WOOD CHIPS SUPPLY STUDY FOR DESPOTOVAC MUNICIPALITY

Prepared for:

Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH DKTI- Development of a Sustainable Bioenergy Market in Terazije 23 11000 Beograd

Prepared by:

Vojislav Milijić, Foragrobio cc doo Sumska 9-III/1,

July 2018

DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study

Table of Contents List of tables List of figures List of charts List of abbreviations 1. Executive summary ...... 5 2. Definition of tasks ...... 6 3. Methodology ...... 7 4. Background ...... 8 4.1. Municipality of Despotovac ...... 8 4.2. Biomass Demand of Despotovac District Heating System ...... 9 4.3. Biomass availability ...... 10 5. Wood Chips Supply and Logistic Model ...... 11 5.1. Model Concept ...... 12 5.2. Wood and wood chips suppliers ...... 18 5.2.1. PE Srbijasume ...... 18 5.2.2. Small-scale private forest owners ...... 20 5.2.3. Medium-scale private forest owners ...... 21 5.2.4. Sawmills ...... 22 5.2.5. Wood chips producers ...... 24 5.2.6. Waste Management Company ...... 27 5.3. Wood Chips Delivery Contracting ...... 28 6. Financial analysis ...... 30 6.1. Investment ...... 30 6.2. Operational costs ...... 30 6.3. Incomes ...... 31 6.4. Economic indicators: iRR, NPV, BCR, sensitivity analysis ...... 31 7. Conclusions ...... 33 8. Literature and sources ...... 34 9. Annexes ...... 35 9.1 Annex I: List of interviewed persons ...... 35

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DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study

List of Tables T-1: Basic information about Despotovac Municipality ...... 8 T-2: Participants in wood chips supply chain for Despotovac ...... 17 T-3: SWOT analysis ...... 18 T-4: Wood chips units, conversion factors and prices in Despotovac region ...... 29 T-5: Investment costs ...... 30 T-6: Unit costs ...... 30 T-7: Inputs for operational costs ...... 30 T-8: Annual operational costs ...... 30 T-9: Economic indicators: NPV, IRR, return of investment and BCR ...... 31

List of Figures F-1: Position of Despotovac Municipality ...... 8 F-2: Position of future Despotovac DH system ...... 9 F-2: Future Despotovac wood chips boiler house location ...... 10 F-3: Wood chips supply model concept ...... 12 F-4: Classification of the industrial by-products and residues and used wood to A, B, C, D classes according to Alakangas at all ...... 14 F-5: Applicable raw material for wood chips and wood chips: firewood, dry forest and sawmill residues, post-consumer chemically untreated wood ...... 15 F-6: Not applicable raw material for wood chips and wood chips: green and fresh logging and other residues, green wood chips stored at the open ...... 16 F-7: Capacities needed for wood and wood chips storage, production and transport – wood chippers, self-unloading trailers and applicable vehicles, telehandlers/front loaders ...... 16 F-8: Municipalities within Juzni Kucaj Despotovac Forest Estate of PE Srbijasume ...... 20 F-9: Locations of Branicevo monastery forests managed by Fornet doo ...... 22 F-10: Branichevska Parrish forests ...... 22 F-11: Location of Amarant doo sawmill ...... 23 F-12: Amarant doo sawmill ...... 24 F-13: Location of Braca Zalicic doo ...... 25 F-14: Capacities – wood chipper, side-kipper truck, truck with wood trailers ...... 26 F-15: Wood chips production from river banks wood, forest residues and fruit crates residues ...... 26 F-16: FCC group location in and Despotovac ...... 27 F-17: FCC group capacities: Container truck/containers and wood residues ...... 28

List of Charts C-1: Costs, incomes, balance ...... 31 C-2: Sensitivity analysis ...... 32

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DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study

List of abbreviations BMZ German Federal Ministry for Economic Cooperation and Development BLTC Biomass Logistic and Trade Centre DH District Heating DKTI Deutsche Klima Technologie Initiative EUR, € Euro FE Forest Estate GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH) GIZ-DKTI Program for the “Development of a sustainable Bioenergy Market in Serbia“ ha hectare kg kilogram mm millimetre m³ cubic meter m2 square meter MW Megawatt PE Public Enterprise srm steer meter Ton, t metric ton VAT Value Added Tax

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DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study

1. Executive summary

Despotovac DH system project completed in spring 2018 considers covering heating of public buildings, including: technical high school, elementary school and kindergarten and the hospital in the first phase and cultural center, communal company building, municipal building, library, court, police station and firemen unit building in the second phase. Project perceives 3 wood chips boilers of 500kW each - a total of 1.5MWthermal. Quality demand for wood chips according to SRPS EN ISO 17225-4 is: Water content M25-M35, M40%max; Particle size: P16-P45S; Ash content A1.0- A3.0; Quality class A1, A2, B2; Bulk density: BD160-250kg/bulk m³; Lower calorific value: 11.17MJ/kg. Total annual wood chips quantity requirement is projected at up to 700tons/year or 2,800 bulk m³/year, at bulk density BD of 250kg/bulk m³.

Biomass availability for Despotovac DH plant have not been analyzed so far. Considering a total production in state, private and church forests in the former forest area of Juzni Kucaj of over 80,000tons of firewood and forest residues, the demand of 700tons/year is less than 1%. On the other hand, demand for wood, especially long firewood in area of Despotovac is very high, due to the fact that largest Serbian wood consumers are in 50km range of forests in Despotovac area. Considering those plants manage to supply from the area suggest that wood is available, however due to competition and high demand supply depends not on the availability but on buyers’ willingness to pay. Considering wood chips quality requirements for the project, other potential sources of woody biomass such as wood from orchards and wood from roadside and water shed clearing and post-consumer wood if dried to 35-40% water content, can be considered even though their high bark share in total wood volume will increases ash content of the wood chips.

Despotovac Municipality is not interested to organize wood chips production but to contract wood chips delivery. Most important wood and wood chips suppliers in proximity of Despotovac have been identified, interviewed and their possibility and propensity to participate in supply of future Despotovac DH system have been analyzed. Considering required raw material and technical process in the production including storing and drying, and also strong demand for wood and wood residues in the region, prices of wood chips should be expected at the range of 16-20€/bulk m³, with possibility to be reduced due to competition and provision utilization of cheaply provided post- consumer wood or wood from river banks and road sides for wood chips production. In case of post-consumer wood as a source for wood chips, class B of wood chips quality should be accepted, and all analyzes according to Serbian standards for wood chips should be performed.

