3,308.2 19,932.6 39,142
Total 19,905 8,840 26,883 55,628
Table 20 - The energy potential of green chips from forestry, with wood waste from sawmill industry, in the municipalities of Nova Varos, Priboj and Prijepolje11
Calculated energy value of forest waste, without the waste of the sawmill industry of SE ‘Srbijašume'
and FE ‘Šuma’, Leskovac (which is not far from the municipality of Medveđa) is shown in the table
below:
Area
Forest area
Wood waste
Annually available energy
Ha m3 t MWh/a
Prijepolje, Priboj, Nova Varoš 96,800 35,097 20,970 55,628
FE ‘Šuma’, Leskovac 37,026 13,425 8,021 21,278
Table 21 - The energy potential of biomass from FE ‘Šuma’, Leskovac12
In the Jablanica District, many companies are producing wooden packaging; there are also sawmills,
wood drying companies and production of furniture. In the near future, in the municipality of
Medveđa, there is planned an investment from Slovenia into a wood pellet plant and the production
of wood packaging.
Photo 34 - Local sawmill and wood drying company
11 Ibid. 12 Own calculation
36
Biomass of wood origin in the form of pellets available on the market is not suitable for analysis due
to the high purchase price. Some of the benefits of wood chips compared to wood pellets are lower
prices and lower level of wood processing. Domestic market transactions are performed on a small
scale between manufacturers and wholesalers, where price reaches 180 €/t of wood pellets.
Depending on the time of purchase, end customers pay between 200 and 220 €/t. The advantage
of pellets is higher bulk density, which means lower transportation costs and smaller storage for the
same amount of fuel in terms of energy produced. Due to lower processing degree than pellet, wood
chips have lower price, but higher percentage of moisture, which affects its energy value, bulk
density, and price. Characteristics and unit price of wood chips depending on the percentage of
moisture are presented in the table.
Wood chips Moisture Energy value Bulk density Cost
(%) (kWh/m3) (bulk-kg/m3) (€/t)
30-40 940-1,200 300-350 45-60
Table 22 - Characteristics of wood chips depending on the percentage of moisture
37
6. TECHNICAL DESIGN CONCEPT
6.1 TECHNICAL SOLUTIONS AND SIZING THE BOILER
Aimed to decreasing fuel costs for heating public buildings in the Medveđa municipality, it is
designed the concept of the construction of central boiler room with biomass- wood chips heated
boiler, remote district heating pipe system, and substations. Comparative analysis of annual fuel
costs in existing systems, and in case of using wood chips is shown in the Table 24. Following Table
shows variation of energy value and unit price of energy, depending on percentage of moisture. Due
to large contact surface, wood chips easily exchanges moisture with environment, which affects its
energy value and unit price of energy.
Moisture
Caloric value
Unit price
(%) (kWh/t) (€/t) (€/kWh)
Biomass, wood chips
30 3,400 53
0.016
40 2,800 0.019
Table 23 - Unit price of wood chips depending on the type of wood quality wood
Unit Energy produce by
Biomass Heavy oil
Light Fuel oil Electricity Wood Total
Energy consumption
(kWh) 410,620 438,561 178,611 1,112,300 2,140,093 2,140,093
Emission CO2 (kg) 114,152 122,797 58,942 23,358 319,250 0
Efficiency of system
(%) 83% 85% 98% 63% 0 83%
Increase for heating up the system
(%) 0% 0% 0% 0% 5%
Consumption of fuel
(t), (m3) 43 45 0 1,681 885
Heated area (m2) 1,510 2,300 1,370 9,672 14,852 14,852
Unit fuel price (€/t), (€/kWh),
(€/m3) 410 1,020 0.09 36 53
Annual energy cost
(€) 17,638 45,763 16,075 60,533 140,009 46,909
Unit price of energy
(€/m2) 11.68 19.90 11.73 6.26 9.43 3.16
Unit price of energy
(€/MWh) 42.95 104.35 90.00 54.42 65.42 21.92
Table 24 - Comparative analysis of the costs of currently used fuels in Medveđa and costs of biomass
Based on collected data, calculated annual fuel costs in buildings used by public institutions in
Medveđa are estimated to be around 140,000 €. If the analysed facilities used biomass-wood chips
for heating, annual fuel costs would come to amount of approximate 47,000 €. The use of biomass
for the heating of analysed facilities can reduce annual fuel costs by the amount of 90,000-95,000 €.
38
Figure 5 - Annual energy costs per fuel types- comparison with biomass
Figure 6 - Unit price of energy per fuel type- comparison with biomass
The program of switching existing fuels with biomass in buildings used by public institutions of
Medveđa requires a complex analysis in order to select the best technical and economic solutions.
Facilities of public institutions are dispersed all around the town, so replacement of individual boilers
requires the construction of a new central biomass boiler room with pipe system for district heating.
Switching from existing fuels to a new biomass heated boilers is not technically feasible, given the
following:
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
Heavy oil Light fuel oil Electricity Wood Total
17,638
45,763
16,075
60,533
140,009
9,0019,613
3,915
24,382
46,911
Annual energy cost (€)
Existing fuel (€) Biomass, ships (€)
0.00
20.00
40.00
60.00
80.00
100.00
120.00
Heavy oil Light fuel oil Electricity Wood Biomass
11.6819.90
11.736.26 3.16
42.95
104.35
90
54.42
21.92
Unit price of energy (€/m2),(€/MWh)
(€/m2) (€/MWh)
39
- Lack of space for boilers
- Lack of storage space for fuel
Even if technical solutions for the establishment of individual boiler rooms in each building did exist,
the cost of such solution would be unjustifiably high.
