Published by: PE Electric Power Industry of Serbia Public Relations Sector 2 Carice Milice St., Belgrade, Serbia www.eps.rs, [email protected] For the publisher: Dragomir Marković, general manager Authors: Dragomir Marković, Bratislav Čeperković, Aleksandar Vlajčić and Stefan Ressl Design: Reakcija, Belgrade Printed by: Portal, Belgrade Circulation: 1000

2 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA Contents

1. INTRODUCTION 7

2. ABOUT US 11

3. LEGISLATIVE 19

EU legislative framework and aspects of EU policy indication ...... 21 The EU roadmap for low carbon 2050 strategy (8 .3 .2011)...... 25 Renewable Energy Road Map (2007): Renewable energies in the 21st century: building a more sustainable future...... 32 Directive 2009/28/EC (23 .04 .2009) on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC ...... 42 Stock taking document (06 .05 .2010): Towards a new Energy Strategy for Europe 2011-2020 ...... 52 Energy 2020 - A strategy for competitive, sustainable and secure energy (10 .11 .2010)...... 54 Renewable Energy Progress Report (31 .01 .2011): Progressing towards the 2020 target...... 57 Communication of EC on energy efficiency (8 .3 .2011): Energy Efficiency Plan 2011 ...... 58 Interpretative note on Directive 2009/72/EC concerning common rules for the internal market in electricity and Directive 2009/73/EC concerning common rules for the internal market in natural gas...... 63 Comment on EU Emission Trading System...... 66 Use of renewable energy in Serbia legal framework...... 67 Strategies of energy development in the Republic of Serbia until year 2015...... 67 Incentive measures of the Serbian Government for privileged producers of electricity...... 68 Privileged producer of electricity ...... 70 Legal form of investment in the construction of energy facilities producing electricity from renewable sources in order to acquire the status of privileged producer -The proposal of a simple model-...... 73 Conclusion ...... 76

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 3 4. PE EPS TOWARDS EC COMMUNICATION ON ENERGY EFFICIENCY, SAVINGS AND RENEWABLE ENERGY ROAD MAP 79

EC communication on efficiency in heat and electricity ...... 81 Savings for consumers ...... 83 PE EPS Case...... 85 Efficiency increasment in generation sector 2000-2020...... 85 New thermal high efficiant generation capacities...... 89 Renewables ...... 97 Wind mills...... 98 Solar Energy...... 101 Small hydro power plants ...... 105 Waste to Energy and Biomass...... 154 Large Hydro power plants...... 171 Smart Grids ...... 181 Main drivers of a new flexible power system...... 181 Bringing customers on board...... 181 DSOs as key enablers for Smart Grids...... 181 Incentivising investment & cooperation ...... 182 What is a Smart Grid? ...... 183 Telecommunication System...... 186 Smart metering...... 193

Literature 197

About authors 201

4 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA ANNEXES

1 . Directive 2009/28/EC (23 .04 .2009) 2 . Stock taking document (06 .05 .2010): Towards a new Energy Strategy for Europe 2011-2020 3 . Energy 2020 - A strategy for competitive, sustainable and secure energy (10 .11 .2010) 4 . Renewable Energy Progress Report (31 .01 .2011): Progressing towards the 2020 target 5 . EU Emission Trading System How the EU ETS works according to the UK environment agency 6 . Legal framework on waste to energy in EU and Republic of Serbia 7 . Alternative Energy Dictionary – English - Serbian

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 5

Introduction

Introduction

The White Book of the Electric Power Industry of Serbia, along The key categories presented in the White Book of the Electric with the Green Book, published in 2009, complements a set of Power Industry of Serbia are: energy efficiency in genera- documents identifying the company’s position in relation to: tion and consumption; expanding the portfolio to include yy a set of legislative instruments and communications of the renewable energy sources; gradual restructuring of the base European Commission and United Nations covering the potential, such as preparing for more intensive utilisation of broad area of sustainable development and energy with a natural gas and/or nuclear power in electric power genera- view to reaching the set targets by 2050; tion; implementing smart networks; developing electric power yy laws and other regulations of the Republic of Serbia per- market and regional cooperation through joint projects with taining to sustainable development, energy efficiency and other companies. renewable energy sources; yy development processes of the South-East Europe (SEE) regional energy system. Document purpose and aim The inevitable conclusion is that the process of finding the The White Book of the Electric Power Industry of Serbia, as a right development path towards non-carbon-emitting industry programme document, presents the priority activities aimed in the EU Member States is several years ahead of the actual at reducing the impact of heat and power generation on situation in the Republic of Serbia. The documents state climate change. clearly what steps the Electric Power Industry of Serbia took between 2000 and 2010 towards achieving the mandatory The document is based on the existing strategic framework objectives of the Treaty Establishing the Energy Community of and specific medium-term objectives, and covers projects South-East Europe. whereby those objectives should be achieved. The EPS management and staff are fully aware of the impor- Among the priority objectives is ensuring the required level of tance and necessity of comprehensive monitoring and imple- international support through public presentation of projects, mentation of the policy endorsed by the European Union which would accelerate the achievement of the desired results and the international community in general in the interest of and thus also the achievement of strategic objectives of the reducing the impact of energy generation on climate change. company, the Republic of Serbia and the region as a whole. The company adheres to principles of sustainable national This is particularly important in view of the inherent link development, by adopting, at its own initiative, all standards between these objectives and the objectives of the European and regulations of the European Union and the international Union and the broad international community. community in the area of reducing climate change effects. The Electric Power Industry of Serbia particularly empha- In view of the complexity of reducing climate change effects sises that, by this document, it commits to assisting the wider and the lengthy process of enacting a unified set of binding community in the Republic of Serbia and South-East Europe instruments at the United Nations level, PE EPS has decided in developing the required strategic and legal documents to to follow and implement the best international practices and involve all stakeholders in the power supply chain, from gener- state-of-the-art technology in this field. ation to consumption, and to improve their efficiency. At the same time, the company will not wait for all these documents Applying the global best available practices has been the to be developed and adopted – instead, with its actions, it is company’s business decision, and setting the development moving one step ahead towards achievement of common path has been informed by the nature of the national energy objectives. resources. Since about 70 percent of electric power is generated from domestically-sourced lignite and the national The company understands that this is the fastest way of potential for economic sustainability is limited, steps have raising national and regional awareness of the necessity and been taken towards identifying other solutions, other energy urgency of taking action to counter climate change, in spite sources. of economic and social limitations, which are – to a greater

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 9 or lesser extent – common to all state parties to the Treaty Document contents Establishing the Energy Community of South-East Europe. In Content development of a programme document such as addition, the company launches a major initiative for preparing this has been decisively influenced by the situation regarding projects, in particular those concerning the use of renewable strategic and legal documents, both in the Republic of Serbia energy sources, for speedy implementation, since loss of time and in the European Union. At this stage, the development of directly lessens the possibility for exploiting the available most documents is the subject of intensive communication potentials. This is especially true for local governments, which whose contents should shortly be endorsed through laws or are key partners to the Electric Power Industry of Serbia in EU directives, as appropriate. The authors of this document implementing the defined projects. This document, amongst have faced a considerable challenge in making references other things, invites all interested investors to co-fund those to contents of documents that are still being developed and projects, which is of particular importance for providing have not been adopted yet. This is the reason why only brief prerequisites for opening up both the electricity market and quotes from some directives that are being drafted have been the market for equipment and services for the construction included in the introductory remarks and conclusions, which and maintenance of distributed generation capacities and outline the essential points and will not lose relevance even smart networks. when these documents are finally adopted. In the interest The programmes presented in this document are expected of coherence, full contents or key quotes from these highly to provide clear orientation to international partners in deter- complex and comprehensive works in progress are available mining their strategic choices in terms of priorities and aims in annexes provided on DVD. of their support to the energy sector of the Republic of Serbia To provide a programme framework, this document presents and the entire South-East Europe region, since some projects an overview of the results achieved to date, in particular in the can be realised only through collaboration of several states. It area of energy efficiency in the generation capacities of the need not be stressed that the Electric Power Industry of Serbia Electric Power Industry of Serbia, as well as an overview of the is fully committed to these processes and willing not only to current situation, medium-term objectives and priority action participate in development projects, but also to make its programmes between 2010 and 2020. knowledge and experience available to all interested investors, in particular to Energy Community members through the The second half of the book outlines priority projects and key Energy Community Secretariat. areas in which international assistance is required in the forth- coming period.

10 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA About us

About us

Public Enterprise “Electric Power Industry of Serbia” (PE EPS) was incorporated under the Serbian Government Decision, which entered into force on 1 July 2005. PE EPS is a vertically integrated company, fully owned (100%) by the Republic of Serbia, entrusted under its Articles of Incor- poration with the duty of electricity generation for the needs of tariff customers. If relatively small electricity generation by the industrial plants is disregarded for their own needs, it may be considered that PE EPS is at this moment the only electricity generator in Serbia. PE EPS mission is the secure electricity supply to all customers, under the most favourable market conditions, with the constant service quality upgrades, environmental preser- vation and the community welfare improvement. PE EPS vision is to be a socially responsible, market-oriented and profitable company, competitive within the European market, with a significant regional influence, recognised as a reliable partner of the domestic and international companies. PE EPS business activities involve the following: 1. Electricity generation; 2. Electricity distribution; 3. Distribution system control; 4. Electricity trade; 5. Coal production, processing and transport; 6. Steam and hot water generation in combined processes; 7. Water utilisation and management; 8. Solid, liquid and gaseous fuels wholesale including similar products , metals, metal ores and other trading; 9. River and lake traffic services; 10. Research and development; 11. Designing, construction and maintenance of energy, mining and other facilities; 12. Engineering. The current employee count is some 29.900 (34.130 employees with the Kosovo and Metohija employees). PE EPS has as a parent company under the Serbian Govern- ment decision incorporated 11 affiliated companies; it has 7 departments and 2 independent sectors.

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 13 14 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA PE EPS operates the installed capacities of 7.124 MW (Kosovo and Metohija capacities excluded), with the following structure:

1. Coal-fired thermal power plants (18 units of various capacity) 3,936 MW 2. Gas and liquid fuel fired combined heat and power plants (6 units) 353 MW 3. Run-of-river hydropower plants (31 units) 1,850 MW 4. Reservoir hydropower plants (17 units) 371 MW 5. Pumped-storage hydropower plants (2 units) 614 MW

In addition, PE EPS operates three power plants, total capacity power plants. The Kolubara, Kostolac and Kosovo and Metohija of 461 MW, not owned by it. mining basins are located close to the thermal power plants. PE EPS supplies electricity to about 3.5 million customers In 2010, PE EPS generated some 35.855 GWh of electricity (Kosovo and Metohija excluded). and some 37.2 million tons of coal, mostly used by its own

Generation structure in 2010 (Kosovo and Metohija not included)

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 15 PE EPS installed capacities THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 17

Legislative

3.1 EU legislative framework and aspects of EU policy indication

This chapter should bring detailed information on the EU Renewable energy policy is quite recent and was introduced intention with respect to future development of energy policy roughly in 1997. Since then the EC and ultimately all EU insti- trends, renewable energy use and other aspects affecting tutions made important steps to position a resource efficient energy companies. Several communications or papers of Europe as a prime policy goal of the European Union. Major various legal status of the EC are included to demonstrate the elements of this strategy consist of the fostering of renewable reasoning and directions authentically (however shortened energy production and the efficient use of energy. In recent in several occasions where less effective on the electricity years major progress has been achieved and the following companies). chapters highlight the various efforts in this sense. To start with, some slides from January 2011 of Ms. Nyitrai and Mr. Schramm from EC ENER Directorate B serve to give an overview of the major topics. Energy Policy development

Factually, since 2007 this became a top level priority and One of the major pieces of energy legislation was the entry the various initiatives can be seen above. It is clear that the into force of the so called “renewable energy directive” (see topic is rather complex, thus this report does not pretend details in the respective chapter) which for the first time made to be complete. From EC side there is the ambition to coor- some renewable energy policy goals binding, like the 20% dinate the policy development in a way which tries to reflect use of renewable energy production in the total energy mix political possibilities on one hand and a reduction of inconsis- or the 20% decrease of greenhouse gas emissions! This is tencies on the other hand, bridging topics like national fossil an ambitious target and has paramount consequences on the fuel subsidies, European competitive liberalized markets and whole of European energy business. This is why also EPS lays enhanced use of new low carbon dioxide technology, like emphasis on learning about the coming changes and adopting renewable energy. to it in a profitable way. The energy and climate package consists of: yy Proposal for new Renewables energy Directive; yy Proposal for new Emissions Trading Directive; yy Proposal for a CCS Directive; yy Proposal for a Decision on effort-sharing to achieve the emissions reductions.

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 21 The 20-20-20 EU policy By 2020

The so-called 20-20-20 energy policy to be fulfilled by 2020 addition, the magnitude of this energy investments needed (although the 20% savings in absolute energy consumption as well as the time period envisaged stretches for more than is not binding) and it remains to be seen whether this can average political calculations and memory periods. For the be achieved in real terms. However, as is stated on several sake of clarity this report takes it for granted that EU Member occasions, the EC and policy makers state that they are aware States’ leaders will adhere to the path and not reverse the that for investments to happen the regulatory framework direction on the way. needs to be stable, foreseeable and non-discriminatory. In

The January 2009 gas crisis and its impact (6-20 January 2009)

22 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA On the way, the political process has to take into account the of supply not only for Serbia but also for whole region. During objectives of security of supply, competitiveness and sustain- that period extra ordinary experience is earned. For EPS, ability. As has been seen in recent years, the security of supply security of supply and thus the supply diversity are key priori- for fossil fuels like natural gas, which is imported from non-EU ties. EPS uses domestic resources and envisages introducing countries to its majority, is not granted. The picture above also renewable electricity production as a means to enhance shows the consequences of the January 2009 gas crises security of supply. With stronger European interconnection it is and the countries affected. Serbia was heavily affected as well. also clear that EPS is evaluating various options for importing During gas crisis PE EPS played the role to stabilize security further needed resources.

EU strongest variable renewable energy potentials

There is a huge potential of renewable energy resources within eventually) and financial or market based flexibility, meaning Europe. It is clear that not everywhere the same type of energy a “real-time” price indicator for producers, suppliers, traders resource is equally attractive. Renewable energy production is as well as for consumers, giving an indication about the real inherently a local optimization issue, having as a second benefit financial value of the electricity in a given time period. Like this shorter transportation ways to the consumers and being thus consumer awareness can be easily raised and demand side more efficient. At the same time, renewable energy based electricity consumption management is a natural result. This is electricity production tends to be more volatile than thermo- a tendency within the European Union, pushed by EU legisla- electrical power plants, particularly talking about wind and tion like the mandatory need to install smart meters before solar energy. Hence, a strong pan-European network intercon- 2020 in every household etc. Serbia is at its beginning but nection is necessary as well as local competences and means can avoid several mistakes other countries (by learning) have to cope with production volatility. The means include physical made and thus progress faster and more effectively using capabilities like flexible pump-hydro storages or flexible already best practices made elsewhere, as appropriate. gas turbines (best as combined cycles and co-generation

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 23 European infrastructures priorities – electricity by 2020

This pictures shows network priorities of the EU, including a yy 10.11.2010: The EC adopts the Communication “Energy better connection of Central and South East Europe. 2020 – A strategy for competitive, sustainable and secure energy”; this document identifies the 5 top priorities with In the following pages the efforts of the EC can be seen respect to energy policy until 2020. This is consistent and explaining the motivation and justifications for the policy inherent for the low carbon strategy. proposals. It has been tried to mention the most relevant yy 31.01.2011: The EC presents its progress report com- initiatives and the most recent ones. munication: “Renewable energy: Progressing towards A short summary: 2020 target” stemming from its reporting requirements. yy 08.03.2011: The EC adopts a Roadmap for transform- It presents an overview of the renewable energy indus- ing the European Union into a competitive low carbon try in Europe, its prospects to 2020 and addresses the economy by 2050. The Roadmap describes the cost- outstanding challenges for the development of the sector. effective pathway to reach the EU’s objective of cutting Thus this is “operational” document of relevance for greenhouse gas emissions by 80-95% of 1990 levels renewable energy industry. by 2050. Based on the cost-effectiveness analysis under- Related topics: taken, the Roadmap gives direction to sectoral policies, yy 08.03.2011: The EC adopts its communication “energy national and regional low-carbon strategies and longterm efficiency plan 2011”; Energy efficiency is at the heart investments. of the EU’s Europe 2020 Strategy for smart, sustainable yy 10.01.2007: Communication of the renewable energy and inclusive growth and of the transition to a resource road map; paves the way for the substantial introduction efficient economy. Energy efficiency is one of the most of the renewable energy legislation. cost effective ways to enhance security of energy supply, yy 23.04.2009: EU Renewable energy Directive 2009/28/ and to reduce emissions of greenhouse gases and other EC; establishes binding targets on the introduction of pollutants. renewable energy production, the reduction of green- yy 22.01.2009: Retail Markets Common Rules, Interpretative house gas emissions and the reduction of energy con- note on Directive 2009/72/EC and Directive 2009/73/ sumption by 2020. It is also called 20-20-20 Directive. EC, Internal Rules for Market in Electricity and Natural Gas. It also establishes a binding target for use of renewables Document put a stress on Customer protection bringing in transport (10%). It also imposes the establishment of the Customer “on board” enabling direct communication national action plans, the issuing of Guaranties of Origin, between distributed productin capacities, DSO and Cus- international cooperation methods for ease of compliance tomer. Chapter 4 of this Document define necessary tech- and other crucial components. nical preconditions and common standards in obtaining yy 06.05.2010: Stock taking document; Towards a new the full benefit of Smart Grid inmplementation. Energy Strategy for Europe 2011-2020; invites the yy Emission Trading System: A document explaining the Member States and stakeholders to give input for further Emission Trading System. The EU Directive 2009/29/EC legislation and policy directions and to issue the 2020 itself has not been included due to its size. energy strategy.

24 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA The EU roadmap for low carbon 2050 strategy (8.3.2011)

1. Europe’s key challenges Together with the White Paper on Transport and the Energy Efficiency Plan, this Communication is a key deliverable under The EU provides its Member States with a long-term framework the Resource Efficiency Flagship. It presents a Roadmap for for dealing with the issue of sustainability and the cross-border possible action up to 2050 which could enable the EU to effects of phenomena that cannot be dealt with at the national deliver greenhouse gas reductions in line with the 80 to 95% level alone. Climate change has long been recognised as one target agreed. It outlines milestones which would show whether such long-term shaping factor where coherent EU action is the EU is on course for reaching its target, policy challenges, needed, both inside the EU and internationally. investment needs and opportunities in different sectors, The Commission recently proposed the Europe 2020 flagship bearing in mind that the 80 to 95% reduction objective in the initiative for a resource-efficient Europe and within this EU will largely need to be met internally. framework it is now putting forward a series of long-term policy plans in areas such as transport, energy and climate change. This Communication sets out key elements that should shape the EU’s climate action helping the EU become a competi- tive low carbon economy by 2050. The approach is based 2. Milestones to 2050 on the view that innovative solutions are required to mobilise investments in energy, transport, industry and information and The transition towards a competitive low carbon economy communication technologies, and that more focus is needed means that the EU should prepare for reductions in its on energy efficiency policies. The Europe 2020 Strategy for domestic emissions by 80% by 2050 compared to 1990. smart, sustainable and inclusive growth includes five headline The Commission has carried out an extensive modelling targets that set out where the EU should be in 2020. One analysis with several possible scenarios showing how this of them relates to climate and energy: Member States have could be done, as explained below. committed themselves to reducing greenhouse gas emissions This analysis of different scenarios shows that domestic (GHG) by 20%, increasing the share of renewables in the EU’s emission reductions of the order of 40% and 60% below energy mix to 20%, and achieving the 20% energy efficiency 1990 levels would be the cost-effective pathway by 2030 target by 2020. The EU is currently on track to meet two of and 2040, respectively. In this context, it also shows reduc- those targets, but will not meet its energy efficiency target tions of 25% in 2020. This is illustrated in Figure on p. 26. unless further efforts are made. Hence, the priority remains to Such a pathway would result in annual reductions compared achieve all the targets already set for 2020. to 1990 of roughly 1% in the first decade until 2020, 1.5% In order to keep climate change below 2ºC, the European in the second decade from 2020 until 2030, and 2 % in Council reconfirmed in February 2011 the EU objective of the last two decades until 2050. The effort would become reducing greenhouse gas emissions by 80-95% by 2050 greater over time as a wider set of cost effective technologies compared to 1990, in the context of necessary reductions becomes available. according to the Intergovernmental Panel on Climate Change The following figure illustrates the pathway towards an by developed countries as a group. This is in line with the 80% reduction by 2050, shown in 5 year steps. The upper position endorsed by world leaders in the Copenhagen and the “reference” projection shows how domestic greenhouse gas Cancun Agreements. These agreements include the commit- emissions would develop under current policies. A scenario ment to deliver long-term low carbon development strate- consistent with an 80% domestic reduction then shows gies. Some Member States have already made steps in this how overall and sectoral emissions could evolve, if additional direction, or are in the process of doing so, including setting policies are put in place, taking into account technological emission reduction objectives for 2050. options available over time.

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 25 EU GHG emissions towards an 80% domestic reduction (100% - 1990)

Emissions, including international aviation, were estimated to Energy Technology plan, requiring an additional investment in be 16% below 1990 levels in 2009. With full implementa- R&D and demonstration of € 50 billion over the next 10 years, tion of current policies, the EU is on track to achieve a 20% is indispensable. Auctioning revenue and cohesion policy domestic reduction in 2020 below 1990 levels, and 30% in are financing options that Member States should exploit. In 2030. However, with current policies, only half of the 20% addition, increasing resource efficiency through, for instance, energy efficiency target would be met by 2020. waste recycling, better waste management and behavioural change, as well as enhancing the resilience of ecosystems, can If the EU delivers on its current policies, including its commit- play an important role. Also, continued effort to strengthen ment to reach 20% renewables, and achieve 20% energy effi- research on climate mitigation and adaptation technologies ciency by 2020, this would enable the EU to outperform the will be required. current 20% emission reduction target and achieve a 25% reduction by 2020. This would require the full implementa- tion of the Energy Efficiency Plan presented together with this Communication, which identifies measures which would be 3. Low carbon innovation: necessary to deliver the energy efficiency target. The amount of currently allowed offsets would not be affected. a sectoral perspective The analysis also shows that a less ambitious pathway could The Commission’s analysis has also explored pathways for key lock in carbon intensive investments, resulting in higher sectors. This analysis looked at a range of scenarios assuming carbon prices later on and significantly higher overall costs different rates of technological innovation and different fossil over the entire period. In addition, R&D, demonstration and fuel prices. They produced largely convergent results with early deployment of technologies, such as various forms respect to the magnitude of reductions needed in each sector of low carbon energy sources, carbon capture and storage, in 2030 and 2050 as indicated by the ranges presented in smart grids and hybrid and electric vehicle technology, are of Table on p. 27. The development of sectoral policy options paramount importance to ensure their cost-effective and large- will have to go into greater depth on costs, trade-offs, and scale penetration later on. Full implementation of the Strategic uncertainties.

26 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA Sectorial reductions

GHG reductions compared to 1990 2005 2030 2050 Total -7% -40 to -44% -79 to -82% Sectors

Power (CO2) -7% -54 to -68% -93 to -99%

Industry (CO2) -20% -34 to -40% -83 to -87%

Transport (incl. CO2 aviation, excl. maritime) +30% +20 to -9% -54 to -67%

Residential and services (CO2) -12% -37 to -53% -88 to -91%

Agriculture (non-CO2) -20% -36 to -37% -42 to -49%

Other non-CO2 emmissions -30% -72 to -73% -70 to -78%

A secure, competitive and fully decarbonised Given that the central role of electricity in the low carbon power sector economy requires significant use of renewables, many of which have variable output, considerable investments in Electricity will play a central role in the low carbon economy. networks are required to ensure continuity of supply at all The analysis shows that it can almost totally eliminate CO 2 times. Investment in smart grids is a key enabler for a low emissions by 2050, and offers the prospect of partially carbon electricity system, notably facilitating demand-side replacing fossil fuels in transport and heating. Although elec- efficiency, larger shares of renewables and distributed genera- tricity will increasingly be used in these 2 sectors, electricity tion and enabling electrification of transport. For grid invest- consumption overall would only have to continue to increase ments, benefits do not always accrue to the grid operator, but at historic growth rates, thanks to continuous improvements to society at large (with co-benefits for consumers, producers, in efficiency. and society at large: a more reliable network, energy security The share of low carbon technologies in the electricity mix is and reduced emissions). In this context, future work should estimated to increase from around 45% today to around 60% consider how the policy framework can foster these invest- in 2020, including through meeting the renewable energy ments at EU, national and local level and incentivise demand- target, to 75 to 80% in 2030, and nearly 100% in 2050. As side management. a result, and without prejudging Member States’ preferences for an energy mix which reflects their specific national circum- stances, the EU electricity system could become more diverse Sustainable mobility through fuel efficiency, and secure. electrification and getting prices right A wide range of existing technologies will need to be widely Technological innovation can help the transition to a more deployed, including more advanced technologies, such as efficient and sustainable European transport system by acting photovoltaics, that will continue to become cheaper and thus on 3 main factors: vehicle efficiency through new engines, more competitive over time. materials and design; cleaner energy use through new fuels and propulsion systems; better use of networks and safer and Energy specific scenarios and the means of achieving such more secure operation through information and communi- decarbonisation, while ensuring energy security and competi- cation systems. The White Paper on Transport will provide a tiveness, will be examined in the Energy 2050 Roadmap. comprehensive and combined set of measures to increase the This will build on the established EU energy policy and the EU sustainability of the transport system. 2020 Strategy. Up until 2025, the main driver for reversing the trend of The EU ETS will be critical in driving a wide range of low increasing greenhouse gas emissions in this sector is likely carbon technologies into the market, so that the power sector to remain improved fuel efficiency. Emissions from road, rail itself can adapt its investment and operational strategies to and inland waterways could in fact be brought back to below changing energy prices and technology. For the ETS to play 1990 levels in 2030, in combination with measures such as this role on the identified pathway to 2050, both a sufficient pricing schemes to tackle congestion and air pollution, infra- carbon price signal and long-term predictability are necessary. structure charging, intelligent city planning and improving In this respect, appropriate measures need to be considered, public transport, whilst securing affordable mobility. Improved including revisiting the agreed linear reduction of the ETS. efficiency and better demand-side management, fostered Other tools, such as energy taxation and technological support through CO standards and smart taxation systems, should may also be appropriate to ensure that the power sector plays 2 also advance the development of hybrid engine technolo- its full part. gies and facilitate the gradual transition towards large-scale

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 27 penetration of cleaner vehicles in all transport modes, including are already pro-actively using structural funds. The analysis plug-in hybrids and electric vehicles (powered by batteries or projects that over the next decade investments in energy- fuel cells) at a later stage. saving building components and equipment will need to be increased by up to € 200 billion. Several Member States have The synergies with other sustainability objectives such as the already implemented smart financing schemes, such as prefer- reduction of oil dependence, the competitiveness of Europe’s ential interest rates for leveraging private sector investments automotive industry as well as health benefits, especially in the most efficient building solutions. Other private financing improved air quality in cities, make a compelling case for the models must be explored. As in the transport sector, shifting EU to step up its efforts to accelerate the development and energy consumption towards low carbon electricity (including early deployment of electrification, and in general, of alter- heat pumps and storage heaters) and renewable energy (e.g. native fuels and propulsion methods, for the whole transport solar heating, biogas, biomass), also provided through district system. In this respect, it is not surprising to see also automo- heating systems, would help to protect consumers against tive industries in the US, Japan, Korea and China increasing rising fossil fuel prices and bring significant health benefits. their investments in battery technology, electric vehicles and fuel cells. Sustainable biofuels could be used as an alternative fuel espe- Industrial sectors, including energy intensive cially in aviation and heavy duty trucks, with strong growth in industries these sectors after 2030. In case electrification would not be The Commission’s analysis shows that GHG emissions in the deployed on a large-scale, biofuels and other alternative fuels industrial sector could be reduced by 83 to 87% in 2050. The would need to play a greater role to achieve the same level application of more advanced resource and energy efficient of emissions reduction in the transport sector. For biofuels industrial processes and equipment, increased recycling, as this could lead, directly or indirectly, to a decrease of the well as abatement technologies for non-CO emissions (e.g. net greenhouse gas benefits and increased pressure on bio- 2 nitrous oxide and methane), could make a major contribution diversity, water management and the environment in general. by allowing the energy intensive sectors to reduce emissions This reinforces the need to advance in 2nd and 3rd generation by half or more. As solutions are sector-specific, the Commis- biofuels and to proceed with the ongoing work on indirect land sion sees a need to develop specific Roadmaps in cooperation use change and sustainability. with the sectors concerned. In addition to the application of more advanced industrial The built environment processes and equipment, carbon capture and storage would also need to be deployed on a broad scale after 2035, notably The built environment provides low-cost and short-term to capture industrial process emissions (e.g. in the cement opportunities to reduce emissions, first and foremost through and steel sector). This would entail an annual investment of improvement of the energy performance of buildings. The more than € 10 billion. In a world of global climate action, Commission’s analysis shows that emissions in this area could this would not raise competitiveness concerns. But if the EU’s be reduced by around 90% by 2050, a larger than average main competitors would not engage in a similar manner, the contribution over the long-term. This underlines the impor- EU would need to consider how to further address the risks of tance of achieving the objective of the recast Directive on carbon leakage due to these additional costs. energy performance of buildings that new buildings built from 2021 onwards will have to be nearly zero-energy buildings. As the EU develops its climate policy framework, there will be a This process has already started, with many Member States need to continue to monitor and analyse the impacts of these implementing stricter energy performance standards for measures on the competitiveness of energy-intensive indus- buildings. On 4 February 2011 the European Council, taking tries in relation to efforts by third countries, and to consider account of the EU headline target, decided that from 2012 appropriate measures where necessary. The Commission’s onwards all Member States should include energy efficiency analysis confirms earlier findings that the current measures standards in public procurement for relevant public buildings provide adequate safe-guards in the current context and and services. By the end of 2011, the Commission will present notes the findings on options for addressing carbon leakage a Communication on “Sustainable Construction” setting out a as set out in the Communication of May 2010, including on strategy on how to boost the competitiveness of this sector the inclusion of imports into the ETS. The extent to which the while improving its environmental and climate performance. existing, adequate safeguards are sufficient will continue to be kept under close review in relation to efforts by third countries. Efforts will need to be strengthened significantly over time. The Commission remains vigilant in order to maintain a strong Today, new buildings should be designed as intelligent low- or industrial base in the EU. The Commission will continue to zero-energy buildings. The extra cost of this can be recovered update the list of sectors at risk of carbon leakage as foreseen through fuel savings. A greater challenge, however, is the refur- in the EU ETS Directive. Clearly, the best protection against the bishment of the existing building stock, and in particular how risk of carbon leakage would be effective global action. to finance the necessary investments. Some Member States

28 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA Raising land use productivity sustainably paper and wood products should be reused and recycled more to reduce pressure on land use. The analysis took account The Commission’s analysis shows that by 2050 the agricul- of global trends towards a greater share of animal products ture sector can reduce non-CO emissions by between 42 and 2 in nutrition. Reversing existing trends of food waste and 49% compared to 1990. The sector has already achieved a re-orienting consumption towards less carbon intensive food significant reduction. More reductions are feasible in the next would be desirable. two decades. Agricultural policies should focus on options such as further sustainable efficiency gains, efficient fertiliser use, bio-gasification of organic manure, improved manure management, better fodder, local diversification and commer- 4. Investing in a low carbon future cialisation of production and improved livestock productivity, as well as maximising the benefits of extensive farming. Improved agricultural and forestry practices can increase the A major increase in capital investments capacity of the sector to preserve and sequester carbon in Various forms of low carbon energy sources, their supporting soils and forests. This can be achieved, for instance, through systems and infrastructure, including smart grids, passive targeted measures to maintain grasslands, restore wetlands housing, carbon capture and storage, advanced industrial and peat lands, low- or zero-tillage, to reduce erosion and processes and electrification of transport (including energy allow for the development of forests. Agricultural and forestry storage technologies) are key components which are starting are also providing the resources for bio-energy and industrial to form the backbone of efficient, low carbon energy and feedstocks, and this contribution is bound to increase further. transport systems after 2020. This will require major and The above elements will be further addressed in the Common sustained investment: on average over the coming 40 years, Agriculture Policy legislative proposals for 2013, of which the increase in public and private investment is calculated to the positive impacts have not yet been taken into account amount to around € 270 billion annually. This represents an in the analysis, as well as the forthcoming Bio-economy additional investment of around 1.5% of EU GDP per annum Communication. on top of the overall current investment representing 19% of GDP in 2009. It would take us back to the investment levels After 2030, the rate of emission reductions in the agricul- before the economic crisis. Investments today will determine tural sector could slow down, in part because of increased the future competitiveness of economies. In this context, it is agricultural production due to the growing global popula- interesting to note the much larger shares of GDP allocated to tion. However, it is important to note that, by 2050, agricul- investments in China (48%), India (35%), and Korea (26%) ture is projected to represent a third of total EU emissions, in 2009, showing emerging economies’ need to build up tripling its share compared to today. Its importance in terms infrastructure but also the potential in leapfrogging towards a of climate policy is, therefore, set to increase: if it does not competitive, low carbon economy. achieve the projected emissions reductions, other sectors would need to reduce even more, which would come at a high Unlocking the investment potential of the private sector and cost. The farming sector is also potentially at some risk of individual consumers presents a major challenge. While most carbon leakage, so changes in production and trade patterns of this extra investment would be paid back over time through should not in the longer-term undermine global reduction lower energy bills and increased productivity, markets tend to of emissions. The analysis also considers implications for discount future benefits, and disregard long-term risks. A key the agricultural and forestry sector in a global perspective. question is, therefore, how policy can create the framework In 2050, the world will have to feed around 9 billion people. conditions for such investments to happen, including through At the same time, tropical forests will have to be preserved new financing models. In the implementation of the 20% as an essential component of tackling climate change and energy efficiency target, the Commission will have to monitor preserving world biodiversity. In addition, mitigation efforts the impact of new measures on the ETS in order to maintain are expected to increase demand for bio-energy alongside the incentives in the ETS rewarding low carbon investments existing and increasing demand for feed for animals, timber, and preparing the ETS sectors for the innovations needed in paper production and bio-industries. The dual challenges of the future. In this respect, appropriate measures need to be global food security and action on climate change need to be considered, including recalibrating the ETS by setting aside pursued together. In order to cope with these increased land a corresponding number of allowances from the part to be use requirements in the EU and on a global scale sustainable auctioned during the period 2013 to 2020 should a corre- increases in the productivity delivered by diverse agricultural sponding political decision be taken. This would also ensure and forestry systems (both intensive and extensive) will need that the contribution to the energy efficiency target would be to continue at rapid pace, not least in developing countries. made in a cost efficient manner in both, the ETS and non-ETS Any negative impacts on other resources (e.g. water, soil sectors. and biodiversity) will need careful management. Accelerating Additional public private financing mechanisms are key in climate change could endanger these productivity improve- order to overcome initial financing risks and cash flow barriers. ments in a world of insufficient action on climate change. Public finance through innovative financing instruments, such This also underscores the need to consider all land uses in a as revolving funds, preferential interest rates, guarantee holistic manner and address Land Use, Land Use Change and schemes, risk-sharing facilities and blending mechanisms Forestry (LULUCF) in EU climate policy. The Commission is can mobilise and steer the required private finance, including preparing an initiative on this issue later this year. In addition, for SMEs and consumers. In this way, limited public finance

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 29 can leverage a multitude of private sector investments. The New jobs European Investment Bank, the European Bank for Recon- struction and Development, as well as dedicated funding in Investing early in the low carbon economy would stimulate a the next Multi-Annual Financial Framework should play a role gradual structural change in the economy and can create in in providing additional financing for energy efficient and low net terms new jobs both in the short- and the medium-term. carbon technologies. Renewable energy has a strong track record in job creation. In just 5 years, the renewable industry increased its work force Increasing domestic investments provide a major opportunity from 230 000 to 550 000. Also for the construction sector for increased productivity, added value and output from a wide low carbon investment offers large short-term job opportuni- range of EU manufacturing industries (e.g. automotive, power ties. With some 15 million employees in the EU, it was partic- generation, industrial and grid equipment, energy–efficient ularly hard hit by the economic crisis. Its recovery could get building materials and the construction sector), which are key a significant boost through a major effort to accelerate the industries for the creation of future growth and jobs. Beyond renovation and building of energy efficient houses. The Energy the reductions in greenhouse gas emissions, which are the key Efficiency Plan confirms the large job creation potential from benefits of the shift to the low carbon economy, this transition promoting investments in more efficient equipment. will bring a number of other essential benefits. In the longer-term, the creation and preservation of jobs will depend on the EU’s ability to lead in terms of the devel- Reducing Europe’s energy bill and its opment of new low carbon technologies through increased dependency on fossil fuel imports education, training, programmes to foster acceptability of new technologies, R&D and entrepreneurship, as well as favour- Taken over the whole 40-year period, it is estimated that able economic framework conditions for investments. In this energy efficiency and the switch to domestically produced context, the Commission has repeatedly emphasized the low carbon energy sources will reduce the EU’s average fuel positive employment benefits if revenues from the auctioning costs by between € 175 billion and € 320 billion per year. of ETS allowances and CO taxation are used to reduce labour The actual cost saving depends on the extent to which global 2 costs, with the potential to increase total employment by up to action on climate change is undertaken. In a scenario of global 1.5 million jobs by 2020. As industry takes advantage of the climate action, less fossils fuel would need to be imported economic opportunities provided by the low carbon economy, into the EU and the cost of what would still be imported would the need to ensure a skilled work force, especially in the decline. construction sectors, technical professions, engineering and If the rest of the world does not take coordinated action, research, becomes more pressing. This will require targeted however, a major benefit of EU action would be to protect the vocational training of the existing work force towards “green- economy against high fossil fuel prices. The analysis, as well as collar” job opportunities, addressing emerging skills bottle- the IEA World Energy Outlook 2010, clearly demonstrates that necks and fostering these skills in education systems. The fossil fuel prices are indeed projected to be significantly higher Commission is currently working on assessing the employ- in case of limited global action. This is not only a longterm ment effects of greening the economy, for instance through issue. Even following the recession in the Western world, oil the implementation of the Agenda for New Skills and Jobs. prices are about twice as high as in 2005. The IEA estimated that the EU has seen its import bill rise by $ 70 billion from 2009 to 2010, and that further rises in the foreseeable future Improving air quality and health are probable. As we experienced in the ‘70s and early ‘80s, Action to reduce GHG emissions would importantly comple- oil price shocks can lead to inflation, increasing trade deficits, ment existing and planned air quality measures resulting in reduced competitiveness and rising unemployment. significantly reduced air pollution. Electrification of transport, In 2050, the EU’s total primary energy consumption could and the expansion of public transport, could strikingly improve be about 30% below 2005 levels. More domestic energy air quality in Europe’s cities. The combined effect of GHG resources would be used, in particular renewables. Imports of reductions and air quality measures would bring about more oil and gas would decline by half compared to today, reducing than 65% lower levels of air pollution in 2030 compared the negative impacts of potential oil and gas price shocks to 2005. In 2030, annual costs of controlling traditional air significantly. Without action the oil and gas import bill could pollutants could be more than € 10 billion lower, and in 2050 instead double compared to today, a difference of € 400 close to € 50 billion could be saved every year. These devel- billion or more per annum by 2050, the equivalent of 3% of opments would also reduce mortality, with benefits estimated today’s GDP. up to € 17 billion per year in 2030, and up to € 38 billion in 2050. Moreover, public health would be improved, with a reduction in health care costs and damage to ecosystems, crops, materials and buildings. These gains will be important also in the light of the comprehensive review of the EU Air Quality Policy, foreseen for 2013 at the latest, where the aim is to maximise co-benefits with climate policy and minimise negative tradeoffs. In accordance with GREEN BOOK of EPS, all utilities intensivily perform programs of primary measures in prevention of traditional air pollution.

30 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 5. The international dimension 6. Conclusions The EU with little more than 10% of global emissions will not The Commission’s detailed analysis of cost-effective ways of be able to tackle climate change on its own. Progress interna- reducing greenhouse gas emissions by 2050 has produced tionally is the only way to solve the problem of climate change, a number of important findings. In order to be in line with the and the EU must continue to engage its partners. By formu- 80 to 95% overall GHG reduction objective by 2050, the lating and implementing ambitious domestic climate change Roadmap indicates that a cost effective and gradual transition policies for more than a decade, the EU has brought many would require a 40% domestic reduction of greenhouse gas other countries on board. The situation today is fundamen- emissions compared to 1990 as a milestone for 2030, and tally different than at the end of 2008 when the EU unilaterally 80% for 2050. Building on what has already been achieved, adopted its Climate and Energy Package. At COP15 in Copen- the EU needs to start working now on appropriate strategies hagen, world leaders agreed that global average temperature to move in this direction, and all Member States should soon should not rise more than 2°C. Today, countries representing develop national low carbon Roadmaps if not already done. more than 80% of global emissions have pledged domestic The Commission is prepared to provide some of the necessary targets under the Copenhagen Accord and the Cancun agree- tools and policies. ments. For some countries, delivering on these pledges will Second, the analysis also shows that with existing policies, the require stronger action than currently envisaged. This concrete EU will achieve the goal of a 20% GHG reduction domesti- action, sometimes more ambitious than what countries would cally by 2020. If the revised Energy Efficiency Plan would be be ready to commit to internationally, is driven to a significant fully and effectively implemented meeting the 20% energy extent also by other domestic agendas: to accelerate inno- efficiency target, this would enable the EU to outperform the vation, increase energy security and competitiveness in key current 20% emission reduction target and achieve 25% growth sectors and reduce air pollution. A number of Europe’s reductions. This Communication does not suggest to set new key partners from around the world, such as China, Brazil and 2020 targets, nor does it affect the EU’s offer in the inter- Korea, are addressing these issues, first through stimulus national negotiations to take on a 30% reduction target for programmes, and now more and more through concrete 2020, if the conditions are right. This discussion continues action plans to promote the “low carbon economy”. Standstill based on the Commission Communication from 26 May would mean losing ground in major manufacturing sectors 2010. for Europe. In the coming years, implementing these pledges will be a key step in globalising climate change policies. The Third, as well as reducing the threat of dangerous climate EU should use this opportunity to strengthen its coopera- change as part of ambitious global action, deep reductions in tion with its international partners, including to work towards the EU’s emissions have the potential to deliver benefits in the a gradual development of global carbon markets to support form of savings on fossil fuel imports and improvements in air efforts of developed and developing countries to implement quality and public health. Fourth, the Roadmap gives ranges for low-emission development strategies, and ensure that all emissions reductions for 2030 and 2050 for key sectors. To climate financing contributes to “climate proof” development realise these milestones as cost-effectively as possible, and to opportunities. maximise benefits for EU manufacturing industries, the imple- mentation of the Strategic Energy Technology Plan is of crucial However, swift implementation of the pledges made since importance. Considering the important labour market implica- Copenhagen would only achieve part of the reductions needed. tions, the New Skills and Jobs Agenda will need to support the A recent report by UNEP estimated that their full implementa- transition process. tion would reach 60% of the required emission reductions until 2020. If no firm global action is taken against climate change, The Commission intends to use the Roadmap as a basis for temperatures might increase by more than 2°C already by developing sector specific policy initiatives and Roadmaps, 2050, and more than 4ºC by 2100. In order to avoid this such as the 2050 Energy Roadmap and the upcoming White scenario, science indicates that by 2050 global greenhouse Paper on Transport. The Commission will initiate the appro- gas emissions need to be reduced by at least 50% compared priate sectoral dialogues. The Commission will continue to to 1990. With the preparation of this Roadmap, the EU is ensure that the EU ETS remains a key instrument to drive taking a new initiative to stimulate international negotiations low carbon investments in a cost-efficient manner. It will also in the run-up to Durban. In this way, the Roadmap is an integral remain attentive to the risk of carbon leakage in order to part of a wider strategy to deliver on the objective to keep the ensure a level-playing field for industry. As part of the develop- global average temperature increase below 2ºC compared ment of the next Multi-Annual Financial Framework, it will also to pre-industrial levels. When cooperating with its partners, examine how EU funding can support instruments and invest- the EU should take a comprehensive approach intensifying ments that are necessary to carried out. bilateral and multilateral engagements on the broad range of What does this mean for the renewable energy policy? What aspects across sectors that touch upon climate policy. was the way chosen?

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 31 Renewable Energy Road Map (2007) Renewable energies in the 21st century: building a more sustainable future

1. Introduction over 250 Mtoe by 2020, of which approximately 200 Mtoe would have been imported, and spur new technologies and The EU and the world are at a cross-roads concerning the European industries. These benefits will come at an addi- future of energy. Climate change, increasing dependence on oil tional cost of between €10-18 billion per year, on average and other fossil fuels, growing imports, and rising energy costs between 2005 and 2020, depending on energy prices. With a are making our societies and economies vulnerable. These conducive regulatory framework, heavy investment has been challenges call for a comprehensive and ambitious response. made in the past in conventional energy sources, notably coal In the complex picture of energy policy, the renewable energy and nuclear energy. The time has now come to do the same for sector is the one energy sector which stands out in terms of renewable energy sources. ability to reduce greenhouse gas emissions and pollution, Pursuing an ambitious Energy Policy for Europe, including a exploit local and decentralised energy sources, and stimulate more vigorous and ambitious promotion of renewable energy world-class high-tech industries. The EU has compelling sources, will require changes in policy. It will entail action at all reasons for setting up an enabling framework to promote policy and decision making levels. This Road Map sets out a renewables. They are largely indigenous, they do not rely on framework for such action. uncertain projections on the future availability of fuels, and their predominantly decentralised nature makes our societies less vulnerable. It is thus undisputed that renewable energies constitute a key element of a sustainable future. 2. Current contribution of The European Council of March 2006 called for EU leader- renewable energy ship on renewable energies and asked the Commission to produce an analysis on how further to promote renewable In 1997, the European Union started working towards a target energies over the long term, for example by raising their share of a 12% share of renewable energy in gross inland consump- of gross inland consumption to 15% by 2015. The European tion by 2010 representing a doubling of the contribution Parliament has by an overwhelming majority called for a 25 from renewable energies compared with 1997. Since then, % target for renewable energies in the EU’s overall energy renewable energies have increased their contribution by 55% consumption by 2020. in absolute energy terms. This Road Map, an integral part of the Strategic European In spite of this progress, current projections indicate that the Energy Review, sets out a longterm vision for renewable 12% target will not be met. The EU looks unlikely to reach a energy sources in the EU. It proposes that the EU establish contribution from renewable energy sources exceeding 10% a mandatory (legally binding) target of 20% for renewable by 2010. energy’s share of energy consumption in the EU by 2020, There are several reasons for this. Even though the cost of most explains why it is necessary, and lays down a pathway for renewable energy sources is declining - in some cases quite mainstreaming renewables into EU energy policies and dramatically - at the current stage of energy market develop- markets. It further proposes a new legislative framework for the ment renewable sources will often not be the short term least promotion and the use of renewable energy in the European cost options. In particular, the failure to systematically include Union. In doing so, it will provide the business community with external costs in market prices gives an economically unjusti- the long term stability it needs to make rational investment fied advantage to fossil fuels compared with renewables. decisions in the renewable energy sector so as to put the European Union on track towards a cleaner, more secure and There are other important reasons why the EU will not meet more competitive energy future. The objectives set out can its objectives for renewable energy. The complexity, novelty only be achieved by significantly increasing the contribution and decentralised nature of most renewable energy applica- from renewable energy sources in all Member States in elec- tions result in numerous administrative problems. These include tricity and transport and in the heating and cooling sector. The unclear and discouraging authorisation procedures for planning, challenge is huge, but the proposed target can be achieved building and operating systems, differences in standards and with determined and concerted efforts at all levels of govern- certification and incompatible testing regimes for renewable ment assuming the energy industry plays its full part in the energy technologies. There are also many examples of opaque undertaking. and discriminating rules for grid access and a general lack of information at all levels including information for suppliers, Reaching the target will generate major greenhouse gas customers and installers. All of these factors have contributed emissions savings, reduce annual fossil fuel consumption by to inadequate growth in the renewable energies sector.

32 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA The development recorded so far is made up of generally sector, means that progress to a large extent is the result of patchy and highly uneven progress across the EU, highlighting the efforts of a few committed Member States. Only inthe that national policies have been inadequate for achieving the electricity sector has substantial progress been made, on EU target. While ambitious policies creating investor certainty the basis of the Directive on renewable electricity adopted in have been adopted in some Member States, national policies 2001, and the targets set will almost be met. The differences have proven vulnerable to changing political priorities. The in the regimes for electricity, biofuels and heating and cooling absence of legally binding targets for renewable energies at established at EU level are reflected in the development of the EU level, the relatively weak EU regulatory framework for the three sectors: clear growth in electricity, the recent start of use of renewables in the transport sector, and the complete solid growth in biofuels, and slow growth rates for heating and absence of a legal framework in the heating and cooling cooling.

The contribution of renewable energy (electricity, transport and heat) 1990-2004 (Mtoe)

As a further explanation, it should be noted that energy effi- 2.1. Electricity ciency has not been as high as expected and that overall In accordance with Directive 2001/77/EC, all Member States energy consumption therefore has been higher than expected. have adopted national targets for the proportion of electricity A considerably bigger contribution from renewable energy consumption from renewable energy sources. If all Member sources to reach the 12% target, which is expressed as a States achieve their national targets, 21% of overall elec- percentage of overall energy consumption (as opposed to a tricity consumption in the EU will be produced from renewable share of overall energy production) is thus required. Also, the energy sources by 2010. With current policies and efforts in fact that the 12% objective is expressed as a percentage of place, and unless current trends change, the European Union primary energy, penalises the contribution of wind energy, will probably achieve a figure of 19% by 2010. a sector which has experienced by far the most significant growth during the period in question. A more detailed account of the situation in the various sectors is set out below.