Investment costs are related to required investments in DH system – boilers and pipeline. Total investment according to the project is 167,000,000RSD or 1,415,000€. Annual operational costs are 97,600€. Income is perceived as sale of 3,000hoursx1.5MW or 4,500MWh of heat for 50€/MWh hypothetical price. Total incomes in both options are calculated at 225,000€/year. Investment can be returned in the eleventh year of operation. Benefit cost ratio is 1.34, while internal rate of return is 7.3%. Sensitivity analysis shows dependence of iRR from change of most important inputs – investment costs and wood chips price. iRR is mostly dependent on investment costs, while change of wood chips price for 30% up or down doesn’t influence iRR for more than 2%.

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DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study

2. Definition of tasks

Despotovac Wood Chips Supply Study is developed as an activity of the project: “Development of Sustainable Bioenergy Market in Serbia” implemented jointly by KfW and GIZ and funded by German Federal Ministry for Economic Cooperation and Development (BMZ).

Objective of Consultants’ assignments in completion of the Study consisted of: - Analysis if available woody biomass potential (logging residues, sawmill residues, roadside, river bank biomass) in the given area meets the requested amounts and quality of wood chips for Despotovac DH project; - Biomass market situation in the given area, identification of potential suppliers (specialized woody biomass mobilization companies, major wood processing companies, and producers of wood chips and wood pellets, etc..) and their potentials and propensity for supply in terms of quantity, quality and other properties; - Price expectations for wood chips including each category of wood residuals and costs of wood chips production; - Biomass storage and overview on technology and machinery to be used in biomass harvest or collection and logistic chains and wood chips production; - Supply chain management and contracting including financial analysis and economic indicators of biomass supply organization and financing options (Investments in machinery, equipment, storage, quality control; Operational costs; Economic indicators including sensitivity analysis)

Consultant’s tasks consisted of: - Task 1: Field visit to municipality of Despotovac: o personal visit to municipality and analysis of DH location and storage locations; o interviewing most important potential wood biomass suppliers (forest managers, forest owners and wood processors) in order to obtain market information, logistic challenges and to assess their propensity for supply;

- Task 2: Design and verification of wood chips supply and logistic models district heating plant in Despotovac: o analysis and design of biomass supply chain models and verify an optimal model of biomass supply chain in order to find, collect, chip, dry, store and deliver wood biomass to district heating plant in the most economically efficient way; o provision of all costs of biomass supply chain (raw materials, collecting, storage, transport, drying, chipping); o provision of conclusions regarding optimal model of biomass supply chain as well as recommendations and instructions how to achieve better, cheaper and more reliable logistic concepts; o provision of recommendations and instructions regarding models of contract between potential suppliers and the municipality.

- Task 3: Results of the assessment including: o summary of findings in an English and Serbian language written report as well as to provide electronic version of the Study (WORD, PDF); o provision of a PPT-presentation; o Preparation and provision of all others requested outputs.

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DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study

Report was prepared by Foragrobio CC doo1 and submitted in July 2018.

3. Methodology

Methodology implemented in the preparation of the report consisted of following steps: - Analysis of related literature, regulations and other sources related to wood biomass, equipment, logistics and municipality/area in question; - Review of Despotovac DH system concept; - Identification of relevant stakeholders’ representatives to be interviewed and scheduling interviews; - Meeting and/or face to face interviews with relevant stakeholders; - On site analysis of potential locations for biomass storages. - Design of wood chips supply concept including investment and operational costs assessment; - Financial analysis including economic indicators; - Reporting.

Literature and sources review was focused on obtaining information about municipality and area in question, including their activities in the process of biomass-based district heating system implementation. In addition, Serbian regulation related to forestry, wood industry, environment, transportation, construction and local administration was also analyzed for definitions of potential impediments in supply of wood biomass. Logistic concept studies and other relevant studies on wood biomass availability were analyzed as well. Potential stakeholders were identified as representatives of the following groups: - local administration (municipal authorities) – decision makers and consumers of biomass; - public enterprise managing state owned forests (central and regional level) – supply and contracting wood biomass and information about forest production in state and private forests, forest infrastructure and other potential suppliers; - existing wood and biomass processors and suppliers – supply and contracting and market information.

Meetings and face to face interviews were carried out in the period of 19th and 27nd to 29th of June 2018, along with onsite analysis of possible biomass storages’ locations. Wood chips supply concept was designed based on the literature review, local condition, stakeholders’ inputs, logistic studies and available best practice examples. Investment and operational costs assessment was also based on review of relevant sources and information provided by interviewed stakeholders, construction standards and equipment distributers.

Financial analysis, based on defined investment and operational costs, included application of methods for calculation of net present value, internal rate of return, benefit-cost ratio, period for return of investments and sensitivity analysis showing basic economic indicators development in case of input increase and in case of output decrease. Report was prepared and submitted to GIZ DKTI comments on 04th of July 2018.

1 http://www.foragrobio.rs/

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DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study

4. Background

Chapter bellow provides basic background information about municipality of Despotovac, their fuel switch activities in district heating systems, technical aspects, biomass demand in terms of form, quality and quantity, biomass availability and legal, financial and political aspects related to biomass supply.

4.1. Municipality of Despotovac

Map of Despotovac municipality, presenting its position in Serbia, along with municipal boarders and major roads is presented in a figure bellow.

Map data © 2018 Google

F-1: Position of Despotovac Municipality

Municipality of Despotovac is situated in Central Serbia in the Region of Šumadija and Western Serbia. Administratively it is a part of Pomoravlje County. Basic information on Despotovac municipality are presented in table below.

Info/Municipality Despotovac Area km2 632 No of settlements 1 urban+32 rural Total population2 22,995 (4,212 in Despotovac town) T-1: Basic information about Despotovac Municipality

2 According to 2011 Census - http://popis2011.stat.rs/?page_id=2162

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DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study

4.2. Biomass Demand of Despotovac District Heating System

Project for Despotovac biomass-based DH system have been in development since 2017. Map below presents location of future Despotovac DH system.