The solution of this problem is the establishment of a new biomass plant and the district heating
network. Construction of district heating network should enable the connection of the considered
public facilities, with the possibility of connecting residential buildings in the future. This district
heating system represents an investment in infrastructure.
The required installed capacity of the boiler and level of efficiency of the heating system is calculated
using the formula:
C
B
QB (kW) Installed boiler capacity
QC (kW) Net consume (capacity)
η System efficiency
η = ηB · ηC
ηB Boiler efficiency
ηC Efficiency of district heating system
τ Simultaneity factor
The calculated heat demand would be covered by installing heating plant of nominal heat output
presented in the next table:
Capacity Qc ηB ηC τ
Calculate QB
Sizing of the boiler
(kW) (kW) (kW)
2.976 0,9 0,92 0,9 3.235 3.500
Table 25 - Calculated capacity of future heating plant
40
Figure 7 - Diagram of the annual distribution of the heat capacity of the heating plant
The number of hours of boiler operations can be determined using Sochinsky formula:
max
1
0
0
0
11 QQ
m
b
max
min0
Q
Q
maxQ
Qmm
Q - heating capacity at the time,
- time,
minQ - minimum heating capacity of boiler
maxQ - maximum heating capacity of boiler
mQ - required capacity
During winter, every heating system is a subject to great fluctuations that depend on the weather
and user’s habits. The maximum output power is utilized very shortly during periods of very cold
weather. Regularly, the boiler is operating for long intervals of time at low load. Therefore, it is
important for the boiler to be operated efficiently during off-peak periods. This can be achieved in
one of the following ways:
0
1000
2000
3000
4000
0 500 1000 1500 2000 2500 3000 3500
kW
Working hours
Heating Capacity (kW) - Heat Load Curve
41
1. The biomass boiler can provide the maximum capacity, while a buffer (a hot water tank) covers
short-term load fluctuations and ensures that the boiler can be operated efficiently during off-peak
periods. This solution has the advantage that only one fuel is required.
2. Combination of more biomass boilers. More boilers increase the reliability of supply and ensure
that the heating operates efficiently, even in off-peak periods.
Optimal model for biomass plant would be the solution with two wood chips heated boilers, 2000kW
+ 1500kW, and hot water tank. The smaller boiler of 1500kW would be used at higher outside
temperatures. In this way, the system would be efficient even in lower operating modes. Existing
boilers in aforementioned facilities would serve as a backup solution.
Comparison of biomass and existing fuels is based on the full load hours of 719 kWh/kW. This
consumption value implies that the heating systems are in a maintenance mode after working hours
and in schools during winter holidays. According to this data, it is necessary to produce yearly
consumption of 2,140 MWh. The unit production cost of the heating energy, according to the solution
with wood chips as a fuel, is about 21.92 €/MWh. Current unit cost for buildings described in this
study, with existing heating systems, is up to 65.42 €/MWh.
42
6.2 HEATING PLANT, LOCATION AND FACILITIES
The plot intended for the construction of a new power plant is located on a part of cadastral plot
2341/2 CM Medveđa with surface of 4,000m2. The location is in the industrial zone on the right bank
of the Jablanica River.
Figure 8 - Situation plan of heating plant
Photo 18 - Cadastral parcel No 2341/2
43
Planned facilities:
Building A:
- Space to install biomass boilers, 120 m2 is needed for installation of following boilers:
a) one boiler with capacity of 1,500 kW. Space necessary for operations of such boiler
has following dimensions: width x length x height = 6,2 x 9,2 x 4,8m
b) one boiler with capacity of 2,000kW. Space necessary for operations of such boiler
has following dimensions: width x length x height = 6,8 x 9,2 x 5,8m
The rest of a space is manipulative space for access to maintaining and safe passage.
- Space to install daily tank of woodchips, 100 m2 and capacity of 40 m3, i.e. 12 t, and
space for daily fuel storage sufficient for 3 days of operations.
- The area of processing equipment (buffers, pumps, collectors) of 130 m2
- Office space of 50 m²
Building B:
- Wood chips storage, area of 750 m2, and minimal useful height of 6 m. Capacity of the
storage is 1470 m3, or 440 t of wood chips, which is average 8 weeks consumption in the
coldest period of a year.
The total area of buildings is 1,150 m2 (120+100+130+50+750 m2) and the degree of availability of
cadastral parcel is 29%.
The heat source consists of two boilers for combustion of biomass with total nominal thermal
capacity of 3,500 kW: one boiler with capacity of 2,000kW, and other boiler of 1,500kW. In the plant
with two boilers, stable operations are ensured with low outdoor temperatures, as well as with higher
outdoor temperatures. In cases of higher outdoor temperatures, one boiler can provide sufficient
heating, without the risk of cooling entire system. The regime of the boiler temperature is 100/70°C.
Maximum operating pressure is 6 bars. The minimum temperature return to boiler is 60°C. It is
planned to install a buffer tank with volume of 50 m3 in order to optimize the operation of the heat
source. Circulator pumps are located between the boiler and buffer tank, as well as three-way mixing
valve in order to provide protection for the cold parts of boilers.
For the purposes of technical calculation, the documentation was used made by ‘Topling-heating
Beograd’, including additional mechanisms for feeding fuel, extracting exhaust gases and ash. For
the purposes of circulation in the distribution system, circulation pump with inconstant flow and
pressure sensors is planned.
It is necessary to build the appropriate facility for biomass boilers and processing equipment, with
the useful area of 250 m², and with necessary height of the boiler room. Next to the building with the
boiler, facility for the storage of fuel - wood chips is needed.