Non-hydro renewable electricity generation in EU-25 (1990-2005)

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 33 While this can only be considered a partial success, the has a tariff protection level of around 45% ad valorem. Import European Union will nonetheless come close to its target for duties on other biofuels - biodiesel and vegetable oils - are renewable electricity by 2010. Since the last Commission much lower (between 0 and 5%). If it would appear that supply report two years ago, renewable electricity (non-hydro) has of sustainable biofuels to the EU is constrained, the EU should increased by 50%. be ready to examine whether further market access would be an option to help the development of the market. In any event, Nine Member States are now fully on track to reach their target, the key EU trade policy challenge is to find ways to promote with some of them reaching the target early. Wind energy, in those international exports of biofuels that unambiguously particular, has made good progress and has broken through contribute to greenhouse gas reduction and avoid rain forest the target of 40 GW by 2010 five years ahead of schedule. destruction. In this respect, complementing the incentive/ Biomass electricity has gone from a yearly growth rate of support system described in Section 3.5 below, certification 7% in previous years to 13% in 2003 and 23% in 2005. schemes elaborated together with exporting trading partners Biomass in 2005 contributed 70 TWh, which means a saving or producers could be a way forward. But this requires further of 35 Mt of CO and 14.5 Mtoe less fossil fuel consumption. 2 study and discussion. Notwithstanding the progress made, this is not the time for self-congratulations. The majority of Member States are still significantly lagging behind in their efforts to achieve the 2.3. Heating and cooling agreed targets. Much more needs to be done. The heating and cooling sector accounts for approximately 50% of overall EU final energy consumption and offers a 2.2. Biofuels largely cost-effective potential for using renewable energies, notably biomass, solar and geothermal energy. However, with Biofuels are the only available large scale substitute for petrol renewables today accounting for less than 10% of the energy and diesel in transport. Given the precarious security of supply consumed for heating and cooling purposes, this potential is situation for oil (and thus for the transport sector), in 2003 far from being exploited. the EU adopted the biofuels directive (2003/30/EC), with the The Community has not so far adopted any legislation objective of boosting both the production and consumption of to promote heating and cooling from renewable sources. biofuels in the EU. Since then the Commission has set out a However, the 12% overall target for renewable energy comprehensive strategy for developing the biofuels sector. sources set in 1997 created an implicit target for heating The biofuels directive established a reference value of a 2% and cooling of an increase from approximately 40 Mtoe share for biofuels in petrol and diesel consumptions in 2005 in 1997 to 80 Mtoe in 2010. Whilst the directive on the and 5.75% in 2010. This should be compared to their share promotion of cogeneration (the CHP Directive) and the of 0.5% in 2003. The indicative targets set by Member States Energy Performance of Buildings Directive promote efficient for 2005 were less ambitious, equating to an EU share of heating, renewable energy in heating has grown only slowly. 1.4%. The share achieved was even lower, at 1%. Progress Biomass use dominates renewable heating consumption was uneven, with only three Member States reaching a share and the bulk of this is in domestic wood heating. Little growth of more than 1%. One Member State, Germany, accounted for has occurred in the use of efficient wood-burning stoves and two thirds of total EU consumption. boilers, or biomass CHP (for industrial use), despite their potential for reducing emissions. Several European countries In addition to the cost factor, there are three main reasons for have promoted other types of renewable heating, with some the slow progress. First, appropriate support systems were success. Sweden, Hungary, France and Germany make the not in place in most Member States. Second, fuel suppliers greatest use of geothermal heat in Europe; Hungary and Italy have been reluctant to use bioethanol (which accounted for lead with low-energy geothermal applications. Sweden has only 20% of total biofuel consumption) because they already the largest number of heat pumps. Solar thermal energy has have an excess of petrol, and the blending of bioethanol with taken off in Germany, Greece, Austria and Cyprus. That said, petrol makes this worse. Third, the EU regulatory framework policies and practices vary widely across the EU. There is no for biofuels is underdeveloped, particularly in relation to the coordinated approach, no coherent European market for the need for Member States to translate their objectives into technologies, and no consistency of support mechanisms. As action. a result of the inertia in the heating and cooling sector, even Member States are due to adopt national indicative targets for where some of the technologies are cost competitive, the lack 2010 in 2007. Some have already done so. Most of these of an appropriate policy including targets and the inability to have followed the reference value set in the directive (a 5.75% remove administrative barriers and provide consumers with share). Nevertheless, taking into account the disparities information on available technologies and inadequate distri- between the targets that Member States announced for 2005 bution channels very little progress has been achieved in this and the low shares that many achieved, the 2010 target is sector. As a consequence, the contribution that the heating unlikely to be achieved with present policies. sector should have provided towards meeting the 12% overall renewable target in 2010 is insufficient. From a trade perspective, the EU maintains significant import protection on some types of biofuels, notably ethanol which

34 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 2.4. Overall progress towards reaching the energy, be it in the shape of technology programmes or specific targets for renewable energy policy initiatives. Policy measures have been adopted in the form of targets, either in a political context such as the 12% The 12% target for the contribution from renewables to renewables target of 1997, or under sector-specific legisla- overall EU energy consumption by 2010 is unlikely to be met. tion, such as the biofuels and renewable electricity Directives, Based on current trends, the EU will not exceed 10% by 2010. which also provide a set of measures aimed at facilitating This can only be considered a policy failure and a result of the the achievement of the targets set. In many sectors of the inability or the unwillingness to back political declarations by economy, targets are used to provide clarity and stability to political and economic incentives. Furthermore, the progress industry, to allow them to plan and invest with a higher degree that has been achieved is largely due to efforts made by a rela- of certainty. Providing targets at the European level augments tively small number of Member States. This is not equitable this stabilising impact: EU policy generally has longer time and risks distorting the functioning of the internal market. horizons and avoids the destabilising effects of short term The European Union has made most progress in the electricity domestic political changes. To be effective, targets have to be sector. Here, with policies and measures currently in place, clearly defined, focussed and mandatory. The “12% renew- the European Union will probably achieve a share of 19% ables” target is a good political target, but has proven insuf- in 2010. However, progress has been uneven across the ficient to develop the renewable energy sector. The Commis- EU, with Member States with a stable regulatory framework sion believes that an overall legally binding EU target of 20% performing best. In transport biofuels, there has been some of renewable energy sources in gross inland consumption by progress, particularly since the adoption of the Directive, 2020 is feasible and desirable. Such a share would be fully but not enough to reach the targets adopted. In the use of in line with the level of ambition expressed by the European renewable energy sources for heating and cooling there has Council and by the European Parliament. been hardly any progress since the 1990s. 3.3. A target for biofuels 3. THE WAY FORWARD Biofuels cost more than other forms of renewable energy. But they are currently the only form of renewable energy which For renewables to become the “stepping stone” to reaching can address the energy challenges of the transport sector, the dual objective of increased security of supply and reduced including its almost complete reliance on oil and the fact greenhouse gas emissions, it is clear that a change in the way that greenhouse gas reductions in this sector are particu- in which the EU promotes renewables is needed. Strength- larly difficult to obtain. Therefore the Commission proposes ening and expansion of the current EU regulatory framework to include, in the new framework, legally binding minimum is necessary. It is, in particular, important to ensure that all targets for biofuels. A clear indication of the future level of Member States take the necessary measures to increase the these targets is needed now, because manufacturers will soon share of renewables in their energy mix. Industry, Member be building vehicles that will be on the road in 2020 and will States, the European Council and the European Parliament need to run on these fuels. The minimum target for biofuels have all called for an increased role for renewable energy for 2020 should, on the basis of conservative assumptions, sources as stated in the introduction. This section explores a related to the availability of sustainably produced feed- possible way forward to achieve this. stocks, car engine and biofuel production technologies, be fixed at 10% of overall consumption of petrol and diesel in transport. To ensure a smooth implementation of this target, 3.1. The principles the Commission, in parallel, intends to propose the appro- priate modifications to the fuel quality directive (98/70/EC) On the basis of the experience gained, a number of key prin- including the means of accommodating the share of biofuels. ciples for the future renewable energy policy framework need to be established. With a view to significantly increase the share of renewable energy sources in the EU’s energy mix, 3.4. National targets and Action Plans; putting the Commission considers that such a framework should: – be based on long term mandatory targets and stability of policy into practice the policy framework, – include increased flexibility in target Given the largely national basis for support measures in setting across sectors, – be comprehensive, notably encom- renewable energy, the overall EU target will need to be passing heating and cooling, – provide for continued efforts to reflected in mandatory national targets. The contribution of remove unwarranted barriers to renewable energies deploy- each Member State to achieving the Union’s target will need ment, – take into consideration environmental and social to take into account different national circumstances. Member aspects, – ensure cost-effectiveness of policies, and – be States should have flexibility to promote the renewable compatible with the internal energy market. energies most suitable to their specific potential and priori- ties. The precise way in which Member States plan to achieve their targets should be set out in National Action Plans to be 3.2. An overall EU target notified to the Commission. These Action Plans should contain sectoral targets and measures consistent with achieving the A policy on renewable energies is a cornerstone in the overall agreed overall national targets, demonstrating substantial EU policy for reducing CO emissions. Since the 1990s the EU 2 progress compared to the agreed 2010 renewable energy has taken various measures aimed at promoting renewable

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 35 targets. In implementing the national targets in practice, and imported, would remain the main biodiesel feedstock, Member States will need to set their own specific objectives complemented by smaller quantities of soy and palm oil and for electricity, biofuels and heating and cooling, which would later by second-generation biofuels, i.e. Fischer-Tropsch diesel be verified by the Commission to ensure that the overall target mostly from farmed wood.” is being met. Proposals for legislation on the overall target and the minimum target for biofuels, together with provisions to facilitate a higher uptake of renewable energies in the three 3.5. Promotional policies and flanking measures sectors, including the necessary monitoring mechanisms In addition to the legislative measures outlined above and will be put forward in 2007. This process should ensure that their application by Member States, the Commission will take the overall EU target is met in a fair and equitable manner the following action: and should clearly strengthen the existing political and legal –– propose strengthening the legal provisions to framework. remove any unreasonable barrier to the integration of renew- “How do we get there? able energy sources in the EU energy system. Conditions for grid connections and extensions must be simplified. The share of renewable energy in overall energy consumption Some Member States have a panoply of permission pro- has been growing, but too slowly. Having carefully examined the cedures to be complied with in order to construct renew- feasibility and the technical and economic potential including able energy systems. This must be reduced. Building variant breakdowns between the renewable energy subsectors, codes normally ignore renewable energies. Red tape for the Commission has come to the conclusion that the overall innovative small and medium-sized enterprises must be objective of a 20% contribution of renewable energy to the EU eliminated. To this effect, the Commission will continue to energy mix is possible and necessary. Meeting this target will stringently apply the Renewable Electricity Directive; require a massive growth in all three renewable energy sectors, but it is feasible. –– propose legislation to address the barriers to growth in the use of renewable energies in the heating and cooling Electricity production from renewables could increase from sector including administrative obstacles, inadequate dis- the current 15% to approximately 34% of overall electricity tribution channels, inappropriate building codes and lack consumption in 2020. Wind could contribute 12% of EU elec- of market information; tricity by 2020. One third of this will more than likely come from –– take further action to improve the functioning of the inter- offshore installations. This is feasible, for example, currently nal electricity market considering the development of 18% of electricity consumption is covered by wind in Denmark. renewable energies. Improved transparency, unbundling, In Spain and Germany this is 8% and 6% respectively. The higher interconnectors capacity, all improve the opportu- biomass sector can grow significantly using wood, energy crops nity for new innovative renewable energy players to enter and bio-waste in power stations. The remaining novel technolo- the market; gies, i.e. photovoltaic (PV), solar thermal power, wave & tidal –– re-examine, in 2007, the situation concerning Member power, will grow more rapidly as their costs come down. PV States’ support systems for renewable energies costs, for example, are expected to fall by 50% by 2020. An with a view to assessing their performance and the need illustration of a projection for the electricity sector is set out in to propose harmonising support schemes for renewables the annex. To meet the overall target in 2020, the contribution in the context of the EU internal electricity market. While from renewables in the heating and cooling sector could more national schemes for renewable energy in electricity may than double, compared with the current share of 9%. Most of still be needed for a transitional period until the internal the growth could come from biomass and will involve more market is fully operational, harmonised support schemes efficient household systems and highly efficient biomass-fired should be the long term objective; combined heat and power stations. The rest could come from –– promote a proposal for an incentive/support system for geothermal and solar installations. Sweden for example has biofuels that, for instance, discourages the conversion of over 185 000 installed geothermal heat pumps, half of the total land with high biodiversity value for the purpose of cul- number installed in Europe. If the rest of the Union followed this tivating biofuel feedstocks; discourages the use of bad rate of installation, geothermal sources would provide a further systems for biofuel production; and encourages the use of 15 Mtoe in Europe. Similarly, German and Austrian levels of second-generation production processes; solar heating installations applied across the EU could lead to –– continue to promote the use of renewable energy sources a contribution of 12 Mtoe. In other words, a large proportion of in public procurement for fostering clean energies, in par- the targets can be reached by applying current best practices. ticular with regard to transport; Biofuels could contribute 43 Mtoe, corresponding to 14% of the –– continue to pursue a balanced approach in ongoing free market for transport fuels. The growth would come both from trade negotiations with ethanol produced countries/ bioethanol (which in Sweden has already achieved a 4% share regions, respecting the interests of domestic produc- of the petrol market and in Brazil, the world leader, more than ers and EU trading partners, within the context of rising 20%) and from biodiesel, which in Germany, the world leader, demand for biofuels; has already achieved a 6% share of the diesel market. Domesti- –– continue to co-operate closely with grid authorities, Euro- cally grown cereals and tropical sugar cane would be the main pean electricity regulators and renewable industry to ethanol feedstocks, later complemented by cellulosic ethanol enable a better integration of renewable energy from straw and wastes. Rapeseed oil, both domestically grown sources into the power grid, with particular attention

36 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA paid to the special requirements related to much larger –– improve pre-planning mechanisms whereby regions and deployment of off-shore wind energy, notably as regards municipalities are required to assign suitable locations for cross-border grid connections. Opportunities provided renewable energies; by the TEN-E scheme should be examined and work on a –– integrate renewable energies in regional and local plans. European offshore super-grid should be initiated; –– exploit fully the possibilities offered by the Community’s financial instruments notably the Structural and Cohe- sion funds, the Rural Development funds, and the financial 4. Assessment of the impact support made available through the Community’s interna- of achieving the target for tional co-operation programmes to support the develop- ment of renewable energy sources in the EU and beyond; renewables –– continue to promote the exchange of best practices on renewable energy sources, using different information and The impact assessment, which accompanies this Road Map, debate platforms, such as the existing Amsterdam Forum. provides a detailed account of the various impacts of the In the context of the Commission initiative on Regions for measures set out above and compares the impacts of various Economic Change, the Commission will also establish net- alternative policy options. works of regions and cities to boost the sharing of best This section of the Road Map provides a brief overview of the practices for sustainable energy use; findings. –– continue to internalise external costs of conventional fossil energy (inter alia by means of energy taxation); –– reap all the opportunities offered for renewable energy by 4.1. Impact on greenhouse gas emissions and the result-oriented actions of the forthcoming European other environmental impacts Strategic Energy Technology Plan (SET-Plan); The importance of climate change has never been greater. –– promote the use of renewable energy sources in its exter- The Environment Council of 10 March 2005 concluded that nal energy policies and favour opportunities for sustain- “reduction pathways by the group of developed countries in the able development in developing countries; order of 15-30% by 2020 compared to the 1990 baseline –– fully implement the Biomass Action Plan adopted by the envisaged in the Kyoto Protocol should be considered.” Commission in December 2005. Biomass offers great Greenhouse gas emissions, including CO emissions, from potential and major benefits in other Community policies; 2 renewable energy sources are either low or zero. Increasing –– continue to use the Intelligent Energy for Europe pro- the share of renewables in the EU fuel mix will therefore result gramme to help bridge the gap between successful dem- in significantly lower greenhouse gas emissions. The addi- onstration of innovative technologies and effective market tional renewable energy deployment needed to achieve the entrance to achieve mass deployment and to boost large- 20% target will reduce annual CO emissions in a range of scale investment across the EU in new and best performing 2 600-900 Mt in 2020. Considering a CO2-price of 25 €/per technologies and to ensure that renewable energy is given tonne, the additional total CO benefit can be calculated at a the highest priority in the sustained efforts to maximise 2 range of €150-€200 billion. Actual CO2 prices will depend on the use of the EU research and technology devel- the future international climate regime. The breakdown of the opment programmes in support of zero- or low carbon CO2 emissions avoided is set out in the annex. Replacing fossil energy technologies whilst developing synergies with fuels also has generally positive air quality benefits. These are Member States involved in similar development. In addi- especially positive in the electricity sector. tion to these Commission initiatives, it should be under- lined that Member States, regional and local authorities have to make a significant contribution towards increas- 4.2. Security of energy supply ing the use of renewables. Currently, Member States use various policy tools to promote renewables, including Renewable energy contributes to security of supply by feed-in tariffs, premium systems, green certificates, tax increasing the share of domestically produced energy, diver- exemptions, obligations on fuel suppliers, public procure- sifying the fuel mix, diversifying the sources of energy imports ment policy and research technology and development. and increasing the proportion of energy obtained from politi- To make progress towards the proposed new targets, cally stable regions. The EU will strengthen its position on all Member States will have to make further use of the range these measures of security of supply if it achieves the proposed of policy instruments at their disposal, in compliance with share of renewable energy. Benefits are seen in all sectors and the provisions of the EC Treaty. are particularly marked in transport. One way to sum up the benefits is to look at the quantity of fossil fuels displaced by Member States and/or local and regional authorities are in renewable energies. Assuming the EU achieved 20% deploy- particular called upon to: ment of renewables, the annual reduction in fossil fuel demand –– ensure that authorisation procedures are simple, rapid can be calculated to be 252 Mtoe from 2020 onwards. This and fair with clear guidelines for authorisation including as figure is equivalent to the total combined energy consumption appropriate, appointing one-stop authorisation agencies of the UK, Latvia and Lithuania. About 200 Mtoe of this saving responsible for coordinating administrative procedures would come from imports, including 55 Mtoe of oil and 90 Mtoe related to renewable energy sources; of gas, predominantly from the Middle East and CIS countries.

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 37 4.3. Cost and competitiveness 60% cheaper than they were in 1990. Despite this, as stated in Section 2, the cost of renewable energies varies signifi- In contrast to conventional energy sources, there has been a cantly according to the resource base and the technologies continued and significant reduction in the cost for renewables concerned, but generally still exceeds that of conventional over the last 20 years. As an example, the cost of wind energy energy sources at present. This is illustrated in the graph per kWh has fallen by 50% over the last 15 years while at below. the same time the size of the turbines has increased by a factor of 10. Solar photovoltaic systems today are more than

Average heating, transport and electricity cost (€/MWh)

Energy market price signals remain distorted in favour of frameworks for renewable energy sources, current market non-renewable energy sources, in particular due to the prices are still far from reflecting true cost. Figure below illus- continued failure to systematically internalise external costs. trates how many renewable energy technologies would be Although external costs are partially internalised through the more able to compete with conventional fuels if external costs EU’s Emission Trading System, fiscal instruments or support were reflected in prices.

Average heating, transport and electricity cost including external cost (€/MWh)

38 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA Reaching the target for renewable energy in the EU by 2020 will the use of renewable energy, some suggesting a small increase entail additional cost. The size of this will depend on the finance (of the order of 0.5%), and others a small decrease. Studies mix, the technology choices made and the degree of competi- also suggest that support for renewable energy will lead to tion in the sector. Above all, however, the cost will depend on a small net increase in employment. Much of the economic international prices for conventional energy sources, notably activity generated by support for renewable energy is located oil. The annual additional cost of increasing the contribution in agricultural areas, often in peripheral regions. of renewables to the proposed share by 2020 is defined as Further business opportunities will arise from the export the total costs of generation of renewable minus the reference of renewable energy technology. Traditionally the EU wind cost of conventional energy production. A balanced mix of industry has held a position as the global market leader. It renewable technologies, combined with low international oil currently holds a 60% world market share. Other renewable prices ($48), will result in an additional average annual cost of technologies are currently experiencing spectacular growth, achieving the proposed share of renewable energy of approxi- for example, solar thermal appliances, for which the Chinese mately €18 billion. Strong research and development efforts market has taken off and currently accounts for more than will certainly lower the costs of renewable energies and thus 50% of global solar thermal installations. Of the employment the overall cost of this policy. The exact choice of the tech- created in Germany by the wind energy sector – evaluated at nologies could reduce this average cost by approximately €2 60 000 full time jobs –half is due to the export market. billion per year. With a strong renewable energy strategy the EU would be “How much will society pay for a 20% share of well placed to maintain its leading role in renewable energy renewable energies? research, and would benefit from increased opportunities for The cost of accelerated growth of renewable energy cited above renewable energy technology exports. should be seen in the context of projected total energy infra- structure investments before 2030, estimated at more than $2 trillion. Some of this will be financed from profits, some from taxes, and some must clearly come from consumers, i.e. from 5. CONCLUSION higher energy bills. With this Road Map the Commission sets out an important It is important to note, that the main factor influencing the cost part of its strategic vision for the energy future of Europe. of a renewable portfolio is oil price. Under a scenario with oil It seeks to significantly accelerate the growth in renewable prices at $78/barrel by 2020, the additional average annual energy, and proposes that the EU achieve a contribution of cost would fall to €10.6 billion. By comparison, the EU’s total 20% of its energy mix from renewable energy sources by energy bill is expected to be about €350 billion that year. 2020. The Commission requests the Spring Council and the European Parliament to endorse this target. This will require Bearing in mind the significant greenhouse gas savings that a substantial strengthening of the EU regulatory framework. will occur as a direct consequence of an accelerated fuel switch Most importantly, the Commission is convinced that a legally from fossil fuels to renewable energies carbon prices of €25 per binding target for the overall contribution of renewables to the tonne combined with high oil prices (78$) would almost entirely EU’s energy mix plus mandatory minimum targets for biofuels cover the additional cost associated with reaching the proposed are now called for. This policy will be a major step along the share of renewable energy.” road to sustainability. Marginal costs of renewable energies are often low compared Reaching this target is technically and economically feasible. to conventional energy sources, and therefore a gradual Additional average costs compared to conventional supply increase in renewable energies in the wholesale electricity options will depend on future innovation rates and conven- market will reduce the wholesale market prices of electricity. tional energy prices and would range between €10.6 to €18 The net effect on power costs to consumers is thus constituted billion per year. The additional renewable energy deployment of two counteracting effects. For the electricity sector, based needed to achieve the 20% target will reduce annual CO on the assumption of a reference spot price of €48.6 per MWh 2 emission by approximately 700 Mt in 2020. The value of for electricity, consumer electricity prices could be 5% higher this significant reduction in greenhouse gas emissions would due to the extra investment in renewable energy. Whether nearly cover the total additional cost under high energy prices. or not energy efficiency measures are applied is also of key At the same time the EU will strengthen its position on security importance and the range cited above assumes energy effi- of supply reducing fossil fuel demand by over 250 Mtoe in ciency policies. Without these, the average annual additional 2020. Until this new legislation enters into force, the current cost would increase by more than €7 billion annually. Full legislative framework, notably for electricity and biofuels, will details of the cost analysis can be found in the impact assess- be vigorously enforced. ment report. No-one can predict oil prices or gas prices over a 20 years The European Council in March 2006 decided to refocus the period, but it would be imprudent not to start investing to Lisbon Strategy on jobs and growth. The renewable energy reduce the uncertainties of the EU’s energy future. To put the sector in the EU has achieved global leadership and has principles and proposals set out in this Road Map into practice, a turnover of €20 billion and employs 300 000 people. In it will be followed by proposals for new legislation in 2007. order to maintain this role, the EU needs to continue to expand New legislation will build on and strengthen the existing legis- the deployment of renewable energy technologies in the EU. lative framework for the post 2010 period. Member States Studies vary in their estimates of the GDP impact of increasing should engage in a process to share the overall target in a fair

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 39 and equitable manner, taking into account national circum- key players are putting in place vigorous promotional policies stances and choices, while at the same time indicating the way on renewables, meeting this objective involves significant in which they intend to make progress in all three sectors in challenges for Europe. Failing to rise to this challenge, through accordance with the agreed target. This policy aims to create inaction or lack of vision, would seriously endanger our leader- a true internal market in which renewable technologies can ship in this field, the importance of which reaches far beyond thrive. It will provide the business community with the certainty the energy sector. and stability it needs to make its investment decisions while at Most importantly, this Road Map provides EU citizens with the the same time give Member States the flexibility they need to assurance they seek from their policy makers: that the serious support this policy in line with their national circumstances. problems of climate change and environmental degrada- The Road Map builds on the reputation and the leading role the tion and of security of supply are being given equally serious EU renewable energy industry sector holds in the world. The answers. objective is to confirm the EU as a world leader in this sector. Several pictures give more detailed information: In view of increased global competition and the fact that other

Renewable energy source share of gross inland consumption in 2004 (Source: Eurostat)

Renewables growth: Electricity projections by 2020

40 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA Avoided CO2 emissions due to new RES deployment up to 2020 in the EU-25

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 41 A decisive directive has been adopted making parts of the renewable strategy issues legally binding:

Directive 2009/28/EC (23.04.2009) on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC

Before delivering the nearly integral text some short remarks: The key targets the EU Member States have to comply with are shown in the next graph:

It shows the share of renewables of each Member State in 2005, the mandatory increase of 5,5% and other elements deriving from the Directive! If Member States will comply this has a land breaking effect!

This graph shows the shares of renewables in energy consumption in 2020 for each Member State.

42 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA The following is the text of the Directive, here included due community development and cohesion by providing to its outstanding importance with the respect to renewable income sources and creating jobs locally. electricity production in Europe (countries adhering to EU 7. Directive 2001/77/EC of the European Parliament and legislaton). of the Council of 27 September 2001 on the promotion of electricity produced from renewable energy sources in Whereas: the internal electricity market and Directive 2003/30/ 1. The control of European energy consumption and EC of the European Parliament and of the Council of 8 the increased use of energy from renewable sources, May 2003 on the promotion of the use of biofuels or together with energy savings and increased energy other renewable fuels for transport established defi- efficiency, constitute important parts of the package of nitions for different types of energy from renewable measures needed to reduce greenhouse gas emissions sources. Directive 2003/54/EC of the European Parlia- and comply with the Kyoto Protocol to the United Nations ment and of the Council of 26 June 2003 concerning Framework Convention on Climate Change, and with common rules for the internal market in electricity estab- further Community and international greenhouse gas lished definitions for the electricity sector in general. In emission reduction commitments beyond 2012. Those the interests of legal certainty and clarity it is appropriate factors also have an important part to play in promoting to use the same or similar definitions in this Directive. the security of energy supply, promoting technological 8. The Commission communication of 10 January 2007 development and innovation and providing opportunities entitled “Renewable Energy Roadmap — Renewable for employment and regional development, especially in energies in the 21st century: building a more sustain- rural and isolated areas. able future” demonstrated that a 20 % target for the 2. In particular, increasing technological improvements, overall share of energy from renewable sources and incentives for the use and expansion of public transport, a 10 % target for energy from renewable sources in the use of energy efficiency technologies and the use of transport would be appropriate and achievable objec- energy from renewable sources in transport are some tives, and that a framework that includes mandatory of the most effective tools by which the Community can targets should provide the business community with the reduce its dependence on imported oil in the transport long-term stability it needs to make rational, sustainable sector, in which the security of energy supply problem is investments in the renewable energy sector which are most acute, and influence the fuel market for transport. capable of reducing dependence on imported fossil fuels 3. The opportunities for establishing economic growth and boosting the use of new energy technologies. Those through innovation and a sustainable competitive energy targets exist in the context of the 20 % improvement in policy have been recognised. Production of energy from energy efficiency by 2020 set out in the Commission renewable sources often depends on local or regional communication of 19 October 2006 entitled “Action small and medium-sized enterprises (SMEs). The oppor- Plan for Energy Efficiency: Realising the Potential”, which tunities for growth and employment that investment in was endorsed by the European Council of March 2007, regional and local production of energy from renewable and by the European Parliament in its resolution of 31 sources bring about in the Member States and their January 2008 on that Action Plan. regions are important. The Commission and the Member 9. The European Council of March 2007 reaffirmed the States should therefore support national and regional Community’s commitment to the Community-wide development measures in those areas, encourage the development of energy from renewable sources beyond exchange of best practices in production of energy from 2010. It endorsed a mandatory target of a 20 % share renewable sources between local and regional develop- of energy from renewable sources in overall Community ment initiatives and promote the use of structural funding energy consumption by 2020 and a mandatory 10 % in this area. minimum target to be achieved by all Member States for 4. When favouring the development of the market for the share of biofuels in transport petrol and diesel con- renewable energy sources, it is necessary to take into sumption by 2020, to be introduced in a cost-effective account the positive impact on regional and local devel- way. It stated that the binding character of the biofuel opment opportunities, export prospects, social cohesion target is appropriate, subject to production being sus- and employment opportunities, in particular as concerns tainable, second-generation biofuels becoming com- SMEs and independent energy producers. mercially available and Directive 98/70/EC of the 5. In order to reduce greenhouse gas emissions within European Parliament and of the Council of 13 October the Community and reduce its dependence on energy 1998 relating to the quality of petrol and diesel fuels imports, the development of energy from renewable being amended to allow for adequate levels of blending. sources should be closely linked to increased energy The European Council of March 2008 repeated that it is efficiency. essential to develop and fulfil effective sustainability cri- 6. It is appropriate to support the demonstration and com- teria for biofuels and ensure the commercial availability mercialisation phase of decentralised renewable energy of second-generation biofuels. The European Council of technologies. The move towards decentralised energy June 2008 referred again to the sustainability criteria production has many benefits, including the utilisation of and the development of second-generation biofuels, and local energy sources, increased local security of energy underlined the need to assess the possible impacts of supply, shorter transport distances and reduced energy biofuel production on agricultural food products and to transmission losses. Such decentralisation also fosters take action, if necessary, to address shortcomings. It also

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 43 stated that further assessment should be made of the to meet its target for the use of energy from renewable environmental and social consequences of the produc- sources in transport solely from domestic production, it tion and consumption of biofuels. is both likely and desirable that the target will in fact be 10. In its resolution of 25 September 2007 on the Road Map met through a combination of domestic production and for Renewable Energy in Europe, the European Parlia- imports. To this end, the Commission should monitor the ment called on the Commission to present, by the end of supply of the Community market for biofuels, and should, 2007, a proposal for a legislative framework for energy as appropriate, propose relevant measures to achieve a from renewable sources, referring to the importance of balanced approach between domestic production and setting targets for the shares of energy from renewable imports, taking into account, inter alia, the development sources at Community and Member State level. of multilateral and bilateral trade negotiations, environ- 11. It is necessary to set transparent and unambiguous mental, social and economic considerations, and the rules for calculating the share of energy from renewable security of energy supply. sources and for defining those sources. In this context, 17. The improvement of energy efficiency is a key objec- the energy present in oceans and other water bodies in tive of the Community, and the aim is to achieve a 20 % the form of waves, marine currents, tides, ocean thermal improvement in energy efficiency by 2020. That aim, energy gradients or salinity gradients should be included. together with existing and future legislation including 12. The use of agricultural material such as manure, slurry Directive 2002/91/EC of the European Parliament and and other animal and organic waste for biogas produc- of the Council of 16 December 2002 on the energy tion has, in view of the high greenhouse gas emission performance of buildings, Directive 2005/32/EC of the saving potential, significant environmental advantages in European Parliament and of the Council of 6 July 2005 terms of heat and power production and its use as biofuel. establishing a framework for the setting of ecodesign Biogas installations can, as a result of their decentralised requirements for energy-using products, and Directive nature and the regional investment structure, contribute 2006/32/EC of the European Parliament and of the significantly to sustainable development in rural areas Council of 5 April 2006 on energy end-use efficiency and and offer farmers new income opportunities. energy services, has a critical role to play in ensuring that 13. In the light of the positions taken by the European Parlia- the climate and energy objectives are being achieved at ment, the Council and the Commission, it is appropriate least cost, and can also provide new opportunities for the to establish mandatory national targets consistent with European Union’s economy. Energy efficiency and energy a 20 % share of energy from renewable sources and a saving policies are some of the most effective methods 10 % share of energy from renewable sources in trans- by which Member States can increase the percentage port in Community energy consumption by 2020. share of energy from renewable sources, and Member 14. The main purpose of mandatory national targets is to States will thus more easily achieve the overall national provide certainty for investors and to encourage continu- and transport targets for energy from renewable sources ous development of technologies which generate energy laid down by this Directive. from all types of renewable sources. Deferring a decision 18. It will be incumbent upon Member States to make sig- about whether a target is mandatory until a future event nificant improvements in energy efficiency in all sectors takes place is thus not appropriate. in order more easily to achieve their targets for energy 15. The starting point, the renewable energy potential and from renewable sources, which are expressed as a per- the energy mix of each Member State vary. It is there- centage of gross final consumption of energy. The need fore necessary to translate the Community 20 % target for energy efficiency in the transport sector is imperative into individual targets for each Member State, with due because a mandatory percentage target for energy from regard to a fair and adequate allocation taking account of renewable sources is likely to become increasingly dif- Member States’ different starting points and potentials, ficult to achieve sustainably if overall demand for energy including the existing level of energy from renewable for transport continues to rise. The mandatory 10 % sources and the energy mix. It is appropriate to do this by target for transport to be achieved by all Member States sharing the required total increase in the use of energy should therefore be defined as that share of final energy from renewable sources between Member States on the consumed in transport which is to be achieved from basis of an equal increase in each Member State’s share renewable sources as a whole, and not from biofuels weighted by their GDP, modulated to reflect their start- alone. ing points, and by accounting in terms of gross final con- 19. To ensure that the mandatory national overall targets are sumption of energy, with account being taken of Member achieved, Member States should work towards an indica- States’ past efforts with regard to the use of energy from tive trajectory tracing a path towards the achievement renewable sources. of their final mandatory targets. They should establish a 16. By contrast, it is appropriate for the 10 % target for national renewable energy action plan including informa- energy from renewable sources in transport to be set at tion on sectoral targets, while having in mind that there the same level for each Member State in order to ensure are different uses of biomass and therefore it is essential consistency in transport fuel specifications and availabil- to mobilise new biomass resources. In addition, Member ity. Because transport fuels are traded easily, Member States should set out measures to achieve those targets. States with low endowments of the relevant resources Each Member State should assess, when evaluating will easily be able to obtain biofuels from elsewhere. its expected gross final consumption of energy in its While it would technically be possible for the Community national renewable energy action plan, the contribution

44 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA which energy efficiency and energy saving measures can it is essential that Member States are able to determine if make to achieving its national targets. Member States and to what extent their national support schemes apply should take into account the optimal combination of to energy from renewable sources produced in other energy efficiency technologies with energy from renew- Member States and to agree on this by applying the able sources. cooperation mechanisms provided for in this Directive. 20. To permit the benefits of technological progress and 26. It is desirable that energy prices reflect external costs of economies of scale to be reaped, the indicative trajectory energy production and consumption, including, as appro- should take into account the possibility of a more rapid priate, environmental, social and healthcare costs. growth in the use of energy from renewable sources in 27. Public support is necessary to reach the Community’s the future. Thus special attention can be given to sectors objectives with regard to the expansion of electricity pro- that suffer disproportionately from the absence of tech- duced from renewable energy sources, in particular for nological progress and economies of scale and therefore as long as electricity prices in the internal market do not remain under-developed, but which, in future, could sig- reflect the full environmental and social costs and ben- nificantly contribute to reaching the targets for 2020. efits of energy sources used. 21. The indicative trajectory should take 2005 as its start- 28. The Community and the Member States should strive ing point because that is the latest year for which reli- to reduce total consumption of energy in transport and able data on national shares of energy from renewable increase energy efficiency in transport. The principal sources are available. means of reducing consumption of energy in transport 22. The achievement of the objectives of this Direc- include transport planning, support for public transport, tive requires that the Community and Member States increasing the share of electric cars in production and dedicate a significant amount of financial resources producing cars which are more energy efficient and to research and development in relation to renewable smaller both in size and in engine capacity. energy technologies. In particular, the European Institute 29. Member States should aim to diversify the mix of energy of Innovation and Technology should give high priority from renewable sources in all transport sectors. The to the research and development of renewable energy Commission should present a report to the European technologies. Parliament and the Council by 1 June 2015 outlining the 23. Member States may encourage local and regional potential for increasing the use of energy from renewable authorities to set targets in excess of national targets sources in each transport sector. and to involve local and regional authorities in drawing 30. In calculating the contribution of hydropower and wind up national renewable energy action plans and in raising power for the purposes of this Directive, the effects of awareness of the benefits of energy from renewable climatic variation should be smoothed through the use sources. of a normalisation rule. Further, electricity produced in 24. In order to exploit the full potential of biomass, the Com- pumped storage units from water that has previously munity and the Member States should promote greater been pumped uphill should not be considered to be elec- mobilisation of existing timber reserves and the develop- tricity produced from renewable energy sources. ment of new forestry systems. 31. Heat pumps enabling the use of aerothermal, geother- 25. Member States have different renewable energy poten- mal or hydrothermal heat at a useful temperature level tials and operate different schemes of support for energy need electricity or other auxiliary energy to function. from renewable sources at the national level. The major- The energy used to drive heat pumps should therefore ity of Member States apply support schemes that grant be deducted from the total usable heat. Only heat pumps benefits solely to energy from renewable sources that with an output that significantly exceeds the primary is produced on their territory. For the proper function- energy needed to drive it should be taken into account. ing of national support schemes it is vital that Member 32. Passive energy systems use building design to harness States can control the effect and costs of their national energy. This is considered to be saved energy. To avoid support schemes according to their different potentials. double counting, energy harnessed in this way should not One important means to achieve the aim of this Direc- be taken into account for the purposes of this Directive. tive is to guarantee the proper functioning of national 33. Some Member States have a large share of aviation in support schemes, as under Directive 2001/77/EC, in their gross final consumption of energy. In view of the order to maintain investor confidence and allow Member current technological and regulatory constraints that States to design effective national measures for target prevent the commercial use of biofuels in aviation, it compliance. This Directive aims at facilitating cross-bor- is appropriate to provide a partial exemption for such der support of energy from renewable sources without Member States, by excluding from the calculation of their affecting national support schemes. It introduces optional gross final consumption of energy in national air trans- cooperation mechanisms between Member States which port, the amount by which they exceed one-and-a-half allow them to agree on the extent to which one Member times the Community average gross final consumption State supports the energy production in another and on of energy in aviation in 2005, as assessed by Euro- the extent to which the energy production from renew- stat, i.e. 6,18 %. Cyprus and Malta, due to their insular able sources should count towards the national overall and peripheral character, rely on aviation as a mode of target of one or the other. In order to ensure the effec- transport, which is essential for their citizens and their tiveness of both measures of target compliance, i.e. economy. As a result, Cyprus and Malta have a gross final national support schemes and cooperation mechanisms, consumption of energy in national air transport which

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 45 is disproportionally high, i.e. more than three times the 38. When Member States undertake joint projects with one Community average in 2005, and are thus dispropor- or more third countries regarding the production of elec- tionately affected by the current technological and regu- tricity from renewable energy sources, it is appropriate latory constraints. For those Member States it is there- that those joint projects relate only to newly constructed fore appropriate to provide that the exemption should installations or to installations with newly increased cover the amount by which they exceed the Community capacity. This will help ensure that the proportion of average gross final consumption of energy in aviation in energy from renewable sources in the third country’s 2005 as assessed by Eurostat, i.e. 4,12 %. total energy consumption is not reduced due to the 34. To obtain an energy model that supports energy from importation of energy from renewable sources into the renewable sources there is a need to encourage strate- Community. In addition, the Member States concerned gic cooperation between Member States, involving, as should facilitate the domestic use by the third country appropriate, regions and local authorities. concerned of part of the production of electricity by the 35. Whilst having due regard to the provisions of this Direc- installations covered by the joint project. Furthermore, tive, Member States should be encouraged to pursue the third country concerned should be encouraged by the all appropriate forms of cooperation in relation to the Commission and Member States to develop a renewable objectives set out in this Directive. Such cooperation can energy policy, including ambitious targets. take place at all levels, bilaterally or multilaterally. Apart 39. Noting that projects of high European interest in third from the mechanisms with effect on target calculation countries, such as the Mediterranean Solar Plan, may and target compliance, which are exclusively provided need a long lead-time before being fully interconnected for in this Directive, namely statistical transfers between to the territory of the Community, it is appropriate to Member States, joint projects and joint support schemes, facilitate their development by allowing Member States cooperation can also take the form of, for example, to take into account in their national targets a limited exchanges of information and best practices, as provided amount of electricity produced by such projects during for, in particular, in the transparency platform estab- the construction of the interconnection. lished by this Directive, and other voluntary coordination 40. The procedure used by the administration responsible between all types of support schemes. for supervising the authorisation, certification and licens- 36. To create opportunities for reducing the cost of achieving ing of renewable energy plants should be objective, the targets laid down in this Directive, it is appropriate both transparent, non-discriminatory and proportionate when to facilitate the consumption in Member States of energy applying the rules to specific projects. In particular, it is produced from renewable sources in other Member States, appropriate to avoid any unnecessary burden that could and to enable Member States to count energy from renew- arise by classifying renewable energy projects under able sources consumed in other Member States towards installations which represent a high health risk. their own national targets. For this reason, flexibility mea- 41. The lack of transparent rules and coordination between the sures are required, but they remain under Member States’ different authorisation bodies has been shown to hinder control in order not to affect their ability to reach their the deployment of energy from renewable sources. There- national targets. Those flexibility measures take the form fore the specific structure of the renewable energy sector of statistical transfers, joint projects between Member should be taken into account when national, regional and States or joint support schemes. local authorities review their administrative procedures 37. It should be possible for imported electricity, produced for giving permission to construct and operate plants and from renewable energy sources outside the Commu- associated transmission and distribution network infra- nity, to count towards Member States’ targets. However, structures for the production of electricity, heating and to avoid a net increase in greenhouse gas emissions cooling or transport fuels from renewable energy sources. through the diversion of existing renewable sources and Administrative approval procedures should be stream- their complete or partial replacement by conventional lined with transparent timetables for installations using energy sources, only electricity produced by renew- energy from renewable sources. Planning rules and guide- able energy installations that become operational after lines should be adapted to take into consideration cost- the entry into force of this Directive or by the increased effective and environmentally beneficial renewable heating capacity of an installation that was refurbished after that and cooling and electricity equipment. date should be eligible to be counted. In order to guaran- 42. For the benefit of rapid deployment of energy from tee an adequate effect of energy from renewable sources renewable sources and in view of their overall high sus- replacing conventional energy in the Community as well tainable and environmental beneficial quality, Member as in third countries it is appropriate to ensure that such States should, when applying administrative rules, plan- imports can be tracked and accounted for in a reliable ning structures and legislation which are designed for way. Agreements with third countries concerning the licensing installations with respect to pollution reduc- organisation of such trade in electricity from renewable tion and control for industrial plants, for combating air energy sources will be considered. If, by virtue of a deci- pollution and for the prevention or minimisation of the sion taken under the Energy Community Treaty to that discharge of dangerous substances in the environment, effect, the contracting parties to that treaty become take into account the contribution of renewable energy bound by the relevant provisions of this Directive, the sources towards meeting environmental and climate measures of cooperation between Member States pro- change objectives, in particular when compared to non- vided for in this Directive will be applicable to them. renewable energy installations.