Project completed in spring 2018 considers covering heating of public buildings, including: technical high school, elementary school and kindergarten and the hospital in the first phase and cultural center, communal company building, municipal building, library, court, police station and firemen unit building in the second phase. Project perceives 3 wood chips boilers of 500kW each - a total of 1.5MWthermal.

Map data © 2018 Google

Map data © 2018 Google

F-2: Position of future Despotovac DH system Page 9 of 35

DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study

Boilers will be installed in the boiler house of Technical High School Building.

Photo by Foragrobio cc doo © 2018 GIZ DKTI

F-2: Future Despotovac wood chips boiler house location

Quality demand for wood chips according to SRPS EN ISO 17225-43 is: Water content M25-M35, M40%max; Particle size: P16-P45S; Ash content A1.0-A3.0; Quality class A1, A2, B2; Bulk density: BD160-250kg/bulk m³; Lower calorific value: 11.17 MJ/kg.

Total annual wood chips quantity requirement is projected at up to 700 tons/year or 2,800 bulk m³/year, at minimum bulk density BD of 250 kg/bulk m³.

4.3. Biomass availability

Biomass availability for Despotovac DH plant have not been analyzed so far. Considering a total production in state, private and church forests in the former forest area of Juzni Kucaj of over 80,000tons of firewood and forest residues, the demand of 700 tons/year is less than 1%. On the other hand, demand for wood, especially long firewood in area of Despotovac is very high, due to the fact that largest Serbian wood consumers - Kronospan4, Sparrow5, Bioenergy point,6 Ekostep pellet7 and others are in 50km range of forests in Despotovac area. Considering those plants manage to supply from the area suggest that wood is available, however due to competition and high demand supply depends not on the availability but on buyers’ willingness to pay. Considering

3 http://www.iss.rs/rs/standard/?natstandard_document_id=53689 4 https://rs.kronospan-express.com/sr/products 5 http://sparrow.rs/ 6 http://www.bioenergy-point.rs/ 7 http://www.ekostep-pellet.rs/ Page 10 of 35

DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study wood chips quality requirements for the project, other potential sources of woody biomass such as pruning residues, wood from orchards and wood from roadside and water shed clearing and post- consumer wood if dried to 35-40% water content, can be considered even though their high bark share in total wood volume will increases ash content of the wood chips.

5. Wood Chips Supply and Logistic Model

Wood chips quality requirement determines the applicable logistics concept more than wood chips quantities requirement – quantities determine the scale of the implemented concept but not the concept model. Specific requirement of the project is water content of maximally 40%, which implicates that wood chips from freshly harvested wood cannot be used – raw material for wood chips needs to be dried or wood chips needs to be dried prior to consumption. Natural drying of wood prior to chipping is most common method for production of dried wood chips. Such concept is already implemented in biomass logistic and trade centers8. Other options include artificial drying of wood chips in rotary or belt dryers, but those options are implemented in wood pellet or chipboard factories or in wood gasification, where drying below 20% is needed in short period of time and where added value of the product can justify investment costs of drying installations. Several researches9 about natural drying time needed for achieving different water content of wood before chipping or wood chips indicate that the time needed to dry fresh wood from 50-60% water content to 30-35% depending on the period of the year, wood species and dimensions, barked or debarked, etc., ranges from 6 to 10 months. We can accept 9 months as applicable in Serbian conditions.

Necessity to provide drying time and space in wood chip supply chain for future DH system of Despotovac implicates following logistic concept - Wood chips need to be produced in biomass logistic and trade center or at least an adequate storage point for drying wood material prior to chipping needs to be provided. Considering 3% limit for ash content wood chips can be produced from firewood, logging residues, sawmill residues, other wood including wood from orchard cleaning, parks and clearage of roadside vegetation, also post-consumer wood delivered to storage point for drying. Considering small amounts of required wood chips and lack of Municipality capacities such storage point can be organized by private companies interested in wood chips supply. Despotovac Municipality is not interested to organize wood chips production but to contract wood chips delivery. Primary suppliers of wood chips for chipping in the chain are state forest managers – PE Srbijasume, small scale private forest owners, medium scale private forest owners – Branicevo Parish and company managing their forests Fornet doo and managers/owners of agricultural land and orchards, river banks or roadsides or park maintenance companies, waste management companies and others. Therefore, municipality will exercise the option of contracting supply of needed quantities of adequate quality wood chips;

This chapter will elaborate supply and logistic concept models in detail including analysis of potential suppliers and organizational and contracting options.

8 See more at: http://bioresproject.eu/ 9http://www.metla.fi/julkaisut/workingpapers/2010/mwp186.pdf and www.biomasstradecentre2.eu/scripts/download.php?file=/data/pdf_vsebine/Technical_backgrounds/XI .Technical_backgrounds.pdf

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DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study

5.1. Model Concept

Applicable woody biomass supply chain model is presented in the figure below. Following operations are present in this supply model concept: 1. Woody biomass production and collection, encompassing: a. Wood and biomass harvesting – in case of utilizing woody biomass from the forests; b. Wood and biomass extraction to the forest road, or central log storage – in case of utilizing wood biomass from the forests; c. Wood processing with woody biomass produced as residues in primary production – in case of utilizing solid sawmill residues as woody biomass; d. Wood residues collections and separation in frame of waste collection – post consumer wood; e. Woody biomass transport to the central biomass storage; 2. Operations in BLTC, including: a. Storing and natural drying of woody biomass; b. wood chipping c. storing of wood chips; d. woody biomass and wood chips manipulation; 3. Wood chips transport; 4. Wood chips consumption in DH plants including: a. Wood chips storing in DH storage; b. Wood chips manipulation; c. Wood chips consumption.

F-3: Wood chips supply model concept

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DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study

Wood and woody biomass production and collection is organized by forest owners and managers. In mountain and hilly areas such as Central Serbia, harvesting is performed with chainsaws, while wood extraction is performed by skidders or agricultural tractors adapted for skidding operations. This is the practice in both state and private forests and the most significant differences between operations in state and private forests is in density of forest roads and skid line network; and scale of harvesting operations. Individual private forest owners perform harvesting operations in smaller areas, usually at one or several forest owners’ plots, while state forest managers organize operations in one or several sections in forest management units.

