Serbia

Renewable

Energy

Sources

2

Potentials (Mtoe)

Biomass 2.70

Hydro 0.60

Solar 0.64

Geothermal 0.20

Wind 0.19

TOTAL 4.33

Serbia’s endowment of renewable energy resources is substantial - realization of these potentials require Government action

Biomass62%

Hydro14%

Solar15%

Geothermal5%

Wind4%

RES Technical Potential

Clear technical potential of renewable energy - insufficient information about the economic potential

3

Biomass

Most promising utilization options for biomass:

•Space heating in households and buildings using biomass pellets or briquettes

•Co-firing or total replacement in district heating plants firing heavy oil or coal in south Serbia, where natural gas is not available yet

•Production of electricity utilizing agricultural and wood wastes

Forest biomass

Fuel Wood

7 million m³

unofficial

--------------------

1.6 million m³

official

(55% from State forest)

Wood residues

5 million m³

TOTAL 12 million m³

Fruit growing residues

Biomass residues

(1,000 tones)

Plum 393.5

Apple 36.2

Cherries 55.0

Pear 14.0

Peach 35.1

Apricot 15.5

Walnuts 55.0

Grapes 515.0

TOTAL 1,119.3

Crop farming residues

1/3 available for Energy Use

Total residues (1,000 tones)

Residues for Energy Use

(1,000 tones)

Wheat 2,905 1,365

Barley 295 180

Rye 15.5 4.4

Corn 5,310 1,140

Sunflower 705 240

Soybean 320 130

Rapeseed 7.8 1.6

TOTAL 9,560 3,060

Wood

biomass

1 Mtoe

Agriculture

biomass

1.4 Mtoe

4

Small Hydro Power Plants

Number of locations for the construction of SHPP according to potential

installed capacity

22

273

173

104

72

46 4839

50

31

9

100-200 kW200-300 kW

300-400 kW400-500 kW

500-600 kW

600-800 kW

800-1000 kW

>5 MW: 9 locations2-5MW: 30 locations (average 3 MW)<1 MW :largest number of locations

1,500 GWh/year

Number of SHPP in Serbia – 60(50% out of operation)

Revitalization

Construction

SHPP Cadastre (1987)856 locations 500 MW

5

Solar

Most promisin utilization options

•Sanitary water heating•Space heating

If each housing unit (2.65 million units) would install average 4 m² of collectors

Equivalent to some saving potential of7,420 GWh

6

Geothermal

Use of geothermal potential is mainly for balneological purposes, sports and recreation

Prospects for expanding geothermal energy for agricultural heat and water heating are reasonably good

Potential for larger scale geothermal electricity is limited - requires water temperatures above 100°C.

Average geothermal flow density in Serbia is higher than 60 mW/m³

There are 160 natural resources of geothermal waters (excluding Panonian basin) with temperature above 15ºC

Highest temperatures recordedVranjska spa - 96ºCJošanička spa - 78ºCSijarinska spa - 72ºC

Total flow rate of geothermal water resources is 4000 l/sec

60 locations are in the water reservoirs up to 3000 m depth

Installed thermal power (MWt)

Produced heat (TJ/year)

Residential and commercial areas 18.5 575Spas and recreation 36.0 1,150Gain drying 0.7 22Greenhouses 8.4 256Fishing and cattle breeding 6.4 211Industrial processes 3.9 121Heat pump heating 12.0 80Total 86.0 2,415

7

Wind

Wind data based on 10 metre heights extrapolated to 50 metre heights

2,300 GWh

1,300 MW of capacity

at sites with minimal average wind speeds of 5 m/s

Best locations in Serbia (extrapolated)

Midzor 7.66 m/s

Suva Mt. 6.46 m/s

Vrsacki breg 6.27 m/s

Tupiznica 6.25 m/s

Krepoljin 6.18 m/s

Deli Jovan 6.13 m/s

8

Barriers for wider use of RES

Institutional barriers

•Lack of experienceNeed for the experience of how a private sector renewable energy project can work in Serbia

Absence of “first set” of projects

•Transition IssuesMany industrial companies are in transition – both with regard to structure and ownership, and managements are not yet ready to consider measures to rationalize energy activities

Financial barriers

Debt Financing supportDifficulty to secure long term loans appropriate for small renewable energy projects

•Electricity tariffLow electricity tariff does not stipulate domestic, commercial and industrial consumers to use renewable energy - current average price is under 5 €cents/kWh