46 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 43. In order to stimulate the contribution by individual citi- including for architects, there is a further need to ensure zens to the objectives set out in this Directive, the rel- that architects and planners properly consider an optimal evant authorities should consider the possibility of combination of renewable energy sources and high-effi- replacing authorisations by simple notifications to the ciency technologies in their plans and designs. Member competent body when installing small decentralised States should therefore provide clear guidance in this devices for producing energy from renewable sources. regard. This should be done without prejudice to the 44. The coherence between the objectives of this Directive provisions of Directive 2005/36/EC and in particular and the Community’s other environmental legislation Articles 46 and 49 thereof. should be ensured. In particular, during the assessment, 52. Guarantees of origin issued for the purpose of this Direc- planning or licensing procedures for renewable energy tive have the sole function of proving to a final customer installations, Member States should take account of that a given share or quantity of energy was produced all Community environmental legislation and the con- from renewable sources. A guarantee of origin can be tribution made by renewable energy sources towards transferred, independently of the energy to which it relates, meeting environmental and climate change objectives, from one holder to another. However, with a view to ensur- in particular when compared to non-renewable energy ing that a unit of electricity from renewable energy sources installations. is disclosed to a customer only once, double counting 45. National technical specifications and other require- and double disclosure of guarantees of origin should be ments falling within the scope of Directive 98/34/EC of avoided. Energy from renewable sources in relation to the European Parliament and of the Council of 22 June which the accompanying guarantee of origin has been sold 1998 laying down a procedure for the provision of infor- separately by the producer should not be disclosed or sold mation in the field of technical standards and regulations to the final customer as energy from renewable sources. It and rules on Information Society services, relating for is important to distinguish between green certificates used example to levels of quality, testing methods or condi- for support schemes and guarantees of origin. tions of use, should not create barriers for trade in renew- 53. It is appropriate to allow the emerging consumer market able energy equipment and systems. Therefore, support for electricity from renewable energy sources to contrib- schemes for energy from renewable sources should not ute to the construction of new installations for energy prescribe national technical specifications which deviate from renewable sources. Member States should there- from existing Community standards or require the sup- fore be able to require electricity suppliers who dis- ported equipment or systems to be certified or tested in close their energy mix to final customers in accordance a specified location or by a specified entity. with Article 3(6) of Directive 2003/54/EC, to include 46. It is appropriate for Member States to consider mecha- a minimum percentage of guarantees of origin from nisms for the promotion of district heating and cooling recently constructed installations producing energy from from energy from renewable sources. renewable sources, provided that such a requirement is 47. At national and regional level, rules and obligations for in conformity with Community law. minimum requirements for the use of energy from renew- 54. It is important to provide information on how the sup- able sources in new and renovated buildings have led to ported electricity is allocated to final customers in accor- considerable increases in the use of energy from renew- dance with Article 3(6) of Directive 2003/54/EC. In able sources. Those measures should be encouraged in order to improve the quality of that information to con- a wider Community context, while promoting the use of sumers, in particular as regards the amount of energy more energy-efficient applications of energy from renew- from renewable sources produced by new installations, able sources through building regulations and codes. the Commission should assess the effectiveness of the 48. It may be appropriate for Member States, in order to measures taken by Member States. facilitate and accelerate the setting of minimum levels 55. Directive 2004/8/EC of the European Parliament and for the use of energy from renewable sources in build- of the Council of 11 February 2004 on the promotion ings, to provide that such levels are achieved by incor- of cogeneration based on a useful heat demand in the porating a factor for energy from renewable sources in internal energy market provides for guarantees of origin meeting minimum energy performance requirements for proving the origin of electricity produced from high- under Directive 2002/91/EC, relating to a cost-optimal efficiency cogeneration plants. Such guarantees of origin reduction of carbon emissions per building. cannot be used when disclosing the use of energy from 49. Information and training gaps, especially in the heating renewable sources in accordance with Article 3(6) of and cooling sector, should be removed in order to encour- Directive 2003/54/EC as this might result in double age the deployment of energy from renewable sources. counting and double disclosure. 50. In so far as the access or pursuit of the profession of 56. Guarantees of origin do not by themselves confer a right installer is a regulated profession, the preconditions for to benefit from national support schemes. the recognition of professional qualifications are laid down 57. There is a need to support the integration of energy from in Directive 2005/36/EC of the European Parliament and renewable sources into the transmission and distribu- of the Council of 7 September 2005 on the recognition of tion grid and the use of energy storage systems for inte- professional qualifications. This Directive therefore applies grated intermittent production of energy from renewable without prejudice to Directive 2005/36/EC. sources. 51. While Directive 2005/36/EC lays down requirements 58. The development of renewable energy projects, includ- for the mutual recognition of professional qualifications, ing renewable energy projects of European interest

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 47 under the Trans-European Network for Energy (TEN-E) connection capacities for new installations producing programme should be accelerated. To that end, the Com- electricity from renewable energy sources. mission should also analyse how the financing of such 62. The costs of connecting new producers of electricity projects can be improved. Particular attention should be and gas from renewable energy sources to the electric- paid to renewable energy projects that will contribute to ity and gas grids should be objective, transparent and a significant increase in security of energy supply in the non-discriminatory and due account should be taken of Community and neighbouring countries. the benefit that embedded producers of electricity from 59. Interconnection among countries facilitates integration renewable energy sources and local producers of gas of electricity from renewable energy sources. Besides from renewable sources bring to the electricity and gas smoothing out variability, interconnection can reduce grids. balancing costs, encourage true competition bringing 63. Electricity producers who want to exploit the poten- about lower prices, and support the development of net- tial of energy from renewable sources in the peripheral works. Also, the sharing and optimal use of transmission regions of the Community, in particular in island regions capacity could help avoid excessive need for newly built and regions of low population density, should, whenever capacity. feasible, benefit from reasonable connection costs in 60. Priority access and guaranteed access for electric- order to ensure that they are not unfairly disadvantaged ity from renewable energy sources are important for in comparison with producers situated in more central, integrating renewable energy sources into the internal more industrialised and more densely populated areas. market in electricity, in line with Article 11(2) and devel- 64. Directive 2001/77/EC lays down the framework for the oping further Article 11(3) of Directive 2003/54/EC. integration into the grid of electricity from renewable Requirements relating to the maintenance of the reliabil- energy sources. However, there is a significant varia- ity and safety of the grid and to the dispatching may differ tion between Member States in the degree of integra- according to the characteristics of the national grid and tion actually achieved. For this reason it is necessary to its secure operation. Priority access to the grid provides strengthen the framework and to review its application an assurance given to connected generators of electric- periodically at national level. ity from renewable energy sources that they will be able 65. Biofuel production should be sustainable. Biofuels to sell and transmit the electricity from renewable energy used for compliance with the targets laid down in this sources in accordance with connection rules at all times, Directive, and those that benefit from national support whenever the source becomes available. In the event that schemes, should therefore be required to fulfil sustain- the electricity from renewable energy sources is inte- ability criteria. grated into the spot market, guaranteed access ensures 66. The Community should take appropriate steps in the that all electricity sold and supported obtains access to context of this Directive, including the promotion of sus- the grid, allowing the use of a maximum amount of elec- tainability criteria for biofuels and the development of tricity from renewable energy sources from installations second and third-generation biofuels in the Community connected to the grid. However, this does not imply any and worldwide, and to strengthen agricultural research obligation on the part of Member States to support or and knowledge creation in those areas. introduce purchase obligations for energy from renew- 67. The introduction of sustainability criteria for biofuels will able sources. In other systems, a fixed price is defined not achieve its objective if those products that do not for electricity from renewable energy sources, usually in fulfil the criteria and would otherwise have been used as combination with a purchase obligation for the system biofuels are used, instead, as bioliquids in the heating or operator. In such a case, priority access has already been electricity sectors. For this reason, the sustainability cri- given. teria should also apply to bioliquids in general. 61. In certain circumstances it is not possible fully to ensure 68. The European Council of March 2007 invited the Com- transmission and distribution of electricity produced mission to propose a comprehensive Directive on the use from renewable energy sources without affecting the reli- of all renewable energy sources, which could contain cri- ability or safety of the grid system. In such circumstances teria and provisions to ensure sustainable provision and it may be appropriate for financial compensation to be use of bioenergy. Such sustainability criteria should form given to those producers. Nevertheless, the objectives of a coherent part of a wider scheme covering all bioliquids this Directive require a sustained increase in the trans- and not biofuels alone. Such sustainability criteria should mission and distribution of electricity produced from therefore be included in this Directive. In order to ensure renewable energy sources without affecting the reliability a coherent approach between energy and environment or safety of the grid system. To this end, Member States policies, and to avoid the additional costs to business and should take appropriate measures in order to allow a the environmental incoherence that would be associated higher penetration of electricity from renewable energy with an inconsistent approach, it is essential to provide sources, inter alia, by taking into account the specificities the same sustainability criteria for the use of biofuels of variable resources and resources which are not yet for the purposes of this Directive on the one hand, and storable. To the extent required by the objectives set out Directive 98/70/EC on the other. For the same reasons, in this Directive, the connection of new renewable energy double reporting should be avoided in this context. Fur- installations should be allowed as soon as possible. In thermore, the Commission and the competent national order to accelerate grid connection procedures, Member authorities should coordinate their activities in the States may provide for priority connection or reserved framework of a committee specifically responsible for

48 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA sustainability aspects. The Commission should, in addi- of the Intergovernmental Panel on Climate Change is tion, in 2009, review the possible inclusion of other the appropriate basis for such standard values. That biomass applications and the modalities relating thereto. work is not currently expressed in a form that is imme- 69. The increasing worldwide demand for biofuels and bioliq- diately applicable by economic operators. The Commis- uids, and the incentives for their use provided for in this sion should therefore produce guidance drawing on that Directive, should not have the effect of encouraging the work to serve as the basis for the calculation of carbon destruction of biodiverse lands. Those finite resources, stock changes for the purposes of this Directive, includ- recognised in various international instruments to be of ing such changes to forested areas with a canopy cover value to all mankind, should be preserved. Consumers in of between 10 to 30 %, savannahs, scrublands and the Community would, in addition, find it morally unac- prairies. ceptable that their increased use of biofuels and bioliq- 72. It is appropriate for the Commission to develop method- uids could have the effect of destroying biodiverse lands. ologies with a view to assessing the impact of the drain- For these reasons, it is necessary to provide sustain- age of peatlands on greenhouse gas emissions. ability criteria ensuring that biofuels and bioliquids can 73. Land should not be converted for the production of qualify for the incentives only when it can be guaranteed biofuels if its carbon stock loss upon conversion could that they do not originate in biodiverse areas or, in the not, within a reasonable period, taking into account the case of areas designated for nature protection purposes urgency of tackling climate change, be compensated by or for the protection of rare, threatened or endangered the greenhouse gas emission saving resulting from the ecosystems or species, the relevant competent author- production of biofuels or bioliquids. This would prevent ity demonstrates that the production of the raw material unnecessary, burdensome research by economic opera- does not interfere with those purposes. The sustainability tors and the conversion of high-carbon-stock land that criteria should consider forest as biodiverse where it is would prove to be ineligible for producing raw materi- a primary forest in accordance with the definition used als for biofuels and bioliquids. Inventories of worldwide by the Food and Agriculture Organisation of the United carbon stocks indicate that wetlands and continuously Nations (FAO) in its Global Forest Resource Assessment, forested areas with a canopy cover of more than 30 % which countries use worldwide to report on the extent of should be included in that category. Forested areas with primary forest or where it is protected by national nature a canopy cover of between 10 and 30 % should also protection law. Areas where collection of non-wood be included, unless there is evidence demonstrating that forest products occurs should be included, provided the their carbon stock is sufficiently low to justify their conver- human impact is small. Other types of forests as defined sion in accordance with the rules laid down in this Direc- by the FAO, such as modified natural forests, semi-nat- tive. The reference to wetlands should take into account ural forests and plantations, should not be considered the definition laid down in the Convention on Wetlands as primary forests. Having regard, furthermore, to the of International Importance, especially as Waterfowl highly biodiverse nature of certain grasslands, both tem- Habitat, adopted on 2 February 1971 in Ramsar. perate and tropical, including highly biodiverse savan- 74. The incentives provided for in this Directive will encour- nahs, steppes, scrublands and prairies, biofuels made age increased production of biofuels and bioliquids from raw materials originating in such lands should not worldwide. Where biofuels and bioliquids are made from qualify for the incentives provided for by this Directive. raw material produced within the Community, they should The Commission should establish appropriate criteria also comply with Community environmental require- and geographical ranges to define such highly biodiverse ments for agriculture, including those concerning the grasslands in accordance with the best available scien- protection of groundwater and surface water quality, and tific evidence and relevant international standards. with social requirements. However, there is a concern 70. If land with high stocks of carbon in its soil or vegeta- that production of biofuels and bioliquids in certain third tion is converted for the cultivation of raw materials for countries might not respect minimum environmental or biofuels or bioliquids, some of the stored carbon will social requirements. It is therefore appropriate to encour- generally be released into the atmosphere, leading to age the development of multilateral and bilateral agree- the formation of carbon dioxide. The resulting negative ments and voluntary international or national schemes greenhouse gas impact can offset the positive green- that cover key environmental and social considerations, house gas impact of the biofuels or bioliquids, in some in order to promote the production of biofuels and bioliq- cases by a wide margin. The full carbon effects of such uids worldwide in a sustainable manner. In the absence conversion should therefore be accounted for in calcu- of such agreements or schemes, Member States should lating the greenhouse gas emission saving of particular require economic operators to report on those issues. biofuels and bioliquids. This is necessary to ensure that 75. The requirements for a sustainability scheme for energy the greenhouse gas emission saving calculation takes uses of biomass, other than bioliquids and biofuels, into account the totality of the carbon effects of the use should be analysed by the Commission in 2009, taking of biofuels and bioliquids. into account the need for biomass resources to be 71. In calculating the greenhouse gas impact of land conver- managed in a sustainable manner. sion, economic operators should be able to use actual 76. Sustainability criteria will be effective only if they lead values for the carbon stocks associated with the refer- to changes in the behaviour of market actors. Those ence land use and the land use after conversion. They changes will occur only if biofuels and bioliquids meeting should also be able to use standard values. The work those criteria command a price premium compared to

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 49 those that do not. According to the mass balance method biofuels and bioliquids established by that list. Where the of verifying compliance, there is a physical link between default value for greenhouse gas emission saving from the production of biofuels and bioliquids meeting the a production pathway lies below the required minimum sustainability criteria and the consumption of biofuels level of greenhouse gas emission saving, produc- and bioliquids in the Community, providing an appropri- ers wishing to demonstrate their compliance with this ate balance between supply and demand and ensuring minimum level should be required to show that actual a price premium that is greater than in systems where emissions from their production process are lower than there is no such link. To ensure that biofuels and bioliq- those that were assumed in the calculation of the default uids meeting the sustainability criteria can be sold at a values. higher price, the mass balance method should therefore 83. It is appropriate for the data used in the calculation of the be used to verify compliance. This should maintain the default values to be obtained from independent, scien- integrity of the system while at the same time avoiding tifically expert sources and to be updated as appropriate the imposition of an unreasonable burden on industry. as those sources progress their work. The Commission Other verification methods should, however, be reviewed. should encourage those sources to address, when they 77. Where appropriate, the Commission should take due update their work, emissions from cultivation, the effect account of the Millennium Ecosystem Assessment which of regional and climatological conditions, the effects of contains useful data for the conservation of at least those cultivation using sustainable agricultural and organic areas that provide basic ecosystem services in critical farming methods, and the scientific contribution of pro- situations such as watershed protection and erosion ducers, within the Community and in third countries, and control. civil society. 78. It is appropriate to monitor the impact of biomass cul- 84. In order to avoid encouraging the cultivation of raw mate- tivation, such as through land-use changes, including rials for biofuels and bioliquids in places where this would displacement, the introduction of invasive alien species lead to high greenhouse gas emissions, the use of default and other effects on biodiversity, and effects on food values for cultivation should be limited to regions where production and local prosperity. The Commission should such an effect can reliably be ruled out. However, to avoid consider all relevant sources of information, including a disproportionate administrative burden, it is appropri- the FAO hunger map. Biofuels should be promoted in a ate for Member States to establish national or regional manner that encourages greater agricultural productivity averages for emissions from cultivation, including from and the use of degraded land. fertiliser use. 79. It is in the interests of the Community to encourage the 85. Global demand for agricultural commodities is growing. development of multilateral and bilateral agreements Part of that increased demand will be met through an and voluntary international or national schemes that set increase in the amount of land devoted to agriculture. standards for the production of sustainable biofuels and The restoration of land that has been severely degraded bioliquids, and that certify that the production of biofuels or heavily contaminated and therefore cannot be used, and bioliquids meets those standards. For that reason, in its present state, for agricultural purposes is a way of provision should be made for such agreements or increasing the amount of land available for cultivation. schemes to be recognised as providing reliable evidence The sustainability scheme should promote the use of and data, provided that they meet adequate standards of restored degraded land because the promotion of biofu- reliability, transparency and independent auditing. els and bioliquids will contribute to the growth in demand 80. It is necessary to lay down clear rules for the calculation for agricultural commodities. Even if biofuels themselves of greenhouse gas emissions from biofuels and bioliq- are made using raw materials from land already in arable uids and their fossil fuel comparators. use, the net increase in demand for crops caused by the 81. Co-products from the production and use of fuels should promotion of biofuels could lead to a net increase in the be taken into account in the calculation of greenhouse cropped area. This could affect high carbon stock land, gas emissions. The substitution method is appropriate which would result in damaging carbon stock losses. To for the purposes of policy analysis, but not for the regula- alleviate that risk, it is appropriate to introduce accom- tion of individual economic operators and individual con- panying measures to encourage an increased rate of signments of transport fuels. In those cases the energy productivity on land already used for crops, the use of allocation method is the most appropriate method, as degraded land, and the adoption of sustainability require- it is easy to apply, is predictable over time, minimises ments, comparable to those laid down in this Directive counter-productive incentives and produces results that for Community biofuel consumption, in other biofuel- are generally comparable with those produced by the consuming countries. The Commission should develop substitution method. For the purposes of policy analy- a concrete methodology to minimise greenhouse gas sis the Commission should also, in its reporting, present emissions caused by indirect land-use changes. To this results using the substitution method. end, the Commission should analyse, on the basis of best 82. In order to avoid a disproportionate administrative available scientific evidence, in particular, the inclusion of burden, a list of default values should be laid down for a factor for indirect land-use changes in the calculation common biofuel production pathways and that list should of greenhouse gas emissions and the need to incentiv- be updated and expanded when further reliable data is ise sustainable biofuels which minimise the impacts of available. Economic operators should always be entitled land-use change and improve biofuel sustainability with to claim the level of greenhouse gas emission saving for respect to indirect land-use change. In developing that

50 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA methodology, the Commission should address, inter alia, necessary for assessing whether sustainability criteria the potential indirect land-use changes resulting from have been fulfilled in relation to biofuels and bioliquids, biofuels produced from non-food cellulosic material and to adapt the energy content of transport fuels to techni- from ligno-cellulosic material. cal and scientific progress, to establish criteria and geo- 86. In order to permit the achievement of an adequate graphic ranges for determining highly biodiverse grass- market share of biofuels, it is necessary to ensure the land, and to establish detailed definitions for severely placing on the market of higher blends of biodiesel in degraded or contaminated land. Since those measures diesel than those envisaged by standard EN590/2004. are of general scope and are designed to amend non- 87. In order to ensure that biofuels that diversify the range essential elements of this Directive, inter alia, by supple- of feedstocks used become commercially viable, those menting it with new non-essential elements, they must biofuels should receive an extra weighting under national be adopted in accordance with the regulatory proce- biofuel obligations. dure with scrutiny provided for in Article 5a of Decision 88. Regular reporting is needed to ensure a continuing focus 1999/468/EC. on progress in the development of energy from renew- 93. Those provisions of Directive 2001/77/EC and Direc- able sources at national and Community level. It is appro- tive 2003/30/EC that overlap with the provisions of priate to require the use of a harmonised template for this Directive should be deleted from the latest possible national renewable energy action plans which Member moment for transposition of this Directive. Those that States should submit. Such plans could include estimated deal with targets and reporting for 2010 should remain costs and benefits of the measures envisaged, measures in force until the end of 2011. It is therefore necessary to relating to the necessary extension or reinforcement of amend Directive 2001/77/EC and Directive 2003/30/ the existing grid infrastructure, estimated costs and ben- EC accordingly. efits to develop energy from renewable sources in excess 94. Since the measures provided for in Articles 17 to 19 also of the level required by the indicative trajectory, informa- have an effect on the functioning of the internal market tion on national support schemes and information on by harmonising the sustainability criteria for biofuels and their use of energy from renewable sources in new or bioliquids for the target accounting purposes under this renovated buildings. Directive, and thus facilitate, in accordance with Article 89. When designing their support systems, Member States 17(8), trade between Member States in biofuels and may encourage the use of biofuels which give additional bioliquids which comply with those conditions, they are benefits, including the benefits of diversification offered based on Article 95 of the Treaty. by biofuels made from waste, residues, non-food cel- 95. The sustainability scheme should not prevent Member lulosic material, ligno-cellulosic material and algae, as States from taking into account, in their national support well as non-irrigated plants grown in arid areas to fight schemes, the higher production cost of biofuels and desertification, by taking due account of the different bioliquids that deliver benefits that exceed the minima costs of producing energy from traditional biofuels on the laid down in the sustainability scheme. one hand and of those biofuels that give additional ben- 96. Since the general objectives of this Directive, namely to efits on the other. Member States may encourage invest- achieve a 20 % share of energy from renewable sources ment in research and development in relation to those in the Community’s gross final consumption of energy and other renewable energy technologies that need time and a 10 % share of energy from renewable sources in to become competitive. each Member State’s transport energy consumption by 90. The implementation of this Directive should reflect, where 2020, cannot be sufficiently achieved by the Member relevant, the provisions of the Convention on Access to States and can therefore, by reason of the scale of the Information, Public Participation in Decision-Making and action, be better achieved at Community level, the Com- Access to Justice in Environmental Matters, in particu- munity may adopt measures, in accordance with the prin- lar as implemented through Directive 2003/4/EC of the ciple of subsidiarity as set out in Article 5 of the Treaty. European Parliament and of the Council of 28 January In accordance with the principle of proportionality, as set 2003 on public access to environmental information. out in that Article, this Directive does not go beyond what 91. The measures necessary for the implementation of this is necessary in order to achieve those objectives. Directive should be adopted in accordance with Council 97. In accordance with point 34 of the Interinstitutional Decision 1999/468/EC of 28 June 1999 laying down agreement on better law-making, Member States are the procedures for the exercise of implementing powers encouraged to draw up, for themselves and in the inter- conferred on the Commission. est of the Community, their own tables illustrating, as far 92. In particular, the Commission should be empowered as possible, the correlation between this Directive and to adapt the methodological principles and values the transposition measures and to make them public.

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 51 HAVE ADOPTED THIS DIRECTIVE: Complete Articles 1 to 25 are the part of ANNEX, on CD only

Stock taking document (06.05.2010): Towards a new Energy Strategy for Europe 2011-2020

INTRODUCTION AND CONCLUDING REMARKS The inclusion of a specific chapter on energy in the Lisbon Treaty now offers a firm legal basis for developing energy *NOTE: draft document is the part of ANNEX onCD initiatives based in particular on sustainability, security of only supply, the functioning of the internal energy markets, the interconnection of networks and solidarity, while restating the right of Member States to decide which fuels to include in their Introduction energy mix. The purpose of this document is to take stock of the far- European energy policy has developed in the last decade with reaching debate on energy policy initiated by the Spanish the European Commission adopting successive Green Papers Presidency, including at the fruitful Informal Energy Council and Strategic Energy Reviews to advance the agenda on on 14-15 January 2010, in view of formulating a new sustainability, competitiveness and security of supply. The first comprehensive Energy Strategy for Europe for 2011-2020 EU Energy Action Plan, endorsed by the European Council in early this year. The Commission is committed to have an in March 2007, has been largely executed through new legisla- depth discussion with all stakeholders on the basis of this tion and ongoing proposals that will soon be agreed. In 2007 stocktaking document. the European Council called on the Commission to prepare a new Action Plan for the post 2010 period. The overall goal of European energy policy remains to ensure safe, secure, sustainable and affordable energy for all, Conclusions businesses and consumers alike. The challenges of global Since endorsement of the first Energy Action Plan by the energy security and energy geopolitics, slow progress in European Council in March 2007, the legislative framework combating climate change at the global level, the urge to for achieving energy policy objectives has been substantially recover on growth and jobs in the EU and the need to invest strengthened. We now need to focus on fully implementing in tomorrow’s energy networks call for a new Energy Strategy this framework and translate our agreed policies into concrete to further deliver on those objectives. The Commission’s results for the citizens and businesses of Europe. Several proposals for a Europe 2020 Strategy include the flagship shortcomings remain and new developments have exacer- initiative topromote a “Resource-efficient Europe”. This incor- bated the need for a reinforced energy strategy. porates the commitment to deliver the 20-20-20 targets on greenhouse gas emissions, renewable energy and energy The key components of such a strategy are the exploitation savings (with the target of a 30% cut in greenhouse gas of the full potential of energy savings, the promotion of low emissions if the conditions at international level are right). carbon innovation, a fully functioning internal energy market, It also requires completing the internal energy market and secure and sustainable energy networks and greater coopera- implementing the European Strategic Energy Technology Plan tion and solidarity within the EU as well as achieving a more (SET-Plan). coherent and effective approach to the EU external energy relations. Short term effects of the economic crisis cannot Completing the internal energy market, achieving reduce Europe’s determination to improve the sustainability energy savings and promoting lowcarbon innovation of our energy consumption and reduce the amount of energy are the main vectors to reach the objectives of competitive- needed and emissions generated per unit of output. ness, sustainability and security of supply. A well functioning internal market, based on regional and pan-European intercon- Compared to the previous Action Plan, greater emphasis nections, will serve all consumers, ensure energy security and is needed on investments. Billions of Euros will need to allow the transition towards a low-carbon electricity system. be invested in new technologies, infrastructure, energy effi- There remains large scope for cost-efficient energy saving ciency improvements, low-carbon power generation and measures in order to reduce greenhouse gas emissions; public education and skills to make the lowcarbon transforma- energy savings also lower the energy bill and reduce depen- tion happen. While the economic crisis made finance scarcer, dence on energy imports. Finally innovation will be essential market-based instruments need to be used more consistently to make energy system sustainable and to renew Europe’s to orient investments in the right direction. Future security of manufacturing base and create green jobs. An open global supply will depend on new interconnections both inside and business climate and a more coherent and effective approach outside the EU, energy saving practices and technologies and to the EU external energy relations will also help us to reach “intelligent” grid and metering technologies. Keeping energy our objectives. affordable for industrial, commercial and private consumers

52 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA will be a further challenge, but European rather than national However, complementary measures will need to be taken, for approaches will be more efficient, and create economies of example to ensure the availability of skilled labour, to realise scale, for the benefit of consumers. this potential. In today’s globalised world, the economic and social The delivery of the 2020 goals will imply a coordinated benefits of achieving the 2020 goals are significant. This effort at all levels. Europe will achieve its objectives of could result in €60 billion less in oil and gas imports by 2020. sustainability, competitiveness and security of supply in This represents not only financial savings; it is also essential energy if it acts collectively. The new Energy Strategy should for energy security. Further progress with the integration encompass actions at both EU and Member State level. Cities of the European energy market can add an extra 0.6% to and regions play a key role in developing local integrated 0.8 % GDP. Meeting the EU’s objective of 20% of renewable solutions. In accordance with the Europe 2020 strategy, sources of energy alone has the potential to create more than new tools need to be developed to assess progress towards 600 000 jobs in the EU. Adding the 20% target on energy common goals and coordinate national strategies. savings, it is well over 1 million new jobs that are at stake.

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 53 Energy 2020 - A strategy for competitive, sustainable and secure energy (10.11.2010)

INTRODUCTION AND CONCLUDING REMARKS *NOTE: draft document is on CD only

Introduction Nevertheless, the existing strategy is currently unlikely to achieve all the 2020 targets, and it is wholly inadequate to The price of failure is too high. the longer term challenges. EU energy and climate goals have Energy is the life blood of our society. The well-being of people, been incorporated into the Europe 2020 Strategy for smart, industry and economy depends on safe, secure, sustain- sustainable and inclusive growth, adopted by the European able and affordable energy. At the same time, energy related Council in June 2010, and into its flagship initiative ‘Resource emissions account for almost 80% of the EU’s total green- efficient Europe’. The urgent task for the EU is to agree the house gas emissions. The energy challenge is thus one of the tools which will make the necessary shift possible and thus greatest tests which Europe has to face. It will take decades to ensure that Europe can emerge from recession on a more steer our energy systems onto a more secure and sustainable competitive, secure and sustainable path. path. Yet the decisions to set us on the right path are needed Despite the importance of energy policy aims, there are serious urgently as failing to achieve a well-functioning European gaps in delivery. energy market will only increase the costs for consumers and put Europe’s competitiveness at risk. The internal energy market is still fragmented and has not achieved its potential for transparency, accessibility and Over the next ten years, energy investments in the order of choice. Companies have grown beyond national borders, € 1 trillion are needed, both to diversify existing resources and but their development is still hampered by a host of different replace equipment and to cater for challenging and changing national rules and practices. There are still many barriers energy requirements. Structural changes in energy supply, to open and fair competition. A recent study into consumer partly resulting from changes in indigenous production, oblige conditions in retail electricity markets indicates sub-optimal European economies to choose among energy products and consumer choice. Implementation of internal market legisla- infrastructures. These choices will be felt over the next 30 tion is disappointing, with over 40 infringement procedures years and more. To enable these decisions to be taken urgently underway on the second internal energy market package from calls for an ambitious policy framework. Postponing these 2003 alone. decisions will have immeasurable repercussions on society as regards both longer-term costs and security. The security of internal energy supplies is undermined by delays in investments and technological progress. Currently, A common EU energy policy has evolved around the common nearly 45% of European electricity generation is based on objective to ensure the uninterrupted physical availability of low-carbon energy sources, mainly nuclear and hydropower. energy products and services on the market, at a price which Parts of the EU could lose more than a third of their genera- is affordable for all consumers (private and industrial), while tion capacity by 2020 because of the limited life-time of these contributing to the EU’s wider social and climate goals. The installations. This means replacing and expanding existing central goals for energy policy (security of supply, competi- capacities, finding secure non-fossil fuel alternatives, adapting tiveness, and sustainability) are now laid down in the Lisbon networks to renewable energy sources and achieving a truly Treaty. This spells out clearly what is expected from Europe in integrated internal energy market. At the same time Member the energy area. While some progress has been made towards States still need to phase out environmentally harmful these goals, Europe’s energy systems are adapting too slowly, subsidies. while the scale of the challenges grows. Forthcoming enlarge- ments of the EU will make this challenge even greater as the The quality of National Energy Efficiency Action Plans, Union takes in countries with outdated infrastructure and less developed by Member States since 2008, is disappointing, competitive energy economies. leaving vast potential untapped. The move towards renewable energy use and greater energy efficiency in transport is The European Council adopted in 2007 ambitious energy happening too slowly. While we are broadly on track for the and climate change objectives for 2020 – to reduce green- 20% target for renewable, we are a long way from achieving house gas emissions by 20%, rising to 30% if the conditions the objective set for energy efficiency. are right, to increase the share of renewable energy to 20% and to make a 20% improvement in energy efficiency. The At an international level, little heed is paid to warnings about European Parliament has continuously supported these goals. tight oil supply in the future. Despite serious gas supply crises The European Council has also given a long term commitment that have acted as a wake-up call, exposing Europe’s vulner- to the decarbonisation path with a target for the EU and other ability, there is still no common approach towards partner, industrialised countries of 80 to 95% cuts in emissions by supplier or transit countries. The potential for further devel- 2050. opment of EU indigenous fossil fuel resources, including

54 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA unconventional gas, exists and the role they will play must be implications for energy policy decisions. This strategy sets assessed in all objectivity. out initial policy decisions which will be needed to meet our 2020 energy objectives as they currently stand. The 2050 Member States’ energy interdependence requires more low carbon economy and energy roadmaps will further inform European action. and guide this programme of action and its implementation by The EU is the level at which energy policy should be developed. offering a long term vision. Decisions on energy policy taken by one Member State inevi- We urgently need far-reaching changes in energy production, tably have an impact on other Member States. The optimum use and supply. energy mix, including the swift development of renewables, needs a continental market at least. Energy is the market First and foremost, the strategy underlines the need to sector where the greatest economic efficiencies can be made rebalance energy actions in favour of a demand-driven policy, on a pan-European scale. Fragmented markets not only empowering consumers and decoupling economic growth undermine security of supply, they also limit the benefits which from energy use. In particular, the transport and construc- energy market competition can bring. The time has come for tion industries must pursue an active energy savings policy energy policy to become truly European. and diversify towards non-polluting energy sources. Beyond the Emissions Trading Scheme (ETS), the strategy should The EU must remain an attractive market for companies at a help create market conditions which stimulate higher energy time of increasing competition on energy resources worldwide. savings and more low carbon investments, to exploit a wide The new European energy strategy must support the inte- range of centralised and distributed renewable energy as well grated industrial approach just presented by the European as key technologies for energy storage and electro-mobility Commission, in particular since energy remains an important (notably electric vehicles and public transport). cost factor for industry. The EU must also consolidate its competitiveness in energy technology markets. The share of Energy policy is a key contribution for achieving the objective renewable energy in the EU energy mix has risen steadily to of the new strategy for smart, sustainable and inclusive growth some 10% of the gross final energy consumption in 2008. In in support of a strong, diversified and competitive industrial 2009, 62% of newly installed electricity generation capacity base. In this context, Europe has to acknowledge that its indus- in the EU was from renewable sources, mainly wind and solar. trial base is in need of all sectors across the entire value chain. However, Europe’s lead is challenged. The independent 2010 Public authorities have to lead by example. Each year, 16% of Renewable Energy Attractiveness Index now cites the US and EU GDP, around € 1,500 billion, is spent by public authorities. China as the best investment opportunities for renewable Public procurement rules should insist on efficiency conditions energy. New stimulus is needed; more than ever is EU leader- to increase energy savings and spread innovative solutions, ship called to address these challenges. notably in buildings and transport. The potential of market- In international energy affairs, the EU could be much stronger based and other policy instruments, including taxation, to and effective if it took charge of its common interest and enhance energy efficiency should be fully exploited. ambition. Despite accounting for one fifth of the world’s energy On the supply side, the priority must continue to be the devel- use, the EU continues to have less influence on international opment of secure and competitive sources of energy. In the energy markets than its economic weight would suggest. field of electricity generation, investments should lead to Global energy markets are becoming tighter, with developing nearly two thirds of the electricity coming from low carbon Asian countries and the Middle East accounting for most of sources by the early 2020’s, the current level being 45%. In the growth in global demand. As the world’s largest energy this context, priority should be given to renewable energies. importer, the EU is likely to be more vulnerable to supply risks The strategy must provide a framework at EU level which, while as a result. respecting national differences, would not only allow Member The inclusion of energy policy in the EU Treaty calls for a new States to outperform their respective targets, but also ensure outlook. that the renewable energy sources and technologies are economically competitive by 2020. We must build on what we have achieved, and be bold in our ambition. The contribution of nuclear energy, which currently generates around one third of EU electricity and two thirds of its carbon- The EU cannot afford to fail in its energy ambitions. Therefore free electricity, must be assessed openly and objectively. The the Commission proposes a new energy strategy towards full provisions of the Euratom Treaty must be applied rigor- 2020. This will consolidate the measures which have been ously, in particular in terms of safety. Given the renewed taken so far and step up activity in areas where new challenges interest in this form of generation in Europe and worldwide, are emerging. It is the result of extensive debates within the EU research must be pursued on radioactive waste manage- institutions and wide-ranging public consultations. ment technologies and their safe implementation, as well as The focus here is not on a comparative analysis of different preparing the longer term future through development of next energy sources, rather the steps which are required to generation fission systems, for increased sustainability and deliver Europe’s medium term policy objectives. Various cogeneration of heat and electricity, and nuclear fusion (ITER). scenarios in terms of energy mix will be presented in the forth- For oil and gas, rising import requirements and increasing coming energy roadmap 2050, which will describe ways of demand from emerging and developing countries call for achieving Europe’s long-term decarbonisation goal and their

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 55 stronger mechanisms to secure new, diversified and safe The new EU energy strategy will require significant efforts in supply routes. As well as crude oil access, refining infrastruc- technical innovation and investment. It will foster a dynamic ture is a crucial part of the supply chain. The EU is a strong and competitive market and will lead to a major strengthening geopolitical partner in energy markets and must have the of institutional arrangements to monitor and guide these devel- ability to act accordingly. opments. It will improve the security and the sustainability of energy systems, grid management, and energy market regu- The new energy strategy focuses on five priorities: lation. It will include extensive efforts to inform and empower 1. Achieving an energy efficient Europe; domestic and business consumers, to involve them in the 2. Building a truly pan-European integrated energy market; switch to a sustainable energy future, for example by saving 3. Empowering consumers and achieving the highest level energy, reducing wastage and switching to low-carbon tech- of safety and security; nologies and fuels. Investments in low-carbon energy produc- 4. Extending Europe’s leadership in energy technology and tion will be further encouraged by market-based instruments innovation; such as emissions trading and taxation. The new strategy will 5. Strengthening the external dimension of the EU energy take the first steps to prepare the EU for the greater chal- market. lenges which it may well have to face already by 2020. Above all, it will ensure better leadership and coordination at the European level, both for internal action and in relations with external partners. Conclusions The global energy system is entering a phase of rapid transi- The EU is on the threshold of an unprecedented period for tion with potentially far-reaching implications that will unfold energy policy. Energy markets have been largely cushioned in the next decades. Europe has to act before the window of from the effects of global market turbulence in recent years as opportunity closes. Time is short. Thus, the Commission will a result of liberalisation, ample supply and production capaci- present most of the proposals to achieve the 2020 goals in ties and adequate import possibilities. However, dramatic the coming 18 months. Discussion, adoption and implemen- changes are afoot. Energy prices will be affected by the huge tation will be needed quickly. In this way, the EU will be better need for energy sector investments, as well as carbon pricing able to put in place the building blocks for the 2020 outcome and higher international energy prices. Competitiveness, – standards, rules, regulations, plans, projects, financial and supply security and climate objectives will be undermined human resources, technology markets, social expectations unless electricity grids are upgraded, obsolete plants are etc. – and prepare Europe’s citizens for the challenges ahead. replaced by competitive and cleaner alternatives and energy Due to the long lead in times for energy system changes, is used more efficiently throughout the whole energy chain. taking action today does not guarantee that the struc- Member States and industry have recognised the scale of tural changes needed for the low-carbon transition will be the challenges. Secure energy supplies, an efficient use of completed in the period to 2020, which this strategy covers. resources, affordable prices and innovative solutions are It is therefore necessary to look beyond the timescale of the crucial to our long-term sustainable growth, job creation and present strategy to ensure that the EU is well prepared for quality of life. Member States have agreed that these chal- the 2050 objective of a secure, competitive and low-carbon lenges will be tackled most effectively by policies and action energy system. The Commission will therefore follow up this at EU level, by ‘Europeanising’ energy policy. This includes strategy with a complete roadmap for 2050 which will set the directing EU funding support towards public priorities that measures covered in this paper in a longer term and consider markets fail to meet and that bring the most European value. further and complementary steps.

56 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA Renewable Energy Progress Report (31.01.2011): Progressing towards the 2020 target

INTRODUCTION AND CONCLUDING REMARKS *NOTE: draft document is on CD only

the use of biofuels and other renewables in transport as well as Introduction the operation of the mass balance verification method for the Renewable energy is crucial to any move towards a low carbon biofuels and bioliquid sustainability scheme Taken together, economy. It is also a key component of the EU energy strategy. these four documents form the Commission’s response to the The European industry leads global renewable energy tech- reporting requirements set out in the relevant EU legislation. nology development employs 1.5 million people and by 2020 could employ a further 3 million. The promotion of renewable energy also develops a diverse range of mostly indigenous energy resources. Conclusion EU renewable energy policy is relatively young, having started The limited and fragmented growth of Europe’s renewable with the adoption of the 1997 White Paper. It has been driven energy industry in the decade to 2008 resulted partly by the need to de-carbonise the energy sector and address from the limited EU regulatory framework. Recognising that growing dependency on fossil fuel imports from politically renewable energy will form the heart of any future low carbon unstable regions outside the EU. Over that period the focus energy sector, the EU introduced a comprehensive and robust has shifted from the promotion of renewable energy through supportive legislative framework. The challenge is now to indicative targets for the electricity and transport sectors to move from policy design to implementation at national level, the definition of legally binding targets supported by a compre- with concrete action on the ground. The implementation of the hensive legislative framework, and most recently, by a reori- Directive and the presentation of plans are encouraging signs entation of European energy infrastructure policy that facili- of progress that need to be sustained. tates renewable energy growth. The new Renewable Energy In the current context of macro-economic fragility and fiscal Directive provides a strong and stable regulatory framework consolidation, it is important to recognise the financing for for the development of the renewable energy in Europe. With renewable energy as growth-enhancing expenditure that will the transposition of the directive by all Member States by the provide greater return in the future. It is equally important deadline of 5th December 2010 and the adoption of National to ensure the quality of the expenditure, applying the most Renewable Energy Action Plans, the foundations for deter- efficient and cost effective financing instruments. Aswith mined EU action on renewable energy have been laid. energy infrastructure, there is a need for European action, to The Commission’s Energy 2020 Strategy highlights how speed up the efficient delivery of renewable energy production EU infrastructure and innovation policies are supporting and its integration into the single European market. the renewable energy sector’s development, ensuring that At national level, any revision of financing instruments should renewable energy sources and technologies become econom- be pursued in a way that avoids creating investor uncertainty ically competitive as soon as possible, thus supporting the and takes into account other Member States’ policies to growth of renewable energy to achieve our goals. However, as ensure an approach coherent with the creation of a genuine a young and developing industry, these important challenges European market. The Commission will actively support as well as the dimension of financing will have to be addressed national cooperation on financing renewables, based on the in the coming years. new framework for Member State cooperation contained in This Communication presents an overview of the renewable the Renewable Energy Directive and promote the integration energy industry in Europe, its prospects to 2020 and of renewable energy into the European market. At European addresses the outstanding challenges for the development of level, EU funds should be directed to ensure cost effective the sector. The background analysis underpinning this Commu- renewable energy development and providing technical assis- nication is provided in three reports reviewing the European tance while ensuring the most effective means of lowering the and national financing of renewable energy, the recent cost of capital investments in the sector, including in collabora- progress in the development of renewable energy sources and tion with the EIB and provision of technical assistance.

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 57 Communication of EC on energy efficiency (8.3.2011): Energy Efficiency Plan 2011

A new plan for energy efficiency Transport has the second largest potential. This will be addressed by the upcoming White Paper on Transport. Energy Energy efficiency is at the heart of the EU’s Europe 2020 efficiency inindustry will be tackled through energy efficiency Strategy for smart, sustainable and inclusive growth and of the requirements for industrial equipment, improved informa- transition to a resource efficient economy. Energy efficiency tion provision for SMEs and measures to introduce energy is one of the most cost effective ways to enhance security of audits and energy management systems. Improvements to energy supply, and to reduce emissions of greenhouse gases the efficiency of power and heat generation are also proposed, and other pollutants. In many ways, energy efficiency can be ensuring that the plan includes energy efficiency measures seen as Europe’s biggest energy resource. This is why the across the whole energy supply chain. Union has set itself a target for 2020 of saving 20% of its primary energy consumption compared to projections, and Targets for energy efficiency are an effective way to trigger why this objective was identified in the Commission’s Commu- action and create political momentum. The “Europe 2020” nication on Energy 2020 as a key step towards achieving our process has created, with the application of the “European long-term energy and climate goals. semester”, a new governance context and additional tools for the EU to steer its efforts on energy efficiency. The Commis- Substantial steps have been taken towards this objective sion therefore proposes a two step approach to target setting. – notably in the appliances and buildings markets. Nonethe- As a first stage, Member States are currently setting national less, recent Commission estimates suggest that the EU is on energy efficiency targets and programmes. These indicative course to achieve only half of the 20% objective. The EU needs targets and the individual efforts of each Member State will to act now to get on track to achieve its target. Responding be evaluated to assess likely achievement of the overall EU to the call of the European Council of 4 February 2011 to target and the extent to which the individual efforts meet take ‘determined action to tap the considerable potential for the common goal. The Commission will support and provide higher energy savings of buildings, transport and products tools for the Member States in the elaboration of their energy and processes’, the Commission has therefore developed this efficiency programmes and closely monitor their imple- comprehensive new Energy Efficiency Plan. mentation through its revised legislative framework and It will be pursued consistently with other policy actions under within the new framework provided under the Europe 2020 the Europe 2020 Strategy’s Flagship Initiative for a Resource process. In 2013, the Commission will provide an assess- Efficient Europe, including the 2050 roadmap for a low carbon ment of the results obtained and whether the programmes economy, to ensure policy coherence, assess trade-offs will, in combination, deliver the European 20% objective. If between policy areas and benefit from potential synergies. The the 2013 review shows that the overall EU target is unlikely energy efficiency measures will be implemented as part of the to be achieved, then as a second stage the Commission will EU’s wider resource efficiency goal encompassing efficient use propose legally binding national targets for 2020. As in the of all natural resources and ensuring high standards of envi- case of renewable energy, it would then be necessary to take ronmental protection. into account the individual starting points of Member States, their economic performance and early action undertaken in The combined effects of full implementation of the existing the field. and new measures will transform our daily life and have the potential to generate financial savings of up to € 1 000 per This plan builds on the contributions of the European Parlia- household every year; improve Europe’s industrial competi- ment, notably the recent own initiative report on energy tiveness; create up to 2 million jobs; and reduce annual green- efficiency, of many stakeholders, and on experience gained house gas emissions by 740 million tons. with the 2006 Energy Efficiency Action Plan. The Commis- sion estimates that the measures already in place, combined The greatest energy saving potential lies in buildings. with those newly presented in this plan, should ensure the full The plan focuses on instruments to trigger the renovation achievement of the 20% target. The leading principle of this process in public and private buildings and to improve the plan is to propose stringent binding measures without binding energy performance of the components and appliances national targets. used in them. It promotes the exemplary role of the public sector, proposing to accelerate the refurbishment rate of The Union’s success in implementing this plan will depend on public buildings through a binding target and to introduce close cooperation between the EU institutions, Member States energy efficiency criteria in public spending. It also foresees and all relevant stakeholders. The Commission counts on the obligations for utilities to enable their customers to cut their involvement and commitment of all parties concerned in this energy consumption. ambitious endeavour.

58 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA Public sector: leading by example is relevant for triggering renovation in public buildings and for upgrading the energy efficiency level of public infrastructure Public spending accounts for 17% of EU GDP. Publicly owned such as street lighting. However, the deployment of energy or occupied buildings represent about 12% by area of the EU performance contracting is hampered in many Member States building stock. A stronger emphasis on energy efficiency in the by ambiguities in the legal framework and the lack of reliable public sector is crucial, covering public purchasing, the refur- energy consumption data to establish the baselines against bishment of public buildings and the encouragement of high which performance is measured. The Commission will bring performance in cities and communities. The public sector can forward legislative proposals to overcome these problems in create new markets for energy efficient technologies, services 2011. and business models. Member States need to reform subsidies promoting energy use, for example by reorienting them to improve energy efficiency and address energy poverty. Implementing energy efficiency on the ground More than two thousand cities have volunteered to implement Energy efficiency in public spending sustainable energy measures through the EU-supported Covenant of Mayors. The Covenant is a formal commitment Steering public spending towards energy efficient products, to reduce signatories’ CO emissions by more than 20% by transport modes, buildings, works and services helps to reduce 2 2020 through sustainable energy measures on their territo- public authorities’ expenditure on energy bills and offers ries. It is made concrete through Sustainable Energy Action improved value for money. The Commission’s work on public Plans, developed in line with the Covenant methodology and procurement for a better environment has supported this by formally agreed by the city/regional council. The benefits go developing procurement criteria that take energy efficiency beyond energy saving: building retrofitting, urban mobility and into account. In addition, public bodies that are subject to the urban renovation are employment-intensive economic activi- EU public procurement Directives are already required to take ties, and the jobs created tend to be skilled, stable and not into account energy efficiency criteria in their procurement of subject to de-localisation. vehicles or office equipment. From 2019 onwards, this will also be the case for the sector’s new buildings, which will have The Commission will continue to support the local approach to reach a “nearly zero-energy” performance level. To deploy to energy efficiency through the Covenant of Mayors and will this approach on a wider scale, the Commission proposes seek to encourage partnerships with more like-minded cities that high standards of energy efficiency should systematically including those from countries outside the EU. In 2011 it be applied when public authorities purchase goods (e.g. ICT will also launch a new Smart Cities and Smart Communities equipment), services (e.g. energy) and works (e.g. refurbish- initiative to develop the European framework for excellence ment of buildings). in innovative low-carbon and efficient energy solutions at the municipal level. This initiative will focus on speeding up the translation of research results into real, practical innovations Renovation of public buildings in selected cities and communities. In particular, the initiative will support large scale demonstration projects also including Public bodies should take the lead in bringing their buildings action on urban mobility, ‘green’ infrastructure and the use of up to high energy performance levels. In order to achieve information and communication technologies. this result it would be appropriate for public authorities at least to double the current renovation rate. The Commission will therefore present a legal instrument under whose provi- sions public authorities will be required to refurbish at least 3% of their buildings (by floor area) each year – about twice Paving the way towards low energy the currently prevailing rate for the European building stock. consuming buildings Each refurbishment should bring the building up to the level of the best 10% of the national building stock. And when public Nearly 40% of final energy consumption is in houses, public bodies rent or buy existing buildings, these should always be and private offices, shops and other buildings. As the figure in the best available energy performance class. shows, in residential homes, two thirds of this is for space heating. Energy performance contracting A large energy saving potential remains untapped. Techniques exist to cut existing buildings’ consumption by half or three Energy performance contracting is an important tool in the quarters and to halve the energy consumption of typical appli- refurbishment of buildings. Under this performance-based ances. But the renovation rate of buildings is too low, as is the form of purchasing, monetary savings from lower utility bills and uptake of the most efficient appliances. The barriers to energy maintenance costs that result from energy efficiency measures efficiency buildings need to be overcome. The Commission are used to cover part or all of the measures’ investment invites Member States to establish promotion systems for costs. This model has been tried and proved cost-effective in private sector buildings. a number of Member States. Energy performance contracting

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 59 EU-27 households’ energy consumption at home, %

Tackling heat use in buildings qualification or training of craftsmen. The Commission will also work with the Member States to adapt their professional Addressing heat consumption in buildings will be of prime and university training curricula to reflect the new qualification importance in the coming years. The Commission will further needs (in line with the European Qualification Framework). The explore the range of available solutions, including possibilities Commission’s Flagship Initiative “An Agenda for New Skills and to promote the use of district heating in the context of inte- Jobs” calls for skills supply to be matched with labour market grated urban planning. needs. Transition to energy-efficient technologies requires new skills, environment-conscious vocational education and Legal obstacles training in construction and in many other sectors. One important barrier is “split incentives” for upgrading energy performance. This term describes the common Energy Service Companies (ESCOs) as catalysts situation in which owners and tenants are each reluctant for renovation to pay for improving the energy performance of a rented ESCOs deliver energy efficiency improvements, accepting property because the benefits are shared between them. financial risk by covering – or helping to finance - upfront Several Member States have developed legal provisions that investment costs and refinancing this through the savings define the amount which can be recovered by investors from achieved. They can help public authorities upgrade buildings tenants. In public and commercial buildings Energy Service by grouping them into scalable projects under energy Companies (ESCOs) can also play a key role in overcoming the performance contracts. Analysis suggests that the market problem. The Commission will bring forward legislative provi- for energy services in Europe is not developing to its full sions requiring Member States to introduce measures – in line potential. Potential clients in the private and public sector with national property law - to address this problem. often lack systematic information on available ESCO services or have doubts about the quality of the services offered. In Training order to overcome these barriers and increase the transpar- ency of the ESCO market, the Commission will propose that Energy efficient building solutions are often technically Member States provide market overviews, lists of accredited demanding. There is a lack of appropriate training for archi- energy service providers and model contracts. In this context, tects, engineers, auditors, craftsmen, technicians and installers, emphasis will be placed on ensuring that when buildings are notably for those involved in refurbishment. Today, about 1.1 renovated that this is done in a comprehensive manner (i.e. million qualified workers are available, while it is estimated deep renovation) to avoid repeated disruption of buildings. that 2.5 million will be needed by 2015. The Commission is The European public private partnership expertise centre therefore launching the ‘BUILD UP Skills: Sustainable Building (EPEC) can also provide useful information. Workforce Initiative’ to support Member States in assessing For ESCOs to play their role, they need access to financial training needs for the construction sector, developing strate- resources. Innovative financing with high leverage both on gies to meet them, and fostering effective training schemes. national and European level would be an appropriate way to This may lead to recommendations for the certification,

60 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA catalyse the development of this market, for example, through the potential to be a key enabler in achieving improvements the expansion of access to project-based financing via instru- in other sectors – to encourage voluntary agreements on ments that may include provision of liquidity and guarantees, implementing energy efficiency processes and systems. These credit lines and revolving funds. should be based on clear targets, methodologies, measure- ment and monitoring schemes, notably via ecodesign require- ments, and can include the dissemination of good practice. Energy efficiency for competitive Research and innovation as catalyst for European industry cost-effective energy efficient technologies in industry Increasing the competitiveness of European To support technological innovation, the Commission will manufacturing industry continue to foster the development, testing and deploy- ment of new energy-efficient technologies, e.g. through About 20% of the EU’s primary energy consumption is the Strategic Energy Technology Plan (SET Plan), in order accounted for by industry. This is the sector where progress in reduce the costs and improve the performance of energy energy efficiency has been greatest (with a 30% improvement efficient technologies, generating new solutions and facilitating in energy intensity over 20 years). Nevertheless, worthwhile widespread market take-up. This will help the EU become more energy saving opportunities remain. The Emissions Trading energy-efficient and open new markets for EU industries. Scheme and the Energy Taxation Directive (including its planned reform) should encourage take-up of some of these opportunities. In addition, obstacles like the lack of informa- tion, lack of access to capital, and short term pressures of the business environment should also be addressed. Overcoming Appropriate national and European these obstacles would reduce energy bills and improve financial support competitiveness. At a time of increasingly scarce energy resources worldwide, expertise in energy efficient processes, Many energy efficiency investments pay for themselves technologies and services can also be turned into a new export quickly, but are not realised due to market and regulatory business, giving a competitive edge to European industries. barriers. Market incentives and price signals therefore need to be intensified through energy and carbon taxes and through The obstacles to investment in energy efficient technologies national energy saving obligations for utilities. This should be are most acute for small and medium sized enterprises complemented by mechanisms to improve the availability of (SMEs). The Commission will therefore encourage Member suitable financing products. Since investment costs represent States to provide them with information (for example about a significant financial barrier to the use of energy efficient legislative requirements, criteria for subsidies to upgrade technologies, availability of funding plays an important role in machinery, availability of training on energy management and accelerating investment. of energy experts) and develop appropriate incentives (such as tax rebates, financing for energy efficiency investments, Complementing national funding programmes, the EU is or funding for energy audits). In association with the relevant currently able to support energy efficiency through: industry associations, the Commission will support the –– Cohesion Policy: For the period 2007-2013, the exchange of best practices in energy efficiency and projects planned support from Cohesion Policy Funds for invest- aimed at building capacity on energy management in micro ments related to energy efficiency, co-generation and and small companies. It will support the development of tools energy management is approximately € 4.4 billion. Two that SMEs can use to benchmark their energy use against key amendments have been made to better reflect energy comparable companies. efficiency needs. Whereas regional policy has traditionally financed energy efficiency investments only in public and For large companies the Commission will propose to make commercial buildings, it is now possible to use these funds regular energy audits mandatory. It will recommend that in the residential sector in all Member States; and the use Member States should develop incentives for companies to of financial engineering instruments has been extended introduce an energy management system (for example as set to energy efficiency in buildings. In cooperation with the out in standard EN 16001) as a systematic framework for the responsible programme managers, the Commission will rational use of energy. seek ways to improve the use of the resources available Building on the success of ecodesign measures as an effective for energy efficiency improvements. tool to stimulate innovation in energy efficient European tech- –– The Intelligent Energy Europe Programme (2007- nologies, the Commission is investigating whether and which 2013): this € 730 million programme supports proj- energy performance (ecodesign) requirements would ects to overcome market failures, including activities to be suitable for standard industrial equipment such as indus- accelerate the renovation of the building stock. One of its trial motors, large pumps, compressed air, drying, melting, newest tools is the ELENA (European Local Energy Assis- casting, distillation and furnaces. tance) facility. This provides grants to local and regional The Commission will continue to work with industry – including authorities for the technical assistance costs of develop- energy intensive industries and the ICT industry, which has ing bankable sustainable energy investments. The original

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 61 facility was implemented by the European Investment A framework for national efforts Bank; two additional facilities are foreseen in 2011. In just over a year of operation, ten ELENA projects have been Member States have the key role to play in introducing the approved which will provide approximately € 18 million in energy efficiency policies and measures needed to achieve grants to final beneficiaries with a view to mobilizing about the 20% target. So far, National Energy Efficiency Action Plans € 1.5 billion in investments over their three year lifetimes. (NEEAPs), introduced under the Energy Services Directive, –– Intermediated finance: Credit lines from International have provided the national framework for energy efficiency Financial Institutions (IFI) and other public sector banks policy development in end-use sectors. In the light of this new have provided an important source of finance for energy Energy Efficiency Plan covering all sectors from generation efficiency projects through intermediated finance through to end-use, it becomes evident that the scope of the national local banks. Use is often made of EU funding to provide framework needs to be expanded to cover the whole energy technical assistance, either to the participating bank for chain, thus tapping into more energy saving potentials. capacity building, or for measures such as energy audits At the same time, the launch of the first European Semester for final beneficiaries. of ex-ante policy co-ordination in the framework of the Europe –– The European Economic Recovery Programme: 2020 strategy opens new opportunities for the Commis- This programme is funding the “Energy-efficient Buildings” sion to follow and assess Member States’ annual progress in public private partnership, providing € 1 billion research energy efficiency. methods and technologies to reduce the energy consump- tion of new and renovated buildings. In addition, the Com- As it is essential to monitor national achievements to assess mission is currently working with the European Investment progress made towards the European 20% target, the Bank to set up a dedicated investment fund using unspent Commission will in the coming months analyse what the most funds from this programme to support energy efficiency appropriate monitoring framework should be. and renewable energy projects. This will be launched later in 2011. –– The Framework Programme for research, techno- logical development and demonstration (2007- Conclusion 2013): this programme supports research and innova- The measures proposed in this Plan aim at closing the gap tion in energy efficiency as a cross-cutting measure right in reaching the EU’s 20% energy saving target as well as at across the Cooperation Programme, resulting so far in helping to realise our 2050 vision of a resource efficient and more than 200 projects being financed with an EU con- low carbon economy, as well as aiming at increased energy tribution of €1 billion. In the process of preparing the next independence and security of supply. Fully implementing this multi-annual financial framework, the Commission is exam- plan should deliver important energy savings: it is estimated ining the results achieved by EU support programmes that the actions of the public sector and the new minimum and their European added value. It will analyse the scope efficiency requirements for appliances should yield savings for improvement of existing EU financial mechanisms as of up to 100 Mtoe and that comparable savings can also be well as further options to trigger investments in energy expected from measures in the transport sector and from efficiency at the scale necessary to attain the 2020 EU energy savings for consumers from their energy suppliers. energy and climate objectives. The binding measures put forward in this plan will be imple- mented through appropriate legislative instruments, including a legislative proposal encompassing revision of the existing Transport Energy Services and Combined Heat and Power Directives. The next steps during 2011 will be the adoption of that As well as the sectors covered in detail in this plan, transport proposal; the adoption of new ecodesign and energy labelling – which accounts for 32% of final energy consumption – is a measures; the launching of the Smart Cities and Smart key area for energy savings. It is the fastest growing sector Communities initiative; and proposals on financing tools which in terms of energy use, with the strongest reliance on fossil will be brought forward during the budgetary discussions of fuel. The upcoming White Paper on Transport will define a 2011. strategy for improving the efficiency of the transport sector The Commission calls on the EU institutions, Member States that includes the introduction of advanced traffic manage- and all relevant stakeholders to endorse this new Energy ment systems in all modes; infrastructure investment and Efficiency Plan, to actively engage in discussion concerning the creation of a Single European Transport Area to promote implementing measures and to cooperate closely in its multimodal transport; smart pricing; and efficiency standards implementation. for all vehicles across all modes as well as other measures to promote vehicle innovation.