Clearing of roadsides or river banks is performed in clear cutting practice and mechanized harvesting. Also, those areas are not considered as forests according to the Law, therefore harvesting is not subjected to forestry regulations.

Sawmill or other wood industry residues are produced at wood processing facilities and they are collected by biomass processors and processed into wood chips. Specific logistics of biomass extraction is not required since those residues are processed on wood industry site accessible by paved roads. Being so, sawmill residues are most utilized form of biomass in Serbia.

Collection of post-consumer wood encompass collection of wood residues deriving from previously utilized wood for packaging, construction or other forms. This practice is not so common in Serbia, however due to increase of demand for wood chips expansion of the practice can be expected. According to literature sources10 post-consumer wood or used wood can be classified in 4 categories: solid biofuel A - chemically untreated wood (such as construction wood, packaging wood); solid biofuel B - chemically treated wood (boards, plywood, etc.); solid recovered fuel C – chemically treated wood (demolition wood, wood including halogenated organic compounds or heavy metals) and solid recovered fuel D – hazardous waste. Detailed scheme is presented below. All kinds of used wood can be collected sorted or unsorted according to classes, but on sorting site which can correspond to site where wood chipping is performed, defined classes of chemically treated and untreated wood needs to be separated before further processing. Defined classes A and B can be used for production of B2 wood chips class if they do not contain heavy metal compounds or halogenated organic compounds used for wood product treatment, therefore chemical analysis need to be performed and origin need to indicated according to wood chips standards11.

10 Alakangas, E., Koponen, K. Sokka, L. & Keränen, J. Classification of used wood to biomass fuel or solid recycled fuel and cascading use in Finland, Book of Proceeding Bioenergy 2015, p. 79 – 86, For Boost for Entire Bioenergy Business, 2 – 4.9.2015, Jyväskylä, Finland https://www.vtt.fi/inf/julkaisut/muut/2015/OA-Classification-of-used-wood.pdf 11 SRPS EN ISO 177225-1 and SRPS EN ISO 177225-4

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DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study

F-4: Classification of the industrial by-products and residues and used wood to A, B, C, D classes according to Alakangas at all

Woody biomass transport to the central biomass storage - BLTC encompass loading unprocessed woody biomass to a transport vehicle at forest or sawmill storage and its transport to biomass central storage. Biomass central storage is a storage facility with enough space to store unprocessed woody biomass and wood chips and provide space for manipulation with engaged machinery. At central storage woody biomass is processed by wood chippers into wood chips.

Wood chips can be stored at central storage, preferably in sheds, in order to provide drying and protection from further decay. Manipulation and loading of wood biomass is usually performed by telescoping handler or front loaders. However, application of tractors with front loader can also be possible. In case of vicinity of woody biomass to DH plants, an option of moving wood chipper to processing site and direct delivery to DH plants can also be applied. For flexibility it is necessary to include mobile wood chippers in the operations.

Transport of wood chips from central storage to DH plants should be performed with vehicles which can be automatically unloaded. Such vehicles need to be in line with traffic regulations, especially if DH plant is located in the city where truck transport is not allowed. For longer transport distances in location accessible by large vehicles, tow trucks and walking floor trailers with capacity of 90-100 m³ are usually utilized, however in smaller distances kipper trucks or trucks with unloadable container can also be utilized. Tractors with unloadable trailers can also be used for wood chips delivery at smaller distances.

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DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study

Photo by Foragrobio cc doo © 2018 GIZ DKTI

F-5: Applicable raw material for wood chips and wood chips: firewood, dry forest and sawmill residues, post-consumer chemically untreated wood

Wood chips storage in DH plant, usually requires space for few days or one week of operation, with perceived reserves in winter time to cover inaccessibility of transport vehicles, due to the unperceived events such as winter storms causing road blockade. In Despotovac project it is a walking floor underground storage connected to a boiler via screw conveyers, therefore no additional manipulation is needed.

Table below presents organizational model for Despotovac municipality. Woody biomass production is organized by state forest managers and private forest owners. In State forests, harvesting, wood extraction is organized by their contractors – private harvesting companies. In case of wood on stump sale by state forest managers, private companies can buy the wood on stump and subcontract private companies for harvesting, extraction and possible delivery to the central biomass storage. In private forests, private forest owners or managers or their harvesting contractors or wood on stump buyers perform harvesting, extraction and they can possibly deliver the woody biomass to a central biomass storage. In similar way, sawmill operators can also deliver sawmill residues to central biomass storage or sell residues ex works to a wood chips supplier.

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DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study

Photo by Foragrobio cc doo © 2018 GIZ DKTI

F-6: Not applicable raw material for wood chips and wood chips: green and fresh logging and other residues, green wood chips stored at the open

Photo by Foragrobio cc doo © 2018 GIZ DKTI

F-7: Capacities needed for wood and wood chips storage, production and transport – wood chippers, self-unloading trailers and applicable vehicles, telehandlers/front loaders

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DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study

Due to the usual practice of state forest managers, woody biomass transport from state forest managers’ forest road or central storage to woody biomass central storage can be organized by wood chips supplier.

