Case Study on Policy Reforms to Promote Renewable Energy in Serbia Economic and Social Commission for Western Asia E/ESCWA/SDPD/2017/CP.12
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Economic and Social Commission for Western Asia United Nations Development Account project on promoting renewable energy investments for climate change mitigation and sustainable development Case Study on Policy Reforms to Promote Renewable Energy in Serbia Economic and Social Commission for Western Asia E/ESCWA/SDPD/2017/CP.12 United Nations Development Account project on promoting renewable energy investments for climate change mitigation and sustainable development Case Study on Policy Reforms to Promote Renewable Energy in Serbia © 2018 United Nations All rights reserved worldwide Photocopies and reproductions of excerpts are allowed with proper credits. All queries on rights and licenses, including subsidiary rights, should be addressed to the United Nations Economic and Social Commission for Western Asia (ESCWA), e-mail: [email protected]. The findings, interpretations and conclusions expressed in this publication are those of the authors and do not necessarily reflect the views of the United Nations or its officials or Member States. The designations employed and the presentation of material in this publication do not imply the expression of any opinion whatsoever on the part of the United Nations concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. Links contained in this publication are provided for the convenience of the reader and are correct at the time of issue. The United Nations takes no responsibility for the continued accuracy of that information or for the content of any external website. References have, wherever possible, been verified. Mention of commercial names and products does not imply the endorsement of the United Nations. References to dollars ($) are to United States dollars, unless otherwise stated. Symbols of United Nations documents are composed of capital letters combined with figures. Mention of such a symbol indicates a reference to a United Nations document. United Nations publication issued by ESCWA, United Nations House, Riad El Solh Square, P.O. Box: 11-8575, Beirut, Lebanon. Website: www.unescwa.org. 3 Preface This case-study report was prepared for the Sustainable Energy Division, United Nations Economic Commission for Europe (UNECE) within the framework of the United Nations Development Account (UNDA) project Promoting Renewable Energy Investments for Climate Change Mitigation and Sustainable Development. The project focused on capacity-building for policymakers and project developers in order to promote investments in renewable projects. The project was led by UN ESCWA and implemented in partnership with the UNECE. The UNDA project included case studies of the experience of renewable energy policy reforms in selected countries from each of the two regional commissions. Four countries were selected from each regional commission: Jordan, Lebanon, Morocco and the United Arab Emirates from UN ESCWA Member States; and Georgia, Kazakhstan, Serbia and Ukraine from UN-ECE Member States. The present report covers the case study for Serbia, and was prepared by Mr Milan Ristanovic (PhD), an Associate Professor of the Faculty of Mechanical Engineering at the University of Belgrade; currently is involved in the development of national policies on energy in Serbia. Mr. Viktor Badaker, Regional Adviser, Sustainable Energy Division (UNECE), helped review and finalize the document. 5 Table of Content Preface 3 4.1. Models used to assess potential energy production 21 4.2. Models used to assess potential CO2 reductions Table of Content 5 in energy production 24 List of Figures 5 V. Economic, environmental and policy analysis: an appraisal of the overall impact of the policy List of Tables 6 measures introduced 27 List of abbreviations 7 5.1. Electricity sector 27 5.2. Heating-energy sector 34 VI. Policy design considerations: implications for I. Sector characteristics 9 promoting this successful policy more widely on a 1.1. Serbian energy sector 9 national basis 35 1.2. Commitment of Serbia to reduce greenhouse-gas 6.1. Beginnings and obstacles 35 emissions 10 6.2. RES projects and programmes of the Ministry 1.3. Renewable energy sources 12 of Mining and Energy 36 6.3. Market conditions and normative conditions 38 II. Current policy: a summary of relevant policies 6.4. Liberalization of the electricity market 38 for renewable energy investments in place before 6.5. RES policy design considerations 39 the introduction of reforms 13 6.6. Further implications 42 III. Renewable energy potential: an assessment 7. Future national policy development and implications of CO emissions 18 2 for adoption of a similar approach in neighbouring IV. Assessment methodology: a description of the countries: conclusions and recommendations: 46 analytical tool or models used to assess potential energy production and CO2 reductions 21 List of figures Figure 1: Share of particular energy sources in gross inland Figure 9: Gross domestic product per capita in euros (2013) 32 consumption for Serbia