62 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA EUROPEAN COMMISSION Brussels, 22 January 2010

COMMISSION STAFF WORKING PAPER

INTERPRETATIVE NOTE ON DIRECTIVE 2009/72/EC CONCERNING COMMON RULES FOR THE INTERNAL MARKET IN ELECTRICITY AND DIRECTIVE 2009/73/EC CONCERNING COMMON RULES FOR THE INTERNAL MARKET IN NATURAL GAS

RETAIL MARKETS Chapter 4. Consumer protection yy energy efficiency and energy savings; yy lower bills due to better customer feedback; yy new services for consumers, including vulnerable 4.7. Implementation of intelligent metering consumers; systems yy improved tariff innovation with time of use tariffs; yy accurate billing; 4.8. Smart grids yy reduced costs and increased convenience for pre-pay; yy less environmental pollution due to reduced carbon emis- This note provides further information to guide the implemen- sions; and tation of measures in the new Electricity and Gas Directives relating to retail market issues. It outlines the new consumer yy the facilitation of microgeneration, including renewable protection measures that are included in the legislation; generation. describes the new roles and duties of Regulators; provides This is not an exhaustive list of potential benefits. Smart direction for the long-term assessment of the cost-benefit metering would also bring benefits to the energy companies analyses that may be carried out on the implementation of in the form of reduced management costs in terms of manual intelligent metering systems (smart meters); and provides meter reading and less significant debt handling costs; more guidance on closed distribution systems. efficient network operation and management; and reduced levels of fraud. With regard to the frequency of meter reading, 4.7. Implementation of intelligent metering it should be noted that consumers must be properly informed systems of actual energy consumption and costs frequently enough to enable them to regulate their own consumption (Annex I(1)(i) of An intelligent metering system or ‘smart meter’ is an elec- the Electricity and Gas Directives). The Commission’s services tronic device that can measure the consumption of energy, consider that receiving information on a monthly basis would adding more information than a conventional meter, and can be sufficient to allow a consumer to regulate his consumption. transmit data using a form of electronic communication. A key When carrying out an economic assessment, Member States feature of a smart meter is the ability to provide bi-directional should have regard to appropriate pilot programmes that have communication between the consumer and supplier/operator. already implemented smart meters. It should also promote services that facilitate energy effi- Where an economic assessment of the long-term costs and ciency within the home. The move from old, isolated and static benefits has been made, at least 80% of those consumers metering devices towards new smart/active devices is an who have been assessed positively, have to be equipped with important issue for competition in energy markets. The imple- intelligent metering systems for electricity by 2020. In reply mentation of smart meters is an essential first step towards to a request for clarification on the scope of the 80 % target the implementation of smart grids. for smart meters in Annex I to the Electricity Directive, the For consumers and the operation of the retail market, there Commission issued a Declaration to the effect that it is under- are a number of benefits associated with the roll-out of smart stood that where no economic assessment of the long-term meters that the Commission considers should be covered by costs and benefits is made, at least 80 % of all consumers the economic analysis, including: have to be equipped with intelligent metering systems by yy improved retail competition; 2020 (Annex I(2) of the Electricity Directive).

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 63 Member States must have regard to the interoperability of The task force (European Technology Platform for Smart Grids smart meters in their jurisdiction when implementing these - ETP SG) who published the above documents comprised the provisions. They must also apply appropriate standards and representatives of the ministries, regulatory bodies, power best practices and have due regard to the importance of utilities, power equipment manufacturers, consultancy firms, developing the internal market for energy. universities and other EU Member States’ institutions. The above documents strategically define, i.e. identify the EU Smart When considering issues relating to the implementation of smart Grid vision, development directions and implementation. meters, Member States should have due regard to the confiden- tiality of consumer information as provided for in Article 16 of In addition, to efficiently coordinate the above plan activities, the Treaty of the Functioning of the European Union. the Commission has in November 2009 initiated the estab- lishment of the Task Force for Smart Grids (TF SG) with the mandate of 20 months. TF SG task was to advise the Commis- 4.8. Smart grids sion concerning the Smart Grid policy and regulatory direc- tions, and to coordinate the initial EU-level implementation The Commission’s services consider that the implementation steps. Three expert groups under the TF SG have in the end of of more active transmission and distribution systems in the June 2010 finalised the following drafts: form of smart grids is central to the development of the internal yy Functionalities of Smart Grids and Smart Meters, market for energy. The development of technology to deliver more efficient management of networks is more commonly yy Regulatory Recommendations for Data Safety, Data Han- known as smart grids. The new systems will improve efficiency, dling and Data Protection and reliability, flexibility and accessibility and are the key next yy Roles and Responsibilities of Actors Involved in the Smart steps in the evolution of the internal market in energy. Member Grids Deployment. States are encouraged to modernize distribution networks, for The above expert groups have based their work both on the example through the introduction of smart grids, which should documents developed by the ETP SG, and on the Roadmap be built in a way that encourages decentralized generation and 2010-2018 and Detailed Implementation Plan 2010-2012 energy efficiency. developed in May 2010 by the European Electricity Grids In order to promote energy efficiency, Member States or, where Initiative (EEGI). EEGI is one of the essential EU industrial a Member State has so provided, the regulatory authority initiatives under the Strategic Energy Technologies Plan (SET- must strongly recommend that electricity and gas undertak- PLAN), comprising of the European Transmission and Distri- ings optimize the use of energy, for example by providing bution System Operators, closely cooperating in the field with energy management services, developing innovative pricing the relevant EC directorates and the European Regulators’ formulas, or introducing intelligent metering systems or smart Group for Electricity and Gas (ERGEG). grids, where appropriate (Article 3(11) of the Electricity Under this document, the 10-year research programme, Directive, Article 3(8) of the Gas Directive). development and the accompanying pilot project in the EU Such encouragement is reinforced by the revised objectives Smart Grid field should receive some EUR 2 billion, out of and duties of national regulatory authorities, who are respon- which EUR 1 billion between 2010 and 2012. sible for promoting a competitive, secure and environmen- Given the indicated trends, activities and experience in the tally sustainable internal market in electricity/gas within the defining the clear framework to apply the established EU-level European Union and effective market opening for all customers concept there was a need to adopt the equivalent documents and suppliers in the European Union, and for ensuring appro- in our country fully aligned with the established strategic priate conditions for the effective and reliable operation of orientations, primarily towards Europe. electricity/gas networks, taking into account long-term objec- tives (Article 36(a) of the Electricity Directive, Article 40(a) of the Gas Directive). Relevant long-term objectives are European 4.8.2. 10 Steps to Smart Grids targets for the share of energy from renewable sources in final energy consumption, energy efficiency improvements and In its Communication “Smart Grids: from innovation to deploy- greenhouse gas emission reductions. ment”, published on April 2011, the European Commission announced that it “will request Member States to produce action plans with targets for the implementation of Smart 4.8.1. Smart Grid Development – EU Directions Grids”. EURELECTRIC DSOs believe that there is a great need for more awareness about what the deployment of smart grids In the previous five years, three strategic projects have been will include, in particular with a view to identifying the most initiated by the European Commission from the field of Smart important steps for policymakers and industry. With the aim Grids: of providing reference to member states, EURELECTRIC DSOs yy Vision and Strategy for Europe’s Electricity Networks of the Directors Gathering has therefore released its indicative 10-Year Future, Roadmap for Smart Grid Deployment in the EU. yy Strategic Research Agenda for Europe’s Electricity Net- works of the Future and The “10 Steps” paper points out what we see as milestones yy Strategic Deployment Document for Europe’s Electricity on the way towards new commercial customer-oriented Networks of the Future. solutions which will contribute to a successful EU energy policy in terms of sustainability, security of supply and competitive- ness. EURELECTRIC believes that with the rising integration of

64 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA variable RES and later also e-mobility into the power system, In the second, deployment phase, large-scale introduction increasing flexibility and establishing new commercial services of in particular “smart network management” and “smart inte- will be a must. Smart grids will enable DSOs to have real-time grated generation” functionalities in the member states will information about electricity flowing within their grids. DSOs follow. This will involve: (5.) rolling out smart metering, (6.) will increasingly move beyond their traditional role and monitoring and controlling the grid & distributed generation, will become enablers for producers, service providers and (7.) moving to integrated local & central balancing of all gener- customers to meet on an open market place. EURELECTRIC ation and (8.) aggregates distributed energy sources. recognizes that implementation of smart grids is an incre- Finally, the will see new services mental and continuous step-by-step learning process, charac- commercialization phase offered by commercial parties: (9.) e-mobility, heating, cooling terized by different starting points throughout Europe. Smart and storage should be integrated into the system on a large grids are a steady evolution which has to include the customer scale and (10.) real customer participation in the power as well as DSOs, energy suppliers and producers. Imple- market should be achieved. This will involve a large number menting smart grids requires 10 steps to be taken, many of of stakeholders and is expected to take longer, most probably which are closely interrelated and will develop simultaneously beyond 2020. rather than in isolation. Nevertheless, EURELECTRIC clusters them in three development phases: While the facilitation phase (our first four steps) will require EU support, the following deployment and large-scale commer- A facilitation phase at both national and EU level will include cialization will take place in those member states where smart (1.) the development of regulatory incentives for smart grid grids are considered to be economically viable, taking into investments and (2.) market models, (3.) setting standards account the energy supply mix, current and future demand, and ensuring data protection and privacy; and (4.) testing and the status of networks. promising projects and sharing knowledge.

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 65 4.8.2 Power Utility Standards Optical Power, Ground Wire (OPGW); IEEE 1222 All Dielec- tric Self-Supporting (ADSS) Fibre Optic Cables; IEEE 1591.1 As a follow-up to “Smart Standards for the Smart Grid”, here Hardware for OPGW Cables; IEEE 1591.2 Hardware for ADSS are the power utility fibre-optic cable standards that attach Cables; IEEE 1591.3 Hardware for WRAP Cables; and IEEE the smart grid to a power utility’s network operations centre. 1594 Standard for Helically Applied Fibre Optic Cables. Without them, there can be no smart grid: IEEE 1138

Comment on EU Emission Trading System

*NOTE: draft document is on CD only

66 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 3.2 Use of renewable energy in Serbia legal framework

The basis of legal framework for the realization of the energy and relatively simple facility for energy production for local policy of the Republic of Serbia, a way of organizing the energy communities needs. markets and conditions for safe production and distribution of Within the new category of “Renewable sources of energy”, electricity, the conditions for carrying out energy activities, which include biomass, hydro potentials of small water environmental protection, energy efficiency and achieving courses (with facilities up to 10 MW), geothermal energy, wind control over the conduct of these economic activities estab- energy and solar radiation, it should be noted that in Serbia lishes the Energy Law. there are special benefits and demand for their organized use Energy Law of the Republic of Serbia (Official Gazette in the so-called decentralized production of heat energy (by RS No. 84/2004), particularly definesrenewable energy burning biomass and “capture” of the solar radiation) and elec- sources as sources that are found in nature and reproduced tricity (construction of mini hydro power plants up to 10 MW in whole or in part. This term particularly includes energy and wind power plants, up to 1 MW) to meet the needs of local that is derived from biomass, geothermal, solar energy, wind consumers, as well as the delivery of surplus electricity to the energy and economically acceptable hydropower potential of local network within the power system of Serbia. small rivers. The energy potential of mentioned renewable energy sources There are two main emphasis of the Energy Law. The first is in Serbia is very significant and amounts to over 3 M t.en. the separation of competencies for the adoption of new regu- annually (with the potential of small hydropower plants, of lations and the establishment of the Energy Development about 0.4 M t.en). Strategy, and the other is a reorganization of Public energy About 80% of the total potential is located in the utiliza- enterprises and the abolition of monopolies in the energy tion of biomass, of which about 1.0 M t.en. is comprised of sector wherever possible, i.e., monopoly control by the Energy the potential of wood biomass (harvest wood and waste of Agency as an independent state institution. wood mass in its primary and / or industrial processing), and The law recognizes the importance of renewable energy more than 1.5 M t.en. is comprised of the agricultural biomass sources and creates detailed legal framework by adopting (agricultural residues and crops, including liquid manure). The variety of bylaws as an incentive for their effective use. energy potential of geothermal resources in Serbia is close to 0.2 M t.en, in the territories of Vojvodina, Posavina, Macva, The Law, therefore, creates the possibility of establishing Danube region and the wider area of central Serbia as well as priorities in the energy sector, which are defined by numerous in existing spas. bylaws, Decrees and Decisions, and in particular by adopting the Strategy of Energy Development in the Republic For the realization of this program it is necessary to establish of Serbia until year 2015 by the Assembly of RS in May incentives for the introduction of modern technology, invest- 2005 (Official Gazette of RS, No. 44/05). ment in new facilities and purchase of equipment for the use of renewable energy sources, followed by the measures for raising awareness of wider and professional community about Strategies of energy development in the Republic the possible use of various renewable energy sources and the of Serbia until year 2015 benefits provided by the International Funds for implementa- tion of specific Projects. The strategy especially deals with the area of renewable energy sources, given the special difficulties and limitations In accordance with the announced harmonization of the in the use of existing resources of energy production and the practice and legislation in this field with EU regulations, this negative energy balance of Serbia in relation to the real needs program would introduce special legislation, regulations and of sustainable economic development in the future. standards for organized stimulation of wide range of activities related to the use of renewable energy sources. Therefore, this Strategy regulates the Program for selective use of new renewable energy sources, which would Similar to the Program for rational use and energy efficiency, establish a framework for all activities that would be imple- it is necessary to “develop” special “schemes” / patterns of mented in order to achieve efficient use of renewable energy financial support for the introduction of measures that enable sources. more intensive use of new renewable energy sources in Serbia. Although there is considerable potential of renewable The Law provides the fundamental definitions in the area which energy sources, they are still for the most part unexploited it governs, among which are the most significant following even though it is a small (from kW up to a few MW at most) concepts:

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 67 Energy activity is defined as the production of electricity, termination of operation of the facility, the amount of funds transmission and transmission system operation, distribution, planned for construction and sources of these funds. organizing of electricity market, electricity trading and other Energy permit is issued with a validity period of 2 years as of activities. the date of issuance and may be extended at the request of Energy operator is defined as a legal entity or entrepreneur the applicant for another year at most. who is registered to perform one or more energy activities. Energy activity is performed by a natural or legal person or Energy permit is a permit for the construction of energy entrepreneur registered and licensed to perform these activi- facilities. ties. Production of electricity is the activity of public interest. License is permission for performing energy activity, in Energy operator may commence energy activity in terms of accordance with the Law. The Law defines other important the license issued by the Agency, while the license is required concepts related to energy. for power generation facilities with power over 1 MW. The license is issued for a period of 10 years. Expiry date can be Law establishes the independent state institution, the Energy extended at the request of the energy operator. Agency, which within its Law defined tasks, carries out tasks of issuing licenses for energy activity. The requirements for issuance of the license are that the operator is registered with the relevant register for performing Law also stipulates that energy facilities are built in accor- activities regarded as the energy activity, that facilities, dance with the law governing spatial planning and construc- systems, installations and plants meet the technical and fire tion of facilities, technical and other regulations, and subject to conditions and requirements of environmental protection, that prior energy permit issued in accordance with the Law. requirements in terms of technical staff handling the facility Energy permit is obtained for the construction and recon- are met, that funding is provided for performing the activity, struction of all facilities for the production of electricity with and that members of the management of the operator have power above 1MW. This permit can be issued only to an not been previously punished for crimes against the economy. energy entity licensed to perform energy activity. Evidences of compliance with these conditions are enclosed by the energy operator when applying for the license. Along Application for issuing energy permits may be submitted by with the application it is necessary to provide a report of a domestic and foreign legal and natural persons. Energy permits competent inspector of compliance with the technical require- can be obtained even before the acquisition of property rights, ments and staffing. or rights of use on the land wherein the planned construction of an energy facility, and prior to issuing the document on Energy facility which is supplied with the license for the produc- urban conditions for the construction of energy facility, i.e., the tion of energy, in accordance with the law, may be subject to construction approval. incentives of the Government of the Republic of Serbia, which relate to specific benefits provided the electricity is produced Energy permit is issued by the Minister for energy affairs. by using renewable sources, as stated above. Criteria, according to which the issuing of permits for the construction of production facilities is performed, include in particular: Incentive measures of the Serbian Government 1. Requirements regarding the safe operation of electrical for privileged producers of electricity power system Decree on the measures of incentives for the production of 2. Requirements for determining the location and land use electricity using renewable energy sources and combined 3. Requirements of environmental protection, production of electricity and heat (Official Gazette of RS, No. 4. Measures of protection of public health and safety of 99/2009), prescribes in more detail measures of incentives persons and property for the production of electricity using renewable energy sources 5. Energy efficiency level and for the purchase of energy - Feed-in tariff, balancing and 6. Requirements for use of primary energy sources readout; defines energy facilities that produce electricity from 7. Requirements related to technical equipment and finan- renewable sources, regulates the content of the agreement cial capacity of the applicant to implement the construc- on purchase of electricity per incentive measures, as well as tion of energy facilities. reimbursement of costs to the purchaser of produced energy. More detailed criteria for issuing these permits are provided The terms used in this Decree have the following meaning: by the Minister. These criteria are set forth in the Regulation –– Renewable energy sources are energy sources that are (Official Gazette of RS, No. 23/2006 and 113/2008). Special found in nature and reproduced in whole or in part espe- Register is kept on issued permits. cially watercourses energy, wind energy, solar energy, biomass, geothermal energy, bio-fuels, biogas, synthetic Application for the issuance of energy permit contains infor- gas, landfill gas, gas from sewage, water and waste water mation on the location wherein the facility should be built, treatment plants from food and wood processing indus- deadline for completion of works, the type and capacity of the tries that do not contain hazardous substances; facility and its energy efficiency, energy sources the facility will use, mode of production and acquisition of energy, means –– Biogas power plants are biogas plants that use gas to protect the environment during construction of the facility emerged from the remains in agriculture (liquid manure and in the course of its operation, the conditions regarding the and manure from livestock and poultry farms), biomass,

68 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA biomass residues resulting from primary processing of 4. power plants for combined production of installed power agricultural products, which do not contain hazardous up to 10 MW which use renewable energy sources, materials, debris and parts of animals; fossil fuels or fossil fuels combined with some renewable –– Hydroelectric power plants on the existing infrastruc- energy source; ture are hydro power plants that use existing dam con- 5. power plants that use separated biodegradable fraction trolled by a public company, as well as hydro power plants of public waste (hereinafter: the waste) of installed power built on pipelines designated to supply raw water to the up to 10 MW. water plant for processing. –– Power plants using landfill gas are power plants that The right to incentive measures set forth in this Decree for use gas originated in the public landfills or gas created by electricity produced in power plants that use un-accumulated plants for treatment of public wastewater; solar energy is limited to the total installed power up to 5 MW –– Power plants with combined production on the in these power plants. existing infrastructure are revitalized old power plants The right to incentive measures set forth in this Decree for with combined production of fossil fuels that were in oper- electricity produced in power plants that use wind energy is ation for at least 25 years prior to the revitalization, as well limited to the total installed power up to 450 MW in these as reconstructed old power plants with combined produc- power plants. tion of fossil fuels, which have not been in the operation for at least five years prior to reconstruction, regardless of Besides the privileged producers that are entitled to incentive time of operation in the plant; measures in terms of paragraph 2 of this Article, the right to incentive measures set forth in this Decree may also be Producer of energy that meets prescribed conditions is the obtained by privileged producers of electricity in wind power privileged producer of electricity. plants at a total of installed power equal to the amount of 10% of the capacity to produce electricity, which is built by a public Power Plant, in the terms of this Decree, is the plant for company for production, distribution and trading of electricity producing electricity or combined production with one or within the period of validity of this Decree. more production units, namely: 1. hydro power plants of installed power up to 10 MW; Incentive measures, in terms of this Decree, include the 2. power plants of installed power up to 10 MW, which in purchase price determined by this Decree, according to the the production process use only biomass or biomass type of power plant that produces electricity using renewable combined with some additional fossil fuel, provided the energy sources as well as according to the installed power (R) energy value of biomass used annually makes at least expressed in MW. 80% of total primary energy; Type of power plant, as well as installed power is determined 3. power plants which produce electricity using renew- by the act on acquiring the status of privileged producers of able sources of energy other than biomass, provided electricity. energy value of used renewable energy in the production process annually makes at least 90% of total primary Purchase prices from first paragraph of this Article, expressed energy, with a supplementary fuel as some of the fossil in euro cents per kilowatt-hour (c € / kWh 1), as follows: fuels, biomass or waste;

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 69 Measure of incentive - Number Type of power plant Installed power (MW) the purchase price (c € / kWh 1) 1. Hydro power plants 1.1 up to 0.5 MW 9.7 1.2 from 0.5 MW to 2 MW 10.316 - 1.233*R 1.3 from 2 MW to 10 MW 7.85 1.4 on existing infrastructure up to 2 MW 7.35 1.4 on existing infrastructure from 2 MW to 10 MW 5.9 2. Biomass power plants 2.1 up to 0.5 MW 13.6 2.2 from 0.5 MW to 5 MW 13.845 - 0.489*R 2.3 from 5 MW to 10 MW 11.4 3. Biogas power plants 3.1 up to 0.2 MW 16.0 3.2 up to 0.2 MW do 2 MW 16.444 - 2.222*R 3.3 over 2 MW 12.0 Power plants using landfill gas and gas from the plants 4. 6.7 for public wastewater treatment 5. Wind power plants 9.5 6. Solar energy power plants 23 7. Geothermal energy power plants 7.5 8. Power plants with combined production on fossil fuels 8.1 up to 0.2 MW Co =10.4 8.2 from 0.2 MW to 2 MW Co = 10.667-1.333*R 8.3 from 2 MW to 10 MW Co = 8.2 8.4 On existing infrastructure up to 10 MW Co = 7.6 9. Waste power plants 9.1 up to 1 MW 9.2 9.2 from 1 MW to 10 MW 8.5

Produced energy can be purchased at prices prescribed by 3 days the information on that is provided to the purchaser this Decree, which is valid for a period as of 1 January 2010 and the producer. to 31 December 2012. Price is determined in EUR per kilowatt hour and provides Privileged producer of electricity different amounts, depending on the installed power of facility and other parameters shown in the above scale, and is paid in Acquiring the status of privileged producer is regulated by dinars counter value by the middle exchange rate of NBS on the Decree on conditions for obtaining the status of the date of invoicing. privileged producer and criteria for assessing compli- ance with these conditions (Official Gazette of RS, No. Purchaser of produced electricity is a public company for 72/2009). production, distribution and trade of electricity. The status of privileged producer may acquire producers that: The rights and obligations of the purchaser and the producer 1. use renewable sources of energy or the separated frac- shall be defined by the Agreement, which is concluded for the tion of public waste in generating electricity; period of 12 years, while the purchaser prepares the model of this Agreement and submits it to the competent Ministry, for 2. generate electricity in power plants, which in terms of the its approval. Law governing the power industry, are considered low power; Privileged producer, who concluded such an agreement, does 3. simultaneously produce electricity and thermal energy, not pay for balancing, or the read-out of electricity. Before provided they satisfy criteria in terms of energy efficiency. signing the agreement, the initial state is read out, and within

70 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA

Biomass, in terms of this Decree, are biodegradable materials If the producer of electricity performs the activity of produc- made in agriculture, forestry and associated industries and tion of electricity in a power plant, which contains different households, which include: plants and plant parts, fuel obtained production units, it obtains the status of privileged producer from plants and plant parts, plant debris and byproducts from only for production units that comply with the requirements agriculture (straw, corn stalks, branches , seeds and husks); prescribed in this Decree. residues resulting in animal agriculture (manure), the remains Producer performing the activity of production of electricity in of plants in forestry (the remains of the logging of forests); several plants submits the application for acquiring the status biodegradable residues in food and timber industries, which of privileged producer for each of the power plants. do not contain hazardous substances, and separated biode- gradable fraction of public waste. Legal entity or entrepreneur can acquire the status of privileged producer, subject to regulation, for: Not considered as biomass, in terms of this Decree, are fossil 1. hydro power plant; fuels, peat, paper and cardboard, textiles, animal body parts, industrial waste except that which is considered as biomass, 2. power plant which in the production process uses public waste, waste from plants for treatment of public waste- biomass or biomass combined with any additional fossil water and commercial waste. fuel or waste, provided the energy value of biomass used annually makes at least 80% of total primary energy; Biogas, in terms of this Decree, is gas formed in biomass 3. plant that produces electricity using renewable energy anaerobic processes. sources, except biomass, provided the process of pro- Synthetic gas, in terms of this Decree, is gas formed in duction used energy value of renewable energy annually pyrolytic decomposition of biomass and separating fraction of makes at least 90% of total primary energy. Additional public waste. fuel can be some of the fossil fuels or waste; 4. plant that produces electricity using waste or waste Waste, in terms of this Decree, is any substance or item combined with some fossil fuel or renewable source of contained in the list of categories of waste (LJ list) that the energy, provided the energy value of used waste annu- owner discards, intends to discard or is required to discard, in ally makes at least 80% of total primary energy; accordance with the law governing waste management. 5. combined power plant that uses fossil fuels or fossil fuels Public waste, in terms of this Decree, is household waste in combination with renewable sources or waste, pro- (house waste), as well as other waste which, because of its vided it has a total annual efficiency level higher than the nature or composition, is similar to waste from households, in corresponding value of the minimum total annual level of accordance with the law governing waste management. power plant efficiency for combined production, listed in the table: Fossil fuels, in terms of this Decree, are coal, petroleum and petroleum products, natural gas and oil shale.

Installed power (MWe) Share of fossil fuel in energy value of fuel consumed (%) (20-40)% (40-60)% (60-80)% (80-100)% <1 45% 50% 55% 60% 1-10 55% 60% 65% 70%

5. the use permit; Application for acquisition of the status of privileged producer is submitted to the minister responsible for energy 6. data on the person responsible for the operation of affairs, in accordance with the law governing the energy sector. power plant (name, position, phone, fax, e-mail). In addition to application under paragraph 1 of this Article, When applying for acquiring the status of privileged producer the applicant shall submit evidence of compliance with the for each plant with combined production, in which the share of requirements for obtaining this status, namely: fossil fuels in total primary energy is higher than 20%, besides 1. copy of the license for production of electricity, provided the documents referred to in paragraph 1 of this Article shall the power plant has power of higher than or equal to be enclosed: 1 MW; 1. the expected annual production of thermal energy, with a 2. copy of the agreement with the holder of the license, pro- monthly schedule; vided the power plant has power of 1 MW or higher, if the 2. the expected value of the total annual level of efficiency. producer is not the holder of the license; 3. project of building of power plant; Based on all of the above set forth, there is obvious economic 4. copy of the agreement on the connection to the distribu- interest in investment in energy facilities producing electricity tion network or transmission system, and for the power from renewable sources and taking measures in order to plants of special features with the combined production, obtain the status of privileged producer, because the differ- the copy of the agreement on the connection and take- ence in prices of purchased energy and economic security over of thermal energy, with the competent energy or which is achieved by concluding long-term agreement with other economic entities; Purchaser (for the period of 12 years), realizes the financial

72 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA “ratio” of such investments, in a short period of time this will described above can be built, adopts planning regula- ensure project profitability, while simultaneously protecting tions which provide for the construction of such facility, the interests of the wider community to improve the overall and renders the decision which assigns the usage right on energy balance of the Republic of Serbia in the years to come. the subject location in favor of the established company, which meets the requirement for eligibility for investments in the amount of land value and all possible costs regarding Legal form of investment in the construction the usage right on the land, while still undertakes to issue of energy facilities producing electricity from the building permit under urgent procedure upon the sub- mitted request, technical admission and issuance of use renewable sources in order to acquire the permit for the facility when built. Municipality, wherein such status of privileged producer facility is being built, shall provide the entire necessary -The proposal of a simple model- infrastructure for the undisturbed construction and opera- Participation of the interested Company (a general term tion of the underlying facility. Form of investment of local used for any potential investor) in the project of financing the self-government, therefore, may be in non-monetary form, construction of an energy facility for the production of elec- as well as know-how and field support, and not just finan- tricity that would meet the requirements for obtaining the cial, that is, monetary investment, depending on the finan- status of privileged producer, and the entity that can make cial capabilities of each local community, and regulations. a profit on the basis of achieving the difference in prices of yy COMPANY obliges to provide funding on behalf of its share produced and sold electricity, can be achieved through the in the total costs of project implementation, given the cost following legal form (joint investment framework), comprising of land, costs of establishment, obtaining permits and of several basic steps: licenses for the production, cost of facility construction, cost of equipment and liquid assets to start the operation Conclusion of the Agreement (pre-contract, the Protocol) on of the facility, in the amount to be ascertained by the study the framework of business cooperation on the project invest- on economic justification of this project and the assess- ment in the construction of the facility for production of elec- ment of an authorized appraiser. tricity from renewable sources, wherein the Company, with the yy Percentage of share ratio of the founders presumably local self-government unit and other potential partners in the would be the subject of evaluation and negotiation in each project, would define mutual rights and obligations regarding particular case the project, on a long-term basis, bearing in mind especially yy Joint responsibility of the founders in the new company that it takes some time for the preparation of studies, prepa- will certainly be the implementing of the necessary pro- ration of project documentation, works on the construction cedures for obtaining permits to build the energy facility of the facility, which include the preparation of planning and for these purposes, a project study on the construction urban development documentation, preparation of ecological of energy facility, the project documentation in order to study, rendering relevant decisions and obtaining all necessary obtain approval for the construction and implementation permits and approvals as well as the license. This Agreement procedures for the procurement of appropriate equipment would determine the legal form of joint ventures. and facilities for the production, under the most favorable Having regard to the regulations mentioned in this report, conditions, thus the equipment meets all the norms and entity obtaining approvals and licenses for performing energy standards for obtaining the license, in accordance with the activity, as well as all necessary approvals for project imple- regulations quoted above. At the same time, the found- mentation, it is rational to anticipate the ESTABLISHMENT OF ers shall bear all costs of acquiring permit and license for COMPANY in the form of Limited Liability Company, which energy production, and also carry out the selection of per- will be registered for conducting the energy activities, serve sonnel necessary for the handling of equipment and facili- as the holder of the project documentation for construction of ties, in order to meet conditions required for issuance of the production facility, of all necessary approvals and licenses, the license. and also be the party to the conclusion of the agreement on yy When the conditions are met that are in compliance with sale of power produced from renewable sources with the the regulations mentioned above and all preconditions authorized Purchaser. for achieving the status of privileged producer are ful- filled, a new company may conclude agreement with the In the process of establishment of the company, it is necessary purchaser, for a term of 12 years, in compliance with the to determine in advance the percentage of participation regulations. of each of the founders, as well as a form of investment- in a limited liability company, it is possible that the share of In the process of establishment of the company, in the form each founder is expressed in objects and / or rights- money, of Limited Liability Company, it is common that the Founding equipment, knowledge and skills (know-how) and other forms Act-Agreement on the establishment provides mutual ratio of of participation in this capital of such company. ownership, appropriate management of the company by the founders, and the most rational solution being ASSEMBLY Bearing in mind the different role of potential participants in AND BOARD OF DIRECTORS, wherein all the founders will be this project, possible investment in cash and non-cash form, proportionally represented. Basic parameters for the estab- would be defined as follows: lishment of the bodies of the company and the establishment yy LOCAL SELF-GOVERNMENT- on the basis of author- procedure are provided by the Companies’ Law. The registra- ity provided by the Law, determines the location where tion procedure is regulated by the rules on registration of the facility for electricity production that meets the criteria Business Registers Agency in Belgrade.

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 73

Please note that, in addition to other provisions of the founding subsidiary company by only one of the participants in the documents that are common, the founding act provides for project, with which other participants would conclude an a special mechanism for resolving all disputes within the Agreement on joint investment in construction and financing company. the operation of the facility for the production of electricity and the manner of division of profit generated in the produc- Founding act provides in a mandatory manner for a way of tion of electricity in this power plant, bearing in mind that the distribution of profit realized by performing business activities, nature of such agreement is entirely different from the above as well as cases where the profits are distributed in other ways. described model. Apart from the founding act, the Agreement of members of Namely, this type of agreement is subject to contractual legal the company may be concluded simultaneously, stipulating regime, unlike the status regime-continuous cooperation and other mutual obligations of the founders which do not have to continuous investment. Contractual agreement, as a commer- be the subject of the founding act, such as, for example, addi- cial agreement, by its very nature has a relatively limited tional obligations without increasing the initial capital, which duration, and thus more exposed to changes, possibilities of are treated as loans, terms and conditions of repayment and termination, cancellation, potential disputes, the blockade of the possibility of conversion of loans into the capital of the work and undisturbed financing, and other shortcomings in company. comparison with the formation of a new legal entity on basis The possibility of subsequent changes in members’ shares of equality. percentage in the capital of the company remains an open Such a contractual agreement has disadvantages in terms of question, as well as the ability to transfer capital to other accession of new contracting parties, as potential strategic founders, or the ability to offer share capital of the company partners, to which a form of continuous cooperation (acquisi- to third parties or interested investors, so they could become tion of share in the company and the status of the founder, new members in the company by joining. as with proportionate participation in decision making) is Of course, one can foresee the possibility that in any period of certainly greater guarantee that every investment should pay the operation of the company, based on consensual decision off in the quickest and safest way. of the founders, new members may adjoin the company, i.e. potential investors, with monetary or non monetary share in order to increase the capital of the company. Conclusion The Agreement on the establishment of the company would Analysis of the legal framework for energy production in anticipate issues in which the consent of the Assembly must the Republic of Serbia, with special emphasis on renewable be obtained for the adoption of certain decisions, the jurisdic- resources, incentive measures adopted by the Government of tion of the Board of Directors, the decision-making of these the Republic of Serbia and obtaining the status of privileged bodies, as well as limitations in representation and signing by power producers, with the aim of achieving multiple benefits, representatives of the company. to both economic, ecological and energetic, also aims to show the possibility of further investment in facilities for the produc- The Founding Act provides for which decisions a consensus tion of electricity from renewable sources, to a relatively must be reached, while for the others a simple or qualified simple legal form of such investment and to arouse further majority is enough in decision-making. interest in domestic and foreign investors for the realization Given that for the implementation of the project it is necessary of such projects. to achieve coordination, promptness in decision making and It can be concluded that there are many potential sources professional support, as well as the maximum cooperation of of energy in Serbia who have not been sufficiently identified, all parties concerned, it is recommended to form a profes- both by authority of local governments, especially the less sional team in advance, comprised of representatives of the developed areas in Serbia, but that there is insufficient infor- founders, for achieving legal, administrative and technical mation of foreign investors on the possibilities of such an support to the founders and to the newly established company investment. in order to facilitate the registration, obtain various permits and approvals and other professional activities. Our demand for increased use of renewable sources is in accordance with the practice of developed countries and Please note that the text above defines one of the possible legal the European Union, which correspond to their aspirations models of investment and establishment of a joint business to reduce emissions of harmful substances and stimulate enterprise, however certainly not the only one that can achieve sustainable development. the investment with stated objectives, but according to many criteria, the simplest and the most effective. Apart from the obvious energy effects (reduction of imported fuel and reduction of endangering the environment), the real- With the development of basic activity, a form of limited liability ization of this program would involve domestic investment can be transformed into the form of joint stock company, of an capital, boost small and medium enterprises and stimulate open and closed form, upon the decision of the founders in domestic production and development of equipment using accordance with relevant laws and internal regulations of the renewable energy sources. Company. Special interest for foreign investments in the implementa- The conclusion is that there are other possible legal forms tion of individual projects under this program derives from of achieving cooperation, such as the establishment of the the growing interest of foreign partners for the acquisition of

76 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA so-called Green certificates, based on electricity production become easily accessible and understandable to all potential using new energy sources, and on this basis the possibility of investors and local self-governments on whose territory there free disposal of their own “quota” of emissions and providing are potentials for development in the energy field. additional financial resources for foreign investment in the development of energetic sector in Serbia. It is important to achieve that, through specific means of informing, development programs and incentives for the * NOTE: Some specific legal issues regarding WASTE TO production of electricity from renewable energy sources ENERGY are mentioned in related chapter.

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 77

PE EPS TOWARDS EC COMMUNICATION ON ENERGY EFFICIENCY, SAVINGS AND RENEWABLE ENERGY ROAD MAP

4.1 EC Communication on efficiency in heat and electricity

Efficient generation of heat and electricity that district heating systems are combined with electricity generation wherever possible. To improve the energy-saving About 30% of the EU’s primary energy consumption is performance of CHP systems, the Commission also proposes consumed by the energy sector, mainly for transforming that electricity distribution system operators provide priority energy into electricity and heat and for distributing it. New access for electricity from CHP, and will propose reinforcing generation capacity and infrastructure need to be built to the obligations on transmission system operators concerning replace ageing equipment and meet demand. It is important access and dispatching of this electricity. to ensure that energy efficiency is taken into account and that new capacity reflects the best available technology (BAT). The Emissions Trading Scheme will encourage this, as will the new Energy efficiency in electricity and gas networks Industrial Emissions Directive. The Commission will monitor the extent to which these measures lead to an improvement The Commission will strengthen the basis for national grid in the efficiency of new generation. Taking into account the regulators to take energy efficiency into account in their results, and the need to achieve greater efficiency in a medium decisions and in monitoring the management and operation and longer term perspective, the Commission will consider of gas and electricity grids and markets, including reflecting introducing a legal provision requiring Member States to make energy efficiency priorities in network regulations and tariffs, the achievement of BAT levels applicable to new installations a network and technical codes. mandatory condition for the authorisation of new capacity and to ensure that existing installations are upgraded to BAT levels applicable to existing capacity as part of their permit update. Energy efficiency as a business sector Exploring ways to tackle the effective recovery of heat losses A prerequisite for an energy efficient Europe is creating value from electricity and industrial production processes will be for energy savings through market mechanisms. Instruments another important task for the Commission, since unused are therefore needed to put a financial value on energy savings energy saving potential is far from being exhausted and could and link the profits of utilities (suppliers or distributors) to cover a significant part of Europe’s thermal energy needs e.g. energy efficiency rather than the volume of energy delivered. for heating and cooling, boosting local resources and displacing Some Member States have already established a system of imported energy in many instances. Harnessing this potential national energy saving obligations for the energy industry with requires an integrated, crosscutting approach that takes good results: savings of up to 6% of final energy consump- into account current thermal energy needs e.g. in buildings tion have been achieved. In systems of this type, utilities and businesses, the role of local and regional authorities in are required to deliver a fixed amount of energy savings by planning and implementing energy efficient and environmental implementing energy efficiency improvements among their friendly strategies, including the development of efficient infra- customers (such as households, companies, municipalities structures, and synergies with commercial solutions for cheap, or housing associations) or in other sectors such as energy clean and convenient thermal supply services using recovered generation or transport. As an alternative to delivering the waste heat. savings themselves, some systems allow utilities to buy the energy savings from actors such as energy service companies Greater use of (high-efficiency) cogeneration, including from (ESCOs). Energy saving obligations stimulate suppliers to municipal waste treatment plants, and district heating and change their business model from retailing energy commodi- cooling can make an important contribution to energy effi- ties towards offering energy services. ciency. The Commission will therefore propose that, where there is a sufficient potential demand, for example where there The Commission will propose that all Member States establish is an appropriate concentration of buildings or industry nearby, a national energy saving obligation scheme appropriate for authorisation for new thermal power generation should be their circumstances. The impact could - depending on the conditional on its being combined with systems allowing the scope and stringency of the requirement - yield savings of up heat to be used – “combined heat and power” (CHP) – and to 100 million tons of oil equivalent (Mtoe) in 2020.