From private forests transport can be organized in a same manner or woody biomass from private forests can be delivered to the central biomass storage by the seller (private forest owner, harvesting company or wood trader). Both ways of transporting operations to central biomass storage can be arranged with sawmill operators as well. All operations on woody biomass central storage including storing unprocessed biomass, chipping, storing wood chips and manipulation with woody biomass and wood chips need to be organized by wood chips supplier or the municipality depending of the implemented option. Wood chipping on the central biomass storage can be outsourced or performed by actor running the supply and storage, depending on the capacity. Private company running the supply can dimension capacities to supply other consumers as well. Wood chips transport to DH plants needs to be organized by wood chips supplier or outsourced. Finally, wood chips storing at DH plants, should be organized by the consumer – municipality. Info/Model – roles Municipality contracts supply of needed quantities of adequate quality wood chips Wood and State forests – wood and biomass on the road or central storage, harvesting site, wood on stump - biomass contractors for PE Srbijašume, FE Juzni Kucaj Despotovac, FMU Despotovac, for wood harvesting harvesting and extraction; private companies buying wood on stump or collecting woody biomass, contractors for harvesting and extraction; Small scale private forests – private forests owners, contractors or wood on stump buyers Woody Medium scale private forests Branicevo Parish of SOC – forest managers Fornet doo biomass production Orchards – farmers or subcontractors do the clearing and provide wood material and Riverbanks and roadsides – companies in charge do the clearing and provide wood material collection Wood and State forests – wood and biomass on the road or central storage, harvesting site, wood on stump - biomass contractors for PE Srbijašume, FE Juzni Kucaj Despotovac, FMU Despotovac, for wood harvesting extraction and extraction; private companies buying wood on stump or collecting woody biomass, contractors for harvesting and extraction; Small scale Private forests – private forests owners, contractors or wood on stump buyers Medium scale private forests Branicevo Parish of SOC – forest managers Fornet doo Orchards – farmers or subcontractors do the clearing and provide wood material Riverbanks and roadsides – companies in charge do the clearing and provide wood material

Collection of Sawmills sawmill and wood industry residues Collection of Waste management companies wood residues from industry Woody biomass transport to the Private company supplying wood chips or subcontractors central biomass storage Storing of Private company supplying wood chips Operations in woody biomass woody Wood chipping Private company biomass central Subcontractor providing wood chipping services storage Storing of wood Private company supplying wood chips chips Wood chips transport to DH Private company supplying wood chips plants Wood chips Municipality Wood chips storing in DH consumption storage in DH plants Wood chips Municipality including consumption

T-2: Participants in wood chips supply chain for Despotovac

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DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study

To summarize, roles and responsibilities of wood chips supplier start with planning of biomass delivery to DH plants and contracting and buying unprocessed woody biomass quantities. Responsibilities continue with takeover (including quantity and quality control) of woody biomass at forest road or central log storage or central biomass storage and transport of unprocessed woody biomass to a central biomass storage depending on procurement agreement with forest owners, managers and sawmill operators. Major responsibility of supply company lies in management and all operations (storing, chipping, manipulation) on central biomass storage and delivery of wood chips to consumer.

Major positive and negative sides of both models are presented in SWOT analysis below.

Municipality contracts supply of needed quantities of adequate quality wood chips Strengths Weaknesses 1. Private supplier will invest 1. High wood chips price 2. Municipality has procurement mechanisms 2. Inability to provide quantities in required time 3. Know-how and capacities 3. Issues in supplying with adequate quality Opportunities Threats 1. Developing efficient wood chips contracting options 1. Different goals of supplier and municipality 2. Economy of scale effect 2. Poor cooperation between supplier and municipality 3. Set up of cooperation model 3. Issues in contract implementation and enforcement T-3: SWOT analysis

Major strength is that private supplier will have to invest and bear the supply risks and that municipality have available public procurement mechanisms to provide competitive supply. Private supplier should have know-how and capacities for wood chipping business development. Major opportunities are in developing an efficient wood chips contracting options and setting up a cooperation model while additional opportunity for private supplier can be to create economy of scale effect by enlarging supply network to other consumers and create additional competitiveness in terms of costs and prices reduction. Major weaknesses are a possible price escalation, inability to provide contracted quantities on required timing and issues in supplying with adequate quality. Major threats are different goals of supplier and the municipality resulting in poor cooperation and issues in contract implementation and enforcement.

5.2. Wood and wood chips suppliers

Most important wood and wood chips suppliers in proximity of Despotovac have been identified, some were interviewed and their possibility and propensity to participate in supply of future Despotovac DH system have been analyzed.

5.2.1. PE Srbijasume

State forests in Despotovac area are managed by PE Srbijasume, Forest Estate Juzni Kucaj Despotovac12 and Forest Unit Despotovac. Juzni Kucaj Despotovac manages forests in city of and municipalities of Despotovac, Cuprija, Svilajnac, , Paracin and . Total area of FE Despotovac forests is 36,000ha, while annual harvest is up to 38,000 m³ of

12 http://www.srbijasume.rs/despotovac.html Page 18 of 35

DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study technical wood and 30,000m³ of firewood, while up to 10,000m³ of forest residues derives after harvesting is performed. Harvesting is organized by PE Srbijasume but done by private harvesting contractors upon public procurement procedures. Wood is sold on the forest road, central storage, stump or next to stump, and wood sale is in jurisdiction of General Direction of PE not forest estates. There is a procedure in application for wood sale contracts, but due to very high demand, grading system favorize old buyers with high degree of wood product finalization.

Due to favorable position of Despotovac FE in the center of Serbia and close to highway, demand for wood in this area is two times higher than production. Also harvesting management plans realization exceeds 99%. Most significant firewood or cellulosic wood consumers in Serbia including Kronospan SRB – Lapovo, Sparrow – Varvarin and Bioenergy point – are within less than 50km from Juzni Kucaj’s forests and supply from the area. Also, special attention is given to supply of local population with firewood by enabling local residents to do forest residues collection.

For now wood chips was not produced from wood originated from state forest in the area. General interest of FE to participate in wood chips production and supply of future Despotovac DH system can be considered as limited, however such decisions are not made on the forest estate but on General Direction level. Therefore, the willingness of PE Srbijasume to participate in wood chips production and supply in general or in specific cases should be determined in direct contact with PE’s general direction.

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DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study

F-8: Municipalities within Juzni Kucaj Despotovac Forest Estate of PE Srbijasume

5.2.2. Small-scale private forest owners

Private forests are dominant category in terms of ownership – over 73,000ha in municipalities managed by FE Despotovac are private forests. Private forest owners manage their forests, but provision of professional and technical services is organized by Despotovac Forest estate, which provides: tree marking, wood stumping and control of wood trade. Private forest owners organize afforestation, harvesting and wood sale. Annually around 10,000m³ of technical wood and 18,000m³ of firewood and 3,000m³ of forest residues are produced in respective private forests. Private forests in the region are significantly fragmented, with average forest plot less than 1 ha. There were attempts to establish private forest owners’ association, such as Bigrenica Forest Owners Association established back in 2008, but none of the established associations are active anymore.