44
6.3 CONCEPT OF DISTRICT HEATING NETWORK
6.3.1 CONCEPT OF DISTRICT HEATING NETWORK
Heating network is designed to connect aforementioned public buildings, and to enable the future
connection of residential buildings. The pipe network consists of pre-insulated steel pipes that are
installed directly in the prepared soil. Distribution network will contain chambers with bulkhead
valves.
Photo 19 - Pre-insulated pipes for the district heating
network13
The quality of the pipes corresponds to 1.0254 i.e. P235
TR1 according to EN10217 T1 (or St.37.0 of the
technical requirements and delivery conditions
according to DIN1626). The operating temperatures at
the threshold of the heat source are:
- The flow temperature is 100℃,
- The return temperature is 70℃
The difference in altitude between the highest point of
the town (on the outskirts) and the lowest point is less
than 20 m, so the lowest required operating pressure in
the pipeline is 6 bar.
Before designing the heating network, it is necessary to
prepare a document on the municipal level, which will
define the Medveđa construction strategy and direction
of the future development of the town centre.
Concept plan of the heating network is preliminary, and designed for the planning of the budget
expenditures.
13 Source: Website of the company Konvar d.o.o., Belgrade
45
6.3.2 SCHEME OF DISTRICT HEATING NETWORK
Based on the position of public institution buildings, as well as on the position of the main town
streets, residential buildings and individual houses, heating network plan would be:
Figure 9 - Disposition of drawings of the heating network per numbers
46
Figure 10 - Drawing No 1 of the heating network
47
Figure 11 - Drawing No 2 of the heating network
48
Figure 12 - Drawing No 3 of the heating network
49
Figure 13 - Drawing No 4 of the heating network
50
Figure 14 - Drawing No 5 of the heating network
51
Figure 15 - Drawing No 6 of the heating network
52
Figure 16 - Drawing No 7 of the heating network
53
Dimensions of heating pipes for the network calculated with the planned reserve for future additions to the network:
Within the analysis, heating network is divided by the routes and transparent points, as shown on the drawings:
Type Route Distance Capacity of Unit price of network
of from to heat substations Dimension Total
route (m) (kW)
main A B 200 150 DN40 120 24,000
main B D 70 180 DN50 130 9,100
main D F 125 430 DN80 175 21,875
main F H 20 980 DN125 265 5,300
main H K 380 1,780 DN150 310 117,800
main K M 75 2,080 DN150 310 23,250
main M O 310 3,380 DN200 465 144,150
connection C 10 30 DN40 120 1,200
connection E 25 250 DN50 130 3,250
connection G 100 550 DN80 175 17,500
connection J 60 800 DN100 220 13,200
connection L 40 300 DN65 145 5,800
connection N 50 1,300 DN125 265 13,250
TOTAL 399,675
Table 26 - Sizing the pipe network by routes
According to the prices of units needed to construct a network of pre-insulated pipes, the costs of the construction of heating network are estimated to 400,000 €. The additional costs of the construction of the chamber with necessary fittings and installation of the fittings increase estimation for 10%, leading to total costs of the heating network of 440,000 €.
Q - The amount of heat transported by the pipeline
w - Velocity of flow of the working fluid
ρ - Density of the working fluid
cp - Specific heat capacity
Δθ - Temperature difference
p
incw
QD
4
54
Calculation of operating point of the network pump is shown in the following Table:
Flow Lenght Speed
from to diemeter wall unit total friction local TOTAL
kW l/h m mm mm m/s Pa/m kPa kPa kPa
O M 3.380 99.661 310 273,0 6,3 0,520 9,23 2,861 1,966 4,827
M K 2.080 61.330 75 273,0 6,3 0,320 3,61 0,3 0,3 0,618
K J 1.780 52.484 380 219,1 5,9 0,432 8,53 3,2 0,6 3,876
J G 980 28.896 20 219,1 5,9 0,238 2,71 0,1 0,2 0,246
G F 430 12.679 70 219,1 5,9 0,104 0,57 0,0 0,1 0,093
F D 430 12.679 55 88,9 3,2 0,659 61,30 3,4 1,5 4,845
D B 180 5.307 70 60,3 2,9 0,632 95,70 6,7 1,4 8,055
B A 150 4.423 200 48,3 2,6 0,843 226,77 45,4 2,4 47,761
MAX: 99.661 SUM: 70,3
10% 9.966 Security increase: 25% 17,6
Total for calculate: 109.627 heat excanger: 30
Adopted value: 110.000 (l/h) reserve: 10
Total for calculate: 127,9
Adopted for calc. (kPa): 130
Route Dimension of pipe Pressure dropCapacity
Table 27 - Calculation of operation point of network pump
The operating point of the network pump (or a pair of network pumps, depending on the solution
adopted in the preliminary design) is as follows:
- V = 110 m3/h
- H = 130 kPa
The operating point is selected on a basis of the pressure drop in the hydraulically least favourable
heating substation.
Aimed to saving electricity for pumping the working fluid, it is necessary to incorporate the engine
frequency controls in order to optimize the operation of network pumps and synchronize it with the
actual required thermal energy to be delivered to the consumer.
55
6.3.3 CONCEPT OF HEATING SUBSTATIONS District heating transfer stations provide the link between district heating suppliers and the customers’ systems. They incorporate the necessary equipment to tailor the supplied heat to the needs of the user. Indirect connections (in which district heating and in-house systems are hydraulically isolated) incorporate components to separate the systems (heat exchanger), to limit the flow volume, regulate the secondary supply temperature and measure the energy consumption. Substations are designed for installation in already existing boiler rooms. The existing boilers will be reviewed in terms of functionality. Those that do not meet the minimum requirements for safe operations will be removed from the substations (i.e. from the existing boiler rooms). Those that meet the minimum technical requirements will remain as a backup heat source in case when, for any reason, the heating system goes into breakdown of operational mode; or to serve as back up heating source if there is an increase of heat consumption that cannot be foreseen at this moment. The operating pressure in the primary part of the substation will be up to 6 bars max., and will
correspond to the parameters of the heating network, while the temperature range will be 100/70℃ in the primary part and 80/60℃ in the secondary part. The further development of the heating system, with a focus on the connection of residential buildings, would involve the installation of heating substations of the packet type in each building, with identical operating parameters as for heating substations in public institutions or business facilities.