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 81 82 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 4.2. Savings for consumers

Improvements to the energy performance of devices used by In its future work on ecodesign and energy labelling the consumers – such as appliances and smart meters – should Commission will examine the option, where relevant, of play a greater role in monitoring or optimizing their energy covering systems as well as individual products. In order to consumption, allowing for possible cost savings. To this end enforce the effectiveness of these measures, the Commis- the Commission will ensure that consumer interests are sion will continue to analyse the life-cycle energy impact of properly taken into account in technical work on labelling, products. It will strengthen market surveillance to ensure energy saving information, metering and the use of ICT. The that product requirements are properly implemented and will Commission will therefore research consumer behaviour and support measures to help consumers, installers and retailers purchasing attitudes and pre-test alternative policy solutions make best use of energy labels. on consumers to identify those which are likely to bring about desired behavioural change. It will also consult consumer organisations at the early stage of the process. Consumers Empowering consumers with new technology need clear, precise and up to date information on their energy Under current EU legislation, final consumers should already consumption – something that is rarely available today. For be informed frequently about their energy consumption at example, only 47% of consumers are currently aware of the time of use to enable them to regulate their consumption how much energy they consume. They also need trustworthy through individual meters for all important types of energy: advice on the costs and benefits of energy efficiency invest- electricity, gas, heating and cooling and hot water. They ments. The Commission will address all of this in revising the should also be provided with information through their bills legislative framework for energy efficiency policy. and contracts about prices and energy costs. This should be presented in ways which help them improve their energy effi- Promoting energy and resource efficient ciency, for instance relating their consumption to benchmarks appliances or available energy efficient solutions. In practice, these consumer rights still need to be properly Improving the performance of buildings, and the products implemented. The information provided must be better used to heat, cool, ventilate and light them, is one of the most targeted to consumer needs. The Commission will work with tangible ways in which energy efficiency policy can benefit Member States to ensure the full implementation of these household budgets. Already-introduced ecodesign efficiency as well as other provisions of European energy efficiency standards and energy labels for household appliances have legislation. delivered substantial energy savings for consumers and business opportunities for European manufacturers of high In future years the deployment of a European “smart grid” quality goods. Under the current ecodesign working plan, will bring about a step change in the scope for gathering the Commission will continue this approach, setting stricter and communicating information about energy supply and consumption standards for heating boilers, water heaters, consumption. This information will allow consumers to save computers, air conditioners, tumble driers, pumps, vacuum energy. Member States are obliged to roll out smart elec- cleaners and further types of lighting. It will also bring forward tricity meters for at least 80% of their final consumers by a new working plan for 2012-2014. 2020 provided this is supported by a favourable national cost-benefit analysis. It is important to ensure that intelligence Energy labels are an essential accompaniment to this can also develop in other networks, such as heat, cooling approach. They are most effective when taking the way and gas, and that these intelligent networks all contribute consumers choose as their starting point. The Commission will to build a well-functioning, interoperable market for energy launch a survey on consumer understanding of energy labels. efficiency services. Smart grids and smart meters will serve This will help to better accommodate consumer interests (e.g. as a backbone for smart appliances, adding to the energy reflecting on the perception of different labels and the influence savings obtained by buying more energy efficient appliances. of marketing) in forthcoming energy labelling measures and New services will emerge around the development of smart also support the dialogue with consumer organisations. grids, permitting ESCOs and ICT providers to offer services to Today more than 40% of windows in the EU are still single- consumers for tracking their energy consumption at frequent glazing, and another 40% are early uncoated double-glazing. intervals (through channels like the internet or mobile phones) The Commission will work to facilitate the market uptake of and making it possible for energy bills to indicate consumption more efficient building components, for example by applying for individual appliances. Beyond the benefits for household the eco-design or labelling frameworks to windows. consumers, the availability of exact consumption data through

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 83 smart meters will stimulate the demand for energy services how to make their consumption less energy intensive and thus by companies and public authorities, allowing ESCOs to offer reduce their costs. To this end, the Commission will propose credible energy performance contracts to deliver reduced adequate measures to ensure that technological innovation, energy consumption. Smart grids, meters and appliances will including the roll-out of smart grids and smart meters fulfils allow consumers to choose to permit their appliances to be this function. These measures will include minimum require- activated at moments when off peak cheaper energy supply ments on the content and format of information provision and or abundant wind and solar power are available – in exchange services. Further, the Commission needs to ensure that energy for financial incentives. Finally, they will offer consumers the labels (energy performance certificates) and standards for convenience and energy saving potential of turning appliances buildings and appliances reflect, where appropriate, the incor- on and off remotely. poration of technology that makes appliances and buildings “smart grid ready” and capable of being seamlessly integrated Delivering on this potential requires appropriate standards for into the smart grid and smart meter infrastructure. Appliances meters and appliances, and obligations for suppliers to provide such as fridges, freezers and heat pumps could be the first to consumers with appropriate information (e.g. clear billing) be tackled. about their energy consumption including access to advice on

84 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 4.3 PE EPS Case

Serbia is on its way to EU accession and has signed already Parliament and of the Council on energy end-use efficiency the Energy Community Treaty and is currently transposing the and energy services, in conformity with the recommended energy acquis communautaire. It is clear that sooner or later model prepared by the Energy Efficiency Working Group, Serbia will want to or have to comply with the requirements of established within the Energy Community Secretariat. The the respective EU legislation. As has been shown in the section crucial period for EU Member States to attain the indicative on EU regulation there are currently many significant changes target, under the Directive, is 2008–2016. The principal with respect to major energy companies, such as EPS. aim is for all Member States to realise the planned savings amounting to 9% of the average energy end use for 2001, in During the past decades Member States were throughout the ninth year of implementation of the Directive. The above Europe mostly establishing a monopolistic national energy target does not pertain to energy consumers covered by company being either owned publicly or at least closely linked Directive 2003/87/EC of 13 October 2003 establishing to policy. a scheme for greenhouse gas emission allowance trading Currently there is a tendency towards the abolishment of “a within the Community or to energy end users belonging to air national market” to form integrated regional or a European and river transportation sectors. market, to move from the monopolistic to deregulated liber- From 30 June 2007, EU Member States started submit- alized and potentially competitive markets and from a rather ting their national action plans, in which they committed to fossil fuel friendly environment with few huge thermoelectrical increasing energy savings to 9% by 2016, to the European power plants running at baseload to a low-carbon sustainable, Commission. competitive environment with high volatility and uncertainty. As regards the Republic of Serbia, in conformity with Decision 2009/05 of the Ministerial Council of the Energy Community, the first Action Plan covers the period from 2010 to 2012 4.3.1 Efficiency increasment in and sets the average indicative target for this period at 1.5% generation sector 2000-2020 of domestic energy end use in 2008, and the end target at a minimum of 9% of energy end use in the ninth year of imple- mentation (at the end of 2018). The energy end-use savings CHAPTER INTRODUCTION target of 1.5% will be attained by implementing measures towards increasing energy efficiency in household, public and In defining its development plans, PE EPS aims to build on commercial sectors (0.0235 Mtoe), industry (0.0566 Mtoe) the Republic of Serbia energy policy guidelines, in line with and transportation (0.0453 Mtoe). During the APEE imple- the EU energy policy (“20-20-20 energy targets”). The main mentation period, the Republic of Serbia should continue premise in identifying Serbian energy policy aims and setting introducing considerable legislative, fiscal, financial and organ- its priorities and the appertaining instruments stems from isational measures in the interest of full implementation of and the country’s political commitment to alignment of the overall adherence to the Directive. energy system development with the country’s economic development in a cost-effective manner and its progress The implementation of measures required for attaining the towards European integration. Within a short time period, indicative target requires mobilising considerable financial energy system development should be brought in line with resources, broadening the state’s activities towards improving the country’s economic development, and energy generation energy efficiency and further energy market liberalisation, sector development – with energy consumption sectors. in particular on the energy services supply side, as well as developing public-private partnership in the sphere of energy Aiming to contribute to the attainment of the proclaimed efficiency. This document (White Book) should introduce the EU target of increasing overall energy efficiency by 20% by Republic of Serbia’s planned activities concerning energy year 2020, on 29 October 2010 the Republic of Serbia efficiency enhancement to the general public and thus enable adopted the Action Plan for Energy Efficiency 2010–2012 access to EU pre-accession funds for the purpose of financing (hereinafter: “APEE”), prepared on the basis of require- these activities. ments contained in Directive 2006/32/EC of the European

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 85 PE EPS POLICY IN THE SPHERE OF ENERGY EFFICIENCY PE EPS aims to introduce and implement energy efficiency enhancement measures throughout the chain, from primary energy to final energy generation. PE EPS users’ consump- 4.3.1.1 2000–2010, THE PAST TEN tion equals 2/3 of the average EU users’ consumption, but YEARS their approach to using electric and overall energy is far less rational than that of EU consumers. They consume 1.6 times In conformity with the first and highest priority of the Energy more total primary energy than the EU average (calculated Sector Development Strategy of the Republic of Serbia by in terms of primary energy consumption, source: Eurostat, 2015, namely the priority of continuity in terms of technology, 2009). In view of these indicators, in its plans, PE EPS pays most EPS activities over the past ten years were focused on increasing attention to activities aimed at enhancing energy rehabilitation and modernisation of the existing generation efficiency. capacities. In qualitative terms, a new level was reached, which was reflected in improved overall power system perfor- In rehabilitation and modernisation of the existing generation mance. Since the adoption of the Energy Sector Development capacities, PE EPS has always applied the “best available tech- Strategy in 2005, changes have taken place, both internation- nology” principle”; as a result, in the past ten years or so, it has ally and domestically, affecting the energy situation in Serbia achieved considerable success in generation (most notably, and the bases for building its future in terms of energy. overcoming the “gas crisis” of 2008 and 2009) by increasing facilities’ availability and the amount of energy deliverable to Serbia has become party to the Treaty Establishing the Energy consumers. Community of South-East Europe. Ten more countries from the South-East Europe region have chosen to join this Energy In the past ten years, the main priority of PE EPS has been Community, thus committing to aligning their legislative “successful repair and rehabilitation of energy sources”, to and regulatory frameworks with the acquis communautaire overcome accumulated problems arising from years of restric- governing the field of energy industry, energy market opening tive maintenance. The main criterion for defining priorities and and development, and integration in the common EU energy scale of works has been meeting Serbian consumers’ energy market. The implementation of this Treaty is significant for PE requirements, and technical assessments indicated that the EPS and Serbia, primarily for ensuring a more favourable invest- thermal power sector should have the priority in investments. ment climate and enhancing security of supply. Investors expect The results achieved showed that this was the right strategic security of their investments, and among the most important decision, as thermal power sector’s operation indicators were guarantees of security is the establishment of a stable regula- considerably improved. tory and legal framework. Ratification of the Treaty Establishing The results achieved in 2010, following the rehabilitation the Energy Community of South-East Europe imposes a formal interventions on TPPs, in comparison with results from 2001, obligation on the Republic of Serbia, and thereby also on PE are illustrated by the following figures: EPS, to observe the EU energy policy and to promote sustain- yy Thermal units’ reliability was increased by 10.7%; able, competitive and secure energy supply.

Thermal power plants’ reliability (2001–2009)

86 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA yy TPP’s efficiency was raised by 11.9%, i.e. the energy deliv- Kostolac amounted to 30708 GWh compared to 2001, ered to the system increased by 4189 GWh in absolute or an additional 1.5 billion EUR in financial terms; terms or by 22% compared to 2001, which practically yy Overall TPP unavailability during outages and operation means that, at the annual level, compared to 2001, the was reduced by as much as 16.8%; EPS electric power system had an additional 478 МW yy Generation costs were also reduced – specific coal con- unit on the grid (it operated at the installed capacity of sumption was reduced by 3.3%, and fuel oil consumption Kp = 100%, without a single outage, for full 8760 h, was halved; Ke = 100%); yy Increased investments in environmental protection. yy The cumulative increment of the electric energy generated by the units in the corporate enterprises of TENT and TPPs

Specific heat consumption

Increasing energy efficiency of coal-fired thermal power plants

These results were achieved by “old” units, which realised an increased coal output (5 mil. t/year), although investments in average of over 193 thousand hours of operation. Such good the coal sector were considerably lower. results in the thermal power sector were accompanied by

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 87 4.3.1.2 2010-2020, PE EPS PLANS Between 2010 and 2020, investment interventions in UNTIL 2020 hydro-power plants will receive more attention. The period of modernisation of the existing hydro-power plants commenced In view of positive experiences and results achieved through in 2009 by rehabilitation of one unit in each of our largest application of advanced technologies, in new planned projects hydro-power plants: Djerdap I and Bajina Bašta. The average PE EPS intends to apply only those technologies that conform HPP age at the end of 2010 was 36. to the appropriate BREF BAT – Best Available Techniques.

Planed increase in the installed capacity of EPS power plants

Increase in the Power plant/Unit installed capacity (MW) HPP Djerdap I, unit 6 22.00 HPP Djerdap I, unit 5 22.00 HPP Djerdap I, unit 4 22.00 HPP Djerdap I, unit 3 22.00 HPP Djerdap I, unit 2 22.00 HPP Djerdap I, unit 1 22.00 HPP Bajina Basta, unit 1 13.00 HPP Bajina Basta, unit 2 13.00 HPP Bajina Basta, unit 3 13.00 HPP Bajina Basta, unit 4 13.00 HPP Zvornik, unit 1 6.35 HPP Zvornik, unit 2 6.35 HPP Zvornik, unit 3 6.35 HPP Zvornik, unit 4 6.35 HPP Medjuvrsje (2 units) 2.37 HPP Ovcar Banja (2 units) 1.63 TENT B1 47 TENT B2 47 TENT A6 40 TENT A3 30 TENT A4 30

In the forthcoming period, PE EPS also foresees considerable metering, two-way communication with consumers and a new activities towards enhancing energy efficiency in the distribu- metering system will facilitate better supply monitoring and tion sector. The planned activities are focused on improving control at the distribution level, higher quality of the delivered the operational indicators of the distribution network by electric energy and also a considerable reduction of grid implementing the “smart grid” concept. The procurement and losses. installation of modern equipment, more precise consumption

88 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 4.3.2 New thermal high efficiant delivered. Initiated activities on project implementation and usage of World Bank loan have progressed very slowly. Due generation capacities to lack of funding in 1992 activities have completely been suspended. By 1992, when works were suspended due to Construction completion of sanctions, about 40% of the facility was constructed at the site. After that, only the most essential activities have been TPP Kolubara B (2 x 350 MW) done. As a result of the changed concept of heat supply to TPP Kolubara B is located in the vicinity of Kalenic village, 60 Belgrade, operational regime has been changed, i.e. the facility kilometres south-west from Belgrade, at the northern side of will operate in condensation regime. open cast mine Tamnava – West Field. In the second half of the nineties the issue of construc- Decision on construction of CHP Kolubara B (as it was called tion continuation was opened again, but without any major then), capacity 2 x 350 MW, was adopted in 1983. It was progress. In the beginning of 2000 the issue of construc- designed as the facility for combined generation of electricity tion continuation became topical again, summary of previous and heat, with the intention of heat delivery to Belgrade for investments has been made, together with construction its district heating system. Preparation activities have been continuation feasibility assessment, when it was concluded started in 1988 by execution of construction works (site prep- that there are technical – technological solutions guaranteeing aration and organisation), while the construction continued modern operating parameters in the rank of modern thermal in accordance with available funds. Procurement of the third power units. part of basic equipment was contracted, and it was mostly

Basic parameters of TPP Kolubara B Unit capacity 350 МW Number of units 2 Boiler Combustion Engineering, flow-through with subcritical steam parameters Turbine condensation, triple-housing with additional steam reheating and regenerative heating of feed water and condensate Basic fuel lignite from Kolubara mining basin, 6,700 kJ/kg Unit efficiency ratio (net) ≥ 37 %

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 89 Project value Project status The study which established that more than EUR 300 million EPS has initiated activities for the finalisation of TPP Kolubara B, has been invested so far in the construction of TPP Kolubara B through implementation of the joint venture model of EPS with was developed in 2004, with assessment that about a strategic partner, whereas EPS will make available assets EUR 550 million still need to be provided for construction (facilities and equipment) already constructed, i.e. procured completion. Executed analysis for the construction of new equipment, while the strategic investor will invest capital and generation capacities firing Kolubara lignite indicate imple- thereby acquire its share in ownership proportionally to the mentation feasibility of TPP Kolubara B construction. invested capital. In this manner, necessary funds for project implementation will be provided

90 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA Implementation manner Planned commissioning of the first unit is in 2015 and the strategic partner other in 2016. It is expected that the strategic partner will be selected through transparent tendering procedure by the end of 2011. Planned construction beginning 2012 Construction duration 3-4 years

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 91 TPP Nikola Tesla B3 - New Unit at the same site. During the first phase of building the TPP Nikola Tesla B, certain facilities and structures required for the Thermal power plant Nikola Tesla B is located on the right bank second phase were also designed and built. of the River Sava, about 60 km upstream from Belgrade. Elec- tricity generation in thermal power plants is based on lignite The second construction phase was executed by building the coming from open cast mines of Kolubara Mining Basin. The first new unit B3, with the capacity of ca. 700 MW. construction phase of thermal units was implemented by 1985, The exact location of the new unit at this location was based on with the total capacity 2 x 620 MW (TPP Nikola Tesla B). the requirement for high functionality of technological process, For the purpose of further development and construction of with observation of the basic assumptions: thermal units at this location, it became necessary to analyse –– New unit B3 will be constructed in continuation of existing possibilities and feasibility of construction continuation on the units B1 and B2; existing location Vorbis, through the construction of state-of- –– Installed capacity of this unit will be ca. 700 MW; theart unit of total capacity ca. 700 MW, while observing all –– There will be no further construction on this location; environmental measures. –– The new unit will be fitted in architectural, construction and In the period up to 1985, the first construction phase was technological terms into the existing layout, in accordance completed by building two units with a total capacity of 2 x with the available area, taking into account facilities exe- 620 MW (TPP Nikola Tesla B), while the technical design docu- cuted within Phase I of construction, as well as the area for mentation foresaw building two more units of equal capacity the location of environmental capacities.

Basic parameters of TPP Nikola Tesla B Unit capacity ~ 744 МW Number of units 1 Boiler with supercritical steam parameters Turbine condensation, with additional steam reheating and regenerative heating of feed water and condensate Basic fuel lignite from Kolubara mining basin, 6,900 kJ/kg Unit efficiency ratio (net) ≥ 40 %

Project value i.e. together with the strategic partner selected under the tendering procedure. Finalisation of the tending procedure is Investment–technical documents for the construction of unit expected in the last quarter of 2011. B3 at TPP Nikola Tesla analysed the construction of unit with the capacity of 744 MW , with net efficiency ratio of approxi- Implementation manner mately 40%. Basic investment is at the level of EUR 870 strategic partner million. Executed analyses indicate that this investment is Planned construction feasible, i.e. that all profitability parameters of the facility are beginning 2013 positive. Construction duration Project status 4-5 years Implementation of this project has been anticipated through Commissioning of the unit was planned for 2017. the application of the same model as for TPP Kolubara B,

92 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 93 CHP Novi Sad efficiency gas–steam unit possesses the highest cost-effec- tiveness level. Existing CHP Novi Sad in cogeneration operation regime generates electricity and heat for the heating of Novi Sad, as Key reasons for implementing the project of building a new well as technological steam for the needs of Oil Refinery. The gas-steam unit at CHP Novi Sad include the following: first construction phase was finalised in 1981 and the second –– High efficiency level of imported natural gas in the cogen- in 1984. This facility has been used in previous years during eration process of electricity and heat, as well as in the the coldest winter months for Novi Sad heating, as well as for condensation operation regime; the coverage of the Republic power system needs. –– Relatively low investment and capital costs compared to Modest efficiency level of existing cogeneration facility, power facilities using other fossil fuels (coal, fuel oil); without steam reheating, as well as high gas and fuel oil price –– Possibility of rational utilisation of existing infrastructure have caused very restricted utilisation of available installed at the location; capacity and thereby low generation and income. However, it –– Short construction period of the new plant (up to 3 years) should be taken into consideration that CHP Novi Sad is also in accordance with the fulfilment of growing power system an irreplaceable basic heat source of Novi Sad district heating needs; system, supplying more than 60,000 households and other –– Exceptionally low fixed operation costs of modern gas- consumers. Considering the above-mentioned multiple role of steam plants; CHP Novi Sad, it became necessary to find a new business –– Fulfilment of the strictest environmental standards (con- model enabling its economically feasible operation and fulfil- siderably higher carbon-dioxide emission compared to ment of PE EPS business interest in electricity and heat gener- other fossil fuels, etc). ation for longterm supply of district heating system under the Economically most favourable results would be achieved price lower than the one generated in boiler plants of Novi Sad through the construction of modern high-efficiency gas-steam heating plant. facility with the total capacity above 400 MW el, and high By considering a series of possible reconstruction variants efficiency level in electricity generation of over 58%, with of existing CHP Novi Sad into gas–steam facility, with the possible heat generation of 300 MWt with minimum electric utilisation of existing equipment and comparison with the power reduction factor in the combined operation regime construction of the new gas–steam unit with the utilisation of and total heat efficiency of over 82%. Basic indicators of the the existing location and infrastructure, it was concluded that considered facility to be installed in continuation of existing the construction of the new cogeneration high capacity and turbine hall are provided in the table below.

94 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA Basic parameters of CHP Novi Sad Nominal electrical gross unit capacity 478 mw (448 - 492) MW Heat load of steam turbine extraction 300 MWt Nominal electrical power of gas turbine under ISO conditions (0 masl, 60% of relative humidity and air 322 MW temperature of 15°c) Nominal steam turbine capacity with collection 155 MW Gas turbine efficiency level 39.5% Total efficiency level of facilities in condensation operation regime ca. 58% Total thermodynamic efficiency level of the facility higher than 82%

Project value been created for intensive project development, i.e. selection of the strategic partner with whom this project would be Investment value of this project, depending on final facility implemented. configuration and the usage level of existing infrastructure on the current location, would reach EUR 280 million, providing Implementation manner the level of specific investments of 550 EUR/kWh. strategic partner Project status A strategic partner is expected to be selected through a transparent tendering procedure by the end of 2011. Retention of the cogeneration concept of electricity and heat in the context of investment capital attraction required the Planned construction formation of an institutional framework for long-term public beginning 2012 interest protection in the field of energy supply, through Construction duration formation of a joint company by EPS and the City of Novi 2–3 years Sad. By recognising this concept, support of the Serbian Government was obtained and agreement achieved with Commissioning of the unit is planned in 2014. administration of Novi Sad, whereby initial assumptions have

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 95 TPP Kostolac B3 – New Unit first phase, some plants and facilities have been constructed foreseen for the needs of the second construction phase. Thermal power plant Kostolac B is located on the right bank of the Mlava River, in the area of the Drmno village near Kostolac. By constructing the new unit, B3, ca. 350 MW, the second Electricity generation in this thermal power plant is based construction phase would be implemented. on lignite coming from the open cast mines of the Kostolac The new unit position at this site was based on the techno- Mining Basin. By 1991, the first construction phase of units logical process functionality requirements and the following B1 and B2 was finalised, 2 x 348.5 МW total capacity (TPP assumptions: Kostolac B). –– the new B3 unit will be built in continuation of the existing To further develop and construct the thermal power units on B1 and B2 units; this site, it was necessary to analyse the potentials and feasi- –– installed capacity of the new unit will be ca. 350 MW; bility of construction continuation on the existing site, by the –– no further construction will be performed on this site; construction of a modern unit with the total capacity of ca. –– the new unit is fitted in architectural, construction and 350 MW, and consideration of all environmental measures. technological terms into the current layout, in accordance The first construction phase was implemented by 1991, with the available space, taking into account the facilities covering two units with the total capacity of 2 х 348.5 МW, already built during the first construction phase, as well as while the design-technical documents foresee the construc- the future environmental facilities. tion of two more units of the same capacity. Throughout the

TPP Kostolac B3 parameters Unit capacity 350 МW Number of units 1 Boiler With subcritical or supercritical steam parameters Turbine Condensation with additional steam reheating and regenerative feed water and condensate heating Basic fuel Kostolac Mining Basin lignite, 7,800 kJ/kg Unit efficiency ratio (net) ≥ 40 %

Project value Project status The B3 unit construction investment – technical documents The project will be implemented by PE EPS using foreign loan at TPP Kostolac B analysed the 350 MW unit construc- funds. tion with the net efficiency ratio of approximately 40%. The Manner of implementation: individually basic investment is at the level of EUR 600 million. Executed Planned start of construction: 2015 analyses indicate that this investment is feasible, i.e. that all Construction duration: 4-5 years the profitability parameters are positive. Unit commissioning was foreseen for 2015.

96 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 4.4. Renewables

Introduction Technological improvements of all different ways using solar power, including solar cells and the photovoltaic effect will Global increase of population and wealth leads to increasing bring a competitive way of producing electricity within the next consumption and thus scarcity of resources particularly 2-3 years. Once PV is competitive (also reinforced through energy resources and potable water. The electricity consump- distributed generation policy and smart grids) its installation tion is said to double over the next 15-20 years. potential is extremely significant. Independently from environmental concerns is the increase The assumptions are mostly derived from information from the of renewable electricity production a major need for states EC (e.g. Photovoltaic Solar Energy), the IEA, BP World Energy to reduce their external dependence and quest for resources. Statistics, ETH Zürich, EWEA (Powering Europe,..). Some addi- Renewable resources are a valuable alternative over time. In tional respective sources of information are however also many areas (e.g. Mediterranean area) solar power is abundant used in the following pages. and for free, in others wind power is a natural choice.

Environmental issues Environmental concerns but also a need to more cost-efficient investment and operation pushes EPS to raise efficiencies Energy supply’s environmental impact is, nowadays, one of of the current power plants. In addition, EPS is aware of the the biggest civilization’s threats: global warming, nuclear need to provide its staff with job opportunities and to be ulti- waste, pollution have been key points in all energy policies mately competitive in the European market, profiting from the since some years ago. excellent skilled staff and its geo-strategic position amongst EPS relevance other issues. Issues of higher efficiency but also aspects of security of supply EPS is also actively preparing its future and develops its CO2 reduction strategy. There are several important aspects to be result in the introduction of new technologies and new ways taken into account, given the importance within Serbia, like the of operations of energy networks. As the current EU tendency good quality of service to the customers and a stable network. is to introduce smart technologies such as smart metering

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 97 and generally move to a more distributed generation pattern, be seen in Germany that this brings several job opportunities. which means that more smaller scale decentralized production 10 MW of installations would result thus in a sum of roughly facilities serve jointly to supply the market but reducing inher- 1 million € to the economy and employment. In the section on ently transport distances (losses) and transformation losses, solar one can get more details on the potentials. EPS is also assessing its way forward. The overall goal is to achieve over time a 20% share of It is clear that more decentralized electricity production renewable energy production (compared to energy needs) in reduces constraints on transmission level, potentially reducing the distribution area of Uzice. 2011 will see the first projects the need for major transmission network investments to cope start, the goal should be achieved long before 2020. with future increase of electricity demand. Based on this experience EPS will also engage in other However, most of the decentralized low-carbon and sustain- distribution areas to assess investments in similar projects, able electricity production possibilities stem from renewable according to the possibilities. In some areas the use of wind energy. Some technologies, like hydro, biomass or waste- and biomass will be combined, others will have another mix, to-energy can be operated at stable and predictable rhythm, the importance is to be on one hand flexible with respect to others, like eolic and solar produce electricity as nature the means of resources used and on the other hand to achieve wishes, thus in a very volatile fashion. the objective of producing 20% of energy consumption. EPS is however needing to achieve the projects on a commercially EPS is studying the effects of such technologies on its overall viable bases. EPS hence urges the Serbian authorities to portfolio. guarantee that investment conditions are right. EPS is actually owning and operating several distribution Another issue is to raise the efficiency of network operation companies and a part of its strategy to reduce CO emissions 2 and thus reduce system losses and eventually try to introduce are dealt with on distribution level. This is consistent with the elements of smart metering as a start. introduction of decentralized power production and helps to find the right choices with respect to optimal local renewable Generally, EPS prepares for EU market rules and wants to energy options. be an active player in the European market. In addition, EPS is committed to provide Serbian citizens with best service EPS tries to focus and this white paper shall bring some possible and at a high quality level, being in line with EU obli- examples of future developments. For instance, the distribu- gations and developments. tion area of ED “Užice” and ED “Čajetina” will be the first region to realize several projects with a view of alignment with the renewable directive of the European Union. These projects will serve as base for learning and enhancing the technologies and 4.4.1 Wind mills practices necessary for a successful company development in the new environment. As can be seen in the documents of the EU there is a huge potential in Europe for eolic electricity production and, at EPS will begin with 3 projects, likely to be started in 2011, locations of suitable weather conditions, be on the brink of provided that the right co-investors can be found on occasions. competitive pricewise. In the area of Zlatibor preparations are to establish a utility For the time being however the potential in Serbia has to be scale PV installation, the first phase of which shall be opera- further assessed by EPS in order to decide on further engage- tional later this year. After the initial stage, at least 10 MW ment. Relatively, the potential of solar, hydro and biomass should be installed there finally. seem to be more promising at this stage as a first. To counterbalance the stronger volatility of local energy produc- tion, an investment will be undertaken in the vicinity of Užice to upgrade an existing pump-hydro power plant to be able to Economic and commercial assumptions compensate the production variation of the solar installation. for eolic (wind power): general (from It is clear that this is on one hand a physical potential, but the EWEA, Powering Europe) intention is also to be prepared for stronger market liberaliza- tion and volatile competitive market oriented electricity prices, Europe has a particular competitive advantage in wind power hence these two projects shall be seen independently from a technology. Wind energy is not only able to contribute to commercial and physical point of view in the mid term. securing European energy independence and climate goals in the future, it could also turn a serious energy supply problem In addition to the 2 projects, a waste-to-energy facility should into an opportunity for Europe in the form of commercial bring additional generation capacity to the area. This partic- benefits, technology research, exports and employment. The ular project also eases the stress of local authorities on waste fact that the wind power source is free and clean is economi- treatment. cally and environmentally significant, but just as crucial is the These 3 projects will also have a positive effect on local fact that the cost of electricity from the wind is fixed once the employments. To cite an example, current solar installations wind farm has been built. This means that the economic future are calculated around 3,2 €/Wp of which roughly 30% are of Europe can be planned on the basis of known, predictable benefiting directly people being in charge of designing, manu- electricity costs derived from an indigenous energy source facturing, transporting and installing the power plant compo- free of the security, political, economic and environmental nents. It has been seen in the early years in Spain, but can also disadvantages associated with conventional technologies.

98 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA Wind power and European electricity from wind energy can be reached by meeting EWEA’s 2030 installed capacity target of 400 GW wind power, 150 GW of Due to its ageing infrastructure and constant demand growth, which would be offshore. Up to 2050 a total of 600 GW of massive investment in generation plant and grids are required. wind energy capacity would be envisaged, 250 GW would be Over the next 12 years, 360 GW of new electricity capacity – onshore and 350 GW offshore. Assuming a total electricity 50% of current EU electricity generating capacity – needs to demand of 4,000 TWh in 2050 this amount of installed wind be built to replace ageing power plants to meet the expected power could produce about 2,000 TWh and hence meet 50% increase in demand. of the EU’s electricity demand. Wind energy technology has made major progress since the In June 2010 the European Commission’s Joint Research industry started taking off in the early 1980s. Thirty years of Centre highlighted that provisional Eurostat data showed technological development means that today’s wind turbines that in “2009 about 19.9% (608 TWh) of the total net Elec- are a state-of-the-art modern technology: modular and quick tricity Generation (3,042 TWh) came from Renewable Energy to install. At a given site, a single modern wind turbine annually sources. Hydro power contributed the largest share with produces 200 times more electricity and at less than half 11.6%, followed by wind with 4.2%, biomass with 3.5% and the cost per kWh than its equivalent twenty five years ago. solar with 0.4%.” It went on to conclude “that if the current The wind power sector includes some of the world’s largest growth rates of the above-mentioned Renewable Electricity energy companies. Modern wind farms deliver grid support Generation Sources can be maintained, up to 1,600 TWh services – for example voltage regulation – like other power (45 – 50%) of renewable electricity could be generated in plants do. Effective regulatory and policy frameworks have 2020.” Whilst the technology has been proven, the full potential been developed and implemented, and Europe continues to be of wind power is still to be tapped. Europe’s grid infrastructure the world leader in wind energy. Wind currently provides more was built in the last century with large centralised coal, hydro, than 5% of Europe’s electricity, but as the cheapest of the nuclear and, more recently, gas fired power plants in mind. The renewable electricity technologies, onshore wind will be the future high penetration levels of wind and other renewable largest contributor to meeting the 34% share of renewable electricity in the power system require decision makers and electricity needed by 2020 in the EU, as envisaged by the stakeholders in the electricity sector to work together to make EU’s 2009/28 Renewable Energy Directive. the necessary changes to the grid infrastructure in Europe. On 7 October 2009, the European Commission published By 2020, most of the EU’s renewable electricity will be its Communication on “Investing in the Development of Low produced by onshore wind farms. Europe must, however, Carbon Technologies (SET-Plan)” stating that wind power also use the coming decade to exploit its largest indigenous would be “capable of contributing up to 20% of EU electricity resource, offshore wind power. For this to happen in the most by 2020 and as much as 33% by 2030” were the industry’s economical way Europe’s electricity grid needs major invest- needs fully met. With additional research efforts, and crucially, ments, with a new, modern offshore grid and major grid rein- significant progress in building the necessary grid infrastruc- forcements on land. The current legal framework, with newly ture over the next ten years, wind energy could meet one fifth established bodies ENTSO-E and ACER, the key deliverable of the EU’s electricity demand in 2020, one third in 2030, and of the 10-Year Network Development Plan, as well as the half by 2050. ongoing intergovernmental “North Seas Countries’ Offshore Meeting the European Commission’s ambitions for wind energy Grid Initiative” are all steps in the right direction and the would require meeting EWEA’s high scenario of 265 GW of political momentum for grid development and the integration wind power capacity, including 55 GW of offshore wind by of renewable energy is evident. 2020. The Commission’s 2030 target of 33% of EU power

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 99 Wind power in the system overall power supply it is largely unimportant what happens when the wind stops blowing at a single wind turbine or wind Wind cannot be analysed in isolation from the other parts of farm site. the electricity system, and all systems differ. The size and the inherent flexibility of the power system are crucial for deter- The essentials on wind power technics mining whether the system can accommodate a large amount Although on a system-wide level wind power plants generate of wind power. The role of a variable power source like wind electricity just like any other plant, wind power has quite energy needs to be considered as one aspect of a variable distinctive generation characteristics compared to conven- supply and demand in the electricity system. Grid operators tional fuels. Firstly, there is the technical concept of the wind do not have to take action every time an individual consumer power plant. But perhaps more importantly, there is the changes his or her consumption, for example, when a factory variable nature of the wind resource driving the wind plant. starts operation in the morning. Likewise, they do not have Understanding these distinctive characteristics and their inter- to deal with the output variation of a single wind turbine. It action with the other parts of the power system is the basis for is the net output of all wind turbines on the system or large integrating wind power into the grid. groups of wind farms that matters. Therefore, wind power has to be considered relatively to the overall demand variability Wind power plant concepts and grid-friendly wind and the variability and intermittency of other power genera- turbines tors. The variability of the wind energy resource should only Wind turbines are usually placed in clusters (wind farms), with be considered in the context of the power system, rather than sizes ranging from a few MW up to several 100 MW. These in the context of an individual wind farm or turbine. The wind clusters are connected to the grid as single generation units, does not blow continuously, yet there is little overall impact if therefore the term wind plants is the best suited. Whereas initially the wind stops blowing in one particular place, as it will always the emphasis on wind farm design was mainly on efficient and be blowing somewhere else. Thus, wind can be harnessed economic energy production that respected the rules of the grid to provide reliable electricity even though the wind is not operators, nowadays, with increasing wind power penetration, available 100% of the time at one particular site. In terms of

100 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA the demands of the grid operators have changed. In response to these demands, modern wind turbines and wind farms have developed the concept of the so-called wind energy power plant. The concept is essentially a wind farm with properties similar to a conventional power plant, with the exception that the fuel injection is variable. The operation of a wind energy power plant is designed in such a way that it can deliver a range of ancillary services to the power system. Its control system is designed such that the power can be actively controlled, including ramping up and down similar to conventional generation plants. Wind power plants can and do positively contribute to system stability, fault recovery and voltage support in the system. The properties described above greatly enhance the grid integration capability of wind power. In order to achieve high penetration levels, active control properties are essential to optimally share the power supply tasks together with other plants and to enhance network security. For essential power plant services, wind plants become comparable to conventional plants, as illustrated in the following table, where the maximum possible values for both technologies are shown. Differences will remain due to the nature of variable generation dictated by meteorological input.

4.4.2 Solar energy expected production of 14.710 MWh. This would result in roughly 2,8% of electricity consumption, and of course less As can be seen in the documents of the EU there is a huge with a view to the total energy consumed. However, as a start potential in Europe for solar electricity production and, at (the 10 MW might be achieved over time) it will serve as a locations of suitable weather conditions, be a substantial reference installation and field experience site. In addition, the factor for achieving the renewable energy target. EPS believes area of Zlatibor is famous for its healthy air and its tourism that the cost decrease of modules will continue and that ulti- which is protected when producing electricity from solar. mately also the solar industry will see installations based on In addition, when tourists are at maximum, which is often competitive price calculations in mid term. during summer, the solar production is also at its highest. To Concerning the concrete envisaged project in the Zlatibor compare, Germany currently envisages an average of 3 GW of area, the following statements can be made. The area of ED solar power installed per year. Given the bigger size but also “Užice” and ED “Čajetina” had a yearly electricity consump- the fewer irradiation, a potential of 300 MW per year in Serbia tion of 513.553 MWh. Conservative calculations of a 10 MWp can be envisaged. solar installations using single axes trackers show a yearly

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 101 Economic and commercial assumptions concentration…). The different technologies create competi- for photovoltaics: general tion and the module prices go down significantly. It is expected that this trend continues at a digressive pace as can be seen There are several technologies of producing photovol- in the following table. taic electricity (thin film, monocristaline, polycristaline,

Early 2008 Early 2009 2009 2010 2012 ~ 3,5 €/Wp ~2,2 1,8 – 2,2 ~ 1,5 ~1

Introduction to EC support schemes and techni- Framework Programme (FP) for research. Through a series cal development of research FPs, the European Commission has maintained long-term support for research, development and demonstra- Over the last decade, European photovoltaic companies have tion in the photovoltaic sector, providing a framework within achieved an average annual production growth rate of over which researchers and industry can work together to develop 40 %. Currently the turnover of the photovoltaic industry photovoltaic technology and applications. Within the 6th amounts to some EUR 10 billion. The European market is Framework Programme (FP6, 2003-06), the European characterised by a dominant German market while other Commission committed EUR 105.6 million for supporting European countries – like Spain, Italy, France and Greece – photovoltaic research, development and demonstration have recently boosted their share. For the whole European (RD&D) thus continuing co-financing the development of solar Union (EU), approximately 70,000 people are employed by electricity in Europe. the photovoltaic sector. Although productivity in the photo- voltaic industry progresses with automated production and This synopsis describes the projects funded under FP6, in the reduced unit and system costs, the rapid market growth will research, development and demonstration domain, their aims create new jobs in Europe. and the achieved results. In addition, it outlines four photo- voltaic projects funded under the first Intelligent Energy Support for the research, development and demonstra- – Europe programme (IEE-I, 2003-06) which tackles the tion of new energy technologies is available through the EU ‘softer’, non-technological factors and ran in parallel with FP6.

102 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA The impact of EU programmes on the development of photo- programme, and will run for seven years. Calls for proposals voltaics can be examined on several levels. The announce- based on topics identified in thework programme are launched ment of champion cell efficiencies achieved in EU projects is on an annual basis. an obvious indicator. Indeed one key impact, which arguably FP7 has begun with less emphasis on the development of only really began to manifest itself within the current environ- traditional wafer-based silicon for photovoltaic solar cells – ment of dynamic market growth, is the creation of know-how, the focus of increasing R&D investment by companies and resulting in start-up companies. For example, many of the national programmes. Material develop ment for longer-term European companies producing thin-film photovoltaics have applications, concentration photo voltaic and manufacturing their origins in EU projects. There is also significant anecdotal process development have attracted most European funding. evidence that start-up companies receiving support from Furthermore, significant funding is expected to be made EU RD&D projects can successfully attract investment from available for thin-film technology in future years. The potential larger companies that are looking to broaden their technology of solar electricity and its contribution to the EU’s electricity portfolio. FP6 coincided with a remarkable period of sustained generation for 2020 has recently been reassessed by the high growth of photovoltaics. As a result of such growth, the photovoltaic industry. This ambition needs now to be made role and objectives of European RD&D have been re-exam- concrete in a realistic European Solar Initiative to make the ined, with the aim of maximising the effect of available public sector realise its full potential. funds, including national and regional funds. Two initiatives – the European Photovoltaic Technology Platform and PV-ERA- Variable electricity generation (as with solar photovoltaic), at NET – which began during FP6, have been active in recent high penetration level, will bring additional challenges to power years in improving the overall coordination of the photovoltaic systems. Furthermore, quality and longevity of photovoltaic sector at European level. devices and systems, and profitable lifecycle features of whole photovoltaic systems, will become increasingly important in The budget for the 7th Framework Programme (FP7, such a highly competitive world market. These are parts of the 2007-13) has significantly risen compared with the previous RD&D needs which future activities should address.

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 103 104 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 4.4.3 SMALL HYDRO POWER PLANTS Considered small hydropower plants have been divided into four categories: yy Existing SHPPs owned by EPS which need to be revitalised; FOREWORD yy SHPPs on existing water management facilities; This overview considers the small hydropower plants (SHPP) yy SHPPs on existing hydropower plants (HPP) and thermal construction, i.e. revitalisation potentials on the territory of the power plants (TPP) owned by EPS and Republic of Serbia. yy SHPPs on new sites (Greenfield). This document is based on the Decree on the Republic of Serbia With regard to the first group (existing SHPPs owned by EPS), Energy Sector Development Strategy by 2015 Implementation point 6.2.8 SIP indicates some of the SHPPs which need to be Programme for the period from 2007 to 2012 (hereinafter modernised and revitalised (Sveta Petka SHPP, Sicevo SHPP referred to as: SIP). It was published in the Official Gazette RS, and Sokolovica SHPP), as well as the need to modernise and No. 27 from 28 April 2010. revitalise SHPPs foreseen by the PE EPS investment plan. In the course of preliminary analyses it was proposed to consider in more detail the 17 existing SHPPs owned by EPS. Therefore, the subject of this consideration is: Ovcar Banja SHPP, Medjuvrsje SHPP, Raska SHPP (Sopocani), Seljasnica SHPP (Seljasnica – Prijepolje), Turica SHPP, Kratovska Reka SHPP (Kratovo – Priboj), Pod Gradom SHPP (Uzice), Moravica SHPP (Ivanjica), Sveta Petka SHPP, Sicevo SHPP, Temac SHPP, Sokolovica SHPP, Gamzigrad SHPP, Vucje SHPP, Jelasnica SHPP, Radaljska Reka SHPP (Banja) and Vrelo SHPP. As regards the second group (SHPPs on existing water management facilities), point 6.3.1 SIP provides the list of existing reservoirs which can be supplemented with the energy function: Ćelije, Bovan, Barje, Grlište, Brestovac, Nova Grošnica, Zlatibor, Gruža, Garaši, Krajkovac, Bresnica, Bukulja, Goli kamen, Pridvorica, Rastovnica, Velika Dičina, Parmenac, Prvonek, Rovni and Selova, whereas, EPS may be the sole investor, individually or with a local government. Preliminary analysis carried out for the purpose of this overview estab- lished that 9 out of 20 indicated SHPPs should be analysed in more detail, while the remaining 11 SHPPs have considered as a second priority. There are also some power plants covered by the special investment programmes (Prvonek). For this reason, the subject of this consideration includes the following SHPPs: Celije SHPP, Bovan SHPP, Barje SHPP, Zlatibor SHPP, Parmenac SHPP, Rovni SHPP, Selova SHPP, Svrackovo SHPP (Arilje) and Vrutci SHPP. When it comes to the third group (SHPPs on existing HPPs and TPPs owned by EPS), section 6.3.1 SIP indicates the construc- tion of Jezero SHPP, SHPP Mala Vrla 1, Zavoj SHPP and Pirot SHPP, whereas, EPS may be the sole investor, individually or with a selected strategic partner. Based on this, the subject of this consideration covers 5 SHPPs which may be constructed on existing HPPs and TPPs: Jezero SHPP, Mala Vrla 1 SHPP, Zavoj SHPP, Pirot SHPP and TENT B SHPP. In addition to the above, this document considers some possible SHPPs on new sites (Greenfield). Currently, 4 potential SHPPs have been identified: Tigar SHPP, Banjica SHPP, Stalac SHPP and Sokolja SHPP (it should be noted that point 6.3.1 SIP indicates the construction of Banjica SHPP located between the existing Sveta Petka SHPP and Sicevo SHPP). This group is still open for inclusion of other potential sites established by the preliminary analysis to be suitable for further consideration.

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 105 Revitalisation of Existing SHPPs owned by EPS

■■ Ovcar Banja SHPP is a facility which together with the Medjuvrsje SHPP utilises the Zapadna Morava river hydropower potential through the The Ovcar Banja SHPP is a facility which together with the Ovcarsko - Kablarski Canyon. First studies were made in the Medjuvrsje SHPP utilises the Zapadna Morava river hydro- beginning of 20th century, while the power plant was commis- power potential through the Ovcarsko - Kablarski Canyon. First sioned in 1954. The Ovcar Banja SHPP is a storage power studies were made in the beginning of 20th century, while the plant, with gross head of 18.5 m. Six meters of gross head is power plant was commissioned in 1954. The Ovcar Banja obtained from backwater in the reservoir while the rest repre- SHPP is a storage power plant, with gross head of 18.5 m. sents the natural head of the riverbed along a relatively short Six meters of gross head is obtained from backwater in the section of 700 m. Headwater tunnel is 400 m long. There are reservoir while the rest represents the natural head of the 2 generator sets in the powerhouse, with revitalised installed riverbed along a relatively short section of 700 m. Headwater capacity 7.8 MW. Revitalisation of the power plant electrical tunnel is 400 m long. There are 2 generator sets in the power- equipment is under way, covering capacity increase for over house, with revitalised installed capacity 7.8 MW. Revitalisation 15%. Considering its operating life, revitalisation of mechan- of the power plant electrical equipment is under way, covering ical equipment was planned, together with the rehabilitation capacity increase for over 15%. Considering its operating life, of the civil part of the facility, to the extent demonstrated by revitalisation of mechanical equipment was planned, together the investment-technical documents whose development is with the rehabilitation of the civil part of the facility, to the extent planned, i.e. in progress. demonstrated by the investment-technical documents whose development is planned, i.e. in progress.The Ovcar Banja SHPP Dam and reservoir data

Dam type Gravity concrete + earth dam Construction height m 23.2 Total reservoir volume million m3 0.63 Live storage million m3 0.20 Spillway elevation mASL 286 Normal backwater elevation mASL 292 Year of construction 1954

Watercourse and catchment area data

Watercourse Zapadna Morava Narrow / wider catchment area Mean annual discharge m3/s 35.26 Guaranteed discharge m3/s 3.75

Facility and water use data

Facility use Energy production Current water intake m3/s 0 Future water intake m3/s 0

Energy data Installed discharge m3/s 48.0 Capacity MW 7.8 Possible annual generation GWh 37.4 Estimated investments EUR 1,200,000

106 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Ovcar Banja 48.00 19.50 7.80 250,000 700,000 250,000 1,200,000

Ovcar Banja SHPP

Ovcar Banja SHPP

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 107 ■■ Medjuvrsje SHPP facility. This fact and occurrence of islands within the reservoir, its location between the Ovcar and Kablar massifs, thirteen The Medjuvrsje SHPP, which is a storage dam facility, uses the monasteries in the surrounding area and weekend homes on Zapadna Morava river potential downstream from the Ovcar the reservoir bank provide great potentials for tourism devel- Banja SHPP. Gravity concrete dam is 21 m high. Underground opment in this area. powerhouse is constructed on the right side, downstream from watertight diaphragm. Revitalisation of electrical equipment in the Medjuvrsje SHPP is in the final phase. Development of the design documents for Initial gross reservoir volume was 18 million m3. Intensive revitalisation of this part of the facility is planned. erosion in the catchment area caused reservoir volume to reduce for 90%, as a result the HPP operates as run-of-river

Dam and reservoir data

Dam type Gravity concrete Construction height m 31.35 Total reservoir volume million m3 4.9 Live storage million m3 3.6 Spillway elevation mASL 267 Normal backwater elevation mASL 273 Year of construction 1957

Watercourse and catchment area data

Watercourse Zapadna Morava Narrow/wider catchment area Mean annual discharge m3/s 35.26 Guaranteed discharge m3/s 3.75

Facility and water use data

Facility use Energy production Current water intake m3/s 0 Future water intake m3/s 0

Energy data Installed discharge m3/s 48.0 Capacity MW 7.6 Possible annual generation GWh 42.6 Estimated investments EUR 1,500,000

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Medjuvrsje 48.00 21.60 7.60 300,000 900,000 300,000 1,500,000

108 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA Medjuvrsje SHPP ■■ Radaljska Reka (Banja) SHPP

Dam and reservoir data

Low gravity dam with stop logs Dam type (emergency gates) Construction height m 15.4 Total reservoir volume million m3 0.089325 Live storage million m3 0.088176 Spillway elevation mASL 475.00 Normal backwater elevation mASL 475.00 Year of construction 1986

Watercourse and catchment area data

Watercourse Radalj Narrow/wider catchment area Drina Mean annual discharge m3/s 0.144 Guaranteed discharge m3/s 0.015

Facility and water use data

Facility use Energy production Current water intake m3/s 0.074 Future water intake m3/s 0.142

Energy data Installed discharge m3/s 0.400 Capacity MW 0.250 Possible annual generation GWh 0.400 Estimated investments EUR 100,000

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Radaljska reka 0.40 70.00 0.25 30,000 60,000 10,000 100,000

110 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA ■■ Vrelo SHPP head ranges between 17.01 m and 15.1 m. Minimum net head is 13.09 m, while the maximum head amounts to 15.65 m. The Vrelo SHPP was constructed in 1927 at the Perucac The turbine is of horizontal Francis type with automatic regula- settlement. The Vrelo spring is located on 234mASL, while the tion. Installed capacity is 60 kW. The design annual electricity actual watercourse is 365m long, with the mean discharge of generation is 350,000 kWh. Installation of one more turbine 2.1 m3/s. The power plant was revitalised in 1987 and it is was foreseen under the 1986 Detailed Reconstruction Design. currently operational. This is a derivation, run-of-river hydro- power plant with the installed discharge of 0.75 m3/s. Water is led to the powerhouse by a 1.5 m3/s capacity channel. Gross

Dam and reservoir data

Low gravity dam with side intake and Dam type stop logs (emergency gates) Construction height m 2.1 Total reservoir volume million m3 No accumulation Live storage million m3 No accumulation Spillway elevation mASL 238.15 Normal backwater elevation mASL 238.33 Year of construction 1927

Watercourse and catchment area data

Watercourse Perućačko vrelo Narrow/wider catchment area Drina Mean annual discharge m3/s 1.00 Guaranteed discharge m3/s

Facility and water use data

Facility use Energy production Current water intake m3/s 0.75 Future water intake m3/s 0.75+1.50

Energy data Installed discharge m3/s 2.25 Capacity MW 0.060 Possible annual generation GWh 0.476 (with new generator set 0.751) Estimated investments EUR 110,000

Existing documentation: yy The Vrelо SHPP Reconstruction – Detailed Construction Design, Hidroprojekat, 1986

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Vrelo 2.25 17.00 0.06 30,000 70,000 10,000 110,000

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 111 ■■ Raska (Sopocani) SHPP revitalisation of the headwater system needs to be carried out, together with powerhouse equipment overhaul. It is especially The Raska SHPP is a derivation facility using the potential necessary to analyse the installed discharge duration increase of the Raska river tributaries and waters from the Pester and reduction of water losses, i.e. increase of energy genera- plateau. Derivation consists of a headwater tunnel, 4 km long, tion, which would have an impact on the profitability of the surgetank and a steel pipeline. Powerhouse is of underground entire revitalisation. type. It is located near Novi Pazar, i.e. medieval monastery Sopocani. The powerhouse houses two identical generator The Raska SHPP also includes the Sopocani pumping sets. Power plant is connected to 35 kV power grid. Consid- station, with the capacity of 2 x 500 l/s. Pump head is 25m. ering its water potential, as well as its technical and tech- The pumping station pumps the water collected from the nological characteristics, this SHPP is able produce about surrounding springs to the headrace tunnel. 21,000 MWh of energy annually. In order to achieve this,

Dam and reservoir data

Dam type Low concrete dam in stream bed Construction height m Total reservoir volume million m3 0 Live storage million m3 0 Spillway elevation mASL Normal backwater elevation mASL Year of construction 1953

Watercourse and catchment area data

Watercourse Raska Narrow/wider catchment area Mean annual discharge m3/s 2.82 Guaranteed discharge m3/s 0.42

Facility and water use data

Energy generation, water supply Facility use of Novi Pazar after energy usage Current water intake m3/s - Future water intake m3/s -

Energy data Installed discharge m3/s 4.6 Capacity MW 6.4 Possible annual generation GWh 21.0 Estimated investments EUR 2,640,000

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Raska 4.60 160/ 6.40 440,000 1,980,000 220,000 2,640,000

112 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA ■■ Seljasnica SHPP under preparation. The turbine shut-off valve and the turbine No. 2 abutment technical conditions for overhaul will serve for (Seljasnica – Prijepolje) the tendering process. In addition to this, automation design was also developed. The contract value was RSD 2,764,696. The Seljasnica SHPP is a derivation facility, with a channel The roof and the ceiling were replaced, the facade repaired, 800m long. Powerhouse houses two Pelton turbines. Over the painting and decorating works performed, together with reha- summer, due to the lack of water, SHPP is not in operation bilitation of water supply and sewage systems and installation (water from the same spring is used by the city water supply of sanitary fixtures and joinery. system). Technical documents are incomplete. Tender documents for powerhouse and pipeline reconstruction are

Dam and reservoir data

Low gravity dam with stop logs Dam type (emergency gates) Construction height m Total reservoir volume million m3 0.0006 (reservoir) Live storage million m3 Spillway elevation mASL Normal backwater elevation mASL Year of construction 1953

Watercourse and catchment area data

Watercourse Seljasnica Narrow/wider catchment area Lim / Drina Mean annual discharge m3/s 1.0 Guaranteed discharge m3/s 0.15

Facility and water use data

Water supply (Prijepolje) Facility use and energy generation Current water intake m3/s Future water intake m3/s

Energy data Installed discharge m3/s 0.75 Capacity MW 0.9 Possible annual generation GWh 2.0 Estimated investments EUR 150,000

Existing documentation: yy Detailed Headrace Reconstruction Design; yy Detailed Design – Volume 3, Volume 5, drawings; yy Project documentation – drawings.