Although private forest owners manage their forests and have organized harvesting in the past, due to high demand for wood, harvesting of private forests became private business of local and regionally active companies. Usual practice in private forests is that wood is sold on stump to buyers who do the harvesting and wood sale. Also, sale of complete forest plots by owners who live in the cities or abroad is occurring. Buyers buy wood on stump, organize harvesting and sell

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DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study logs and firewood. Final consumer of wood from private forests are sawmills, firewood users, pellet and chipboard companies. Due to proximity of pellet and chipboard factories pressure on the forests is high. In addition, private forests from the area due to highway proximity are very favorable source for firewood for traders who sell it to consumers in . So far, wood chips production from private forest was not recorded.

5.2.3. Medium-scale private forest owners

The largest private forest owner and the largest individual private forest plot in Serbia are both in Despotovac Municipality. Branicevo Parish owns 7,600ha including property of monastery close to Despotovac with the area of 4,500ha. In additional, they are claiming 1,500ha property of Monastery Ravanica, also in Despotovac municipality, which is in the restitution process. Other properties of Branichevo Parish include monasteries: Gornjak (800ha), Vitovnica (1,000ha), Tumane (700ha), Nimnik (200ha), Zaova (200ha), Miljkovo (70ha) and Tomic (50ha).

Branichevo Parish’s forests are managed by Fornet doo, according to cooperation contract. Fornet doo is in charge of organization of forest management activities while the Parish gets contracted compensation from Fornet doo. Apart from Branicevo Parish, Fornet doo manages forests of and Banat Parish as well. The Company also operates a sawmill business in Cicevac. Management activities they perform include preparation and implementation of forest management plans, tree marking, organization of harvesting, wood stumping, wood sale and investments in forest infrastructure. In Branicevo parish according to management plans annual harvest is around 28,000m³ per year from which 50% in Manasija property. Quality structure of harvested wood is 40% or 11,200m³ of saw and veneer logs, 50% or 14,000m³, of firewood and up to 10% of forest residues, from which 50% can be extracted or up to 1,500tons. Main tree species is beech.

Harvesting is subcontracted by Fornet doo to forestry harvesting companies, all logs are utilized in their own sawmill in Cicevac, while most of the firewood is produced as long firewood and sold to Kronospan or pellet factories. Part of firewood is produced at 1m length and delivered to churches and monasteries for heat. Forest residues13 are sold in the forest or they remain unutilized.

Fornet doo haven’t produced wood chips so far but they can consider wood chips production and supply. They already produce cut to length dried firewood for export and wood pellet at their sawmill in Cicevac. They can consider delivery of wood chips based on outsourced chipping services to Despotovac DH system from Manasija property or from Cicevac, but not at the prices and profit margin less than they have now when selling long firewood, residues or wood pellets.

Potential sale of the raw material for wood chipping, would not require significant change in their harvesting principle and production since they already practice long firewood instead of meter length firewood, which reduces harvesting costs to certain extent. Fornet doo also have space to provide wood drying and foresters which guard the forests and wood stocks.

13 Crowns and branches with diameter less than 7cm and uneven pieces of wood less than 1m in length. Page 21 of 35

DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study

Map data © 2018 Google

F-9: Locations of Branicevo monastery forests managed by Fornet doo

Photos by Foragrobio cc doo © 2012 GIZ DKTI F-10: Branichevska Parrish forests

5.2.4. Sawmills

Only three sawmills have been identified in Despotovac municipality, and the largest one - Amarant doo have been analyzed in detail. Maps below show Amarants’ position. Sawmill is located in Strmosten village, 20km from Despotovac.

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DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study

Map data © 2018 Google

Map data © 2018 Google

F-11: Location of Amarant doo sawmill

Amarant doo have annual processing of ca 2,000m³ of beech logs into boards, beams, pallets and other elements. They are steaming the beach wood products as well. Annually around 800tons of residues are produced and they are processed into wood pellet. However, their pellet factory is not at sawmill site but in Vojka, close to , so they transport milled and dried wood pellet material to pellet production point. They are equipped with stationary Gandini wood chipper and rotation dryer.

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DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study

Also, the location in Strmosten have enough space for wood residues storage and natural drying. Owner is interested to supply future DH and to produce wood chips if it is more profitable than pellet production. They haven’t made wood chips prices calculations so far.

Photos by Foragrobio cc doo © 2018 GIZ DKTI

F-12: Amarant doo sawmill

5.2.5. Wood chips producers

One wood chips producer – Braca Zalicic doo, Svilajnac is identified and interviewed. Company have been established in 2000 as a sawmill and wood transport company but started wood chipping business in 2010. After the fire and demolition of their sawmill two years ago, they are focused in wood chips production and wood transport services.

Currently they have ca. 1.2ha of storage area. They are also constructing wood chips shed of 30x20x6m. They operate with self-propelled custom-made wood chipper with the capacity of 30t/hour mounted on the truck. They also own 2 trucks with side kippers, telehandlers and several trucks for wood transport. Raw material they use for wood chips are sawmill residues, fruit crates production residues and wood from clearing road sides and river banks. They are performing river banks clearing services and also perform service wood transport for Kronospan. Also they procure wood chipping services for 250EUR/hour.

Wood chips they sell mostly to Kronospan, but there are other buyers such as blueberry producers. Last year they have sold over 15,000 bulk m³ of wood chips. Naturally, they are interested to supply future Despotovac DH system and have enough capacities and they are able to develop additional capacities to supply other current and future users of wood chips.

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DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study

Map data © 2018 Google

Map data © 2018 Google

F-13: Location of Braca Zalicic doo Svilajnac

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DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study

Photos by Foragrobio cc doo © 2018 GIZ DKTI

F-14: Capacities – wood chipper, side-kipper truck, truck with wood trailers

F-15: Wood chips production from river banks wood, forest residues and fruit crates residues

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DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study

5.2.6. Waste Management Company

Other potential supplier which showed interest for wood chips production is FCC group14.

F-16: FCC group location in Lapovo and Despotovac

14 http://www.fcc-group.eu/sr/Srbija/Pocetna.html

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DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study

Company core business is waste management and they are operating a landfill in Lapovo and waste management in public private partnership with municipalities of: Lapovo, Despotovac, Batočina, Rača, , Žabari, Žagubica, Tutin and .