1- External sensor 2- Thermometer 3- Manometer 4- Sensor 5- Air vent 6- Drainage 7- Prim. Connection DHW 8- Safety thermostat 9- Connection to expansion 10- Controller 11- Strainer 12- Heat meter 13- Ball valve 14- Safety valve 15- Heat exchanger
Figure 17 - Scheme of compact substation DSA 1 Mini Danfoss14
14 www.danfoss.com
56
Figure 18 - Substation DSP-MAXI Danfoss
Figure 19 - Substation DSA 1 Mini Danfoss15 16
Substations models DSP-MAXI are designed for power stronger than 100 kW. Substations DSA1-Mini are designed to power up to 100 kW and can be mounted on the wall. Heat substation should be dimensioned according to the size of the heat loss of the building. The reconstruction of the existing boiler rooms should be executed in a way that does not change the working fluid distribution system and the heating substation is connected to the existing supply and return collectors. The existing circulation pumps should be replaced by more energy-efficient units with motors of variable frequency, in order to achieve savings in power consumption and reduce heat dissipation in the buildings.
No Institution Position on the
drawing
Type of No of subst.
Power Price substation
(kW) (€)
1 Technical school ‘Nikola Tesla’ N-1 DSP-MAXI-32 2 400 12,000
2 Sports hall N-2 DSP-MAXI-12 2 250 10,000
3 Police station, Medveđa L-3 DSP-MAXI-22 1 300 5,500
4 Primary school ‘Gornja Jablanica’ J-4 DSP-MAXI-32 2 400 12,000
5 Health centre ‘Medveđa’ G-5 DSP-MAXI-22 1 300 5,500
6 Cultural centre G-6 DSP-MAXI-12 1 250 5,000
7 Social welfare centre C-7 DSA 1-30 1 30 3,500
8 Kindergarten ‘Mladost’ A-8 DSP-MAXI-11 1 150 4,300
9 Building of the Medveđa municipality
E-9 DSP-MAXI-12 1 250 5,000
TOTAL: 62,800
Table 28 - Selection of substations in the facilities
15 www.danfoss.com 16 Ibid.
57
7. PRELIMINARY COST ESTIMATES
The task of this study has a number of levels:
‒ Fuel switch to biomass of existing heating systems in public buildings in Medveđa, by
construction of the central biomass heating plant
‒ Construction of district heating distribution system to connect the public buildings
Fuel switch to biomass of heating systems in public buildings in Medveđa should provide lower costs
of heating energy, reduce CO2 emissions, contribute to environmental protection, and enhance local
economic development in terms of growing and processing biomass. Implementation of the project
should provide savings in the Medveđa municipal budget, and thus a quick return of the investment.
The preliminary cost estimates includes annual investment and operating costs. Investment would
include the purchase of equipment and boilers, necessary construction works, mechanical works,
and electrical works on the construction and installation of a new boiler, the heating network, heating
substations; and connecting the buildings to the new distribution system.
Position Investment costs - Description (€)
1. Access road and landscaping plots for the new building and for the route of new pipeline.
40,000
2. Construction of a technical bridge for pipes over the Jablanica river 10,000
3. Construction of the new boiler room the total area 400m2 80,000
4. Construction of the fuel storage facility area 750m2 40,000
5. Energy plant, mechanical and electrical equipment works (except boilers) 70,000
6. Biomass boilers and associated equipment 1,500+2,000kW 375,000
7. Chimneys 15,000
8. Construction of heating grid - distribution network 440,000
9. Heating substations for public administration buildings 62,800
10. Adaptation of spaces for heating substations in public buildings 15,000
11. Drum wood chipper 10,000
12. Documentation, construction management, commissioning of the plant and heating grid
40,000
13. Unforeseen costs 20,000
CAPEX (Capital Expenditure) 1,217,800
Table 29 - Investment costs17
The composition of operational costs (OPEX) is diverse and affected by many factors. In order to
calculate operational costs, there will be reviewed analysis of all annual expenses.
After reconstruction, energy rehabilitation and modernization of the buildings, it is expected
reduction of annual energy consumption for 0.1%.
For the period of 10 years, the price of heating wood is assumed to increase from 23%.