9

Barriers for wider use of RES

Technical barriers

•Absence of technical standardsDespite the existence of manufacturers of heating equipment and biomass fuel (briquettes and pellets), production standards are not regulated

Equipment for biomass energy utilization need clear information about technical specification and performance characteristics

•Barriers to biomass utilizationLow electricity price, which decrease motivation to install biomass firing boilers

No developed market for biomass fuel and biomass utilisation facilities

•Absence of a renewable energy resources inventoryUpdate and development of Small Hydro Cadastre

Wind monitoring programme with wind speed measurements at 50 metres needed

10

Legal Regulation–Decree on conditions for acquiring status of Privileged Power Producer

SHPP up to 10 MW

Cogeneration up to 10 MW

Power plants that use at least 90% renewables except biomass

Power plants that use at least 80% of biomass

Ministry of Mining and Energy

Minister

Feed-in tarriff

Decision on granting Status of privileged power producer – up to 12 years

Monitoring

Power plants that use comunal waste

Request for status of privileged power producer

Privileged Power Producer

11

Market Model for RES-E

Electric Power Industry of Serbia (EPS) – Supplier for Tariff

consumers

Regulatory Energy Agency

Privileged Power Produces

Power Purchase Agreement

Price of electricity for tariff consumer

Feed-in tarriff

Electricity

Consumer

Cost of RES-E

+

Cost of balancing

Payment for RES-E

12

Feed-in tariffs adopted in Decembre 2009

Power Plant Type Installed Capacity (kW) Feed-in tariff (c€/kWh)

Small Hydro Power Plants (up to 10 MW)

1.1 Up to 500 kW 9,7

1.2 500 kW - 2 MW 10,316 – 1,233*Р

1.3 More than 2 MW 7,85

1.4 Existing infrastructure Up to 2 MW 7,35

1.5 2 MW – 10 MW 5,9

Biomass Power Plants

2.1 Up to 500 kW 13,6

2.2 500 kW - 5 MW 13,845 – 0,489*Р

2.3 More than 5 MW 11,4

13

Feed-in tariffs

Power Plant Type Installed Capacity (kW) Feed-in tariff (c€/kWh)

Biogas Power Plant

3.1 Up to 200 kW 16,0

3.2 200 kW - 2 MW 16,444 – 2,222*Р

3.3 More than 2 MW 12,0

Power plants that use landfill and sewage gas

6,7

Wind 9,5

Limit for total installed wind energy – 450 MW

Solar Photovoltaics 23

Limit for total installed solar PV – 5 MW

Geothermal energy 7,5

1414

Feed-in tariffs

Power Plant Type Installed Capacity (kW) Feed-in tariff (c€/kWh)

CHP on fossil fuels

1.1 Up to 0,2 MW 10,4

1.2 0,2 MW to 2 MW 10,667 – 1,333*Р

1.3 2 MW to 10 MW 8,2

1.4 Existing infrastructure Up to 10 MW 7,6

Power plants that use communal waste

2.1 Up to 1 MW 9,2

2.2 1 MW to 10 MW 8,5

15

Investment incentives applicable to RES projects

INVESTMENT INCENTIVESIn case of investments in production facility, Government approve grant between 2000 and 5000 euros per new job creation, minimal investment value is within the range of 1 and 3 million euros, whereas the minimal number of new jobs is 50

An investor that invests in fixed assets, i.e. in whose fixed assets other entity invests over 600 million RSD (6.8 million EUR), and uses these assets for conducting business in Serba and during the investment period additionally recruit at least 100 people - shall be exempted from corporate profit tax payments for the period of 10 years proportionally with the investment made

TAX CREDITSA tax payer that made profit in newly established business unit in an underdeveloped area will receive a corporate profit tax reduction in the duration of two years, proportional to the share of such made profit in total profit of the company

ACCELERATED DEPRECIATION OF FIXED ASSETSThis incentive is provided for fixed assets that are used for the prevention of air pollution, water and soil pollution, noise reduction, energy savings, forestation, and collection and utilization of waste for industrial raw materials and fuels

FOREIGN INVESTMENTS INCENTIVESThe law on foreign investments stipulates free import of goods that are the foreign investor’s nominal capital (founding capital) – providing it fulfils acts regulating environment protection. Import of equipment as the founding capital of a foreign investor, except for passenger motor vehicles and game & gambling machines, is free from customs and other duties. Besides, a foreign investor and a company with foreign founding capital are entitled to tax and customs related deductions in line with the law