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Seljasnica 0.75 160/ 0.90 50,000 90,000 10,000 150,000

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 113 Seljasnica SHPP

Turica SHPP

114 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA ■■ Turica SHPP activities for SS 110/x kV Arilje. The following concrete works should be performed: surgetank rehabilitation, together with The surgetank rehabilitation study and preparation of the sand blasting and painting of the pipeline. tender documents have not been developed since the persons in charge for civil works were engaged on supervisory

Dam and reservoir data

Dam type concrete Construction height m 18.9 Total reservoir volume million m3 0.060 Live storage million m3 0.040 Spillway elevation mASL 438.0 Normal backwater elevation mASL 438.0 Year of construction 1929

Watercourse and catchment area data

Watercourse Djetinja Narrow/wider catchment area Zapadna Morava/Velika Morava Mean annual discharge m3/s 4.14 Guaranteed discharge m3/s 0.61

Facility and water use data

Facility use Energy generation Current water intake m3/s Future water intake m3/s

Energy data Installed discharge m3/s 2.0 Capacity MW 0.32 Possible annual generation GWh 1.95 Estimated investments EUR 389,000

Existing documentation: yy SHPPs in Užice, ‘Science and Technology Museum’, 1999; yy Basic data and drawings.

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Turica 2.00 /21.84 0.32 64,000 290,000 35,000 389,000

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 115 ■■ Kratovska Reka SHPP drive were prepared. Old design documents developed by ’24. septembar’ from Uzice were used as baseline information to (Kratovo – Priboj) prepare the necessary equipment and works specifications. Tender documents for the procurement and construction of This SHPP is a derivation facility with a pipeline 1900 m long. the control-signalling connection cable between the SHPP and It has two Francis turbines. Tender documents for the procure- the waterintake dam have also been prepared. ment and installation of dam trashrack cleaning device reducer

Dam and reservoir data

Dam type Low concrete dam Construction height m 3.5 (above ground level) Total reservoir volume million m3 Live storage million m3 Spillway elevation mASL 589.5 Normal backwater elevation mASL 589.5 Year of construction 1989 (commissioned)

Watercourse and catchment area data

Kratovska reka Watercourse (right tributary of Lim river) Narrow/wider catchment area Kratovska reka / Lim Mean annual discharge m3/s 0.6 Guaranteed discharge m3/s 0.09

Facility and water use data

Water supply (Prijepolje) Facility use and energy generation Current water intake m3/s Future water intake m3/s

Energy data Installed discharge m3/s 0.58 Capacity MW 1.4 Possible annual generation GWh 2.0 Estimated investments EUR 1,346,000

Existing documentation: yy Construction permit; yy Water management permit; yy The Kratovska reka SHPP Technical - Economic Study; yy Pipeline usage agreement for the SHPP Kratovska reka needs; yy Detailed Construction Design updates; yy The Kratovska reka SHPP As-Built Design for 10 kV unit and 0,4 kV switchgear.

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Kratovska reka 0.58 123.00 1.40 224,000 1,010,000 112,000 1,346,000

116 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA ■■ Pod Gradom SHPP (Uzice) has three Francis turbines. Last large reconstruction was in 2000. Complete electrical equipment was overhauled and It is located on the Djetinja river. This SHPP is a deriva- automated, together with the 2.1 kV and 10 kV switchyard. tion facility with a 519 m long channel and a 4 m concrete Technical documents development is in the final phase. dam, practically representing a waterintake. The power plant

Dam and reservoir data

Dam type Low concrete dam Construction height m 4.5 (above ground level) Total reservoir volume million m3 Live storage million m3 Spillway elevation mASL Normal backwater elevation mASL 416.20 Year of construction 1900 (1904 started to work)

Watercourse and catchment area data

Watercourse Djetinja Narrow/wider catchment area Djetinja / Zapadna Morava Mean annual discharge m3/s 1.62 Guaranteed discharge m3/s 0.24

Facility and water use data

Facility use Energy generation Current water intake m3/s Future water intake m3/s

Energy data Installed discharge m3/s 2.3 Capacity MW 0.3 Possible annual generation GWh 0.26 Estimated investments EUR 185,000

Existing documentation: yy Licenses and Permits; yy Investment technical documentation.

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Pod Gradom 2.30 11/ 0.30 30,000 140,000 15,000 185,000

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 117 Pod Gradom SHPP ■■ Moravica SHPP (Ivanjica) This is a reservoir dam facility constructed on the Moravica river in the town of Ivanjica. Installed discharge equals to 2.5 m3/s and it is used through one turbine. The total installed Throughout its long-term operation from 1911, SHPP Ivanjica power plant capacity is 160 kW. It is connected to 0.4 kV only had one equipment overhaul in 1987. However, from power grid. 2004 and 2005 serious problems have been identified, Given that this SHPP also has a historical and cultural value, especially on the civil part of the facility, resulting in operation and that the Moravica river water potentials are much higher prohibition by the inspection. than the ones currently in use, there are ideas to build one The indicated problems may be resolved in two phases: more modern dam-derivation SHPP located downstream from yy Phase I: The existing Ivanjica SHPP reconstruction in the existing one. Waterintake of this SHPP would be made in an terms of security and facility and equipment functioning appropriate place within intake structures of the existing SHPP with the aim of returning it to its former state, i.e. provide (probably in the headrace), with a penstock leading from this its functioning; point to the newly planned SHPP (ca. 50 m long). This solution yy Phase II: The Ivanjica SHPP reconstruction from the view- provides the creation of a 10 m gross head, making the total point of the modern hydropower potential use options capacity of the old and the new SHPP about 650 kW, (i.e. of this dam site, by observing the modern dimensioning some 300% higher). Depending on the current water amount, criteria and by using significant recent equipment devel- operation of these two SHPPs could be combined. opment achievements, especially electrical equipment The above solution was elaborated at the conceptual solution (remote control, higher performance machines, etc.); level; therefore, additional hydrological and technical- economic analyses should be performed in order to make the Mechanical equipment was reconstructed in the course of final decision whether to go ahead with this investment or not. 2007. On 14 July 2010, civil structures rehabilitation and One advantage is that relatively small investments into intake reconstruction were officially initiated, while the preliminary structures of the newly planned SHPP are necessary given that works, access roads and fence posting is under way. The the existing plant infrastructure will be used. Estimated value supervisory engineer was selected. The automation detailed of this investment is between EUR 600,000 and 700,000. design tender documents are being developed.

Dam and reservoir data

Dam type Gravity - arch dam Construction height m 17 Total reservoir volume million m3 Live storage million m3 Spillway elevation mASL 453.00 Normal backwater elevation mASL 456.25 Year of construction 1911

Watercourse and catchment area data

Watercourse River Moravica Narrow/wider catchment area Moravica / Zapadna Morava Mean annual discharge m3/s 6.72 Guaranteed discharge m3/s 0.69

Facility and water use data

Facility use Energy generation Current water intake m3/s 2.5 Future water intake m3/s 5

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 119

Energy data Installed discharge m3/s 2.5 Capacity MW 0.16 Possible annual generation GWh 1.4 Estimated investments EUR 1,700,714

Existing documentation: yy The Moravica SHPP Mechanical Equipment Overhaul Report; yy The Detailed Moravica SHPP Reconstruction Design; yy Reconstruction approval decision; yy Water management permit; yy Water management agreement; yy Urban Planning Conditions Act; yy Power grid connection conditions.

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Moravica* 2.50 8.00 0.66 1,385,714 200,000 115,000 1,700,714

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 121 ■■ Sveta Petka SHPP Installed discharge is some 10.5 m3/s, gross head around 7 m. The powerhouse houses three identical generator sets This is a run-of-river derivation facility utilising the Nisava and 200 kW capacity. SHPP is connected to 10 kV power grid. river hydropower potential, located some 10 km downstream The revitalisation may start once the hydro-potential of this of the Sicevo SHPP. The derivation comprises of a headrace, Nisava river section has been analysed. relief well and a steel pipeline. The powerhouse is of surface type. It is located near Ostrovica. The facility was commis- Estimates show that the installed capacity may be increased sioned in 1931, together with the downstream Sicevo SHPP for 120% requiring additional investment of EUR 1,000,000. and it was used to power machines in the textile industry.

Dam and reservoir data

Dam type Concrete dam Construction height m 4.0 Total reservoir volume million m3 0 Live storage million m3 0 Spillway elevation mASL Normal backwater elevation mASL Year of construction 1908

Watercourse and catchment area data

Watercourse Nisava Narrow/wider catchment area Nisava / Juzna Morava Mean annual discharge m3/s 22.0 Guaranteed discharge m3/s 4.2

Facility and water use data

Facility use Energy production Current water intake m3/s Future water intake m3/s

Energy data Installed discharge m3/s 10.5 Capacity MW 0.60 Possible annual generation GWh 3.1 Estimated investments EUR 1,720,000

Existing documentation: yy Restoration-Conservation Works Design, the Cultural Monuments Protection Authority, Nis, 2008; yy Single-line diagram.

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Sveta Petka 10.50 / 7 1.32 1,120,000 540,000 60,000 1,720,000

122 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA Sveta Petka SHPP ■■ Sicevo SHPP Nisava river stretch, considering that the Sveta Petka SHPP is located upstream on the same watercourse and that there This is a run-of-river, derivation facility utilising the Nisava river is one section of the watercourse between these power plants hydropower potential. The derivation is made of a headrace , which can be used for power generation. Accordingly, the relief well and a steel pipeline. The powerhouse is of a surface existing SHPPs head and discharge increase options should type. It is located near Sicevo. The plant was commissioned be analysed or a construction of one additional cascade in 1931. Installed discharge amounts to 20.0 m3/s, net head providing more efficient use of this hydropower potential. For some 8 m. The powerhouse has three generator sets, two with this to take place existing SHPPs should be adequately revital- the same characteristics (each with the capacity of 352 kW) ised and their potential capacity increase re-examined. and one generator set with the capacity of 644 kW. The power plant is connected to 10 kV power grid. Revitalisation project It is estimated that 20% installed capacity increase would of this SHPP should cover the hydropower potential of this require further investments of about EUR 100,000.

Dam and reservoir data

Dam type Concrete dam in stream bed Construction height m 4 (above ground) Total reservoir volume million m3 Live storage million m3 Spillway elevation mASL Normal backwater elevation mASL Year of construction 1931

Watercourse and catchment area data

Watercourse Nisava Narrow/wider catchment area Nisava / Juzna Morava Mean annual discharge m3/s 22.0 Guaranteed discharge m3/s 4.2

Facility and water use data

Facility use Energy generation Current water intake m3/s Future water intake m3/s

Energy data Installed discharge m3/s 20.0 Capacity MW 1.35 Possible annual generation GWh 3.7 Estimated investments EUR 1,060,000

Existing documentation: yy Dam drawing; yy Turbine drawing; yy Gate drawing; yy Permit issuing order.

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Sicevo 20.00 10/9.5 (8) 1.62 260,000 720,000 80,000 1,060,000

124 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA Sicevo SHPP ■■ Temac SHPP power plant is connected to 10 kV power grid. Given its civil structures and equipment state, civil structures (tail race and The Temac SHPP is a storage plant with a short derivation powerhouse) should be rehabilitated, while the mechanical (about 20m) cutting the large Temstica river meander in the and electrical equipment should be overhauled, replaced and area of the Temska village, near the town of Pirot. Its installed revitalised to increase its operational security. discharge equals to 4.65 m3/s, utilised by the three different capacity turbines (2.5 m3/s, 1.4 m3/s and 0.75 m3/s). The

Dam and reservoir data

Dam type Concrete dam in stream bed Construction height m 5 Total reservoir volume million m3 Live storage million m3 Spillway elevation mASL Normal backwater elevation mASL Year of construction 1940

Watercourse and catchment area data

Watercourse Temska reka Narrow/wider catchment area Mean annual discharge m3/s 4.35 Guaranteed discharge m3/s 0.65

Facility and water use data

Facility use Energy generation Current water intake m3/s Future water intake m3/s

Energy data Installed discharge m3/s 4.65 Capacity MW 0.78 Possible annual generation GWh 2.5 Estimated investments EUR 360,000

Existing documentation: yy Generation Upgrade – Conceptual Solution

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Temac 4.65 20.00 0.78 60,000 270,000 30,000 360,000

126 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA Temac SHPP ■■ Sokolovica SHPP same dimensions and improved performance (higher η), dam and headrace mechanical equipment rehabilitation or replace- This is a storage dam facility constructed on the Timok river ment, concrete damages repair, access road and power plant near the town of Cokonjar. Its installed discharge equals to connection to the control centre reconstruction. The installed 40 m3/s utilised by the three turbines (8 m3/s, and 2 x capacity and energy generation may be increased for 10% by 16 m3/s). The generator sets capacity is 3.724 kW, with increasing the backwater elevation through the spillway gate the first one commissioned in 1948. The power plant is level increase. connected to 35 kV power grid. The revitalisation should cover the turbine runner replacement with the one of the

Dam and reservoir data

Dam type Concrete dam Construction height m 17.8 Total reservoir volume million m3 Live storage million m3 0.63 Spillway elevation mASL Normal backwater elevation mASL 97.8 Year of construction 1948

Watercourse and catchment area data

Watercourse Timok Narrow/wider catchment area Timok Mean annual discharge m3/s 27.8 Guaranteed discharge m3/s

Facility and water use data

Facility use Energy generation Current water intake m3/s Future water intake m3/s

Energy data Installed discharge m3/s 40.0 Capacity MW 3.72 Possible annual generation GWh 10 Estimated investments EUR 1,160,000

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Sokolovica 40.00 12/8.50 3.72 360,000 620,000 180,000 1,160,000

128 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA Sokolovica SHPP

Gamzigrad SHPP

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 129 ■■ Gamzigrad SHPP

Dam and reservoir data

Dam type Concrete dam Construction height m 6 Total reservoir volume million m3 Live storage million m3 Spillway elevation mASL Normal backwater elevation mASL Year of construction 1909

Watercourse and catchment area data

Watercourse Crni Timok Narrow/wider catchment area Crni Timok Mean annual discharge m3/s 17.10 Guaranteed discharge m3/s 1.7

Facility and water use data

Facility use Energy generation Current water intake m3/s Future water intake m3/s

Energy data Installed discharge m3/s 4.20 Capacity MW 0.22 Possible annual generation GWh 1.00 Estimated investments EUR 192,000

Existing documentation: yy Detailed Gamzigrad SHPP Civil Structures Reconstruction Design; yy Construction documents review report.

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Gamzigrad 4.20 9/8.5 0.22 32,000 144,000 16,000 192,000

130 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA ■■ Vucje SHPP relief well, steel pipeline and a powerhouse. The power- house has three generator sets with different capacities, total The Vucje SHPP is a derivation facility utilising the Vucjanka capacity 930 kW. This is the one of the best maintained SHPPs river hydropower potential to generate energy. The facility owned by EPS. comprised of a Tyrolean intake in the river, open headrace,

Dam and reservoir data

Dam type Tyrolean side water intake Construction height m Total reservoir volume million m3 Live storage million m3 Spillway elevation mASL Normal backwater elevation mASL 599.02 Year of construction 1903

Watercourse and catchment area data

Watercourse Vucjanska reka Narrow/wider catchment area Mean annual discharge m3/s 0.76 Guaranteed discharge m3/s

Facility and water use data

Facility use Energy generation Current water intake m3/s Future water intake m3/s

Energy data Installed discharge m3/s 1.35 Capacity MW 0.93 Possible annual generation GWh 3.00 Estimated investments EUR 100,000

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Vucje 1.35 139.2/123.8 0.93 10,000 80,000 10,000 100,000

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 131 Vucje SHPP

Jelasnica SHPP

132 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA ■■ Jelasnica SHPP

Dam and reservoir data

Dam type Construction height m Total reservoir volume million m3 Live storage million m3 Spillway elevation mASL Normal backwater elevation mASL 820 Year of construction 1928

Watercourse and catchment area data

Watercourse Jelasnica Narrow/wider catchment area Jelasnica / Juzna Morava Mean annual discharge m3/s Guaranteed discharge m3/s

Facility and water use data

Facility use Energy generation Current water intake m3/s Future water intake m3/s

Energy data Installed discharge m3/s 0.42 Capacity MW 0.40 Possible annual generation GWh 2.00 Estimated investments EUR 384,000

Existing documentation: yy Detailed Gamzigrad SHPP Civil Structures Reconstruction Design; yy Construction documents review report.

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Jelasnica 0.42 120/117 0.40 64,000 288,000 32,000 384,000

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 133 SHPP Construction on the Existing Water Management Facilities

■■ SHPP Bovan Total reservoir volume (from the spillway crest) amounts to 47.5 million m3, while its live storage equals 19.5 million m3. The Bovan SHPP could be constructed on the Bovan dam near Aleksinac. This SHPP utilises the Moravica river water (Alek- The powerhouse could have two generator sets. Installed sinacka), the right tributary of the Juzna Morava. discharge of the main generator set would be 6 m3/s, and its mean annual generation 5.52 GWh. The generator set would The dam is of rock-fill type, 52 m high from the foundation and have an installed discharge of 0.5 m3/s at the biological 151 m long at the crest. Dam crest elevation is 236 mASL, minimum outlet, while its mean annual generation would equal maximum level 261.5 mASL, spillway crest elevation 1.40 GWh. 258.5 mASL and normal backwater elevation 252.5 mASL.

Dam and reservoir data

Dam type Rock-fill dam with clay core Construction height m 52 Total reservoir volume million m3 47.5 Live storage million m3 19.5 Spillway elevation mASL 258.5 Normal backwater elevation mASL 252.5 Year of construction 1979

Watercourse and catchment area data

Watercourse Moravica Narrow / wider catchment area Moravica / Juzna Morava Mean annual discharge m3/s 3.1 Guaranteed discharge m3/s 0.35

Facility and water use data

Flood protection, irrigation, Facility use water supply, energy Current water intake m3/s 0,15 water supply Future water intake m3/s by 0,5 water supply

Energy data Installed discharge m3/s 6.5 Capacity MW 1.5 Possible annual generation GWh 7 Estimated investments EUR 2,000,000

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Bovan 6.50 35.00 1.50 495,200 1,243,900 260,900 2,000,000

134 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA ■■ Celije SHPP through an existing channel with a 2600 mm diameter, subse- quently through a 1500 mm pipeline, 50 m long. Generator The Celije SHPP is a dam, reservoir SHPP located within the sets would be of Francis type with a vertical shaft. Installed existing Celije dam structure. The dam is located on the Rasina capacity of each generator set would be 1.8 MW, maximum river, at the section some 23 km away from Krusevac. The capacity 2 MW, and generator capacity of 2.5 MVA. Estimated dam is 52 m high, 49 m above riverbed bottom. It is 220 m annual operating hours would be 3400 h, with the mean long at the crest, and 8 m wide. Dam is equipped with the side annual electricity generation (peak energy) of 11.5 GWh. The spillway. Water management permit was issued for elevation generator set would have an installed discharge of 0.56 m3/s 277, while the live storage under this elevation amounts to (maximum 0,6 m3/s), under the guaranteed flow, while its net 36.6 million m3. Reservoir elevation would range from 272 to head would equal 43 m. Installed generator set capacity would 277 mASL during SHPP operation, while tail water elevation amount to 0.2 MW (maximum 0.22 MW), while the generator would equal 232 mASL. Installed discharge of main generator capacity would be 0.250 MVA. Annual electricity generation sets would be 10 (2 x 5) m3/s, their gross head 45 and net (45% peak energy) would amount to 0.987 GWh. head 43 m. Water would be conveyed to the generator set

Dam and reservoir data

Dam type Rock-fill dam with clay core Construction height m 52 Total reservoir volume million m3 64 Live storage million m3 55.5 Spillway elevation mASL 282.0 Normal backwater elevation mASL 277.0 Year of construction 1978

Watercourse and catchment area data

Watercourse Rasina Narrow/wider catchment area Rasina /Juzna Morava Mean annual discharge m3/s 5.1 Guaranteed discharge m3/s 0.56 (according with watershed licence)

Facility and water use data

Water supply, flood protection, low water Facility use improvement, irrigation, energy Current water intake m3/s 0.6 water supply/1.0 irrigation (summer) Future water intake m3/s 1.2 water supply/1.0 irrigation (summer)

Energy data Installed discharge m3/s 10.6 Capacity MW 4.22 Possible annual generation GWh 12.5 Estimated investments EUR 3,000,000

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Celije 10.60 35.00 4.22 301,000 2,086,000 613,000 3,000,000

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 135 ■■ Barje SHPP would be conveyed to the generator set through a tunnel with a 3100 mm diameter, 400 m long, subsequently through a The Barje SHPP is a dam, reservoir SHPP located within 1500 mm pipeline, 50 m long. Generator sets would be of the the existing Barje dam structure. The dam is located on the Francis type with a horizontal shaft. Installed capacity of each Veternica river, some 33.5 km from the confluence to the generator set would be 1.05 MW, maximum capacity 1.1 MW, Juzna Morava river. The dam is 75 m high. It is 330 m long and generator capacity 1.25 MVA. Estimated annual operating at the crest, and 10 m wide. Dam is equipped with a shaft hours would be 3000 h, with the mean annual electricity spillway. Total reservoir volume equals 40.67, while its live generation (peak energy) of 6.309 GWh. The guaranteed storage amounts to 21 million m3. discharge generator set would have an installed discharge of The maximum level is 382, normal level 370.5 and spillway 0.35 m3/s (maximum 0,45 m3/s), while its net head would elevation 379 mASL. Spillway capacity amounts to 1270, amount to 48 m. This generator set would be of the Francis while the capacity of other discharge structures equals type with a horizontal shaft. Installed generator set capacity 280 m3/s. The powerhouse would comprise three generator would amount to 0.14 MW (maximum 0.18 MW), while the sets, two main ones and one for the guaranteed discharge. generator capacity would be 0.250 MVA. Annual electricity Installed discharge of the main generator sets would be 5 generation (45% peak energy) would amount to 0.679 GWh. (2 x 2.5) m3/s, their gross head 50 and net head 48 m. Water

Dam and reservoir data

Dam type Rock-fill dam with clay core Construction height m 75 Total reservoir volume million m3 40.67 Live storage million m3 21 Spillway elevation mASL 379 Normal backwater elevation mASL 370.5 Year of construction

Watercourse and catchment area data

Watercourse Veternica Narrow / wider catchment area Veternica / Juzna Morava Mean annual discharge m3/s 2.522 Guaranteed discharge m3/s 0.378

Facility and water use data

Water supply, flood control, Facility use biological minimum increase Current water intake m3/s 0.675 water supply Future water intake m3/s 0.8 water supply

Energy data Installed discharge m3/s 5.35 Capacity MW 2.34 Possible annual generation GWh 7 Estimated investments EUR 1,500,000

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Barje 5.25 50.00 2.34 142,000 882,500 475,500 1,500,000

136 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA ■■ Zlatibor SHPP Normal backwater elevation of the reservoir is 986 mASL, while the maximum backwater elevation equals 988 mASL. The Zlatibor SHPP would be built within the Zlatibor dam, built on the Crni Rzav river, near the Ribnica village. It was built for This SHPP would entirely be generating the peak energy. water supply purposes of Partizanske vode, Cajetina and other settlements in Zlatibor area. The dam is of arched, concrete type, with the crest elevation of 988 mASL. Along the crest, the dam is some 94.2 m long and 1.5 m wide.

Dam and reservoir data

Dam type Concrete arch dam Construction height m 32.5 Total reservoir volume million m3 7.6 Live storage million m3 2 Spillway elevation mASL 986 Normal backwater elevation mASL 986 Year of construction 1972

Watercourse and catchment area data

Watercourse Crni Rzav Narrow/wider catchment area Veliki Rzav / Drina Mean annual discharge m3/s 1.121 Guaranteed discharge m3/s 0.025

Facility and water use data

Facility use Water supply Current water intake m3/s 0.15 water supply Future water intake m3/s 0.2 water supply

Energy data Installed discharge m3/s 1.55 Capacity MW 0.26 Possible annual generation GWh 1.125 Estimated investments EUR 600,000

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Zlatibor 1.55 25.00 0.26 142,000 380,000 78,000 600,000

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 137 ■■ Parmenac SHPP amounts to 36.85 m3/s. Reservoir elevations would range between 365 to 370 mASL during SHPP operation, while The Parmenac SHPP is a dam, reservoir SHPP located within tail water elevation would amount to 318 mASL. Head water the existing Parmenac dam structure. The dam is located on elevation would be 247.20, and tail water from 242.00 to the Zapadna Morava river, close to Cacak. It is 16.5 m high, 242.50 mASL. The powerhouse would contain two generator and 50 m long at the crest. Total reservoir volume is 0.15 sets. Installed discharge would be 50 (2 x 25) m3/s, with the million, while its live storage equals 0.12 million m3. Maximum head of 5 m. Generators would be of S (optionally bulb) type backwater elevation is 248.1, while normal level elevation with a horizontal shaft. Installed capacity of each generator amounts to 247.5 mASL. The Parmenac reservoir is intended set equals 1.1 MW, while the generator capacity is 1.25 MVA. for water levelling when the Medjuvrsje HPP is in operation. Annual electricity generation would amount to 12 GWh. The Zapadna Morava river mean annual flow at the dam section

Dam and reservoir data

Low gravity dam with stop logs Dam type (emergency gates) Construction height m 16.5 Total reservoir volume million m3 0.15 Live storage million m3 0.12 Spillway elevation mASL 243.0 Normal backwater elevation mASL 247.50 Year of construction 1960

Watercourse and catchment area data

Watercourse Zapadna Morava Narrow / wider catchment area Zapadna Morava Mean annual discharge m3/s 33.85 Guaranteed discharge m3/s 3.75

Facility and water use data

Facility use Irrigation Current water intake m3/s 2.5 irrigation Future water intake m3/s 2.5 irrigation

Energy data Installed discharge m3/s 50 Capacity MW 2 Possible annual generation GWh 12 Estimated investments EUR 3,500,000

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Parmenac 50.00 5.00 2.2 1,616,000 1,427,500 456,500 3,500,000

138 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA ■■ Rovni SHPP The dam is 75 m high, while dam crest elevation equals 363.50 mASL. The Rovni SHPP would be constructed inisde the Rovni dam, built on the Jablanica river, 15 km upstream from This SHPP would be located downstream from the diversion Valjevo, between the villages of Stubo on the right bank and tunnel outlet gate. The powerhouse would contain three Rovni on the left bank. Reservoir with the total capacity of generator sets. In addition to this, a balancing reservoir 51.5 million m3 would be formed once the dam is constructed. construction was also envisaged.

Dam and reservoir data

Dam type Rock-fill dam with clay core Construction height m 75 Total reservoir volume million m3 51.5 Live storage million m3 49.5 Spillway elevation mASL 360 Normal backwater elevation mASL 360 Year of construction Under construction

Watercourse and catchment area data

Watercourse Jablanica Narrow/wider catchment area Kolubara / Sava Mean annual discharge m3/s 1.5 Guaranteed discharge m3/s 0.13

Facility and water use data

Flood protection, water supply Facility use and provision of guaranteed discharge (for the Kolubara B TPP needs) Current water intake m3/s 0 Future water intake m3/s 0.6 (1.4) water supply

Energy data Installed discharge m3/s 1.8 Capacity MW 0.75 Possible annual generation GWh 3.5 Estimated investments EUR 1,300,000

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Rovni 1.80 36.00-45.00 0.75 237,000 897,000 166,000 1,300,000

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 139 Rovni SHPP

■■ Selova SHPP minimum discharge, while the third one would process water surpluses, since this SHPP operates in accordance with the The Selova SHPP would be constructed inside the Selova dam, needs of basic reservoir users. built on the Toplica river, near Kursumlija. The water supply generator set installed flow is 2.0 m3/s, Dam crest elevation is 527 mASL, dam length at the crest biological minimum generator set 0.3 m3/s and surplus water 429.5 m and its width 8 m. generator set 2.0 m3/s. Gross heads of these generator sets Three generator sets would be installed in the powerhouse, are 34.5, 59.5 and 59.5 m, respectively. Their installed whereas, the first generator set would operate depending on capacities - 0.5, 0.15 and 0.9 MW. water supply needs, the second one with constant biological

Dam and reservoir data

Dam type Rock-fill dam with clay core Construction height m 73 Total reservoir volume million m3 70.5 Live storage million m3 46 Spillway elevation mASL 516.5 Normal backwater elevation mASL 516.5 Year of construction Under construction

Watercourse and catchment area data

Watercourse Toplica Narrow / wider catchment area Toplica/Juzna Morava Mean annual discharge m3/s 3.7 Guaranteed discharge m3/s 0.3

Facility and water use data

Facility use Water supply, irrigation and energy Current water intake m3/s 0 Future water intake m3/s 1.7

Energy data Installed discharge m3/s 4.3 Capacity MW 1.55 Possible annual generation GWh 5.5 Estimated investments EUR 1,700,000

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Selova 4.30 34.5-59.5 1.55 370,000 1,110,000 220,000 1,700,000

142 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA ■■ Svrackovo SHPP (Arilje) water supply system of West Serbia (Arilje, Pozega, Lucani, Cacak, Gornji Milanovac) and a balancing reservoir for the According to the feasibility study, developed in 2007 based future peak Roge HPP. The SHPP was foreseen on the down- on the detailed design, the Svrackovo SHPP was foreseen stream toe of the rock-fill dam to process surplus waters and within the Svrackovo multipurpose reservoir, on the Veliki guaranteed discharge waters. Rzav river. It forms the part of the Zapadna Morava regional

Dam and reservoir data

Dam type Construction height m 68 Total reservoir volume million m3 Live storage million m3 Spillway elevation mASL Normal backwater elevation mASL Year of construction

Watercourse and catchment area data

Watercourse Veliki Rzav Narrow/wider catchment area Mean annual discharge m3/s 6.21 Guaranteed discharge m3/s

Energy data Installed discharge m3/s 15.86 Capacity MW 7.65 Possible annual generation GWh 22 Estimated investments EUR 9,280,000

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Svrackovo 15.86 53.50 7.65 1,920,000 7,280,000 80,000 9,280,000

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 143 ■■ Vrutci SHPP on the considered section equals 2.03 m3/s. Water for this SHPP would be captured through an opening in the dam, with The Vrutci SHPP would be positioned inside the Vrutci dam, the 1.4 m diameter and width of 6.5 m. This water would be at the entrance into the Djetinja Gorge, 12 km upstream from conveyed to the powerhouse by a 1300 mm pipeline. The Uzice, close to the Stanisavic village. The dam is of arched, powerhouse would contain three generator sets with nominal dome type, with double curvature, 77 m high, 241 m long and discharge of 0.96 m3/s each, minimum discharge 0.48 3.01 m wide at the crest. Dam crest elevation is 630mASL, m3/s and maximum discharge of 1.2 m3/s. Installed power while the spillway crest elevation equals 627 mASL. The plant discharge amounts to 3.6 m3/s. Net generator sets normal reservoir backwater elevation is 621.3 mASL, with the head equals 53 m while the nominal generator capacity is maximum backwater elevation of 629 mASL. Total reservoir 0.63 MVA. volume is 54 million m3. The Djetinja river mean discharge

Dam and reservoir data

Dam type Concrete arch dam Construction height m 77 Total reservoir volume million m3 54 Live storage million m3 35.26 Spillway elevation mASL 627.0 Normal backwater elevation mASL 621.3 Year of construction 1984

Watercourse and catchment area data

Watercourse Djetinja Narrow / wider catchment area Djetinja/Zapadna Morava Mean annual discharge m3/s 2.03 Guaranteed discharge m3/s 0.85

Facility and water use data

Water supply, flood protection, Facility use biological minimum increase Current water intake m3/s 0.4 water supply Future water intake m3/s 0.8 water supply

Energy data Installed discharge m3/s 3.6 Capacity MW 1.90 Possible annual generation GWh 5.0 Estimated investments EUR 2,650,000

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Vrutci 3.60 53.00 1.90 907,300 1,602,300 140,400 2,650,000

144 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA SHPPs Construction on the existing HPPs and TPPs owned by EPS

■■ Jezero SHPP pipeline to the powerhouse located at the Vlasinsko Lake edge. The headrace is dimensioned for the discharge of 8 m3/s. The Vlasinsko Lake waters transported via the Bozicki tunnel would be used to operate the Jezero SHPP. The current A concrete pipe, with a 1.9 m diameter and 76 m long, will be available discharge is 3.90m3/s, out of which 1.19m3/s tied to the derivation channel. represents a gravitational inflow coming down the Bozicki The powerhouse would contain two Kaplan type generator and Toplodolski tunnels, while 2.71m3/s is pumped from the sets, with installed discharge of 2 x 4m3/s. Gross head ranges Lisina reservoir. There are plans to increase this discharge to from 11 to 15.5m. 4.5m3/s. Installed SHPP capacity is 1 MW, and its mean annual genera- Water for this SHPP would be captured at the Bozicki tunnel tion 4.85 GWh. outlet and conveyed further via a derivation channel and a

Watercourse and catchment area data

Bozicki tunnel – Watercourse gravitational transport Narrow / wider catchment area Bozicka, Lisina, Ljubatska and Toplodolska rivers Mean annual discharge m3/s 3.90 Guaranteed discharge m3/s

Energy data Installed discharge m3/s 8 Capacity MW 1 Possible annual generation GWh 4.85 Estimated investments EUR 2,980,000

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Jezero 8.00 13.00 1.00 920,000 1,950,000 110,000 2,980,000

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 145 ■■ Mala Vrla 1 SHPP capacity relief well. 120 m long steel pressurised pipeline was planned from the relief well to the SHPP, with an 800 mm The Vrla 1 SHPP was foreseen to use waters from Vrla and diameter. The Powerhouse with two generator sets is antici- Gradska rivers. Power plant structures include Tyrolean pated in the area of the current storage at the plateau in front intakes with sedimentation tanks on Vrla and Gradska rivers, of the Vrla 1 HPP entrance. The Vrla 1 SHPP and the Vrla 1 headwater pipelines 1.5 and 2.0 km long with the diameter of HPP share the same tail water. 600 and 900 mm respectively, leading to the joint 137 m3

Watercourse and catchment area data

Watercourse Vrla, Gradska Narrow / wider catchment area Mean annual discharge m3/s 0.80 Guaranteed discharge m3/s

Energy data Installed discharge m3/s 1.40 Capacity MW 0.47 Possible annual generation GWh 1.83 Estimated investments EUR 800,000

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Mala Vrla 1 1.40 44.00 0.47 290,000 435,000 75,000 800,000

146 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA ■■ Zavoj SHPP The Zavoj SHPP technical solution comprises a foundation outlet gate intake, headwater steel 540 m long pipeline, with The Zavoj SHPP is foreseen on the Zavoj dam foundation a 600 mm diameter, anticipated in the foundation outlet outlet. The Pirot HPP water management permit establishes tunnel, as well as a surface powerhouse on the left bank of the an obligation for continuous water discharge from the Zavoj Visocica river upstream from the foundation outlet, housing reservoir downstream from the dam, in the amount of 60 l/s, one generator set. as well as the discharge of additional water amount intended to meet the guaranteed discharge at the Temska village equalling 1120 l/s.

Dam and reservoir data

Dam type Rock-fill with central clay core Construction height m 83 Total reservoir volume million m3 Live storage million m3 Spillway elevation mASL Normal backwater elevation mASL Year of construction 1990

Watercourse and catchment area data

Watercourse Visocica Narrow/wider catchment area Visocica Mean annual discharge m3/s 6.17 Guaranteed discharge m3/s 0.60

Facility and water use data

Facility use Energy generation Current water intake m3/s Future water intake m3/s

Energy data Installed discharge m3/s 0.90 Capacity MW 0.58 Possible annual generation GWh 2.94 Estimated investments EUR 1,112,000

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Zavoj 0.90 75.50 0.58 294,000 728,000 90,000 1,112,000

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 147 ■■ Pirot SHPP discharge channel, with an installed discharge of 10 m3/s and available gross head from 2 to 4 m. Installed capacity of this The Pirot SHPP would be constructed in the Pirot HPP SHPP under the above conditions would amount to 0.39 MW. balancing reservoir. HPP Pirot operates in a peak regime up to 4 hours a day, while its balancing reservoir is emptied during Phase II would comprise the Pirot 2 SHPP construction, on the entire day. The Pirot HPP installed flow is 45 3m /s. the right bank of the Nisava river discharge channel, with an installed discharge of 48 m3/s and installed capacity of The balancing reservoir water discharge has hydropower 1.41 MW. potential which could be used by constructing the Pirot SHPP. The total Pirot II SHPP installed discharge after construction Phase I of the Pirot SHPP construction would involve the would amount to 58 m3/s, with the installed capacity 1.8 MW. Pirot 1 SHPP construction, on the left side of the Nisava river

Watercourse and catchment area data

Watercourse River Visocica (Zavoj Lake) Narrow / wider catchment area Juzna Morava Mean annual discharge m3/s 10

Energy data Installed discharge m3/s 10 Capacity MW 0.39 Possible annual generation GWh 2.1 Estimated investments EUR 720,000

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Pirot 10.00 2.00-4.00 0.40 100,000 600,000 20,000 720,000

148 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA ■■ TENT B SHPP The technical solution comprises the waterintake downstream from the overflow chamber not affecting the thermal power The TENT B SHPP processes cooling water coming from the plant operation and security, an inlet pipeline and a power- Nikola Tesla B TPP. The Nikola Tesla B TPP utilises the Sava river house on the right Sava river bank nearby the existing water water to cool the turbine condenser of the turbine-feed pump discharge. Two generator sets have been anticipated for two equalling 20m3/s per unit. This water is collected in the overflow existing TPP units, with potential cooling water use from the chamber 4.26 m above the Sava river average level. There are third unit under construction. plans to use this water potential through the TENT B SHPP.

Watercourse and catchment area data

Cooling water discharge Watercourse from TENT B Narrow/wider catchment area Sava Mean annual discharge m3/s 40

Energy data Installed discharge m3/s 40 Capacity MW 1.6 Possible annual generation GWh 7.34 Estimated investments EUR 4,000,000

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR TENT B 40.00 2.50-4.50 1.60 1,000,000 2,800,000 200,000 4,000,000

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 149 SHPPs construction of on the new sites

■■ Banjica SHPP Provisional dam height equals 7 m. The Banjica SHPP (catchment area 3480 km2, Q = 30 m3/s) is a run-of-river, The Banjica SHPP would be placed in the Sicevacka Gorge, sr dam type power plant. The Nisava River would be partitioned some 2 km south-east from Sicevo located in the Nis munici- by a dam with the provisional height of about 7 m. Road and pality. The SHPP would utilise the Nisava river waters, the right railway on the right reservoir bank are essential elements used tributary of the Juzna Morava river. to establish the dam height (head water elevation). The Banjica SHPP dam section and powerhouse would be positioned between the Sicevo SHPP (downstream) and the Sveta Petka SHPP (upstream).

Dam and reservoir data (unconstructed facility)

Dam type Low concrete gravitation dam Construction height m 12 m provisionally Total reservoir volume million m3 - Live storage million m3 - Spillway elevation mASL - Spillway apron elevation - Normal backwater elevation mASL 235

Watercourse and catchment area data

Watercourse Nisava Narrow/wider catchment area Nisava/Juzna Morava Mean annual discharge m3/s 30 Guaranteed discharge m3/s 3

Energy data Installed discharge m3/s 45 Capacity MW 2.3 Possible annual generation GWh 12 Estimated investments EUR 5,900,000

Source of information and estimate

Source of information Jaroslav Cerni Institute data base (estimate) Feasibility Very good

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Banjica 45.00 7.00 2.30 1,800,000 3,900,000 200,000 5,900,000

150 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA ■■ The Stalac SHPP elevation 141 mASL. A ship-lock for potential future naviga- tion can be formed in this zone (some 130 m wide). The Stalac SHPP would be placed on the Juzna Morava river, upstream from Stalac (in the gorge). The SHPP would be of dam, Head water elevation during operation would amount to 140, run-of-river type. The Juzna Morava river average discharge tail water 131 mASL, gross head 9 and net head 8 m. The of on the Stalac SHPP section amounts to 92.49 m3/s. powerhouse would comprise four generator sets. The river would be partitioned by a so-called low gated dam: Generator sets installed discharge would amount to 140 (4 the powerhouse would be formed on the right bank at the x 35) m3/s. They would be of S type with a horizontal shaft. existing local road level (about 32 m wide); a spillway dam Installed capacity of each generator set would be 2.5 MW, with gates, 4 x 14 m wide, would be constructed in continu- maximum capacity 2.7 MW, while the generator capacity ation along the entire width of the existing riverbed. Spillway would equal 3.15 MVA. elevation would amount to 133 mASL, with normal backwater Mean annual electricity generation would amount to 48 GWh. elevation of 140 mASL. A low dyke would be constructed on the left bank, 6 m high above the ground level, with crest

Dam and reservoir data (unconstructed facility)

Low concrete gravity dam Dam type with rock-fill section Construction height m 25 Total reservoir volume million m3 - Live storage million m3 - Spillway elevation mASL - Spillway apron elevation 133 Normal backwater elevation mASL 140

Watercourse and catchment area data

Watercourse Juzna Morava Narrow / wider catchment area Juzna/Velika Morava Mean annual discharge m3/s 92.5 Guaranteed discharge m3/s 9

Energy data Installed discharge m3/s 140 Capacity MW 11 Possible annual generation GWh 48 Estimated investments EUR 29,000,000

Source of information and estimate

Source of information Jaroslav Cerni Institute data base (estimate) Feasibility good

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Stalac 140.00 9.00/8.00 11.00 12,500,000 13,500,000 3,000,000 29,000,000

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 151 ■■ Sokolja SHPP Head water elevation would amount to 815, tail water elevation 520 mASL. A mini reservoir was constructed on the Gvozdacka Reka, right tributary of the Ibar river, whose waters are captured and Installed capacity of the generator set would amount to 0.8 MW, conveyed via a tunnel into the catchment area of Sokolja river maximum 0.9 MW, and the generator capacity 1 MVA. Mean (forming the Ribnica river). These waters have previously been annual electricity generation would amount to 4.26 GWh. processed by the Sokolja SHPP, which suffered large damages The Sokolja II SHPP would have an installed discharge of in the meantime preventing its further use. 0.6 m3/s, gross head of 90 mASL and net head 85 mASL. In the newly formed system, the existing Sokolja SHPP would One Pelton type generator set would be installed in the power- become the Sokolja II SHPP, while the Sokolja I SHPP would be house with a horizontal shaft. constructed upstream. Head water elevation would amount to 510, tail water Both facilities are of derivation, run-of-river type. elevation 420 mASL. The Sokolja I SHPP would have an installed discharge of Installed capacity of the generator set would amount to 0.32 m3/s, gross head of 295 mASL and net head 285 mASL. 0.45 MW, maximum 0.50 MW, and the generator capacity One Pelton type generator set would be installed in the power- 0.5 MVA. Mean annual electricity generation would amount to house with a horizontal shaft. 2.34 GWh.

Watercourse and catchment area data

Watercourse Gvozdacka Reka Sokolja Narrow / wider catchment area Ibar Ribnica/Ibar Mean annual discharge m3/s 0.25 0.22

Energy data Sokolja I Sokolja II Installed discharge m3/s 0.32 0.6 Capacity MW 0.8 0.45 Possible annual generation GWh 4.3 2.3 Estimated investments EUR 3,000,000

Source of information and estimate

Source of information Jaroslav Cerni Institute data base (estimate) Feasibility good

Gross/ Investments Installed Investments Investments Investments SHPP net head Capacity –civil discharge – equipment -unspecified - total height structures m3/s m MW EUR EUR EUR EUR Sokolja 0.32-0.60 285+85 1.25 459,900 1,903,800 636,300 3,000,000

152 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA Conclusion In addition to this, it is important to say that the Rovni dam is under construction, while the Svrackovo dam construction This document provides an overview of potential investments should be initiated. for the revitalisation of the existing or the construction of new SHPPs within the Republic of Serbia territory. It was compiled Given the above, it may be expected that all 9 SHPPs would be from various materials of different reliability levels, whereby, built under this programme. some data should be taken with certain level of criticism and reserve. SHPPs which could be constructed on existing HPPs and TPPs SHPP owned by EPS requiring revitalisation Total capacity of these SHPPs is 4.05 MW. Total capacity of all analysed SHPPs from this group amounts Total mean annual generation of these SHPPs is 19.06 GWh. to 33.2 MW. Total construction investments of these SHPPs are EUR 9.6 Total mean annual generation of all analysed SHPPs from this million. group is 134.8 GWh. It should be emphasised that in the case of Pirot SHPP, the Total revitalisation investments of all analysed SHPPs from current state data have been provided (not including addi- this group amount to over EUR 12.5 million. tional waters). In the case of TENT B SHPP, data are based on It should be noted that the values indicate the original state the current Nikola Tesla B TPP construction level with 2 units of SHPPs, without the increase of their generation capacities. (the existing TENT B SHPP concept design anticipates the construction of the complete facility independently from the Another thing to be noted is that some of these projects are fact whether at the moment of SHPP construction a third TPP in progress (Ovcar Banja and Medjuvrsje). It is expected that unit will be constructed or not). these SHPPs will be revitalised based on already initiated programmes. Moreover, the descriptions provided in Section Having this in mind, it may be expected that all 5 SHPPs would 2 demonstrate that in the case of certain SHPPs, revitalisa- be constructed under this programme. tion of individual civil structures or equipment elements has already been started. SHPPs which could be constructed on new sites Bearing this in mind, it may be expected that 15 SHPPs will be revitalised under this programme. Total capacity of 4 analysed SHPPs from this group is 20.4 MW. Total capacity of these SHPPs is 17.8 MW. Total mean annual generation of 4 analysed SHPPs from this Total mean annual generation of these SHPPs is 54.8 GWh. group is 82 GWh. Total revitalisation investments of these SHPPs are EUR 9.8 Total revitalisation investments of 4 analysed SHPPs from this million. group are EUR 45.1 million. It should be stressed that data on some of these projects are SHPPs which could be constructed on existing water quite unreliable (SHPP Tigar) or there are major potential management facilities ownership issues (SHPP Sokolja), therefore, these projects should not be considered further without detailed verification. Total capacity of these SHPPs is 22.37 MW. Taking this into account, it may be expected that 2 SHPPs will Total mean annual generation of these SHPPs is 76.63 GWh. be implemented under this programme, Banjica SHPP and Total construction investments of these SHPPs are EUR 25.5 Stalac SHPP. million. Total capacity of these 2 SHPPs is 13.3 MW. It should be noted that investment values provided in this Total mean annual generation of these 2 SHPPs is 60.0 GWh. overview only cover the SHPPs construction. They do not include operational costs (water use fee paid to the state and Total construction investments of these 2 SHPPs are EUR maintenance paid to the dam owner, etc). 34.9 million. Another thing to be stressed is that property issues need to be It should be noted that this group of power plants has still not resolved for this group prior to the SHPP construction on these been analysed sufficiently and that other possible sites may facilities (property right is a necessary condition to obtain the be included recognized as suitable for further consideration site permit – e.g. a contract with the owner on site use). based on preliminary analyses.