17 Own calculations
58
Based on the forecast of the World Bank18, expected variations of fuel prices in a period of 10 years
are following:
- Liquid fuels: 57% - Wood chips 23%
Description Unit 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Heat energy consumption
(MWh/a) 2,140 2,139 2,138 2,137 2,136 2,135 2,134 2,133 2,132 2,130
Wood chips consumption
(t) 885 885 884 884 883 883 882 882 882 881
Price of wood chips
(€/t) 53 54 55 57 58 59 61 62 63 65
Unit price of energy from wood chips
(€/MWh) 21.92 22.41 22.92 23.44 23.97 24.51 25.06 25.63 26.21 26.80
Heavy fuel oil price
(€/t) 410 433 458 484 512 541 572 604 639 675
Light fuel oil price
(€/t) 1,020 1,078 1,140 1,205 1,273 1,346 1,422 1,504 1,589 1,680
Electricity price (€/MWh) 0.09 0.09 0.09 0.10 0.10 0.10 0.10 0.11 0.11 0.11
Wood price (€/m3) 36 37 38 39 39 40 41 42 43 44
Unit price of energy from existing fuels
(€/MWh) 65.42 67.95 70.59 73.36 76.25 79.28 82.44 85.76 89.24 92.88
Maintenance of equipment and installation
% CAPEX / a 0.50 0.50 0.50 0.50 0.50 1.00 1.00 1.00 1.00 1.00
Cost (€/a) 4,739 4,739 4,739 4,739 4,739 9,478 9,478 9,478 9,478 9,478
Insurance % CAPEX / a 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5
Cost (€/a) 6,001 5,891 5,784 5,680 5,580 5,482 5,388 5,296 5,208 5,123
Electricity - costs of the plant
kWhel / MWhth
2 2 2 2 2 2 2 2 2 2
Cost (€/a) 385 395 404 414 424 435 445 456 467 479
Labour costs (€/a) 6,700 6,801 6,903 7,006 7,111 7,218 7,326 7,436 7,548 7,661
Removal and disposal of ash
(t/a) 17.7 17.7 17.7 17.7 17.7 17.7 17.6 17.6 17.6 17.6
Cost of Removal and disposal of ash
(€/a) 531 539 547 554 563 571 579 587 596 604
Chemical treatment of circulating water
Volume (m3) 155 180 180 180 180 180 180 180 180 180
Losses (m3 / a) 5 5 5 5 10 10 10 10 10 15
Unit price (€/m3) 3.00 3.03 3.06 3.09 3.12 3.15 3.18 3.22 3.25 3.28
Cost (€/a) 23 27 28 28 56 57 57 58 58 89
Depreciation of equipment and installations
% / a 3 3 3 3 3 3 3 3 3 3
Cost (€/a) 20,034 19,433 18,832 18,231 17,630 17,029 16,428 15,827 15,226 14,625
Depreciation of buildings
% / a 1 1 1 1 1 1 1 1 1 1
Cost (€/a) 2,600 2,574 2,548 2,522 2,496 2,470 2,444 2,418 2,392 2,366
18 World Bank Commodity Forecast Price Data, July 2015
59
Description Unit 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038
Heat energy consumption
(MWh/a) 2,129 2,128 2,127 2,126 2,125 2,124 2,123 2,122 2,121 2,120
Wood chips consumption
(t) 881 880 880 879 879 878 878 878 877 877
Price of wood chips
(€/t) 65 66 67 67 68 69 69 70 71 72
Unit price of energy from wood chips
(€/MWh) 27.07 27.34 27.61 27.89 28.17 28.45 28.74 29.02 29.31 29.61
Heavy fuel oil price (€/t)
682 689 696 703 710 717 724 731 739 746
Light fuel oil price (€/t)
1,697 1,714 1,731 1,748 1,766 1,783 1,801 1,819 1,837 1,856
Electricity price (€/MWh) 0.12 0.12 0.12 0.12 0.13 0.13 0.13 0.14 0.14 0.14
Wood price (€/m3) 45 45 46 46 46 47 47 48 48 49
Unit price of energy from existing fuels
(€/MWh) 93.95 95.03 96.13 97.24 98.37 99.51 100.67 101.85 103.04 104.24
Maintenance of equipment and installation
% CAPEX / a 1.50 1.50 1.50 1.50 1.50 2.00 2.00 2.00 2.00 2.00
Cost (€/a) 14,217 14,217 14,217 14,217 14,217 18,956 18,956 18,956 18,956 18,956
Insurance % CAPEX / a 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5
Cost (€/a) 5,042 4,963 4,887 4,815 4,746 4,679 4,616 4,557 4,500 4,446
Electricity - costs of the plant
kWhel / MWhth 2 2 2 2 2 2 2 2 2 2
Cost (€/a) 491 503 515 528 541 554 567 581 595 610
Labour costs (€/a) 7,776 7,892 8,011 8,131 8,253 8,377 8,502 8,630 8,759 8,891
Removal and disposal of ash
(t/a) 17.6 17.6 17.6 17.6 17.6 17.6 17.6 17.6 17.5 17.5
Cost of Removal and disposal of ash
(€/a) 613 622 631 640 650 659 669 678 688 698
Chemical treatment of circulating water
Volume (m3) 180 180 180 180 180 180 180 180 180 180
Losses (m3 / a) 15 15 15 15 20 20 20 20 20 20
Unit price (€/m3) 3.31 3.35 3.38 3.41 3.45 3.48 3.52 3.55 3.59 3.62
Cost (€/a) 89 90 91 92 124 125 127 128 129 130
Depreciation of equipment and installations
% / a 3 3 3 3 3 3 3 3 3 3
Cost (€/a) 14,024 13,423 12,822 12,221 11,620 11,019 10,418 9,817 9,216 8,615
Depreciation of buildings
% / a 1 1 1 1 1 1 1 1 1 1
Cost (€/a) 2,340 2,314 2,288 2,262 2,236 2,210 2,184 2,158 2,132 2,106
Table 30 - Operational costs19
Estimation of operational costs (OPEX) predicts that after first 10 years, prices will stabilize and
19 Own calculations
60
achieve small growth of 1% annually.
In following 10 years, it is expected wood chips price increase up to 65€/t. After this period, the price
would continue growing per 1% annually. For the price of electricity, it is foreseen annual growth at
a rate of 2.5%.
Insurance costs are estimated for all of facilities, equipment, and installations built by the investment.
Considering workforce, it is planned engagement of one highly technically educated employed.
Workers with lower qualifications would be replaced from existing assignments in the facilities that
are the subject of this study. Salaries costs would increase per annual rate of 1.5%.
Costs of cleaning exhaust systems and ash disposal are proportional to quantity of ash (2%) in
burned wood chips. Unit price of these costs would increase per annual rate of 1.5%.