They also perform recycling and waste management for industry all over Serbia. Also, they are engaged in disposal of different kinds of wood waste – mostly chemically untreated residues from pallets or other kinds of packaging residues, which are already dry. In addition, they have road maintenance winter service, the perform park cleaning and road side cleaning in Despotovac municipality and other municipalities in Central Serbia. They have locations adequate for development of wood residues separation, storing and chipping, both in Lapovo and in Despotovac. Also, they have transport capacities – kipper trucks and container trucks. Annually they collect 2,000-3,000tons of different types of wood residues. They either dispose it or sell it to companies recycling pallets or to Kronospan. FCC haven’t made calculations for wood chips selling prices, but they plan to do so and to consider wood chips supply as additional business.

Photos by Foragrobio cc doo © 2018 GIZ DKTI

F-17: FCC group capacities: Container truck/containers and wood residues

5.3. Wood Chips Delivery Contracting

Despotovac Municipality do not have the ambition nor the capacities to procure wood residues and develop wood chipping material storing, drying and processing into wood chips. Municipality will organize public procurements for Wood chips delivery to a storage at DH plant – consumption point. Buying conditions should encompass binding obligations in terms of requested quality, quantities to be delivered and timing including delivery schedule. Contract should reflect the price, quality, quantity, delivery schedule and mutual responsibilities. Price of wood chips can be determined per unit of defined wood chips quality and referent water content. Quality of wood chips

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DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study should be determined based on Serbian wood chips standards15 and requirements of firing technology used. Quantity should be determined by calculated and determined consumption, while delivery schedule should be determined according to heat production monthly demand and capacity of the storage in each of DH plants. Finally, all mutual responsibilities including payments, penalties, dispute settlements and possibility of contract termination, should be defined.

Wood chips on Serbian and Western Balkan market is usually sold per weight unit or bulk volume unit. Transactions based on energy content are still not present. Table below presents wood chips, units, conversion factors and prices. For contracting between envisaged parties, we can recommend sale based on volume unit with sample control including quality control, granulation control and water content control defined by Serbian standard16. Since wood chips will be delivered to DH plants from central storage, where it will be additional dried, 30% - 40% will be water content range on which wood chips should be delivered to DH plant. Thus, the price can be indicated in RSD per bulk m³ of wood chips with water content ranging from 30-40%, without acceptance of wood chips water content higher than 40%. Table below shows basic features of wood chips in Despotovac region.

Products/Units Bulk m³ tons Definition A volume of space that is made by a cube of bulk wood chips with Weight unit space between wood chips pieces included that is 1 meter on each side. Wood Chips Measure used by chipboard and pellet factories Measure used by pellet factories and wood chips traders Density (t/bulk m³) Wood Chips Water content (%) Conifer Broadleaves Heat value Properties (kWh/kg) Definition Share of water in total Weight of 1 bulk m³ of wood chips Heat value of 1kg of wood chips weight of humid wood chips Wood chips 30-40 223-260 328-397 3.40

Wood Chips Prices Delivered to buyers’ site

Definition Wood chips delivered and unloaded to buyers point Conifer & 16-20 €/bulk m³ Broadleaves mix T-4: Wood chips units, conversion factors and prices in Despotovac region

Indicated pries of 16-20€/bulk m³ consider wood chips produced from dried sawmill residues and logging residues and firewood as indicated by wood chips producers in the area. Highest prices are related to peak demand of pellet factories in the winter season. Price of wood chips from post- consumer have not been calculated so far, but it can be considered as competitive solution. However, in case of producing wood chips from chemically untreated post-consumer wood, such wood chips will fall in class B and will be subjected to analysis according to class be of SRPS EN ISO 177225-4. In addition, production of wood chips from post-consumer wood requires establishment of separation procedures, metal detecting, screening and then delivering, which will affect the cost side to certain extent.

15 SRPS EN ISO 177225-1 and SRPS EN ISO 177225-4 16 SRPS EN ISO 18134-2, SRPS EN ISO 17827-1, SRPS EN ISO 18315, SRPS EN ISO 14780

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DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study

6. Financial analysis

Financial analysis will present an overview of envisaged investment and operational costs and incomes along with calculation of basic financial indicators for wood chips supply.

6.1. Investment

Investment costs are presented in table below. Investment costs are related to required investments in DH system – boilers and pipeline. Total investment according to the project is 167,000,000RSD or 1,415,000€.

Investment € DH system including pipeline 1,415,000 Total Investment costs 1,415,000

T-5: Investment costs

6.2. Operational costs

Operational costs are related to woody biomass and wood chips prices presented in chapter 5. Unit costs are presented below.

Unit costs specification Costs Wood chips price delivered to DH (€/bulk m³) 20 Gross salary DH operators (€/month) 600 Maintenance costs (€/year) 20,000

T-6: Unit costs

Quantities of various inputs for operational costs are presented below.

Info Quantity Wood chips demand (bulk m³/year) 2,800 Number of DH operators 3

T-7: Inputs for operational costs

Annual operational costs based on above mentioned inputs are presented below. In total they are 97,600€.

Costs € Salaries 21,600 Wood chips procurement costs 56,000 Indirect costs including utilities and maintenance 20,000 Total Operational costs 97,600

T-8: Annual operational costs

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DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study

6.3. Incomes Income is perceived as sale of 3,000hoursx1.5MW or 4,500MWh of heat for 50€/MWh hypothetical price. Total incomes in both options are calculated at 225,000€/year.

6.4. Economic indicators: iRR, NPV, BCR, sensitivity analysis Cash flow for 20 years of operation, along with incomes and costs is presented in chart below. Cash flow is based on the assumption that production capacities will not grow, and that infrastructure and object will retain their value at the end of 20-year cycle.