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 153 4.4.4 WASTE TO ENERGY AND only for a minimum project period of 30 years, it is clear that the whole venture is faced with grave issues, especially from BIOMASS the standpoint of investments provided from international sources, and based on the EU Directives. 1. Introductory explanation In order to prolong the working life of the landfill, it is necessary to amend the general concept of technical and technological In Serbia as well as world-wide, waste management has solutions used as a base of the project. The new concept is entered a period of rapid and dramatic changes. Having in to result in minimizing the amounts of waste to be disposed mind principles of European legislation as well as the need at the landfill, in order to save the available space for the to improve the quality of the environment, Serbian munici- longest possible period of time. In order to reach an optimum palities are faced with the need to find a way to reduce the concept compliant with the situation in the field, principles current number of inappropriate waste dump sites and start of environmental protection, and economic requirements of implementing sustainable waste and resource management users, investors and managers, it is necessary to deliberate methods. Waste management is to be tackled in such a manner and evaluate a number of possible solutions, starting with as not to jeopardize the present and ensure safe future. This maximum possibilities for separation of individual waste elementary principle of sustainable development calls for fractions, the system of thermal treatment of individual fundamental changes in the attitude to waste, accountability fractions or all waste collected, with the assessment of the on part of every individual and all institutions, as well as devel- possibility of using the generated thermal energy for the opment of awareness that responsibility in this matter will in purpose of electricity production. no manner be left to others. By the Serbian Government decision, National waste manage- ment Strategy was adopted in 2003; it implies implementa- THE PURPOSE OF THIS DOCUMENT tion of the following principles: prevention, separate collection Having in mind PROTOKOLS signed between PE of waste materials, neutralization of hazardous waste, regional EPS and municipalities of Užice and city of Kragu- approach in waste collection, and rehabilitation of the existing jevac this chapter represents an invitation for third landfills and dump sites. The objectives of sustainable waste part to participate as co-investor in futher projects management also relate to minimization of waste generated development. at source, and increase of the portion of waste which may be re-used, which simultaneously reduces the amount of waste to be disposed of at landfills. The National Strategy also defined The main purpose of the document is to provide relevant data regional waste management concept which implies joint waste and sufficient level of information to pass a relevant decision disposal with a number of adjourning municipalities. on technical possibilities for construction, and establish initial In these terms, regional waste management system “Duboko” viability of investment in construction of a plant for thermal was established on the basis of common vested interests in treatment of municipal waste. Based on this information the following 9 towns: Užice, Cajetina, Arilje, Pozega, Ivanjica, it is possible to pass the decision on viability of investment Lucani, Kosjeric, Bajina Basta and Cacak, with the accompa- in further preliminary works and composition of the General nying rural settlements (as many as 305 of them). Following project and Pre-feasibility study, appropriate spatial planning the environmental policy of the Republic, i.e. PUC “Duboko” documents, as well as other documents necessary in the as their executive project-implementing body, the municipali- process of construction of thermal energy sources in line with ties adopted the concept of waste separation at the point of the relevant legal regulations. generation. Unfortunately, the varying levels of development, In these terms, the items which need to be analyzed are as qualitative levels of approach to the system, as well as levels follows: of awareness and interest resulted in extreme unevenness in yy Amounts of waste generated at the territory of each indi- implementation of the concept. vidual municipality participating in the regional system, The same thing is with regional project for City of Kragujevac. portions of individual fractions in the total mass of waste, During a course of years, from the original project to the yy Manner of collection, pre-treatment and transport of waste, beginning of implementation, the project was modified several yy Possibilities for purchase, use, regular maintenance, pos- times in order to reflect the EU Directives and local regula- sible damages, etc. for each deliberated technological tions. The major modifications were introduced for the purpose option, of adapting work to the conditions necessary for inclusion of yy Basic economic indicators, municipalities which gravitate towards Užice as the regional yy Impact to the environment, centre. However, all modifications contributed to increased yy Market and possibilities of selling products (electricity and costliness of the project, while the implemented technical possibly thermal energy), solutions could not solve the problem of landfill capacity; thus, yy Micro-location of the source of thermal energy; every time a new municipality was added, the landfill lifespan yy Technology, power, and configuration of the thermal was shortened. The expected working life of “Duboko” landfill is energy source, 12 years; as all valid calculations and recommendations state yy General concept of the project, including limitations, that construction of a regional landfill may be cost-effective meeting the legal requirements.

154 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 2. Legal framework on waste to energy is in ongoing status) includes space for waste disposal, access road and all necessary infrastructures, the center of in EU and Republic of Serbia the selection of waste, as well as the necessary vehicles and equipment for work. As elaborated in text above, the project * NOTE: draft document is on CD only has gone through several stages of expansion, improvement and modernization, which resulted in substantial savings in terms of the projected period of landfill use. Under present 3. Options for landfill extension use conditions, the concept is based on the principle of separation: regarding techno-economic solutions primary separation, secondary separation and permanent waste disposal. In general, the existing concept of a regional Regional waste management system which PE EPS with system of “Duboko” can be expressed through the following partners predict for project in Kragujevac and Užice (which scheme:

Schematic of the work concept of a regional system „Duboko“

The analysis of past practice is based on research conducted the organic component condenses and filters through various in the area of urban environment of Čacak and compared layers of the earth. If landfill is not properly covered (foil or with similar studies in developed countries and developing clay material) precipitation increases the amount of water that countries in which the waste management system gradually passes through the landfill body. This kind of landfill liquid has introduced in previous years. In all analyzed cases imple- pollution up to 10,000 times the pollution of waste waters mented in different levels, the amount of recycling material from urban sewage collectors. had a similar share in the total weight of waste and varied Although the projected landfill management methods of the depending on various factors: the region where the analysis project minimize the impact of filter vaters using a measure was performed, period of years, population habits, develop- of protection from precipitation and organized collection by ment of the country, living standards, etc. Comparing research drainage system, and then purification and provide for the results confirmed the validity of research in Čacak, which point collection and burning landfill’s gases with the possibility out that municipal waste which generally comes to the landfill, of energy efficiency, these measures do not contribute to consists of 20% recycling components, 60% biodegradable reducing the dimensions of delayed waste due to decay. components and 20% useless parts. Reducing the amount of waste that is disposed in a landfill The results of analysis shows fact that the life of any landfill, can be achieved only by treatment of biodegradable and inert and landfill “Duboko” in Užice, could be extended ifthe components of the inert rest, or by biological-mechanical approaches to the treatment of biodegradable waste compo- treatment (composting) or through incineration, i.e. burning nents and the subsequent treatment of inert residues. The under controlled conditions, where you get a certain amount biodegradable component contains 30-60% moisture of energy. (depending on the composition, season, local and current weather conditions, etc.) in terms of depositing, other than In further analysis these technological processes disas- a busy area as a result of biochemical degradation process, sembles, where it is important to emphasize that the use of respectively decay, producing the effect of creating landfill’s waste as fuel, because of the sensitivity of the process and gases that can be causes of problems in the maintenance and resistance to the public, in recent years improved and refined work of the landfill if not properly evacuated from landfill body. in order to avoid negative impacts on the environment. In Also they could have degrading property, since it is a gas of addition to biodegradable of municipal solid waste, thermal greenhouse gases, primarily of methane, hydrogen sulfide and treatment process to destroy other wastes which processing carbon dioxide. On the other hand, the moisture contained in is expensive or irrational, such as plastic films, bags, textile

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 155 remnants and similar, and the process itself depends on yy energy recovery, the used technology could include waste sludge from waste yy disposal water, waste from slaughterhouses, and even some types of EU member states are obliged to apply the above principles hazardous waste. during the waste life-cycle. During its adoption process, Treatment of inert rest that is left after the thermal treatment the EU Waste Framework Directive has been critised for the of waste is an advanced and relatively expensive technolog- consistence of applied and prescribed technological proce- ical process, mainly because of the heterogeneous composi- dures. Specifically, debates related to incineration in terms of tion of matter, in which are often found potentially hazardous “recovery” or “redistribution”. The main criticism was given by substances (heavy metals, etc.). Delay or secondary treatment so called “Green group” of the EU Parliament considering a of these substances is conducted in strictly controlled “green” electricity generated by waste incineration as a myth, processes. In highly developed countries, this treatment is provided that burning of waste is followed by large carbon- usually performed using plasma plant. dioxide emissions. However, most of representatives agreed with the Comission and Parliament to accept to treat waste incineration in terms of “recovery”, provided that waste incineration plants strictly apply energy efficiency standards 3.1 Available technologies applied and other protection measures. Among the existing variety in practice and options for of technologies, the disposal still remains the most frequent treatment option; recycling is applied for one quarter of waste minimization waste generated, and incineration, i.e. energy production is expanding and has already reached the level of almost 20%. 3.1.1 Experiences from developed EU There are differences in respect to applied technologies from countries the experiences of number of EU countries. It is typical that recycling is most represented in the countries of Benelux, The main task of waste hierarchy, a significant element of Germany and Austria, landfilling - in Great Britain and South waste management policy in the EU countries, is primarily European countries (Italy, Greece), as well as in Ireland, Finland targeted to waste minimization, promoting recycling and and Spain, and incineration as a waste treatment method is reuse, while leaving disposal at landfills as a final solution. The most developed in Scandinavian and Benelux countries. It EU Waste Framework Directive sets a six-tier waste hierarchy: can be noticed that France and Luxembourg have the most yy prevention, balanced municipal waste treatment. yy reduction, Figure below presents general overview of municipal waste yy re-use, treatment in the EU countries in 2005. yy recycling,

Overview of municipal waste treatment in EU countries in 2005

Differences are obvious with regard to waste generation as Greece, Portugal, Finland, Sweden and Belgium – less than well. Ireland has the highest annual waste generation rate per 500 kg/inh/year. capita (even 869 kg/a), followed by Denmark, Luxembourg, Next table provides overview of waste generation and Holland and Austria. The lowest waste generation rates have treatment in the EU countries, the status in 2005.

156 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA Municipal waste management in the EU member states

Yearly production State Recycled (%) Landfilled (%) Incinerated (%) (kg/inh.) Holland 65 3 32 624 Austria 59 31 10 627 Germany 58 20 22 600 Belgium 52 13 35 469 Sweden 41 14 45 464 Denmark 41 5 54 696 Luxembourg 36 23 41 668 Spain 35 59 6 662 Ireland 31 69 0 869 Italy 29 62 9 538 Finland 28 63 9 455 France 28 38 34 567 Great Britain 18 74 8 600 Greece 8 92 0 433 Portugal 3 75 22 434

Source: Institute for Public Policy Research

Comparative overview of waste treatment in the EU member states

From the above analysis it can be concluded that Ireland and 3.2 Options contained in the Greece do not have capacities for waste incineration, and that recycling rates are lowest in Portugal and Greece, the National Waste Management later having the highest percentage of disposal as municipal Strategy waste treatment method. Holland and Denmark are biggest opponents to this way of treatment, closing down intensively The National Waste Management Strategy determines inte- the rest of their landfills. grated waste management. Integrated waste management relates to waste monitoring from its generation, minimization,

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 157 collection, transport, treatment, disposal. In order to establish yy development of new production technologies and waste sustainable waste management system, it is necessary to use procedures; consider all relevant and possible waste treatment options. yy analysis of markets for the placement of recyclables. Decision on the selection of waste treatment option is based The hierarchy concept in waste management indicates that on the analysis of waste category, life-cycle, economic possi- the most effective solution for environment protection is to bilities, and integrates characteristics of the evinronment and reduce waste generation. However, if further reduction is not local conditions where waste is generated. possible, products and materials can be reused, for same or The important factors, affecting the decision on use or waste different purpose. If this is not applicable, waste can be further disposal, are: used through recycling or composting, or energy recovery. If yy increased requirements for environmentally safe waste none of these options provide adequate solution, waste shall removal, resulting with higher cost disposal; be disposed at landfill. yy application of principles of real costs for disposal in respect to polluter and waste generator;

General overview of municipal waste treatment

3.2.1 Reduction of waste at source 3.2.2 Reuse of products Unlike other options in the waste management hierarchy, Some products were specifically designed to be used several the reduction of waste is not the option that may be chosen times. By introducing regulations on packaging waste, the in lack of other options. Waste reduction should be consid- incentive has been given to producers to take into consid- ered every time the use of resources is subject to decision- eration multiple use of packaging waste. In other cases, the making. The reduction must be designed through the life cycle products may be treated for same or similar purposes. There of a product, i.e., already in the design phase, through manu- are good reasons for products reuse, considering following: facturing, packaging, transportation and product placement. yy reduction of costs both for producers and users; Consumers should also take an active role in the reduction of yy savings in energy and raw materials; waste by purchasing products with less packaging material or yy reduction of waste disposal costs. products in bigger packaging, as well as products for multi- and long-term use. In certain cases the system of reuse of product has been applied for a long period in our country. The most frequent The Government of the Republic of Serbia shall be the engine case has been the exchange of glass bottles when buying and main promoter of waste reduction policy. Reduction, i.e. liquids (oils, alcoholic drinks, mineral water..). There are minimization of waste generation represents strategic goal examples in the world where such system comes back in the and requires broad and long-term campaigning, regard- same or modified form, and in the past few years it has the less waste management concept and options. It has basic widest application through the model presented in the Law on strategic importance and could be connected to any type of Packaging and Packaging Waste, prescribing that the product activity. Since given activities have as direct impacts saving of price shall include waste management, once the product, his energy and resources and reduction of import of raw materials parts or packaging become waste. or final products, influencing directly products’ prices and life costs, the issue presents one of the key issues of national importance.

158 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 3.2.3 Recycling In principle, composting is conducted in two phases: yy collection and separation of organic components (kitchen It is practically impossible to give a decisive answer to question waste and garden waste) for composting in compost fields whether recycling is more important in the sphere of industrial or in special plants (most often of regional type); or municipal waste, since in both cases significant technical, environmental and economic effects are obtained. The most yy independent composting “in own yard” through education important are: drastic reduction of quantities of industrial and and development of small vessels for composting. municipal waste that must be disposed to sanitary landfills, With regard to the EU Directive on Landfills and the prohibi- which prolongs the period of use of landfill, improved landfill tion of disposal of biodegradable waste to landfills, composting management, significant slow down of the process of exploi- became important as an alternative for treating biodegradable tation of natural resources, energy savings etc. Reasons to waste. increase the use of waste are numerous: yy the awareness about limitated natural resources and the need of rational use of what we have at our disposal; 3.2.5 Anaerobic digestion yy regulations on environmental protection prescribe more severe criteria for waste disposal, therefore it is necessary Decomposition of organic, biodegradable part of solid waste to reduce the volume of waste to be disposed to the landfill in gases with a high amounts of methane may be achieved by recycling; by anaerobic decomposition or anaerobic fermentation in yy problems in finding locations for new landfills indicate that reactor. After the fermentation of organic waste separated at recycling could be considered as one of the options to source, the remains of the fermentation (digestat) is normally reduce the need for new landfills. treated aerobically up to the level of compost. In this way, the final result of waste fermentation is in most cases similar to Typical components of recycling system in view of materials aerobic composting. The result of the decomposition process recovery and separation of useful waste are, as follows: is biogas, compost and water. Wastewater, resulting from yy separation of different components at source of waste the treatment process, is treated and one part of it may be generation – in households, shops, institutions, streets returned into the process. or in centers where recyclable waste is collected (primary The substances obtained - biogas and compost, i.e. treated recycling); slugde, have good energy value and can be used in the incin- yy separation of recyclables out of the total waste volume in eration process with other flammable waste components. waste separation plants; yy preparation of separated materials in waste baling lines (paper, plastic), pressing (metal) or grinding (glass, con- 3.2.6 Waste incineration struction waste). The technology of burning (incineration) of waste represents the oxidation of flammable materials contained in waste. The 3.2.4 Composting incineration of waste is applied to reduce the waste volume, and the energy generated in the process may be used to obtain Composting is defined as a fast and partial decomposition thermal or electrical energy. However, economic viability of of wet solid organic substances, wastes from food, garden the use of energy is not always acceptable at first sight, and it waste, paper, cardboard and similar, by means of aerobic should be taken in consideration that the investment and oper- micro-organisms and under controlled conditions. As a ational costs of incinerators in accordance with the EU regula- product a useful material is obtained, similar to humus, without tions are high, and in general higher than the costs of waste unpleasant smell and that can be used as soil conditioning disposal to sanitary landfills for municipal waste. It means agent or as a fertilizer. that the incineration is an important and useful way to reduce waste, and the problems accompanying disposal of waste to The advantages are as follows: the end-product has a certain landfills may be avoided on a long-run. market value that should result in the return of a certain part of invested funds; the space required for the plant location is Waste incineration with energy recovery should present relatively small and transportation prices are not that high. full and integral part of local and regional solutions to be On the other hand, such plants may require significant capital developed in the next period in order to develop a sustain- investments as well. The market for the obtained product is not able waste management system. The incineration of waste always secured, and storage of the end-product may also be a together with energy use must be considered in the context of problem for producer. The quality of compost as a product is integral approach to waste management, i.e. reduction, re-use important in case there is respective market. Practice shows and recycling. that although the organic waste from landfill may successfully If incineration with energy recovery is the most practical envi- be transformed in compost, the contamination (particularly ronmental option, it is necessary to consider the possibility of from polluters from the landfill) and the one from glass, metal obtaining combined thermal and electrical energy in view of and plastic particles reject potential users. Thus the organic increasing efficiency of the process. waste for composting should be separated at source and before disposal to the landfill.

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 159 3.2.7 Solidification weak points. In the hierarchy of waste this concept has strong support to the environmental consciousness of users, admin- Solidification is term used to define different treatment options istrative authorities, management structures and the social changing physical and chemical characteristics of waste in responsibilities of companies. In addition to this the entire order to make it suitable for disposal. Solidification is applied program has a firm reliance on the strong media campaign, for treatment of liquid waste and slugdes containing heavy uncompromising work of inspection and communal police metals and hazardous wastes. The objective of solidification is and close cooperation with the environmentally oriented civic to turn waste in a form that would immobilize waste constitu- associations (NGOs). ents from its spreading in the environment. The first and basic step of the “zero waste” concept refers to avoiding the creation of waste. This includes complete custom- 3.2.8 Disposal of waste to landfills ization of industry, retailers, administration and citizens to the new circumstances; from the production of consumer good, There are three types of waste disposal landfills: the commercial network, administrative and management yy landfills for disposal of non-hazardous waste; systems, media activities, to purchase household necessities yy landfills for disposal of inert waste; and treatment of waste at home. It also includes an extremely yy landfills for disposal hazardous waste, high level of social development, because the waste manage- ment costs in this way are very high. Certain types of waste are disposed on landfills designed for that type of waste. Sanitary landfills are used for disposal of Some experiments which were carried out in several German inert and non-hazardous waste and they represent sanitary- cities led to the fact that people in households have up to 12 technically arranged space in which waste generated in public different dishes and that the small collect station located at areas, households, production process, work process, sales or 1 km of mutual suspension, so that the system has proved use, that contains no hazardous substances and that cannot cumbersome and difficult acceptable by the population and be processed i.e. rationally used as industrial raw material or required the employment of large numbers of people, vehicles energy fuel, is disposed. and machinery. The landfills envisaged for disposal of hazardous wastes Certainly this concept itself carries the high costs of collec- are designed according to special technical requirements. tion, storage and removal of waste, and according to the Hazardous waste disposed in such landfills must be previously “German model - a pilot project” citizen would pay a fee for treated in accordance with regulations. unselected garbage disposal. In a complex system of calcula- tion included the cost of care of unuseful waste disposal and Landfills are required in each chosen waste treatment option, household waste disposal costs of hazardous characteristics because there is always a part of waste that can not be treated, etc. Although the pilot did not give the expected results, but and must be disposed. proved that cumbersome organizations carry high costs, the experience after the performed analysis applied selectively to certain types of waste. The expected goal of the organization 3.3 Possible solutions based on of waste management in this concept nevertheless is reduced to 5-10% of the components of waste that cannot be treated best available technologies otherwise than heat and at high temperature. (BAT) To the analysis of possible solutions in aspect of selection 3.3.2 Waste collection concept without of the best available technology in the practice must be previous separation approached taking into account the opportunities and needs This, the simplest concept is based on the principle of of future users. This analysis has a conceptual sense and secondary separation and although it is not explicitly specified, in that sense, the valuation approach by examining several it means the separation of certain (common) type of waste criteria, some of which were previously defined - the ability to from citizens on the voluntary basis. The simple organization extend life of landfill “Duboko” economic parameters, respec- of the collection follows the technological process of waste tively amount of investment, maintenance costs, return on separation by type, which can be organized as a manual or investment period etc., and some will be dealt with through partially automated. Experience has shown that even when further analytical considerations - the impact on the environ- using the most modern automatic machines must establish ment, the specificity of the organization, expertise and skills visual control by the present staff. of staff etc. In practice there are a number of developed technology solutions to the separation of waste from the total mass, but 3.3.1 “Zero waste” concept the lack of it is getting dirty secondary raw materials, which have lower cost because it requires pre-treatment, while This approach to waste management is gaining more and the extracted organic material are most suitable for thermal more supporters in the European countries although in general treatment. can be compared with the model of “perpetuum mobile” in the management of waste. Essentially it is primarily based on Complex technological equipment includes a variety of the activities of high-quality organization with practically no magnets, air and ballistic separators, and the conveyer belt

160 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA on which workers are assigned to set aside with the task to treatment. Most often it is about making small briquettes, separate certain material. which are made from unuseful organic waste part. Technology known as pelleting, includes pre-separation of solid materials The remaining waste, after the separation, shall be deposited (metals, glass, rubble, etc.) and technological process requires in sanitary controlled conditions. grinding of the remaining waste, bringing in specific humidity The rate of separated secondary - useful materials in this and making briquettes with properties suitable for burning in concept rarely exceeds 50%. power plants (cement factories, power plants, etc.). Briquette received from palletizing process has a modest 3.3.3 Concept of using technology for energy value and may contain a number of harmful ingredi- ents, so it is recommended for burning in the plants with double processing waste into secondary product or multiple combustion, to avoid the occurrence of harmful form for the purposes of thermal gases. The technological process of making small briquettes is treatment certainly designed to give a better effect of combustion due to low calorific value waste as fuel mixture. A number of technological procedures have been developed in order to as better as it can adapt the waste to future thermal

Briquettes from waste - pellets, prepared for the heat treatment

3.3.4 Biological-mechanical treatment The most widely used process based on biological-mechanical treatment is a process of cogeneration, which is successfully Biological mechanical treatment of waste involves decompo- applied in many European countries. Cogeneration plants sition of organic matter under influence of bacteria, microbes can be done modularly and have more treatment options and insects. The resulting products, the bio gas and compost depending on how the process will be designed: to produce has a market value and application, because the gas can be heat, electricity or combined. obtained for energy, either heat or electricity, and reworked organic content can be used in agriculture, re-cultivation of The treatment residue shall be deposited in sanitary controlled degraded area and also as fuel. In some processes the animal conditions. Cogeneration process ensures that (taking into remains are added in the organic material (example Sweden). account the primary selection) 70-80% of the total mass Certainly it goes without saying that the basis of processing of waste processed in an appropriate manner, and that only organic waste is contained in the primary separation, where 20-30% deposit. except recycling consumer materials (metal, paper, plastics, Technological process may include some of these conceptual glass), separately collecting of the organic waste is organized. method (production of pellets out of dry residue) or directly In this way the unselected waste can be processed. Thus, burn the unuseful waste content which cannot be recycled the resulting material is not suitable for agricultural use due (small fraction of paper and plastic, foil, dirty waste, wood to the impurities content of inorganic origin (glass, metal, residues, textiles, etc.). plastics), which, even though physically removed, are leaving harmful substances such as oil residues, detergents, chemical 3.3.5 Other procedures of waste treatment agents, etc. In this case the technological process is thermal processing which requires prior removal of mineral noncom- If we want a sustainable system of waste management, it is bustible materials. necessary to consider all options of waste treatment. New

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 161 technologies, if they are reliable and competitive compared process reached a temperature from 3,000 °C to 15,000 °C. to other options, may also take place in the system. These Due to high temperatures comes to decomposition of organic options are mainly contained in the concept of energy produc- matter from the waste and melting of inorganic materials. In tion from waste. Many of them have the potential to produce gas phase comes to the intense decomposition of organic more energy than the same amount of fuel in direct combus- molecules, which almost completely eliminate harmful tion. Some of these options are as follows: emissions. It is also the main advantage of plasma process. yy Thermal Technologies Inorganic materials are vitrificated after melting, so that they yygasification (fuel gas, hydrogen or synthetic fuels are can be used in addition to the building material or can be produced), safely putt off. This system is extremely costly and still is very yythermal depolimerization (the product is synthetic little in the application. crude oil, which can be refine later) yypyrolysis (the product is tar or bio-oil and soot) yyplasma gasification process (PGP) (products can be WASTE AS FUEL enriched with a synthetic gas that contains hydrogen Some industrial processes and plants for the production of and carbon monoxide, usable in fuel cells, useful sili- energy work under conditions that allow the use of waste with cates and metal blocks, salt and sulfur) high power of heat rather than high conventional fuel. The yy Non-thermal Technologies: most common example is the production of cement, where yyanaerobic digestion ( product is biogas rich in methane) high temperatures and long holding time provide complete yyfermentation (examples are ethanol, lactic acid, combustion of waste. Typical waste that is burned in these hydrogen) processes includes municipal waste, tires and spent solvents. yymechanical-biological treatment (MBT) (may include Urban heating plants that supply the cities with thermal energy anaerobic digestion or processing of waste in the can also be a significant infrastructure for waste combustion. bio-fuel) Integrated pollution prevention and control given the extent to which a given technological process can replace the primary GASIFICATION fuel waste. EU Directive on the incineration of waste also prescribes allowable emission limits for facilities that use Gasification is the high temperature process of the waste alternative fuels. treatment in the presence of air or water vapor in order to obtain fuel gases. The technology is based on the familiar process of gas production from coal. Reaction product is a mixture of gases. Gas obtained in this way can be burned 4. Tehnical and economical analysis of or used in plants for cogeneration. Due to the high tempera- rationality for considered options ture process occurs vitrification slag formed in the process. Gasification is still not widespread waste treatment process, From the above presented the following undisputed facts: because the fuel must be of relatively homogeneous composi- yy Landfill everywhere in Serbia is a very limited receiving tion, which means that the municipal solid waste required a capacity, and pre-treatment. yy To reduce amounts of waste and extend the life of the land- fill, recyclable waste facilities must be treated, including its organic component. PYROLYSIS It is also undisputed that the waste management must be Pyrolysis is a process during which occurs the decomposition organized in accordance with prescribed procedures and of organic waste at high temperature and in the absence of air. criteria, and based on the recommendations of the National During the process is coming to the thermal decomposition Waste Management Strategy. of organic matter in the trash, with resulting pyrolytic gas, oil and solid phase rich in carbon. According to the temperature Rational organization and management can be achieved by range at which it took place, can distinguish three variants of introducing the principle of primary separation, or separate pyrolysis can be distinguish: collection of certain types of waste in the area of its origin. yy low temperature to 500°C; very indicative sample is as part of a regional landfill “Duboko”, yy medium temperature from 500°C to 800°C; the secondary separation plant (which is under construction), yy high temperature higher than 800°C. with the primary process of separation that has already begun to take place in the participating municipalities of the regional By increasing the reaction temperature increases the share system, we come to the conclusion that the life of landfills, pyrolytic gas in the reaction products, while reducing the share essentially based on: of solid and liquid phases. Pyrolytic gas is usually burned. yy separation and processing of organic waste component, Smoke gases are used for heating or getting electricity. and yy separation of small fractions of municipal waste that can not be recycled, but they can be thermally processed. PLASMA PROCESS The concept of a regional system is based on the construc- An alternative system of treatment, plasma process, release tion of transfer stations, where the emphasis is just on the energy by electrical discharge in inert atmosphere. This primary separation of recycable materials, while other waste

162 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA is transported by special vehicles to a regional landfill. This yy cogeneration or energy getting from waste that was previ- materials previously passes through the secondary separation ously treated, and plant - select center. yy plasma gasification or combustion of waste at extremely high temperatures. In such projected conditions, if the organic waste is used for composting in order to get the compost, it would be necessary to build a separate facility, which construction dimensions requires a large open space that location “Duboko” does not 4.1 Economic parameters have. Analysis of economic parameters approached through the Minding all the specific reasons and conditions of the site, consideration of experiences in countries where the quality as the only reasonable proposal there is a heat treatment, management of waste has reached the level of organization respectively building facilities where an organic component of that at least burden the end-user. As will be seen in the subse- waste would be used for energy production. At the same time quent analysis, the structure of costs is based on the quality of must be aware that there are different concepts, as mentioned services, level of organization, construction cost, maintenance above, which in general can be reduced to the three most costs, labor costs, benefits received and the final product. commonly applied technology solutions: The following table shows the cost of waste disposal in some yy incineration or burning of waste, with or without prior European countries: preparation

Cost of waste disposal in some EU countries

The fee for care Tipping fee €/t - Heat treatment - €/t Denmark Fee for waste delivered to the 44 (without the combined energy use) 50 incinerators 38 (with the combined energy use) Belgium Commision for insineration (with or 6.2 - 20 52-55 (depending on the without energy recovery) utilization of landfill gas) France Not charged - 9.14 Netherlands Commision for incineration adopted as 0 € 75 (for combustible nonhazardous waste) 12.5 2 (for noncombustible hazardous waste) Norway Basic and additional compensation 9.93 - 29.80 39.75 Sweden Not charged - 31

As can be seen from the table above, the payment models 4.2 Concluding remarks are different in economically strongest countries in the EU. Certainly, however, that the waste disposal in landfills is the most expensive and the most unreasonable form of waste If carefully considered, the results of a SWOT analysis leads to management. At the same time minding that in all these the following conclusions: countries a primary principle of separation of waste and 1. Production of briquettes and pellets out of waste is not recycling is developed, and many of them uses composting in conflict with insineration and cogeneration, can be as a method of treatment of organic waste components. Of arranged in smaller towns with smaller capacity and is course, that the compensation by the end-user pays for directly dependent on the local organization of waste burning is not small, however, it depends on several factors, collection; such as the way, and applied technology of burning, amount 2. Incineration and cogeneration are largely compatible and manner of using the obtained energy (heat and elec- procedures, with similar effects, but differ in terms of tricity), the political decisions of public authorities to subsidize technology, where cogeneration presents improved and utilities and energy cost thus obtained, stimulating effect to be slightly more complex variation of incineration; achieved in the population etc. 3. Waste treatment in plasma plant is without doubt tech- In any case, waste management is not a social category but a nologically most sophisticated system with minimal business that has its economic requirements which must be negative impacts on the environment, but with two major covered, either from the end user’s pocket or with partial or full disadvantages: assistance from the state. yyextremely high value investment value and long term of payability (which is why very developed and rich countries are avoiding this technology) and

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 163 yythe destruction of waste that can be recycled (con- Combustibility trary to the principles of sustainable development and savings of natural resources). With a view to the above data, research has been undertaken 4. The economic power of the state or its by law enabled to identify the balance of meterials that result from the incin- economic instruments must be one of the key followers eration of communal waste. The research was undertaken in of the future system, the sensitivity of this issue is very the conditions of open incineration, with 100% presence of high: to cover the costs of waste disposal facilities and outside air to ensure high combustion efficiency. The research plant operations, while achieving a stimulating effect on results are presented in the next table. the population.

The following will detailed consider the technologies and Balance of Masses from Incineration of 1 kg of cogenerations as recommended from techno-economic point Solid Municipal Waste of view, after which it will propose the optimal and technical solution of thermal treatment of waste as a measure for the Material Volume (kg) effective and long-term waste management in the regional system,how PE EPS predict for project in Kragujevac and Input Uzice . Municipal solid waste 1.0 Dry air 6.4 5. Technological features of the Total input 7.4 Output energy-from-waste process CO2 0.881

H2O 0.288 O 0.738 5.1 Characteristics of municipal 2 N2 4.9 solid waste, contents and HCl 0.007 combustible features Ash 0.242 Water steam (from waste) 0.312 The internal energy content of the municipal waste is labeled as “calorific value”, which directly depends on the origin of Total (rounded) 7.4 waste and its components. The calorific value is an important indicator in determining the amount of energy that can be Energy equivalent for the incineration of 1 ton of solid achieved and returned through the process of incineration. municipal waste can be expressed as the quantity of energy Plastic, for instance, can acheive 15% participation in the required for producing: overall mass of waste in densely populated urban environ- ments. This practically means a much higher calorific value of 2.5 t steam, t= 400ºC, 40 bar communal waste per 1 MJ/kg (typical calorific value of waste or is 10,6 MJ/kg). Since the calorific value of waste depends 30 t hot water, t= 180-130ºC primarily on its contents, table below provides a generalised or analysis of communal waste per representative elements in 500 kWh electric energy weight ratio. which is equivalent to incineration of 200 kg of oil.

Cost of waste disposal in some EU countries Carbon Dioxide Emission In the technology for production of energy from waste, almost Material % weight the entire carbon content in the waste is released into the atmo- sphere as carbon dioxide, even in cases where final combus- Carbon 24 tion is the result of pyrolysis or gassification. Communal waste Hydrogen 3.2 contains an approximately equal mass of carbon to that of the Oxygen 15.9 released carbon dioxide (27%). In the case of disposal, one metric ton of communal waste can produce approximately Nitrogen 0.7 63 m3 of methane through anaerobic decomposition of the Sulfur 0.1 biodegradeable waste components. This quantity of methane Water 31.2 is more than twice the quantity of the critical value of emission of 1 metric ton of CO produced by combustion. Although Chlorine 0.7 2 methane is used in some countries as an energent, the critical Ashes and inert substances 24.2 emission is still greater than that resulting form combustion Net calorific value 10.6 MJ/kg (1999 research conducted in the USA show that the emission is greater by 32%). The explanation is simple: biodegradable

164 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA waste is mostly composed of biomass originating from plants calculations. Currently, this method is used by three Austrian that use atmospheric carbon dioxide during their growth. This incinerators. is the reason why biomass is used as a renewable energy A comparison between the two methods resulted in an exact source. The remaining waste, consisting mostly of plastic ratio, while tests conducted in Switzerland showed that and liquid derivates of the oil industry, is considered to be both methods achieve the same results. The C carbon can non-renewable. 14 precisely determine the participation of the biomass fraction The percentual content of waste combustion gasses is in the communal waste, however this can not determine its presented in table below. calorific value which is an important prerequisite for obtaining ’green certificates’, such as the Renewable Obligation Certifi- Material % cate program in the UK. The certificate is issued on the basis of the quantity of energy produced from biomass. The other CO2 12.3 (balance) method incorporates all available information, such

Neutral H2O 8.37 as morphological content of waste, balance between energy Neutral O 10.3 production from waste and fossile energents, balance of the 2 overall organic and fossile mass, ratio of carbon in waste Neutral N 68.4 2 materials, etc. Since it does not require additional measure- Pollutants 0.015 ments, this method is easy to apply and very affordable. Total (rounded) 100.00 Determining biomass fractions is of key importance for deter- mining the energy value of waste. It should be emphasised that approximately 85% of carbon- dioxide is created in the process of combustion of organic materials, which is why the above table provides the CO 2 5.2 Energy potential of waste emission data against the base of 500 kWh of energy per one ton of waste. The most important element of energy evaluation of waste is determining its energy potential. Following their use, materials largely loose their original qualities and can be used Heating plant and thermal power plant CO2 emission in producing items of lower quality or for less demanding comparison uses (they become secondary raw materials). When waste is used as an energent, there are no such limitations. The only Coal-fired TPPs 410 g/kWh heat condition is that waste is used in adequate facilities and that 950 g/kWh electricity combustion products are treated in an appropriate manner. Gas-fired TPPs 226 g/kWh heat The compromise between evaluating waste as an energent or 525 g/kWh electricity secondary raw material lies in defining the best available tech- nology (BAT - Best Available Technology). Combined cycle – gas turbine 400 g/kWh electricity Evaluation of waste as an energent has a number of advan- CO emission savings under electricity generation 2 tages in comparison with the ‘classic’ types of treatment from waste compared to: (recycling, disposal, etc.). These include the following: Coal 686 g/kWh electricity yy production of energy, which saves natural non-renewable Gas 261 g/kWh electricity or slowly-renewable resources; yy reduced quantity of waste disposed on landfills; Combined cycle – gas turbine 136 g/kWh electricity yy elimination of non-usable residue after waste separation; yy minimal volume of disposed waste (incineration results in If the facilities include cogeneration, the reduction in the 10-15% ash content); emission of the fossile carbon is reduced by as much as 76%. yy perfect hygienisation of waste; yy detoxication of organic half-products. yy On the other hand, thermal waste treatment has a number Determining Biomass Fractions of recognised shortcomings: There are several methods developed by the European yy energy use of waste requires expensive and technologi- Taskforce to determine the content of biomass in waste cally complex facilities; energents. Two initial methods (CEN/TS 15440), with their yy constant control of waste; respective technological limitations, incorporated manual yy for energy use of mixed and communal waste, continu- sorting and selective dissolving. The first method uses the ing measurement of contents is required, which increases principle of radio-carbon terminology. The technology incorpo- operation costs; rates the method for applying the radioactive carbon isotope yy treatment of polluting gasses for emission reduction C14. The other method dubbed the balance method is based (PCDD/PCPF) requires adequate facilities; on the most common composition of the communal waste yy the investment return period is long. and the methods of mathematical statistics, i.e. probability

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 165 The real potential of energy evaluation of waste is repre- respective phases and corresponding technologies depends sented in the next figure. Storage of waste that incorporates on the condition of waste and the type of evaluation, as well as its energy evaluation can be broken down in three phases: on the required reporting form. regulation, transformation and use. Implementation of the

Possibilities of energy use of waste

166 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 5.3 Energy wastes Energy waste includes biological, synthetic and mixed waste. For a more detailed assessment of the options for energy use of waste, the example of Slovakia has been provided due to Slovakia’s numerous similarities to Serbia. Kinds of energy valuable wastes

5.3.1 Biomass yy Biomass suitable for the production of bioenergents in the form of methyl alcohol, herbal oil components of biodiesel From the perspective of energy use, biomass can be divided (rapeseed, cereals) or in the form of bioalcohol as a com- into three basic groups: ponent in gasoline (corn, cereals, beet, potato). yy Biomass suitable for incineration (purpose: production of yy Biomass suitable for the production of biogass through thermal energy for heating, heating of water for house- combined production of thermal and electric energy by holds and technical water, drying of agricultural produce cogeneration (green biomass, silage waste, etc). and, alternatively, production of electric energy) which includes phytomass (straw), wood waste (orchards and Table below lists the annual production of agricultural biomass vineyards, trees in permanent green areas, particularly suitable for incineration and its energy potential on the in mountain and sub-mountain regions), the so called example of Slovakia. “energy plants” like sorghum and hemp, etc.

The potential of agricultural biomass suitable for energy evaluation

Potential annual production Energy equivalent Type of biomass for energy purposes (t) TWh PJ straw 730,000 2.80 10.4 corn 670,000 2.61 9.4 beet 200,000 0.82 2.9 sunflower 220,000 0.81 2.8 wooden waste 210,000 0.90 3.1 Biomass total 2,030,000 7.94 28.6 Source: Official data of Slovakian Ministry 2006

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 167 From the theoretical quantity of energy produced by incinera- 5 kWh). Therefore, a herd of 200 cows has an energy potential tion of biomass (28.6 PJ), 10-30% can be used in agriculture of approximately 900 kWh, which makes 328,000 kWh on as energents (balled straw, briquettes, pellets), and a further the annual level. The most effective treatment of biogass 10-20% for the production of energy (heat, electric energy). is the combined production of thermal and electric energy in cogeneration units. For the annual production of 1 PJ of The usable potential of forest biomass (dendromass) in heat, some 3,000,000 m3 of biogas is needed, which means Slovakia amounts to the annual value of 1.81 million tons with 1,500,000 t of excrement. the energy equivalent 16.9 PJ. After 2010, the balance of the available forest dendromass can realistically be increased by The first bioreactor for anaerobic fermentation of excrement in the energy production based on the growing of the so called Slovakia encompassed a farm with 1,300 pigs and 220,000 “energy forests” consisting of fast-growing poplar and willow poultry (in 1996, at the farm in Batka, near Nitra). The gas is trees with a short life cycle (3-5). Cutting of tree tops can be used in a cogeneration unit with two gas engines, with a total used as a new, previously unused resource. It is estimated power of 1.6 MWh/year. that 20-30% of the annual production of thin trees – some 300,000-900,000 m3 can be thus used. Experience shows that from cleaning and grooming of trees, parks, green areas 5.3.4 Plastic masses in inhabited localities and other green ares some 300,000 t Plastic masses are organic compounds produced from oil and can be yielded for energy production on the annual level. The their waste is a source of energy. They have a high energy potential of dendromass will by 2020 grow to approximately potential, however from the combustion perspective, plastic 900,000 t on the annual level, and the overall potential of masses that contain chlorine (PVC, polychlorine aromatic energy usable sources may reach the figure of 2,500,000 t compounds, etc.) are problematic, as their combustion on the annual level. In order to meete the requirements of releases chlorine and other highly toxic substances. Conse- the EU Directive 2003/30/EC on the incentives for the use quently, incineration of plastic masses is undertaken in special of bioenergents, Slovakia must allocate100.000 ha for the facilities with strict emission control. growing of rapeseed as the raw material in the production of methyl alcohol which is a component of biodiesel. The planned annual production of bioenergents is 200,000 t with the 5.3.5 Sludge from waste water treatment energy potential of 7.0 PJ. In the process, some 400.000 t of waste is produced in the form of biomass suitable for incin- facilities eration or production of biogass. The energy potential of the Sludge created as residue in the treatment of used (waste) biomass is estimated at approximately 8.4 PJ. water has its energy value. Different waste water treatment applies to communal and industrial waste water. The latter is particularly important for energy production, as it may 5.3.2 Agriculture biomass contain various hazardous matters in concentrations that are dangerous for the environment. One of the forms for the use of agricultural waste is related to phytomass waste. Options for the treatment of sludge have been oriented to its use as an energent. Studies considered six different tech- Some 800,000 ha (the area in Slovakia planted with cereals) nological procedures, The criterium for finding the optimal on average produces 4 t/ha of cereals and an equal quantity of solution was that during the incineration of the sludge the straw. Of the overall quantity, approximately ¼ can not be used emission of hazardous gasses does not exceed the legal limit, (wheat straw. The humidity of fresh straw can vary depending while retaining the energy value of the sludge. on the climate conditions between 40 and 80%. The advantage of using straw lies in relatively quick removal of moisture, as well Optimal technological procedure incorporates gradual as in the technologies for collection, balling and storage. The reduction of the moisture in the sludge, its hygienisation suitable humidity of straw for energy use is up to 20%. and stabilising. Adding dry sawdust reduces the moisture of the processed mixture and at the same time regulates the Another raw material from waste suitable for energy evaluation emission of gasses. Pelleting of the mixture further reduces is the rapeseed straw. With approximately 40.000 ha, approxi- the level of moisture and stabilises thermal and mechanical mately 2.5 PJ of energy can be produced on the annual level. propeties of the resulting energent. Following the treatment, Also suitable for energy use are korn, flax, sunflower, moved pellets even loose their characteristic odour. grass, waste from parks, vineyards and distilleries. Research has tested various ratios of sawdust and sludge in the combustible mixture: 100% sludge, 75% sludge : 25% 5.3.3 Livestock excrement sawdust, 50% sludge : 50% sawdust and 25% sludge : 75% sawdust. Growing livestock produces a large quantity of biologically active material that can be used to produce biogass. From The results of calorific value measurement show that the the manure produced by one cow in one day approximately calorific value of dry sludge is 12 MJ/kg, as well as that the 16-25 MJ of thermal, or 4.5-7 kW of electric energy can be calorific value rises with the ratio of the sawdust in the mixture. produced. From the manure that one pig produces in one day With the ratio of 25% sludge to 75% sawdust, 18 MJ/kg the quantity is around 7 MJ (approximately 2 kWh), and from were produced with moisture level of 18-20%. The alterna- the waste produced by one hundred heads of poultry in a day, tive fuel thus produced is thermally processed at tempera- we can produce approximately 17 MJ of energy (approximately tures 1100ºC.

168 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 5.3.6 Waste as alternative fuel With a view to the relatively wide spectrum of factors that can impact the viablility of the use of the respective types of waste The production of alternative energents from waste is a rela- as energy, the development of an ”individual approach” will tivelly well known technology that is most commonly used be required to evaluate all factors relevant to the proposed in cement furnaces. The technological procedure generally technical solution. Final decisions are made only once the consists of grinding down the waste which is then mixed in an Prefeasibility and Feasibility Study have been developed. adequate proportion with the principal combustible material. The particle size of processed waste does not exceed 1cm. To create a combustible mixture, industrial hazardous waste, 5.4.2 Environmental Perspective waste oil, emulsions, oil residue and distillation residue are When using waste for energy production, basic environmental used. Combustible materials include waste tyres, plastic, plastic requirements have to be respected. Incineration of waste is a packaging, waste from chemical, farmaceutical, shoe, leather chemical reaction during which the combustible components and textile production, waste sawdust from wood processing, of the energent react with oxygen, releasing reaction heat. The etc. The resulting mixture, which is of suitable consistency – process of combustion can be broken down in four phases: alternative fuel – is then used to produce cement. yy Heating and drying; In thermal energy production from alternative fuels, 0.5 PJ yy Thermal decomposition; replaces approximately 20,000 t of bituminous coal. yy Combustion of volatile components; yy Combustion of solid components.

In brief, the process of producing energy from waste can 5.4 COMPARATIVE ANALYSIS be described as follows: At the beginning of the process, waste is heated and dried. When it reaches the temperature Alternative fuels are classified by their organic waste of approximately 150ºC, some components transform into component as ”young fuels” – fuels that have a limited density the gasseous state and the gradual thermal decomposition of energy flow. In comparison with the classic ”old” – fossile of the most unstable components (hemicellulose, cellulose, fuels (coal, ground gas, oil), these fuels have a lower calorific lignina). At the temperature of 200-270ºC, the main product value. Therefore, the investment return period is longer. From of cellulose pyrolysis is created – levoglucosan, as well as a the long-term perspective, alternative fuels can be counted on number of other volatile components and products that ignite as energy sources that will in the future partially replace the at 225-250ºC and combust in the gasseous phase in the conventional methods of energy production. presence of secondary air. Following the release of dissemi- An important factor in the use of alternative fuels are local nated combusting mass, at the temperature of 600ºC wooden requirements and conditions (existence of, and potential for coal is ignited. the creation of distribution networks). From the perspective of the emission norms, the important

The subject of quantitative analysis is evaluation of waste substances are CxHy, CO, CCl, SO2, NOx and dust. Only CO and against the real energy equivalent. Environmental require- NOx can be regulated by primary measures. Carbohydrates ments and economic parameters have to be observed as well. reflect the quantity of organic carbon in energents. Asan example, wood contains more hydrogen than other energents The importance of the above criteria varies with each indi- and its combustion produces more carbohydrates. Combus- vidual case. In some instances, waste processor can procure tion of quality dried wood or wood briquettes reduces the waste at zero purchasing price, or with its negative value quantity of carbohydrates. (subsidised evaluation). Specific values of quantities of hydrocarbons (per unit weight and unit of calorific value)

Fuel Wood (large) wooden chips lignite brown coal anthracite coke

CxHy (g/kg) 10.9 - 37.3 11.6 - 26.6 2.5 6.8 5.0 2.9

CxHy (mg/MJ) 580 - 2180 610 - 1410 80 330 150 95

In terms of the concentration of oxides of carbon (CO2), monoxide created by the combustion of biomass corresponds they are dependent on the supply of primary and secondary in weight to the quantity of this substance in the assimilation air in the incineration chamber, as well as on the moisture process. of the energent. The fact remains that the same quantity of Wood contains a minimum of 0.2% of nitrogen bonded CO would be released into the atmosphere in the process 2 in amino acids, which results in the creation of hazardous of anaerobic decomposition of biomass, however over a nitrogen oxides (NO ). Reduction of the high temperature longer period. Organic waste, or biomass, is also consid- x oxidation of nitrogen is achieved by re-circulation in the incin- ered a suitable energent from the perspective of the carbon eration chamber. monoxide concentration, because the quantity of carbon

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 169 Comparative values of NOx emissions for different fuel types

Fuel Wood Natural gas Propane-butáne Fuel oil Brown coal

NOx (mg/MJ) 30 – 120 48 48 76 220

The following table shows the quantity of ash for different lower in comparison with coal, which represents classic fossil types of fuels. As can be seen from table below, the level energents. Of course, heating oil leaves no ash residue. of ash residue following the incineration of biomass is far

The percentage of ash for different materials

Material Coal Fuel oil Briquettes of wood Briquettes bark Ash quantity 7 – 20 % 0 % 0.4 - 1 % 1 -2 %

5.4.3 Economic Perspective were linked with the use of wood, coal and wood briquettes, as well as for non-renewable and slowly renewable energy Economic indicators are an important element of every source as long as biomass was incorporated in the waste used project – viability of production, return on investment, produc- as the energent in a high ratio. Use of mixed waste was on tion costs, etc. For the comparison of costs on this level, the the borderline for viability as it directly depends on the pricing important criterion is the price per unit of energy.The example policy for the produced energy. of Slovakia developed for the 2001-2003 period can be transposed to our current conditions. It compared costs of The fact remains that the prices of fossile fuels are constantly the average annual energy expenditure for a middle sized on the rise, and their natural reserves are diminishing. Where family home or a 100 m2 apartment, which are 28,000 kWh the use of waste materials as energents is concerned, the or 100.8 GJ. The analyses showed that the lowest energent price per unit of produced energy may be high, however the expenditure was when propane-butane was used, however difference fades when this is compared with collection costs the price per unit was the highest. Optimal values from the and government subsidies, and the full strategic importance of energy aspect of the energy cost estimates for price per unit using waste lies in the saving of natural resources.

170 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 4.4.4 LARGE HYDRO-POWER PLANTS HPP and PSHPP Bajina Bašta, HPP Višegrad and HPP Zvornik have been built on the Drina, with a total head of about 130 m, or less than 40% of the available capacities. HPP Upper Drina The unutilised potential of the Drina may be divided into the The river Drina represents the most significant unharnessed Upper Drina – the untapped potential upstream from HPP hydro-power potential in the region. Its catchment area Višegrad, the Middle Drina – the potential between HPP Bajina stretches across 19,570 km2, and average annual precipita- Bašta and HPP Zvornik, and the Lower Drina – the potential tion is about 1,100 mm. It is characterised by a highly variable downstream from HPP Zvornik. water flow pattern, with minimum flow rates over 200 times The main technical parameters of the hydro-power facilities on lower than annual peak flow rates. Annual average flow rate at the Upper Drina are presented in the following table: the source is 157 m3/s, and at the river mouth – 425 m3/s. Its course totals 346 km, and the head is about 357 m.