61
8. PRELIMINARY FINANCIAL ANALYSIS
Sustainability of the plant will be analysed for a period of 20 years. Variations of operational costs
according to the structure for a period of 20 years are shown in tabular form. Analysis of operational
costs considers forecasts of price variations for each item.
Preliminary financial analysis consists of the table of costs of energy production, and following
figures, (enclosed in the Annex): comparative analysis of costs of heating energy and savings;
savings resulted by a fuel switch; operational costs and depreciation; comparison of total costs of
the existing and a new heating system; and cash flow.
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Biomass - wood chips 46,909 47,945 49,004 50,086 51,193 52,323 53,479 54,660 55,868 57,102
Ash 531 539 547 554 563 571 579 587 596 604
Electricity 385 395 404 414 424 435 445 456 467 479
Water 23 27 28 28 56 57 57 58 58 89
Summary 47,848 48,905 49,982 51,083 52,236 53,385 54,561 55,762 56,989 58,274 Employee – Labour costs 6,700 6,801 6,903 7,006 7,111 7,218 7,326 7,436 7,548 7,661
Maintenance 5,664 5,664 5,664 5,664 5,664 10,773 10,773 10,773 10,773 10,773
Insurance costs 5,638 5,540 5,444 5,351 5,262 5,175 5,091 5,009 4,931 4,856
Summary 18,002 18,004 18,011 18,021 18,037 23,166 23,190 23,218 23,252 23,289
Depreciation 20,234 19,664 19,094 18,524 17,954 17,384 16,814 16,244 15,674 15,104
Total costs 86,084 86,573 87,087 87,628 88,226 93,935 94,564 95,224 95,915 96,667
2029 2030 2031 2032 2033 2034 2035 2036 2037 2038
Biomass - wood chips 57,644 58,191 58,744 59,302 59,865 60,433 61,007 61,586 62,171 62,761
Ash 613 622 631 640 650 659 669 678 688 698
Electricity 491 503 515 528 541 554 567 581 595 610
Water 89 90 91 92 124 125 127 128 129 130
Summary 58,837 59,406 59,981 60,562 61,179 61,771 62,369 62,973 63,584 64,200 Employee – Labour costs 7,776 7,892 8,011 8,131 8,253 8,377 8,502 8,630 8,759 8,891
Maintenance 16,067 16,067 16,067 16,067 16,067 21,731 21,731 21,731 21,731 21,731
Insurance costs 4,783 4,713 4,646 4,582 4,521 4,462 4,407 4,354 4,304 4,257
Summary 28,626 28,672 28,724 28,780 28,840 34,570 34,640 34,715 34,794 34,879
Depreciation 14,534 13,964 13,394 12,824 12,254 11,684 11,114 10,544 9,974 9,404
Total costs 101,997 102,043 102,099 102,165 102,273 108,025 108,123 108,232 108,351 108,482
Table 31 - Costs of energy production20
Financial analysis shows that future plant can generate positive cash flow after the period of 14
years from the start of operations. Such long period needed to achieving the sustainability of the
project is caused by high initial investment costs and by low full load hours (719 kWh/kW) in public
buildings.
20 Own calculations
62
Low biomass price, compared to currently used fuels, would enable better utilization of public
buildings- the Sports hall and the Cultural centre, to the general benefit of local community.
Offered technical solution provides to the municipality the establishment of a sustainable heating
system, which would increase the quality of life, and create a positive impact to the environment.
If the investment was financed from KfW Bank's program, with grant of 20%, grace period of 5 years
and a repayment period of 10 years, the positive business results would be achieved after 12 years
from the start of operations.
63
9. PROJECT EVALUATION
Evaluation of the project is based on the collected and calculated data; costs of the construction of
the biomass plant with two wood chips heated boilers and district heating system; and operational
costs (OPEX). Analysis included variations of fuel prices and operational costs throughout whole
period of analysis.
Based on investment costs (Table 29) and operating costs for the period of 20 years (Table 30)
economic indicators are given in the Table 31 above. Economic indicators necessary for the
investment plan are following:
‒ (F) IRR - (Financial) Internal Rate of Return ‒ (E) IRR - (Economy) Internal Rate of Return ‒ (F) NPV - (Financial) Net Present Value ‒ (E) NPV - (Economy) Net Present Value ‒ DR - Discount Rate
Unit costs of heating energy Unit Value
The investment value – Capex € 1,217,800
Annual production of heat energy (first year of operation) MWh / a 2,140
Total heat production (20 years) MWh 42,599
The operation value (20 years) - OPEX € 1,960,532
LUC - Levelled Unit Costs € / MWh 74.6
NPV € 134.083
DR % 1
IRR % 1.027
Sensitivity to changes in the price of fuel (biomass) IRR%
Price biomass decreased 5% 1.343%
Price biomass increased 5% 0.706%
Price biomass increased 10% 0.380%
Price biomass increased 15% 0.268%
Table 32 - Unit costs of heating energy21
Based on the results of the analysis of techno-economic indicators, it is concluded that the
investment in the construction of a new biomass plant with district heating system for public buildings
in Medveđa is acceptable.
IRR = 1.027% > DR = 1 %
Financial indicators of sustainability are stable related to change of the price of biomass. Increase
of the price of biomass, more than calculated, even up to 5% would affect sustainability of the
project, and such increase would prolong a period of the return of the investment. Increase of the
prices of fossil fuels and of electricity, more than calculated, would affect shortening a period of the
return of the investment to less than 14 years.
21 Own calculations
64
10. LEGAL FRAMEWORK
EU Directive 2009/28/EC promotes the use of energy from renewable energy sources. It sets
binding national goals for the overall share of energy from renewable sources in final energy
consumption (less than 20%), as well as the share of RES in transport (10% of energy from
renewable sources in transport by 2020).