2,000,000

1,500,000

1,000,000

500,000

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 -500,000

-1,000,000

-1,500,000

total costs (€/a) total incomes (€/a) Balance (€/a)

C-1: Costs, incomes, balance

Tables below presents Net present value (NPV), internal rate of return (IRR), payback period and Benefit-cost ratio (BCR). year=n Incomes (€) Costs (€) Balance (€) PV (€) 0 225,000 -1,512,854 -1,287,854 -1,287,854 1 225,000 -97,600 127,400 118,735 2 225,000 -97,600 127,400 110,659 3 225,000 -97,600 127,400 103,133 4 225,000 -97,600 127,400 96,118 5 225,000 -97,600 127,400 89,581 6 225,000 -97,600 127,400 83,488 7 225,000 -97,600 127,400 77,810 8 225,000 -97,600 127,400 72,518 9 225,000 -97,600 127,400 67,585 10 225,000 -97,600 127,400 62,989 11 225,000 -97,600 127,400 58,705 12 225,000 -97,600 127,400 54,712 13 225,000 -97,600 127,400 50,991 14 225,000 -97,600 127,400 47,523 15 225,000 -97,600 127,400 44,290 16 225,000 -97,600 127,400 41,278 17 225,000 -97,600 127,400 38,470 18 225,000 -97,600 127,400 35,854 19 225,000 -97,600 127,400 33,415 4,500,000 -3,367,254 1,132,746 0 ∑ BCR 1.34 IRR 7.3% T-9: Economic indicators: NPV, IRR, return of investment and BCR Page 31 of 35

DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study

Investment can be returned in the eleventh year of operation. Benefit cost ratio is 1.34, while internal rate of return is 7.3%.

16%

14%

12%

10%

8%

6%

4%

2%

0% 70% 80% 90% 100% 110% 120% 130% Chipping Wood chips Heat price Investment

C-2: Sensitivity analysis

Sensitivity analysis shows dependence of IRR from change of most important inputs – investment costs and wood chips price. IRR is mostly dependent on investment costs, while change of wood chips price for 30% up or down doesn’t influence IRR for more than 2%.

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DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study

7. Conclusions

Despovac Municipality prefers to procure wood chips on a market by awarding supply contracts on the public tender.

Considering relatively small amount of wood chips needed for future Despotovac DH system, we can conclude that provision of those quantities should not represent the challenge due to the fact that private forest companies, sawmills, specialized wood chips producers and waste management companies interested to start wood chips production are present. All of them in less than 30km proximity from Despotovac.

Considering required quality of wood chips in terms of ash content and particle size, raw materials which can be used for wood chips production include: firewood, forest residues, sawmill residues, wood from road sides and river banks cleaning, wood from orchards and even post-consumer wood. Considering required water content chipping material should be dried before chipping, in case of fresh wood and natural drying 6-9months, in case of sawmill residues and post-consumer wood in dependence of initial water content.

Considering required raw material and technical process in the production including storing and drying, and also strong demand for wood and wood residues in the region, prices of wood chips should be expected at the range of 16-20€/bulk m³, with possibility to be reduced due to competition and provision utilization of cheaply provided post-consumer wood or wood from river banks and road sides for wood chips production. In case of post-consumer wood as a source for wood chips, class B of wood chips quality should be accepted, and all analyzes according to Serbian standards for wood chips should be performed.

Considering small quantities of required wood chips and relatively high investment costs for the whole DH systems, the level of investment costs has the highest influence on project profitability, while influence of wood chips costs and other costs is not significant. Change of wood chips price for 30% up or down will influence IRR change for only 2%.

Role of the municipality should be in preparation of tender, contracting, monitoring and developing control mechanisms which will ensure efficient and timely supply of needed quantities of adequate quality wood chips.

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DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study

8. Literature and sources

Alakangas, E., Koponen, K. Sokka, L. & Keränen, J. Classification of used wood to biomass fuel or solid recycled fuel and cascading use in Finland, Book of Proceeding Bioenergy 2015, p. 79 – 86, For Boost for Entire Bioenergy Business, 2 – 4.9.2015, Jyväskylä, Finland https://www.vtt.fi/inf/julkaisut/muut/2015/OA-Classification-of-used-wood.pdf

Helbig, F. Market Assessment: Wood Chips in Serbia Production, Consumption & Transportability. 2014. GIZ DKTI.

Milijic, V. Report on Design of woody biomass supply chain cluster for district heating plants in municipalities of , and Nova Varoš. 2015. GIZ DKTI http://www.bioenergy- serbia.rs/images/documents/studies/Cluster_Supply_Study_20150906_final.pdf

Milijic, V. Wood Chips Supply Study. GIZ DKTI.2018

Termah goup doo: Idea Project of Architecture, Mechanical and Electrical Installations for Wood Chips Boiler House in Technical High School in Despotovac. 2018. http://www.bioenergy-point.rs/ www.biomasstradecentre2.eu/scripts/download.php?file=/data/pdf_vsebine/Technical_background s/XI.Technical_backgrounds.pdf http://bioresproject.eu/ http://www.ekostep-pellet.rs/ http://www.fcc-group.eu/sr/Srbija/Pocetna.html http://www.foragrobio.rs/ http://www.fornetserbia.com/ http://www.iss.rs/rs/standard/?natstandard_document_id=53689 http://www.iss.rs/rs/standard/?national_standard_id=58965 http://www.iss.rs/rs/standard/?natstandard_document_id=61418 http://www.iss.rs/rs/standard/?national_standard_id=59631 http://www.iss.rs/rs/standard/?natstandard_document_id=60409 http://www.lamborghini-tractors.com/en-eu/ http://www.metla.fi/julkaisut/workingpapers/2010/mwp186.pdf http://popis2011.stat.rs/?page_id=2162 https://rs.kronospan-express.com/sr/products http://sparrow.rs/ http://www.srbijasume.rs/despotovac.html

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DKTI (GIZ) Program "Development of sustainable bioenergy market in Serbia": Despotovac Wood Chips Supply Study

9. Annexes

9.1 Annex I: List of interviewed persons

Person Position, organization Nikola Nikolic President of Despotovac Municipality Nikola Milosevic Advisor of the President of Despotovac Municipality Dobrica Stojanovic Director of Technical High School Ivan Andrejic FCC EKO doo, Belgrade Nenad Jevtic Director of Forest Estate Juzni Kucaj Despotovac, PE Srbijasume Marko Markovic Director, Fornet doo, Belgrade Ratko Zalicic Owner, Braca Zalicic doo, Svilajnac Mladja Obradovic Owner, Amarant doo

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