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Public Disclosure Authorized Public Disclosure Authorized Final Report Biomass-Based Heating in the Public Disclosure Authorized Western Balkans – A Roadmap for Sustainable Development October 2017 Public Disclosure Authorized Final Report Biomass-Based Heating in the Western Balkans A Roadmap for Sustainable Development October 2017 Disclaimer © 2017 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202–473–1000 Internet: www.worldbank.org This document has been produced with the financial assistance of the European Western Balkans Joint Fund under the Western Balkans Investment Framework. The views expressed herein are those of Tractebel Engie and CRES and can therefore in no way be taken to reflect the official opinion of the Contributors to the European Western Balkans Joint Fund or the EBRD and the EIB, as co-managers of the European Western Balkans Joint Fund. This work is a product of the staff of The World Bank with external contri- butions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or accep- tance of such boundaries. Rights and Permissions The material in this work is subject to copyright. Because the World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Any queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202–522–2422; e-mail: pubrights@ worldbank.org. Contents Acronyms and Abbreviations ............................................................. xiii Acknowledgments .............................................................................. xvii Executive Summary ............................................................................ xix Overview of Biomass Use in the Western Balkans .................................xxi Heat Demand and Technologies ......................................................... xxiii Biomass Supply ......................................................................................xxv Economic and Financial Potential for Biomass-Based Heating .........xxviii Priority Investment Areas for Increasing Biomass-Based Heating .....xxxii Financing Sources ...............................................................................xxxiii Conclusions and Policy Recommendations ......................................... xxxv 1. Background of the Study .................................................................. 1 Scope of the Study .................................................................................... 1 Structure of the Report ............................................................................. 4 2. Overview of Biomass Use in the Western Balkans ......................... 5 3. Heat Demand and Technical Options for Using Biomass for Heating .............................................................................................. 13 Heat Demand and Heating Systems in Use ........................................... 13 Technical Options for Increasing Biomass Use for Heating .................. 18 Biomass Combustion and Air Pollution ................................................. 19 4. Biomass Supply ................................................................................ 23 Current Biomass Supply ......................................................................... 25 Firewood—the Most Commonly Consumed Wood Fuel ................... 28 The Inadequacy of Forest Logistics for Increasing Biomass Supply ... 28 Unproductive Application of Forest Management Techniques ........... 30 The Export of Most Processed Wood Fuels ....................................... 31 The Unregistered Use of Most Woody Biomass ................................. 32 iii iv Biomass-Based Heating in the Western Balkans – A Roadmap for Sustainable Development Failure to Exploit Agricultural Residues ............................................. 33 The Potential for Additional Biomass Supply ........................................ 35 The Estimated Sustainable Technical Potential of Biomass ............... 36 How Improving Forest Roads Could Increase Production ................. 36 Energy Crops and the Potential to Increase Sustainable Biomass Production ....................................................................................... 39 Sustainable Technical Potential of Biomass versus Biomass Consumption ................................................................................... 41 Additional Heating Use Potential of Biomass ........................................ 44 5. Economic and Financial Impact of Biomass-Based Heating ....... 49 Costs of Biomass Feedstock and Heating Equipment ........................... 49 Economic Viability of Biomass Heating Options .................................. 51 District Heating .................................................................................. 59 Combined Heat and Power ................................................................. 60 Heat-Only Boilers ............................................................................... 60 Individual Heating Systems ................................................................ 60 Financial Viability of Biomass Heating Options .................................... 61 Summary of Viability of Biomass Heating Options ............................... 61 6. Barriers to Increasing Biomass Use................................................ 65 Technical Barriers ................................................................................... 67 Supply-Side Barriers ........................................................................... 67 Demand-Side Barriers ......................................................................... 68 Financial Barriers .................................................................................... 69 Policy and Regulatory Barriers ............................................................... 70 Institutional Barriers ............................................................................... 71 Lack of Knowledge-Sharing ............................................................... 72 Changes in Local Government ........................................................... 72 Lack of High-Quality Statistics .......................................................... 73 Lack of Standardization ...................................................................... 73 Market Barriers ....................................................................................... 74 7. Priority Investment Areas for Increasing Biomass-Based Heating ................................................................... 77 Program 1. Conversion of Inefficient Wood Stoves to Efficient Biomass Stoves and Switching from Electric Heating Appliances to Efficient Biomass Stoves in Stand-Alone Buildings ................................................................... 78 Program 2. Switching from Electric Heating Appliances to Wood-Chip–Fired HOBs in Multistory Buildings ............................ 80 Program 3. Switching Existing DH Boilers from Fossil Fuels to Biomass and Developing New, Biomass-Based DH .......................... 81 Contents v Estimated Investments Needed for Implementation of the Proposed Programs ....................................................................... 83 Financing Sources and Models ............................................................... 84 8 Conclusions and Recommendations for Increasing Biomass-Based Heating ................................................................... 93 Pillar 1. Framework Conditions .............................................................. 96 Policy and Regulatory Framework (1.1) .............................................. 96 Data Collection and Monitoring (1.2) .............................................. 104 Awareness (1.3) ................................................................................. 105 Capacity Building (1.4) ..................................................................... 105 Pillar 2. Biomass Supply ....................................................................... 107 Sustainable Forest Management (2.1) ............................................... 107 Development of Enabling Environment for Agricultural Biomass and Energy Crops (2.2) .................................................. 115 Development of Forest and Biomass Supply Infrastructure (2.3) ..... 116 Pillar 3. Efficient Biomass Heating Technologies ................................ 118 Investment Initiatives for (a) Switching from Electric Heating Appliances to Efficient Biomass Stoves and (b) Conversion from Inefficient to Efficient Biomass Stoves in Stand-Alone Buildings (3.1) ............................................................................... 118 Investment Initiatives for Switching from Electric Heating Appliances to Wood-Chip–Fired HOBs in Multistory Buildings (3.2) ..............................................................................
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