In order to support investments in renewable energy sources, the Republic of Serbia adopted a
number of laws and bylaws related to the use of biomass and other renewable energy sources.
These are the following acts:
- Energy Law (Official Gazette of the Republic of Serbia 145/2014)
- Energy Sector Development Strategy of the Republic of Serbia for the period by 2025 with
projections by 2030 (Official Gazette of the Republic of Serbia 101/2015)
- Solid biofuels – Fuel specifications and classes SRPS EN ISO 17225-1,4:2015
- Law on Planning and Construction (Official Gazette of the Republic of Serbia 72/2009,
81/2009-corr, 64/2010 – Decision of the Constitutional Court, 24/2011, 121/2012, 42/2013 –
Decision of the Constitutional Court, 50/2013 – Decision of the Constitutional Court, 98/2013
– Decision of the Constitutional Court)
- Law of efficient energy consumption (Official Gazette of the Republic of Serbia 25/2013)
- Law on Environmental Protection (Official Gazette of the Republic of Serbia 135/2004,
36/2009, 36/2009 and other law, 72/2009 and other law, 43/2011 – Decision of the
Constitutional Court, and 14/2016)
- Law on The Strategic Assessment of Environmental Impact (Official Gazette of the Republic
of Serbia 135/2004 and 88/2010)
- Law on Integrated Prevention and Control of Environmental Pollution (Official Gazette of the
Republic of Serbia 135/2004, 25/2015)
- Law on Waste Management (Official Gazette of the Republic of Serbia 36/2009, 88/2010,
14/2016)
- Law on Air Protection (Official Gazette of the Republic of Serbia 36/2009, 10/2013)
- Law on the Ratification of the Kyoto Protocol to the UN Framework Convention on Climate
Change (Official Gazette of the Republic of Serbia – International Contracts, 88/2007 and
38/2009- other law)
‒ National Renewable Action Plan of the Republic of Serbia (Official Gazette of the Republic of Serbia 53/2013).
65
11. ENVIRONMENTAL IMPACT
Implementation of the project affects the area where the biomass is collected, prepared for transportation, and transported at territory of the Medveđa municipality and at territory of the immediate surroundings. The environmental impact may be registered as noise, vibration, emissions of particulate matter from the exhaust gases, etc. During the construction of the plant, adverse impacts on local environment may occur due to
construction and installation works. Particularly negative impact would produce preparation works
for the construction of the boiler room and storage of wood chips where it would be necessary to
clear and level the ground. Construction works will cause noise and vibration generated by using
construction machinery, as well as increased dust emissions due to the works on the excavation of
foundations, levelling the ground, and the construction of access roads. All of the effects listed above
are of low intensity, and relatively short in duration. The construction site will be surrounded by the
fence, so adverse environmental impacts outside of the fence will be negligible.
Prior to the beginning of works, the Investor is required to prepare a study on the organization of the
site which will display the work areas, corridors for internal transport, temporary storage of
equipment and materials, temporary site landfill, manner and place of storage of flammable and
hazardous materials. The study will show the connection to the outside infrastructure and
installations, usage of protective agents, the method of disposal of solid and liquid waste and other
specific measures, which will be implemented to reduce risks to health and safety of the personnel
engaged; as well as environment protection actions.
During the operations of the energy block, the harmful substances contained in the exhaust gases
will exert the highest impact on the environment. In addition to dust from the fuel, the exhaust gas
also contains solid particles. Adding a cyclone device as a part of a boiler for combustion of biomass
would have effects on the following:
- Nitrogen oxides (NOx) in the case of combusting low moisture biomass: the temperature of
combustion is high in this case, and NOx content is significantly higher than in case of
combusting biomass with high percentage of moisture
- Sulphur oxides (SOx) are low because of the low sulphur content in the biomass
- Carbon dioxide (CO2) is considered neutral because the biomass is a renewable energy
source, so that the entire amount of the carbon emitted in the exhaust gas has been previously
taken from the environment in which the tree grew
- Carbon monoxide (CO) in practice does not occur due to the structure of the boilers and
constant monitoring of the combustion process.
In any case, the planned biomass plant should replace the existing local boilers which use fuel oil,
wood and electricity, and which are extremely unfavourable for the environment.
The heating plant itself does not require a significant amount of water. While in operation, the heating
plant does not have losses and uncontrolled water runoff except in the cases of emergencies
(failures). Such situations are extremely rare with this type of plants, so it is safe to say that there
66
is no risk of environmental pollution, as well as of pollution of surface and/ or groundwater.
The existing sewerage system is able to accept the wastewater that may be of atmospheric origin;
from washing facilities and equipment with a negligible content of oils and grease; waste and
sanitary sewage. In the cases of discharging the installations, a coolant tank is used with a grease
separator, and after the deposition, water is discharged into the sewer system.
The exhaust gases contain solid particles of ash, which are retained in the cyclone device prior to
entering the chimney and discharged into the atmosphere. A metal cartridge is placed into the
cyclone where the separated ash is deposited. In addition, the boiler unit has a cartridge for the
disposal of ash that occurs as a solid residue of the combustion process. The total amount of ash
deposited is 42 t/a, i.e. between 200 and 250 kg per day during the heating season. The ash will be
disposed in a safe place and once a week transported to the landfill under a contract with the local
utility company. The amount of ash is relatively small and does not represent a risk to the
environment.
The operations of the boilers and electric motor drives in the boiler room represent a source of
constant noise and vibration. All equipment that emits noise and vibration is located within the area
of the boiler room so that the sound is quite absorbed by the walls of the building. After
commissioning the boiler room, the measures will be implemented to eliminate or reduce the noise
to the acceptable level according to the Law on the protection of environmental noise22. According
to this Law, the maximum allowable noise level is 35 dB (A) during the day and 30 dB (A) during
night.