3 HPP Vkor (hm ) Ni (MW) Esr (GWh/g) Total 54.4 237.9 797.3

Project value According to the investment and technical documentation, the investment cost of all four hydro-power plants is estimated at EUR 435 million.

Project status In view of the prepared documentation, it is certain that activi- ties towards the construction of hydro-power facilities on the Upper Drina should be continued. The first of these hydro- power plants is expected to be commissioned in 2015. Technical documentation, i.e. conceptual designs with feasi- bility studies are being developed for all four foreseen hydro- power facilities on the Upper Drina; following this, investment decisions will be taken, the financing framework will be agreed upon and their construction will commence.

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 171

PSHPP Bistrica HPP Potpeć. The importance and role of PSHPP Bistrica are particularly prominent on the regional energy market, in partic- Among the most attractive new hydro-power facilities is ular owing to the existence of upstream storage reservoirs on certainly the new 680 MW pumped-storage hydro-power plant the river Uvac (Kokin Brod and Uvac), whose regulated water Bistrica, in the vicinity of the existing HPP Bistrica. The upper could be used for peak operation, together with the existing reservoir of PSHPP Bistrica is the newly designed reservoir HPP Bistrica, with installed capacity of 104 MW. of Klak on the river Uvac, immediately downstream from the Radojnja reservoir, with an energy storage capacity of about The main characteristics of PSHPP Bistrica are as follows: 60 GWh, while the lower reservoir is the existing reservoir of

Power plant type pumped-storage Normal backwater elevation 812 mASL Live storage 80х106 m3 Tail water elevation 430 – 436 mASL Type and number of units single-stage pump-turbine x 4 Discharge per unit 42/54 m3/s Pump head/hydraulic head 397/381 m Nominal motor-generator capacity 180/180 MVA Installed capacity 680 MW cos φ 1.0 / 0.95

Project value solution defined by by the Conceptual Design has been From 1973 to 1980, project documentation was prepared performed. Construction works should last six years. The and exploratory works carried out. The main design for the specific investment cost indicator of 813,000 EUR/MW construction of the Klak dam was prepared. According to the shows that this is an attractive renewable energy source that feasibility analysis, the total investment is worth EUR 553 contributes to system security, may have a significant role on million, i.e. 813,000 EUR/MW. the regional electricity market, and enhances the quality of the existing system of HPPs Drinsko-Limske. Project status Implementation modality: own funds/loan The feasibility analysis for PSHPP Bistrica is being finalised; as part of the analysis, investment appraisal of the technical Planned construction start: 2015

Future PSHPP Bistrica site

174 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA HPPs on the Middle Drina other purposes, such as housing, industrial and tourism facili- ties and farming. The middle course of the Drina, between the existing HPP Bajina Bašta and HPP Zvornik, is also attractive in energy The Outline Design and Pre-feasibility Study for hydro-power terms. For this reason, HPPs on the Middle Drina are included plants on the Middle Drina are being reviewed and adopted; as in the spatial planning documentation of the Republic of Serbia part of this, several options have been considered, aiming to and the Republic of Srpska, i.e. Bosnia and Herzegovina. The make the best use of the hydro-potentials, taking due account area is all the more important owing to the existing upstream of the conditions required for the operation of other assets reservoirs in the Drina catchment (HPP and PSHPP Bajina located within the area affected by them. Bašta, HPP Višegrad, HPP Piva, HPPs Drinsko-Limske) and According to the findings of the Outline Design and Pre- the planned reservoirs on the Lim and the Upper Drina in near feasibility Study, the hydro-potential of the Middle Drina may future. be used to optimum benefit by building three impoundment Owing to the spatial planning aspect of this portion of the river hydro-power plants. Of the total head of 63 metres, 60 m Drina with its littoral area, in particular the land development would thus be used. level, it is necessary to plan and technically elaborate cascade The main technical parameters of the HPPs on the Middle HPPs to utilise this renewable energy source, with due Drina are presented in the following table: attention to protecting the littoral area, already being used for

HPP Ni (MW) Esr (GWh/g) Total 321.0 1,197.0

Project value Middle Drina hydro-potential will be addressed in the following According to the abovementioned technical documentation, steps of developing documentation. The construction of prepared in 2010, the investment costs of the proposed three these facilities is expected to start after the completion of the hydro-power plants are estimated at EUR 819 million. planned upstream cascades. Project status In view of the extent of the prepared technical documentation, Implementation modality: strategic partnership/loan the issue of selecting the optimum approach to utilising the

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 175 HPPs on the river Ibar identifies the possibility of utilising the hydro-potential of the Ibar between the towns of Raška and Kraljevo by means of a The river Ibar, the largest, right tributary of the Zapadna series of 10 cascade impoundment hydro-power plants. The Morava, contributes over 53% of its water on average, or river valley morphology and its use for other infrastructural about 25% of the Velika Morava’s water, on average. facilities, in particular the railway, could not be overlooked in The technical documentation developed to date and endorsed identifying the modality of using this hydro-potential. by the adopted planning instruments of the Republic of Serbia

In 2010, the General Design and Pre-feasibility Study were prepared; this includes carrying out the associated on-site developed for utilising the hydro-potential of the Ibar between exploratory works. Raška and Kraljevo; the resulting solution was 10 cascade The main technical parameters of the HPPs on the Ibar, based impoundment HPPs. The next stage in developing technical on the General Design, are presented in the following table: documentation is in progress – the Conceptual Design is being

3 HPP Qi (m /s) Ni (MW) Esr (GWh/g) Total 100.0 103.0 418.6

Elaboration within the Conceptual Design indicates the possi- there will be no unforeseen developments that might signifi- bility of increasing the installed capacity of these HPPs, which cantly increase the investment cost; the HPPs on the Ibar can, would result in more efficient utilisation of the potential. therefore, be considered an attractive project opportunity. Project value According to the abovementioned General Design of 2010, IImplementation modality: strategic partnership/loan the investment cost of these 10 HPPs totals EUR 284.1 Planned construction start: 2014 million. Project status The on-site explorations carried out to date and the designing activities under way (the Conceptual Design) suggest that

176 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA

HPPs on the Velika Morava All this indicates the complexity of utilising the hydro-poten- tial of the Velika Morava, which has been studied on several The river Velika Morava, with a catchment area of over occasions over the past decades without a single hydro- 37,000 km2, has an average flow rate of over 230 m3/s. Its power facility built as a result. The only development was course is about 182 km in length, with an elevation difference Prag na Moravi, in the vicinity of TPP Morava, a division of the of 62 metres. On about 20 km of its course, downstream from Corporate Enterprise TPPs Nikola Tesla, for the purposes of the Ljubičevo bridge, the river is under the HPP Djerdap 1 the plant’s water cooling system. backwater, i.e. the 5 m head downstream from that point has already been utilised for hydropower purposes. Explorations and designing activities to date indicate that the water of the Velika Morava could be used for energy genera- According to the Serbian planning documentation, the Velika tion purposes by building several cascade impoundment HPPs. Morava valley is an area of intensive development, featuring major road and rail routes, a gas pipeline, many communities, In 2010, the General Design of HPPs on the Velika Morava was large areas of farm land, the Kostolac coal mining basin and prepared as part of efforts towards integrated management of other economic structures. The South Stream pipeline and an the available water of Velika Morava, and the main technical inland waterway are foreseen to run along the Velika Morava parameters of the HPPs are presented in the following table: valley.

3 HPP Qi (m /s) Ni (MW) Esr (GWh/g) Total 375.0 181.7 714.2

Project value the HPP construction project on the Velika Morava remains in focus. Therefore, the development of technical documentation According to the aforementioned technical documentation, will proceed to subsequent, more elaborate stages, with more the investment cost of these five cascade HPPs is estimated detailed inputs and bases, appropriate to document level. at EUR 352 million. The construction duration for the HPP This primarily pertains to more detailed topographic bases, system on the Velika Morava is estimated at five years. geotechnical, engineering-geological and hydrological explor- atory works in order to appraise with sufficient certainty the investments in the required hydro-technical and hydro-power Project status facilities on the Velika Morava. In view of the prepared documentation, its extent, the bases used for its development and the complexity of the terrain on the one hand, and the impetus that would be given to Serbian Implementation modality: strategic partnership/loan economy by building HPPs on the Velika Morava on the other,

178 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA PSHPP Djerdap 3 yy Phase III entails building another set of penstocks with two units and extension of the Pesača reservoir by an additional The main concept of building PSHPP Djerdap 3 is based 37.5 hm3 of live storage capacity; an alternative solution on using the existing HPP Djerdap 1 reservoir as the lower that was considered would entail building the Brodica dam, reservoir and establishing the upper reservoirs in the Pesača with reservoir capacity of about 545 hm3, thus providing river valley (construction phases I and II) and the Brodica river the possibility of proceeding with Phase IV, i.e. building an valley (construction phases III and IV). The facility would have a additional 600 MW of generation capacity. The reservoirs head of about 400 m, and the selected location for the Pesača of Pesača and Brodica would operate according to the impoundment and the PSHPP powerhouse on the right bank of communicating vessels principle and would be linked by an the Danube enables a relatively short headrace (∑L/H = 6.8), 8 km communicating tunnel. The energy storage capacity making this PSHPP an economically advantageous solution. of these reservoirs would total about 460 GWh and would In view of negligible natural inflow of water into the upper have seasonal relevance. reservoirs, all energy is obtained by using water pumped The 1973 documentation specified Phases I and II, while from the lower reservoir, and the facility’s cost-effective- PSHPP Djerdap 3 with the Brodica dam was specified in 1990 ness is based on the peak and base energy price difference. at the level of outline design (general design). Prominent features include favourable morphological, topo- graphic and geological conditions for establishing the upper reservoirs, whose total live capacity will be about 578 hm3 Project status (Pesača reservoir – 32.5 hm3, Brodica reservoir – 545 hm3). In the feasibility analysis carried out in 2010, the invest- The Conceptual Design, prepared in 1973, foresees construc- ment costs of the technical solution proposed in the Concep- tion in stages, as follows: tual Design were updated and the figure amounted to about yy Phase I: Building the Pesača dam, with live capacity of EUR 400 million. Construction works would last four years. 18.5 hm3, 1915 m headrace, surge tank, 664 m steel The specific investment cost indicator of 670,000 EUR/MW pipeline and powerhouse with two units (pump turbines), shows that this is an attractive renewable energy source that and installed capacity of 2 x 300 MW = 600 MW. contributes to system security and may have a significant role yy Phase II: Extending the Pesača dam by 20 m in height to on the regional electricity market. provide an additional capacity of 14.0 hm3 and building two additional generation units and penstocks with the Implementation modality: strategic partnership/loan same properties as those from Phase I. Planned construction start: 2015

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 179 180 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 4.5 Smart Grid

Introduction with the electrification of heating and cooling, they will further contribute to the projected growth in electricity demand. “Smart Grid” simply put, is modernization of electrical grids to As a result, the assumption that the demand for electricity allow for real-time monitoring and control of power usage to dictates the amount of electricity produced no longer holds. avert the risks of system overload during the periods of peak Power will not only flow in one direction from the power consumption. system to the consumer, but increasingly from the customer This modernization entails the deployment of advanced to the power system as well. communication networks that allow energy providers to proac- tively monitor and a manage power usage and even automate much of the process. But once this kind is in place between the Bringing customers on board power station and the end user – be it a residence, a business or a public sector institution – the utility has a ripe opportu- The traditional solution to the challenges ahead entails nity to expand into providing a host of other services that can building additional distribution lines and enhancing the veiled new streams of revenue and allow it to play an even capacity of flexible generation sources for balancing purposes, more integral in support of its community – provided that this so as to prevent congestion when variable RES run at their network has been built using the right infrastructure. full production capacity. Notwithstanding the fact that lack of public acceptance currently hinders the building of new power lines in Europe, such a system would also be underutilized Main drivers of a new flexible when variable RES production is low. For instance, wind plants generate electricity only about 20 to 40% of the time, for power system photovoltaic, the figure is about 10 to 20%. To achieve flexibility, customers need to became actively Modernizing Europe’s electricity system is vital for Europe’s involved. This will only be successful if electricity retail prices energy policy ambitions. Indeed, the European electricity and grid tariffs reflect the actual market and grid situations. industry will have a key role to play in supporting these Both customers and the retail market must became more ambitions. The European Union has set three targets for responsive, optimizing the use of electricity to the benefit of 2020: it aims to reduce its CO emissions by 20%, achieve 2 all. Well-functioning retail markets need to be boosted, allowing a 20% share of renewable energy sources (RES) in overall suppliers to deliver competitive, innovative and sustainable energy consumption, and be 20% more energy efficient. product to customer. The increasing share of variable RES will prove challenging Increasing system flexibility and establishing new commercial to the electricity system’s stability, security and reliability. services is a must. But it will only be achievable if distribution Already today, these challenges are making themselves felt system operators (DSO) have real-time system information at in several European regions. By 2020. Intermittent RES such their disposal which allows them to operate the grid safely and as wind and solar are expected to represent 17% of the EU’s to dynamically manage distributed generation and demand. total electricity consumption. On the one hand, this figure will Not only power, but information too will need to flow in both include large scale renewable generation sources such as directions. To achieve its overarching energy and climate offshore wind farms, whose development will require substan- policy goals, Europe thus needs more intelligent mid and low tial investment in the transmission grid. On the other hand, voltage grids by 2020 – the so called SMART GRIDS. distribution networks will need to accommodate an increasing number of small-scale sources. In France, for example, 900 MW of variable RES are already connected to the distri- bution grid; in Germany the figure is about 50 GW. DSOs as key enablers for At the same, electrification of transport will be needed Smart Grids to further decarbonise the economy. For significant deploy- ment of electric vehicles by 2050, Europe needs to target a Smart grids imply a huge cultural change in the way electricity 10% share of electric vehicle by 2020. These vehicles will is distributed, touching upon issues from long-term network need to be charged through the electrical system. Together planning to real-time network operation. DSOs currently

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 181 responsible for transporting electricity from the transmission Incentivising investment system to customers (excluding supply), will be at the heart of the new, intelligent electricity system. They will increasingly & cooperation move beyond their traditional role of “building and connecting” The International Energy Agency has estimated the invest- towards “connecting and managing” and will become enablers ment needs in Europe’s distribution grid at 480 bn euros for producers, service providers and customers to meet on an by 2035. Yet DSO investments in smart technologies are open market place. While smart grids will benefit all parts of currently being hampered by two things: sub-optimal rates of the electricity value chain, DSOs will bear the lion’s share of return and regulatory instability. Before anything else, action the initial investments to encourage development of commer- at the European level should thus encourage efficient regu- cial solutions. Such solutions cannot develop before the intro- lation at the national level that focuses on longer term grid duction of smart grid functionalities that will provide all actors requirements and provides a fair rate of return. with swift, transparent and accurate information and help to maintain network stability. Apart from strong political commitment to establish right regulatory conditions, movements towards intelligent power

182 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA systems will require increased cooperation among all players have opted for the definition given by the following document: in this area, including customers. Given the opportunity to Strategic Deployment Document for Europe’s Elec- easily manage their electricity use and receive the information tricity Networks of the Future, European Technology about its value, customer could be stimulate to change their Platform for Smart Grids, 2010. consumption habits. A smart grid is an electricity network that can intelligently integrate the behaviour and actions of all its users – genera- tors, consumers, and the ones performing both activities - to 4.5.1 What is a Smart Grid? ensure a sustainable, economic and secure electricity supply. Figure below illustrates this definition showing all the Smart 4.5.1.1 Smart Grid Definition Grid users.

The term Smart Grid is worldwide defined in several ways by various international organisations and institutions. Here we

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 183 4.5.1.2 Smart Grid Solution Deployment 4.5.1.3 Smart Grid Solution Objectives Reasons Smart Grid development objectives fully aligned with the The most important Smart Grid deployment reasons relate to EU-level objectives are listed below: the fulfilment of the following global objectives: 1. Provide integration and improve generator operation of yy Meeting the EU 20-20-20 targets by 2020, all sizes and technologies (e.g. renewables), yy Provision of high energy independence, 2. Network (e.g. loss reduction) and network infrastructure yy Security of supply improvements and optimisation, yy Application of the new technologies (e.g. electric vehicles). 3. Provide customers with more information and choice in selecting their suppliers, as well as the chance to partici- To achieve the above global objectives, the power grid in pate in the power system optimisation, the near future will have to adapt to the mass distributed 4. Considerably reduce the power system environmental electricity production, it should enable the widespread use impact, of renewables, mass application of the electric vehicles and 5. Maintain or improve the current high reliability, security at the same time provide high reliability and security levels. and supply quality levels, Without implementing the modern (advanced) solutions and 6. Efficiently maintain and improve the existing network technologies, the existing power system will not be able to functionalities (e.g. efficient and reliable oversight, distri- provide an efficient response to the indicated challenges, bution network failure management, adequate distribu- i.e. it will not be able to provide efficient electricity distribu- tion network protection concepts, adequate distribution tion. Moreover, a wide range of stakeholders will benefit for network voltage control concepts, etc). the implementation of the advanced technologies (society as a whole, energy producers, customers, traders, distribution companies, transmission and distribution system operators, 4.5.1.4 Smart Grid Solution Development etc). It is difficult to predict at what pace the above solution and Directions technologies will be implemented due to wide-ranging factors, primarily conditioned by the application of the latest techno- To achieve the above-indicated objectives, the previously logical solutions and platforms, not easily deployed in practice mentioned EU documents define six main power system owing to the insufficient standardisation levels, and the current development priorities (directions) aimed at implementing the economic-political barriers. Smart Grid solution. When it comes to the European power grid, where grids are in Priority development directions include: some cases considerably over-dimensioned in terms of their 1. Network operation and utilisation optimisation capacities, large funds have been foreseen for their revitali- This direction should be achieved through a well-coordi- sation, since they need to be the backbone of the advanced nated distributed approach to control and operation, pro- (Smart Grid) networks. According to the IEA data, almost EUR viding reliable, secure and efficient power grid operation 480 billion will be invested for their revitalisation by 2030. given all economic-technical barriers. In our country the electrification process was practically 2. Network infrastructure optimisation finalised some 40 years ago. However, despite the highly This direction should provide more efficient asset man- degraded operational power grid performance due to the agement, as well as network planning under increased reduced maintenance scope, this grid represents a good uncertainty of the distributed sources. starting point for the information-communication network 3. High renewables integration integration, considerably expanding in the past decade, thus This direction should create preconditions for mass inte- providing the advanced (Smart Grid) network. In PE EPS, we gration of diverse production capacities and technolo- have so far adopted an Advanced Metering Infrastructure gies (wind, solar, etc) in the power system. (AMI) solution integrated with the Meter Data Management 4. Introduction of modern information and commu- (MDM) system, also implying the future Home Area Network nication technologies (HAN) deployment. This will provide a sound basis to develop This direction should supply the starting point to define the advanced networks. Moreover, this type of network is the communication standards and to standardise the already enabled by some solutions implemented within our data model, one of the essential conditions to implement distribution networks. Primarily the SCADA system solutions the Smart Grid concept. with the integrated DMS applications in the control centres, 5. Active distribution network implementation and the distribution network automation solutions, together This direction should provide the necessary distribu- with the substation automation. The current state of this field tion network organisational, management and operation in Serbia is described in the annexed document (Annex 2). changes, transforming the current passive system into Definition and adoption of the clear Smart Grid objectives an active system with clear definition of the distribution and development and deployment directions in PE EPS are system operator role. This is required primarily due to essential for the successful development of PE EPS, at the the complex network operations, planned distribution same time representing a development potential for the entire network development, as well as due to the growing accompanying domestic industry. challenges in providing the final customers’ security and

184 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA reliability of supply based on the established electricity Study), until conditions are created to start working on the supply quality criteria. republic-level strategy development. 6. Energy efficiency, customers and new market yy Smart Grid solution and the PE EPS pilot project will participants receive efficient support, coordination and oversight at the This direction should facilitate the creation of the market PE EPS level. environment with clearly defined obligations of all the yy EU Smart Grid standards and recommendations will be users. adopted and their practical implementation intensified. yy The Smart Grid vision and solutions will be presented to all The above development priorities have been defined as a stakeholders, with potential feedbacks. meta level, i.e. they describe the overall actions and activities yy We will participate in the EU developments in this field. providing the Smart Grid vision achievement. yy The PE EPS skills and know-how will be improved. Each power system has a unique starting point in terms of yy The final users will be included into the Smart Grid solution system performance and the applied concepts and abilities, deployment as much as possible. compared to the established Smart Grid solution deployment yy An open power system performance data access will be objectives, whereby, each system will have to face different fostered. challenges and adopt different final solutions. Therefore, the implementation of the above EU objectives depends on the existing power system development level in individual Member 4.5.1.6 Smart Grid Solution Concept States. Depending on this, each country should plan its own Figure provided under section 4.5.1.1 illustrates the defi- development objectives. Our country should equally plan its nition and shows all the users connected to the Smart Grid. own development objectives. However, it does not show the functional Smart Grid elements, their mutual relations and their relation towards the users and 4.5.1.5 Necessary Smart Grid Solution the DSO. This is the task of the concept model representing the logical Smart Grid matrix providing the connection to the Deployment Activities in PE EPS concrete system implementation. There are concept models We have opted for following the EU objectives and directions defined in the different ways by various authors. Essentially when it comes to implementing the Smart Grid solution in they provide different views of the same concept. We have Serbia, since Serbia is a European country undergoing the EU selected the clearest one according to our opinion providing accession process. In addition, the EU comprises of countries the best connection with the concrete physical Smart Grid of diverse development levels and applied power system solution implementation. Smart Grid is essentially an improve- concepts. The EU Smart Grid strategy is precisely tailored ment of the existing distribution system aimed at achieving the to this diversity, whereas, it should be noted that it includes desired applications by utilising the modern information and countries with similar development level to that of Serbia, communication solutions. This is shown on the following figure. conforming that this approach is applicable in our country. Some of these solutions have already been implemented into the existing distribution system. The Smart Grid comprises the To provide efficient Smart Grid solution implementation is layers from 2 to 5. Customer-oriented applications have been Serbia, the following actions need to be taken: labelled with K+E, while the ones solely used by the DSO with yy The Serbian Smart Grid Strategy development will be pro- E. Layer names and their respective numbers are listed below: posed to the Ministry of Energy. The development process yy SMART GRID foundation (2) will also include PE EPS experts. yy SMART GRID basic application (3) yy To accelerate the Smart Grid Strategy development, PE yy Application provided by SMART GRID development (4, 5) EPS will initiate appropriate actions (the Smart Grid Devel- opment Directions in the Distribution System of PE EPS

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 185 The Smart Grid foundation comprises three elements: 4.5.2 Telecommunications System yy IТ infrastructure yy Communications yy Distribution system model 4.5.2.1 Why fibre is the best infrastructure solution? SMART GRID basic applications: yy SMART METERING (AMM + MDM), (K+Е) Public utilities have a number of options when it comes to deploying an advanced communication network for the Smart yy SN network automation, ( Е) Grid, each with its own distinct characteristics and consider- yy Basic DMS ( Distributed Management System) functions, (Е) ations – power lines, wireless or cellular, copper, or fibre. yy Substation automation, (Е) When comparing these four infrastructure options, fibre often Applications 2, 3, 4 have mostly been integrated into the emerges as the top contender. Larger power companies have existing distribution system. Levels 4 and 5 include applica- been using fibre communications to connect their generation tions made possible by Smart Grid development. Such applica- network with their network control facilities for years. While the tions cover: upfront costs of deploying fibre can be significantly higher than yy HAN (Home Area Network) integration, (K+Е) the other options, it nonetheless offers advantages that, in the yy PEV ( Plug-in Electric Vehicles ) integration, (К+Е) majority of cases, trump the short-term hurdle of that capital yy DER-ES (Energy Storage ) integration, (K+Е) expense: yy DER-DG ( Distributed Generation ) integration, (К+Е) 1. Information at the speed of light. Communication yy DMS/SCADA ( Volt-Var Optimization Application, (Е) in both directions on a fibre network is instantaneous – yy DR (Demand Response), (Е) allowing electric distributors to efficiently manage and yy MICROGRID, (Е) monitor their power demand in “real-time.” yy Advanced DMS functions (Operational Efficiency), (K+Е) 2. The more responsive, the more cost effective: The more easily and efficiently power usage can be monitored Figure above indicates that one of the Smart Grid solution and managed, the more cost savings can be realized. The foundations is the telecommunication system and that the first strain on overtaxed and aging power generation facilities step towards the Smart Grid solution implementation is the is reduced, prolonging their life without costly investments Smart Metering. For this reason, the specified elements will be in repairs, upgrades and replacements of equipment. more closely considered in the following sections. 3. Ultimate reliability and performance. Fibre optic cables, whether buried or overhead, offer improved reli- ability and can transport vast amounts of information through a single fibre strand.

186 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 4. Self-healing: A fibre-based system can be designed The main network level has been completed under the initial with redundant pathways to ensure a continuous flow of design a long time ago and commissioned with small capaci- information in the event of an interruption to the primary ties. This was one of the essential preconditions to reconnect route. with the UCTE. 5. Feeding the grid: “Green” residential developments are already taking hold across the world, in which homes Further main network utilisation depended on the lower generate their own power with a renewable source such network levels development. This additional development has as solar. A fibre-based Smart Grid allows for much more so far unfolded very slowly. From the onset of the new EPS efficient management of the supply of power by these telecommunications network project development it was micro-producers back to the grid. assumed that the surplus capacities of such network would 6. Future proof. Once a fibre pipe is in place it has almost after the development be offered in the free telecommunica- limitless capability to handle more bandwidth and scale tions market both in the country itself and the surrounding up to deliver more advanced services. The fibre itself will countries. This was one of the points also made in the Business not need to be upgraded or replaced to increase band- Plan. width, only the electronics at either end. Over the previous network development, special efforts were 7. Why stop at power management? That big fibre pipe primarily invested in meeting the EPS and EMS requirements, allows a public utility to branch out into new broadband while the surplus capacities would also be offered to others. services that create new revenue opportunities, such as The international experience has demonstrated that this is the the triple play of ultra-fast Internet, HD and IP television, best method to use the advantages of easy fibre-optics instal- and telephone, with lighting fast connection speeds of up lation along the transmission lines. to 100 mbps. The current utilisation level of the new network in both 8. Underserved and over charged. In many communi- ties, incumbent telecommunications providers without companies is on the level of 10%. The installed capacity utili- wire line competition will “milk” their legacy copper sation level will reach 50% at the most only after all financial networks, delivering substandard service at often times divisions are able to use it, once the computer centres higher rates. The expansion by a public utility into fibre- become operational and integrated, when the substation and based triple-play services will introduce real marketplace transmission line protection starts using it (since fibre-optics competition, breeding innovation, improved customer is the only solution for the modern protection systems), when service and better pricing for both commercial and resi- the remaining phone lines have been modernised and trans- dential customers. Public utilities are local, have signifi- ferred to the IP technology, when all the control systems are cant infrastructure experience, and the right “mission” to upgraded, when the remote control and supervision is installed serve their community. in the majority of facilities, when plants and facilities become unmanned and when the smart metering is introduced. 9. Stimulating the local economy. Fibber optic net- works provide tremendous communications capabilities To update the existing Business Plan, the new status of the to enable existing small, medium and large businesses to Serbian telecommunications market should be assessed, operate more efficiently, while positioning the community together with the status analysis of the neighbouring countries. to attract new industry and skilled workers. Much like the In the meantime, the requirements have grown considerably, interstate highway system 50 years ago, fibre optic net- while other networks have not followed this growth in all their works open businesses up to expanded markets, across segments. Other networks are usually based on the optical the world. cable ground routing or along some other structures (gas pipelines, railways, etc.). 4.5.2.2 The future EPS advanced network Our market also has some new significant participants which system infrastructure state need to be recognised. Moreover, others need to be advised that there is a higher quality, more reliable and a potentially EPS already has a backbone of the telecommunications cheaper network. system based on the OPGW cables. There are various international experiences in this field. As 2010 – EPS Telecommunications Project Status a result, there are some utilities with their own telecommu- I. From the very beginning of the new EPS telecommunica- nications and those outsourcing these services. The latest tion network implementation there was an idea to build smart technologies introduction trend actually represents a a company-level basic telecommunications network, maximum utilisation of the telecommunication – information therefore the Project and the Business Plans have been technologies within the energy sector. This evidently implies made with this idea in mind. The regional and the local data transfer via fibre-optics. levels were planned for development by the distribution The basic task of such modern telecommunications network companies and individual generation companies. is full satisfaction of their company requirements in all appli- II. Implementation of all three telecommunications network cation aspects of such technologies. This network segment levels and their appropriate equipping would create con- can be completely independent and fully autonomous from ditions for modern utilisation of all services provided by other network parts. This especially goes for the network parts such a technologically advanced network. serving for control needs.

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 187 The telecommunications capacities surplus is viewed in a to allow only maximum 5–minute outages throughout the number of different ways. Some companies simply lease this year. This is one of its huge advantages. surplus as the so-called dark fibre (the entire fibre). While Currently, the STM – 16 (2.5 Gb/s) capacity equipment others more market-oriented companies lease individual fibre has been installed along the main routes, while some other capacities or even offer different provider services. less important routes have smaller capacities. If necessary, In general, it may be concluded that the above activities are such capacities can be increased by adding the appropriate highly profitable, while the systems are reliable requiring hardware, which is a potential option. almost negligible maintenance. There are cases where tele- At the moment, the network is developed along the regional communication activities profits are even comparable with the planes under the EPS classification – this practically means principal business profits. that it is developed from the substations situated along the outskirts of the cities towards the more central locations in all 4.5.2.3 Technical characteristics – the new larger cities throughout the country. It should be noted that commercially interesting levels have been reached in Belgrade, Electric Power Industry of Serbia Novi Sad, Nis, Leskovac, Zrenjanin, Novi Pazar, Bajina Basta, optical telecommunications network etc. Further development unfolds daily. Based on the experience of the advanced west European The network of such quality is even further improved by intro- utilities in terms of marketing the free telecommunications ducing the IP technology, at this moment only the phone lines capacities, this network was also designed and implemented inside EPS and EMS. Twelve sites are equipped with the devices to primarily satisfy the EPS and EMS requirements, while the serving to improve the voice data transfer. The following phase surplus capacities would be offered on the Serbian and SE logically involves service expansion to cover all the sites within Europe telecommunications market. our company. Its implementation was partly supported by the European At this moment, some 2 500 km of optical network is actively financial institutions, while the remaining funds were provided used, mostly for control needs and our NDC connection to by EPS. Currently the main network level development is in its other NDCs in the neighbouring countries, as requested by final stage. The majority of routes, especially interconnections the UCTE. Much lower capacities than the available ones were with the neighbouring utilities have already been commis- used for this purpose. sioned. Investments so far are at the level of tens of millions In general, all the installed capacities of the new EPS telecom- of Euros. munications network have been designed and implemented Given that the modernisation of all EPS activities is an utmost to offer surpluses in the free market. At the moment, and in priority, it is imperative to introduce a state-of-the-art tele- the following ten years, the company will use some 30% of communications infrastructure with extremely high opera- the total transport capacity. The remaining capacity, even tional reliability, whereby this has been taken as the basic physically separated, may be used for commercial purposes planning and designing parameter. For this reason, the new as a highly reliable, quality transmission telecommunications EPS telecommunications network has some state-of-the-art network. The commercialisation precondition is to create a equipment installed and the highest transport capacities in the company registered for such activities. country. This orientation has also been identified by the Republic The basic technologies used to implement the EPS telecom- of Serbia Telecommunications Development Strategy for munications network include the optical transmission paths, the period 2006 – 2010. It states that large companies, SDH terminal equipment and IP network used for voice and including Electric Power Industry of Serbia among others, business data transfer. not having telecommunications as their principal business, but operating the telecommunications networks for their own The optical network has so far been implemented along the needs may use such unused capacities for public use. This has transmission lines of all voltage levels at the total length of also been confirmed by the current international legislation some 4 300 km. It covers the entire Serbian territory reaching and practice. Starting from this, one of the strategic objectives the larger towns, i.e. substations situated in these towns. of the Serbian telecommunications sector development is to The network also extends towards the other neighbouring improve and put to the public commercial use the unused tele- countries, except Macedonia. It is mainly constructed by using communication capacities operated by the public enterprises. optical cables with 48 fibres, 24 fibres of G652 type and 24 fibres of G655 type. These fibres were manufactured by the The legal framework was provided through the Telecom- best international companies and the measurements to date munications Act stipulating that the legal entity with the have confirmed the high quality of these optical transmission principal business other than the telecommunications, already paths. The network is further expanded towards the regional possessing or planning to obtain the public telecommuni- and local planes to cover the requirements of the company’s cations network licence and/or the public telecommunica- generation or distribution segments. It has also been expanded tions service licence should perform this business activity in the urban areas for the potential needs of external users, belonging to the field of telecommunications for which it naturally, primarily electricity customers. already possesses or it intends to obtain the licence through a separate affiliated legal entity. This is the case of PE EPS, since To achieve the high operational reliability, the network is based its Incorporation Decision lists the designing, construction, on the node structure and it has been developed in such a way maintenance and operation of the telecommunication facilities

188 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA and devices as one of the activities in addition to the energy the previous PE EPS experience with incorporating the similar activities. In accordance with the public enterprises and the affiliated companies. Further registration, company bodies’ public interest activities legislation, PE EPS is authorised to nomination and existing infrastructure transfer activities, incorporate an affiliated company to perform activities estab- together with the commissioning may take up to a couple of lished by its Articles of Incorporation, i.e. in this case an affili- months, given that the precondition to start the operation is ated company for designing, construction, maintenance and the obtain the corresponding licence in accordance with the operation of the telecommunications facilities and devices. Telecommunications Act. The Incorporation Decision for one such special company is The following two figures show: adopted the PE EPS Management Board, under the Serbian yy The telecommunications network architecture containing Government compliance. The process involving the Decision the installed active equipment sites, network organisation preparation, harmonisation and adoption with all the accom- and the connection capacities panying documents and permitting procedures and the final yy The EPS physical telecommunications network structure Government compliance may last up to six months based on (installed fibre-optics topology)

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 189

EPS telecommunications network architecture

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 191 EPS physical telecommunications network structure

192 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 4.5.3 Smart Metering plants. Annual production in 2009 was about 36,000 GWh, two-thirds from coal-fired plants (with the lignite from EPS owned and operated mines) and one-third from hydro genera- 4.5.3.1 The reasons for smart metering tion (combined heat and power plants has a very small share introduction in PE EPS in total generation, 139 GWh in 2009). Peak-load reached in 2009 was 6,383 MW. In the structure of electricity sales ‘Elektroprivreda Srbije’ (EPS) is Serbia’s dominant power utility the residential sector accounted for 53% of total sales in established in its present form in 2005 when the transmission 2009, while the industrial sector accounted for 38% and system operator was unbundled from the previous vertically the commercial/ institutional sector for 9%. The distribution integrated utility... The company comprises 11 subsidiaries (5 network is 141,482 km long, with an installed capacity of generation/ mining companies and 6 distribution companies), distribution transformers of 25,413 MVA. with a total staff of about 37.000 serving a customer base of approximately 3.4 million. EPS (excluding Kosovo) has a total In the past years no significant investments were made in the effective capacity of 7,124 MW, of which 3,936 MW in six distribution network and technical and commercial losses coal-fired thermal power plants (TPPs), 353 MW in three gas/ remain high (with an increasing trend) as shown in the Table fuel-fired heating plants, and 2,835 MW in twelve hydropower below: Distribution losses between 2005 and 2009

Distribution Distribution losses company I-XII 2005 I-XII 2006 I-XII 2007 I-XII 2008 I-XII 2009 "Еlektrovojvodina" 12.47 12.65 12.29 12.62 13.82 "ЕDB" 15.04 14.01 14.54 14.69 15.26 "Еlektrosrbija" 13.45 14.40 14.05 14.31 15.31 ЕD"Јugoistok" 17.37 17.83 18.09 18.94 18.40 ЕD "Centar" 12.82 13.08 13.06 12.70 13.49 Total: 13.82 14.22 14.20 14.48 15.19

EPS also observed a significant reduction in the collection rate in 2009, as shown in the following table:

Collection rates between 2005 and 2009

Distribution Collection rates company I-XII 2005 I-XII 2006 I-XII 2007 I-XII 2008 I-XII 2009 "Еlektrovojvodina" 94.83 107.91 99.61 99.84 97.54 "ЕDB" 92.46 103.86 95.70 97.17 95.17 "Еlektrosrbija" 92.31 107.77 99.07 98.25 95.54 ЕD"Јugoistok" 81.98 97.40 92.20 94.35 84.95 ЕD "Centar" 84.72 103.83 88.57 93.18 88.61 Total: 90.95 105.01 96.38 97.41 93.90

In order to reduce losses and improve collections EPS is yy reduction of reading costs and increase of the number of entering into a pilot phase of smart metering project with a read electrical meters; total value of approximately €80 million. yy increase of metering accuracy and reduction of the number of complaints; The overall System deployment objective is to improve the yy acceleration of invoice issuing and reduction of collection energy efficiency and fostering of more rational energy usage period; in accordance with the European 20-20-20 target, i.e. 20% yy increase of customer analytics, possibility of remote dis- more of renewable energy sources, 20% less of CO2 emission connection of customers and increase of collection rate; and 20% increase of energy efficiency in EU by 2020, all yy reduction of non-technical losses; under the broader SmartGrids platform. yy implementation of technological platform for application of The most important implementation objectives of the System complex tariff system; include the following:

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 193 yy improvement of network and load management (better AMR/AMM systems have been characterised by a rapid devel- usage of existing capacities and postponement of invest- opment in the current decade. After initial attempts in the ments into electric power system); beginning of this decade, and by considering the standardised yy improvement of network development planning; EU and USA trends, it is clear that full inter-operability of yy reduction of maintenance costs; meters and other AMI components of different manufacturers yy shortening of interruption duration time and distribution will soon be achieved. network reliability increase; yy implementation of the basis for SmartGrids. This will enable mass replacement of older generation meters (roll-out) and transition of electricity distribution companies Fulfilment of these objectives will bring multiple advantages, (EDC) to a new business level and implementation of the enabling rapid return of invested assets, in some areas even Smart Grids concept. in 6 months. The system possesses the following functions: yy remote reading of all metered (registered) values with ele- 4.5.3.2 PE EPS Smart Metering System ments of the System; Description yy remote change of parameters of System components; yy remote connection/disconnection of customers; The advanced system for electricity consumption metering yy storage and archiving of remotely read data; and management, electrical meters reading, data processing yy review, graphic presentation and analysis of data; and storage (Smart Metering System – hereinafter referred yy automatic detection of newly-installed meters in the to as: ‘ ’) includes advanced metering infrastruc- the System System; ture (AMI), automated metering management and meter data yy automatic reconfiguration of the path and finding of optimal management and repository (MDM/R). repeater routes; AMI is the infrastructure under which data stored in meters yy potential access of other users to the memorised data; marked by the exact date and time are periodically remotely yy potential usage of pre-paid meters; collected by means of a concentrator (AMRC) and transferred yy potential data collection from other types of metering to the advance metering control computer (AMCC) within the devices such as gas meters , water gauges, heat meters, AMM Centre, and further on to the centralised MDM system. etc. (multi-metering); Remote data collection can also be realised in direct commu- yy potential HAN (Home Area Network) connection. nication between meters equipped by the corresponding communication modules (AMCD) and AMCC.

Smart Metering system

Smart Metering system AMI(Advanced Metering Infrastructure)

AMCD Metering display Industry AMCD AMM system

Electricity buyers

LAN

Concentrator AMM Households WAN Advanced meters AMRC centre

WAN WAN

Customer support (informaon; accounng and EDC «Firewall» collecon) Network planning Management

MDM/R system

Electricity delivery

MDM system Data storage (Meter Data Regulatory agency (Meter Data Repository) Management) Maintenance Billing

194 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA The System is based on the following principles: yy bidirectional communication; yy interoperability*, yy data security; yy reliability; yy unification and standardisation of the System functions and controls. yy scalability; yy flexibility; AMI/MDM system context from the aspect of directly affected yy modularity; EDC business functions (reference architecture) maintains yy automatic recognition and introduction of components eight main logic/abstract components (potentially deployed into the System (‘plug and play’); as the information sub-systems), as follows: Smart metering system functional diagram and context

Outage Network management planning [17] (OMS)

[1] Customer account informaon Metering [16] [12] [2] Configuraon and installaon point AMI [18] [3] Control and signalling Data acquision [4] Buyer informaon [13] MDM/R system [5] Special consumpon reading AMM Centre [3] [6] Signals for required consumpon Management and [4] [7] Connecon/Disconnecon reconfiguraon [12] [8] Mounng, Dismantling, Repair, etc [2] [9] Load curves, metering archive Customer Support and Billing [10] Tariff policy [7] [11] Metering point state Metering point [11] [6] [1] [12] Consumpon data records maintenance and [13] Consumpon data asset management [20] Network Electricity [14] Request for metering point repair [10] management delivery [15] Consumpon reading request Load analysis [16] Outages and verificaon of restoraon [8][12] Load [17] Supply reliability and quality [3] management [18] Readings, events and signals system [9] [19] Special reading [9] [19] [9] Load [14] [20] Parameters and tariffs Management of management works [21] Informaon exchange [18] [22] Exchange of records [14] [5]

* Interoperability is the capacity of the device of at least three manufacturers to exchange and use infor- mation automatically within the System by recognising their scope, format and meaning.

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 195

Literature

Annexes

1. DIRECTIVE 2009/28/EC 2. STOCK TAKING DOCUMENT 3. ENERGY 2020 4. RENEWABLE ENERGY PROGRESS REPORT 5. COMMENT ON EU EMISSION TRADING SYSTEM 6. LEGAL FRAMEWORK W TO E

Literature

1. PE EPS Energy Generation Department documents 2. PE EPS Electricity Distribution Department documents 3. PE EPS Electricity Trade Department documents 4. PE EPS Strategy and Investment Department documents 5. PE EPS Operation and Development Plan 2008-2015 6. Strategija razvoja energetike Republike Srbije do 2015 7. Program ostvarivanja Strategije razvoja energetike Republike Srbije do 2015. godine za period od 2007. do 2012. godine 8. Uredba o merama podsticaja za proizvodnju električne energije korišćenjem obnovljivih izvora energije i kombinovanom proizvodnjom električne i toplotne energije 9. Vision and Strategy for Europe’s Electricity Networks of the Future, ETP SG, 2006 10. Strategic Research Agenda for Europe’s Electricity Networks of the Future, ETP SG, 2007 11. Strategic Deployment Document for Europe’s Electricity Networks of the Future, ETP SG, 2010 12. Mission of the Тask Force for the Implementation of Smart Grids into the European Internal Market, TF SG, 2009 13. Roadmap 2010-2018 and Detailed Implementation Plan 2010-2012, EEGI, 2010 14. Directive 2009/72/EC of the European Parliament and of the Council, 2009 15. Smart Grids Scope, History and Prospects / Update on Smart Metering Activities, Council of European Energy Regulators - CEER, 2009 16. Funkcionalni zahtevi i tehničke specifikacije AMI/MDM sistema, PE EPS Advanced Networks Task Force, 2010 17. Analiza trenutnog stanja funkcije upravljanja i sistema daljinskog nadzora, upravljanja, analize i optimizacije pogona elek- troenergetskih objekata i opreme svih naponskih nivoa u PD za DEE, PE EPS Advanced Networks Task Force, 2010 18. Peter Kallai and Kim Kersey, 10 Reasons Why Fiber Is the Right Choice for Your Smart Grid Network, 2010 19. Pavla Mandatova, 10 Steps to Smart Grids: EURELECTRIC DSOs Release 10-Year Roadmap for Smart Grid Deployment in the EU, 2011 20. Terms of Reference, Serbia: EPS Metering Project, 2010 21. Katie Fehrenbacher, Does Fiber Have a Role in the Smart Grid?, 2010 22. Commission Staff Working Paper: Interpretative Note on Directive 2009/72/EC concerning Common Rules for the Internal Market in Electricity, 2009 23. Kitti Nyitrai/ Cristophe Schramm, Energy policy, Security of supply and networks, Directorate -General for Electricity, Direc- torate B-Security of supply and energy markets: Energy infrastructure priorities for 2020 and beyond, 2011 24. European Commission, Photovoltaic solar energy — Development and current research, 2009

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 199

About authors 202 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA –– January 2001 – September 2005: TPPs Nikola Tesla, Dragomir Marković Deputy Director Education: –– August 1999 – January 2001: TPP Nikola Tesla B, –– 1980: Faculty of Mechanical Engineering, Belgrade Director –– October 1981 – December 1998: TPP Nikola Tesla B, Current position: various positions –– March 2009 - to date: General Manager, Electric Power Industry of Serbia (EPS) Memberships in expert unions and organizations: –– President of the Board of Association for Energy and Employment History: Energy Mining of Serbian Chamber of Commerce –– October 2005 – March 2009: EPS, Strategy and Invest- (2004 – 2010). ments Director

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 203 Bratislav Čeperković was born in Kraljevo 1962. He has national strategy gasification Serbia, regional center for a PhD in medical science. From the period 1996 – 2003, he climate change and trading emission CO2 in Belgrade, regional worked on the international projects on recycling and waste center for monitoring transport for SEE WITH HQ in Belgrade, management for several companies, including ALBA inter- member PHLG for transport EU-SEE Road Corridor E7 and national, Rethmann and ALT VATER-SULO GROUP in Serbia, E10 in strategic priority EU for West Balkans and Serbia. Germany, and other countries in the region at the position He has participated in numerous conferences in support of of Executive and Corporate Development Manager. He is an strong relations between the EU and the West Balkans. From expert in EU integration and energy diplomacy. Over the past 2004 – 2008 he was minister – counsellor in the Serbia 5 years he has been engaged in the EU integration process, Mission to the EU Brussels. He is currently the chairman of the in the development of the PEOP and White Stream projects PE Transnafta Managing Board and Executive Manager at EPS and is one of the architects of the Energy community treaty, (Electric Power Industry of Serbia). He is also special advisor EU-SEE Gas ring. He has been the initiator of a great number of to the Deputy Prime Minister of Serbia, engaged in foreign energy transport environment projects. He was also engaged affairs and EU integration issues. He speaks English and in drafting numerous international agreements, including: German. He lives in Belgrade. Among his countless awards we Transport treaty EU-SEE, Open single sky agreement, air may exctract Belgrade October award and Nikola Tesla award. traffic agreement, strategy gasification SEE with EU DG TREN,

204 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA Aleksandar Vlajčić & Maintenance Engineer; 1983 Mašinoprojekt, Belgrade, Project Engineer. Born on 30 July 1955. Present position: Thermal Power Plants “Nikola Tesla”, Obrenovac, Serbia, System Development EDUCATION: Graduated from the Faculty of Mechanical Engi- Manager dealing with preparation works for new huge power neering of the University of Belgrade in 1981. plants; from 2007 to 2009: Thermal Power Plants ‘Nikola Graduated Mechanical Engineer; Master of Science, Tesla’, Obrenovac, Serbia, Deputy Manager, he was the Project Director in charge for energy efficiency increase projects; PUBLICATIONS: • Dipl. Ing Mihajlo Gavric, Dipl. Ing. Alek- from 2004 to 2007: Ministry of Energy and Mining of the sandar Vlajcic, Dr. Bratislav Ceperkovic ‘Green Book of PE Republic of Serbia, Assistant Minister, engaged as head of EPS’, Prof. Dr. Vera Sijacki- Zeravcic, Dr. Biljana Andjelic, Dipl. South East Europe Energy Treaty negotiation team, also team Ing. Gordana Bakic, Dipl. Ing. Dusan Milanovic, Dipl. Ing. Alek- member for the Energy Act and the Republic of Serbia Energy sandar Vlajcic, Dipl. Ing. Petar Maksimovic ‘The Designed and Strategy development; from 2001 to 2004: PE Electric Realistic Quality of Material and its Influence on the Reliable Power Industry of Serbia, Assistant Manager for Investments Operation of Power Plant Components’, ‘Elektroprivreda’ responsible for IFI support to the energy sector in the Republic 4/2001 • A. Vlajcic, D. Popovic: “Ash Handling System and of Serbia; from 1990 to 2001: Thermal Power Plant ‘Nikola Availability of 600MW Lignite Fired Unit”, Budapest, Confer- Tesla’, Obrenovac, Serbia; Plant Operation and Maintenance ence on Pneumatic Transport 1990 • A. Vlajcic, D.Popovic: Manager; from 1983 to 1990: Thermal Power Plant ‘Nikola ‘Ash Handling, Operation and Maintenance’, Elektroprivreda, Tesla’, Obrenovac, Serbia Erection, Commissioning, Operation No 10-13 1992.

THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 205 Stephan Ressl for strategy, internal and external business development including strategic projects, new markets and regulatory Dipl. Ing. Dr. Stephan Ressl has a degree in mechanical engi- affairs. He served also as Vice Chairman of EFET Gas and in neering from TU-Vienna and a subsequent PhD focusing on the Easee-Gas Board of Directors. Before he worked in the economics and industrial policy. He specialised in energy European Commission DG TREN C-2 for more than two years, related issues. He is partner and Managing Director in Mithras- dealing mainly with gas market liberalisation items and the Cleanenergy GmbH and Wattpic Energia intelligent focusing on creation of the energy community. He worked for GTE as Vice- solar energy projects. He founded his independent activity in Executive Secretary from 2002 to 2004 after having joined October 2008. OMV in late 2001. He was previously project manager to Prior to the above position, he joined Econgas as Head of set up the Austrian Energy Exchange EXAA and the Austrian Business Development in June 2006 and was responsible Balancing Energy Agency AGCS.

206 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA 207 208 THE WHITE BOOK OF THE ELECTRIC POWER INDUSTRY OF SERBIA