Renewable Energy Centre in Livno, Bosnia and Herzegovina – Project Planning and Development
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Renewable Energy Centre in Livno, Bosnia and Herzegovina – Project Planning and Development Master thesis Environmental System Sciences, Sustainable Regional Development Renewable Energy Centre in Livno, Bosnia and Herzegovina - Project Development and Planning Author: Lovorko Marić, Matriculation number: 0613192 Mentor: Mag. Dr. Wolfgang Fischer, Institute for Geography and Regional Studies Karl-Franzens University Graz January 2013 Lovorko Maric, Environmental System Sciences, Karl Franzens University, Graz, Austria 1 Renewable Energy Centre in Livno, Bosnia and Herzegovina – Project Planning and Development Abstract The focus of the master thesis is the planning and development of a newly launched project, whose main purpose is to establish a centre for renewable energy in the small town and municipality of Livno, situated in western Bosnia and Herzegovina. The renewable energy centre would focus on at least four renewable sources (wind, small hydro, solar - photovoltaics, biomass), with the construction of all the proper facilities and administrative centres in the municipality itself. However, the first phase of project implementation is focused on wind power plants and therefore the main emphasis of this thesis will follow the same approach. The project is supported by a number of Croatian, Bosnian-Herzegovinian and Austrian investors and project developers, along with an established political support and with the proper incentives by the local political bodies. Current status of the project is still in the planning stage, although a pilot project consisting of a construction of three wind power plants has been implemented. The main assignments of the project planning stage are the acquirement of necessary approvals and licences, research of financing sources and development of business and financial plans, all of which are described in detail in the thesis. The second chapter presents the main research question and demonstrates the hypotheses of the thesis. The research question of the thesis is whether a renewable energy centre of this magnitude in the region of Livno is economically and environmentally viable and possible to implement under the current economic and political circumstances in Bosnia and Herzegovina. The main hypothesis conveys a statement that a renewable energy centre in the municipality of Livno is economically and environmentally a viable solution for the economic development and prosperity of the region and the country of Bosnia and Herzegovina. The methodology and the theoretical background are explained. The third chapter describes the town of Livno, namely its physical geographical conditions and potentials, its demographics and the examination of its emigration trend, along with the assessment of political circumstances, previous economic development and potential tourism attractors in the region. A brief tourism plan is presented with the argument that the development of a renewable energy centre will bring industrial tourism into the region, whereby the other branches of tourism (recreational, cultural and historical) will also therefore develop due to the implementation of the renewable centre project, along with the advancement of an interregional tourism development effort, melding Livno with the other tourism hot spots in western Bosnia and Herzegovina for a supra-regional tourism advancement. Lovorko Maric, Environmental System Sciences, Karl Franzens University, Graz, Austria 2 Renewable Energy Centre in Livno, Bosnia and Herzegovina – Project Planning and Development The fourth chapter focuses on the natural potential of the town and municipality of Livno for the production of renewable energy - comparisons within Bosnia and Herzegovina are conducted for wind, hydro, solar, geothermal and biomass resources. All areas with the exception of the geothermal resources (abundance of water for small hydro, the sunniest region in Bosnia and Herzegovina, one of the windiest regions in the country and a richly forested area) in the municipality of Livno present one of the potentially richest and most abundant resource areas in Bosnia and Herzegovina. The fifth chapter describes the main benchmark model for the project in Livno - the centre of renewable energy (with a focus on biomass) in Güssing in Burgenland, Austria, which brought a major economic boom throughout the region and has eliminated emigration trend and economic stagnation in the region, which is the main goal of the Livno project. The sixth chapter provides a brief overview on the status of the project in Livno and the distribution of assets and shares in an established public-private partnership, partially based on the Güssing Model (Canton Herzeg-Bosnia: 50%, the municipality Livno: 25%, the Croatian company investors: 13%, the Austrian investors: 13%). The seventh chapter proposes five different financial options and financial resources for project implementation on the level of the European Union: the Reconstruction Loan Corporation (KfW), the European Investment Bank (EIB), two EU funds (Instrument for Pre-Accession Assistance - IPA, the Global Umbrella Fund for Energy Efficiency - GEEREF) and the SEE- Programme (South East Europe Programme as the successor of the INTERREG initiative). The eighth chapter focuses on the environmentally oriented method of land recycling and redevelopment and reshaping of the town’s industrial landscape, where the existence of abandoned industrial areas in the town of Livno gives an opportunity for a legal and economic restructuring and reshaping for the purpose of renewal and the inclusion of these sites in the industrial and administrative infrastructure of the future renewable energy centre. The ninth chapter is the crux of the thesis, developing a project and time plan for the first phase of the project – the development of a wind energy centre with the capacity of 7 MW, along with project monitoring, contingency planning and a detailed licencing acquisition description. The tenth chapter is the overall conclusion of the thesis in the form of a general summary in the form of a SWOT analysis, namely where the strengths (the growth and catch-up market, ideal Lovorko Maric, Environmental System Sciences, Karl Franzens University, Graz, Austria 3 Renewable Energy Centre in Livno, Bosnia and Herzegovina – Project Planning and Development climate and natural conditions, non-existence of competition), weaknesses (emigration trend, difficult financing, controversial political structure and a complicated situation with the network operators in Bosnia), opportunities (future motorway and infrastructure development) and threats (the continuation and worsening of the already difficult financial crisis) are, how the project will develop in the future and if the research question and the hypothesis of the thesis were answered. Lovorko Maric, Environmental System Sciences, Karl Franzens University, Graz, Austria 4 Renewable Energy Centre in Livno, Bosnia and Herzegovina – Project Planning and Development Table of Contents Abstract ....................................................................................................................................... 2 Table of Contents ........................................................................................................................ 5 List of Figures ............................................................................................................................. 6 List of Tables ............................................................................................................................... 8 List of Abbreviations ................................................................................................................... 9 Dictionary (Croatian-English) .................................................................................................... 10 1. Introduction .......................................................................................................................... 11 2. Research Question ................................................................................................................. 13 2.1. Hypothesis .................................................................................................................. 13 2.2. Theoretical background and methodology .................................................................. 13 3. The Study Region: The Town of Livno .................................................................................. 16 3.1. Physical geographical potentials for renewable energy production in Livno ................. 20 3.2. Demographics ............................................................................................................. 23 3.3. Political circumstances and economic development of the region ............................... 26 4. Renewable Energy Potential in Bosnia and Herzegovina and in the Municipality of Livno .... 37 4.1. Wind power ................................................................................................................ 37 4.2. Biomass ...................................................................................................................... 47 4.3. Geothermal energy ...................................................................................................... 51 4.4. Solar energy ................................................................................................................ 53 4.5. Hydropower – small hydro .........................................................................................