The user of this space will implement specific measures to minimize the negative impact on the
environment. These measures will be applied to the control of air emissions, as well as to the
management of wastewater, solid waste and noise.
Thermal energy for public institutions in the municipality of Medveđa is obtained from different
types of fuel, so the production of CO2 is different for each heat source. Existing heating systems
in public buildings in Medveđa produce up to 320 t of CO2 annually.
22 Official Gazette of the Republic of Serbia No 36/2009 and 88/2010
67
Figure 20 - Emission of CO2 per a fuel type
If the biomass for combustion were obtained by deforestation and without reforestation, an emission
of CO2 by biomass combustion would be 3.5 times less than from the combustion of heavy oil. If the
biomass for combustion were provided from wood waste or from forestation, then reduction of CO2
emissions would be lower for 320 t per year.
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
20
31
20
32
20
33
20
34
20
35
20
36
20
37
20
38
Ave
rage
Emission CO2 (kg), Comparasion to fuel
Emision CO2 (kg) - Existing fuel Emision CO2 (kg) - Biomass
68
12. ENERGY EFFICIENCY MEASURES AND CONCLUSION
Public buildings in the Medveđa municipality are heated by electric heaters or by light fuel oil, mazut,
or wood used as a fuel in individual boiler rooms located in the buildings. These heating systems
require high fuel expenses and a lot of engagement on purchase and storing the fuel; as well as on
regular maintenance and servicing.
Heating systems that use wood as a fuel (Technical school ‘Nikola Tesla’ and Primary school ‘Gornja
Jablanica’) are very inert, requiring long period of gradual warming of facilities, as well as long period
of cooling. There is no reliable regulation system of water temperature in these systems.
Furthermore, during the heating period, there is a lot of work on firing and cleaning the boilers, which
is a big expense. Described heating systems that use wood as a fuel are very inefficient for the
following reasons:
‒ low efficiency of the boilers;
‒ large storage area necessary for storing the fuel;
‒ there is no reliable regulation system of the temperature;
‒ frequent work interruptions due to the cleaning of the boilers.
Heating systems that use light fuel oil and mazut have higher level of automation in terms of
maintaining water temperature. In spite of higher efficiency- compared to wood heated systems,
they are big pollutants, and the fuel expenses are high for such systems.
Facilities heated by electricity are energy very inefficient, even though the heating is easily
managed, and desired air temperatures are easily reached.
In respect to the above, the existing heating systems in public buildings in Medveđa are energy very
inefficient, and they require high expenses related to the following: the purchase of the fuel;
maintenance; servicing. Furthermore, these systems are big environmental pollutants.
Construction of central boiler room with biomass heated boilers of 3,5MW and of heating network
will enable sustainable, cheaper, more reliable, manageable, and ecologically acceptable heating
system to public buildings in Medveđa. Heating systems in the buildings would be connected to the
district heating network in the heating substations, which would enable measuring of delivered
heating energy and management of consumption in accordance with the requirements of specific
facility.
Construction of biomass heating plant and of district heating network will enable following:
‒ lower costs of the heating,
‒ reduction of fuel consumption,
‒ reduction of CO2 emission,
‒ reduction of environmental pollution,
‒ increased comfort, and increased quality of services,
‒ decrease of a fuel expense and of maintenance costs.
69
There are forests at territory of the Municipality of Medveđa and the Jablanica District sufficient to
provide biomass for district heating plant. In addition, biomass can be purchased as residues from
orchards and private forests. In such way, local community could close the circle of production and
consumption of heating energy.
70
13. ANNEX
71
Figure 21 - Comparative analysis of costs of heating energy and savings
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038
Existing fuels x 103 138,2 140,9 143,6 146,4 149,3 152,2 155,1 158,2 161,2 164,4 167,6 170,9 174,2 177,6 181,0 184,6 188,2 191,8 195,6 199,4
Wood chips x 103 46,90 47,94 49,00 50,08 51,19 52,32 53,47 54,66 55,86 57,10 57,64 58,19 58,74 59,30 59,86 60,43 61,00 61,58 62,17 62,76
Saving x 103 91,29 92,95 94,64 96,36 98,10 99,88 101,6 103,5 105,4 107,3 109,9 112,7 115,4 118,3 121,2 124,1 127,2 130,2 133,4 136,6
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
220,000Comparative analysis of cost heat energy and saving - (€)
72
Figure 22 - Savings from fuel switch
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038
Saving x 103 91,2 92,9 94,6 96,3 98,1 99,8 101, 103, 105, 107, 109, 112, 115, 118, 121, 124, 127, 130, 133, 136,
Saving from fuel switch - (€)
73
Figure 23 - Operational costs and depreciation
0
20,000
40,000
60,000
80,000
100,000
120,000
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038
Operational costs and Depreciation - (€)
Biomass - wood chips Extra energy Employee – Labor costs Maintenance & Insurance costs Depreciation
74
Figure 24 - Comparison of total costs of the existing system, new heating system and new system supported by KfW Credit
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038
Total costs of Existing sistems - CAPEX+OPEX - KfW Credit (€)
Existing heating sistems CAPEX+OPEX KfW Credit
75
Figure 25 - Cash flow balance
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038
TotalCashFlow x103 -1,28 -1,22 -1,15 -1,07 -998, -915, -826, -730, -628, -518, -409, -298, -185, -70,2 47,43 164,6 284,0 405,8 529,8 656,1
-1,500,000
-1,000,000
-500,000
0
500,000
1,000,000
Cash flow balance - (€)