in 2014 9 Figure 10: Variation of gross domestic product per capita in Figure 2: Share of various energy sources in Serbia since 1995 33 electricity production 9 Figure 11: Gross final energy consumption (2012) 35 Figure 3: Share of different energy sources in total final energy consumption 10 Figure 12: Electricity market in Serbia 39 Figure 4: Share of different energy sources in energy Figure 13: The number of all types of renewable-energy- consumption of district heating systems 10 fuelled power plants from introducing the system of incentives with feed-in tariffs 41 Figure 5: Total available technical potential (Mtoe/year) 13 Figure 14: Installed capacities of all types of renewable- Figure 6: Total unused available technical potential energy-fuelled power plants from introducing the (Mtoe/year) 13 system of incentives with feed-in tariffs 41 Figure 7: EU Member States implementing retroactive Figure 15: Number of status of temporary and privileged changes to laws and unplanned reductions in producers issued from introducing the system of the acceptance of electricity produced from incentives with feed-in tariffs 42 renewable energy sources 30 Figure 16: EU actual and approximated progress to interim Figure 8: Review of the goals of the renewable energy and 2020 targets 42 sources action plan for Serbia for 2020 under the section of electricity and their implementation Figure 17: The main support schemes expose renewable- by 2016 32 energy-sourced electrictiy producers to different levels of risk 44 6 CASE STUDY ON POLICY REFORMS TO PROMOTE RENEWABLE ENERGY IN SERBIA List of tables Table 1: Greenhouse-gas emission scenarios Table 7: Net reduction of CO2 in the case of substituting in Serbia up to 20201 11 heating energy in existing conditions with the maximum technically possible production of heat Table 2: Overview of technically usable potential of energy from renewable energy sources 20 renewable energy sources 12 Table 8: Net reduction of CO2 in the case of fossil-fuel Table 3: Expected gross final energy consumption in Serbia substitution in the transport sector (diesel and petrol) in the areas of heating and cooling, electricity and with maximum technically possible production transport until 2020, taking into account the impact of biodiesel and bioethanol 20 of energy efficiency and energy-saving measures 2010–2020 (ktoe) 15 Table 9: Recently built power plants 26 Table 4: Feed-in tariffs for electricity production (2016) 16 Table 10: Thermal power plants and combined heat and power plants in Serbia 28 Table 5: Preliminary list of old large combustion plants from “network-energy“ sector in Serbia envisaged Table 11: Hydropower plants and PSHPP in Serbia 28 for “opt-out” mechanism 18 Table 12: Overview of the planned (in line with the National Table 6: Net reduction of CO2 in the case of substitution Renewable Energy Action Plan) and constructed from electricity produced by existing TPP with power plants in the field of renewable energy maximum technically possible production sources 40 of electricity from RES 19 7 List of abbreviations BAU business as usual MW megawatt BFPE MWel BM build margin NHSS National Hydrometeorological Service of Serbia CDM Clean Development Mechanism (Kyoto Protocol, UNFCCC) NERP National Emission Reduction Plan CHP combined heat and power NREAP National Renewable Energy Action Plan CM combined margin OIE CO2 carbon dioxide OM operating margin EnC Energy Community PE ENTSO-E PFS ETS Emissions Trading System or Scheme (EU) PSHP pumped storage hydropower plant EU European Union PPA power purchase agreement FIP feed-in premiums PPP privileged power producer FIT feed-in tariffs PU EMS Public utility Elektromreže Srbije, independent transmission system and GHG greenhouse gas market operator GWth PU EPS Public utility Elektroprivreda Srbije, HPP hydrower plant vertically integrated public utility IED Directive 2010/75/EU of the European PV photovoltaic Parliament and of the Council of 24 RED November 2010 on industrial emissions (integrated pollution prevention RES renewable energy sources and control) RES Directive Directive 2009/28/EC — promoting the IPA use of energy from renewable sources ITC Inter-Transmission System Operator SHPP small hydropower plant Compensation (EU) SPP solar power plant JP EPS TEEnC Treaty establishing the Energy ktoe thousand tons of oil equivalent Community LCP directive Directive 2001/80/EC of the European TJ terajoule Parliament and of the Council of 23 TPP thermal power plant October 2001 on the limitation of emissions of certain pollutants into TPPP temporary privileged power producer the air from large combustion plants UNFCCC United Nations Framework Convention LSU local self-government units on Climate Change MFI WPP wind power plant Mtoe million tons of oil equivalent 9 I. Sector characteristics Figure 1: Share of particular energy sources in gross inland consumption for Serbia in 2014 1.1. Serbian energy sector Serbia has diverse energy supplies. Energy generation 24% Crude oil relies largely on lignite reserves, which are estimated Oil derivatives at 3.1 billion tons (excluding reserves in Kosovo and Natural gas Metohija).