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Energy Sector Development Energy Sector Development Strategy of Republic of Serbia up Strategy of Republic of Serbia up to 2025 with projections to 2030 – to 2025 with projections to 2030 – Draft Draft
Prof. dr Dejan IvezicUniversity of Belgrade – Faculty of Mining and Geology
Republic of SerbiaRepublic of SerbiaMinistry of Energy, Development and Environmental ProtectionMinistry of Energy, Development and Environmental Protection
Project realization:
- Analysis of previous Strategy realization
- Energy resources and energy potentials of the Republic of Serbia
- Scenarios of development
- Energy balances by fuels (oil and oil derivartes, natural gas, coal, electricity, heat and RES) for 1990-2010
- Total energy balances for 1990 – 2010 period
- Energy Sector Development Strategy of Republic of Serbia up to 2025 with projections to 2030 – Draft
Team for project realization
doc. dr Marija Živković dr Branislava Lepotić Kovačević prof. dr Nenad Đajić prof. dr Petar Đukić doc. dr Jovan Mikulović prof. dr Vladimir Pavlović prof. dr Dušan Danilović prof. dr Dragan Ignjatović doc. dr Snažana Grujić Aleksandar Vučetić, dipl.ecc. doc. dr Miloš Tanasijević doc. dr Vesna Karović Maričić Aleksandar Madžarević, MSc. Miroslav Crnogorac, MSc
Energy Sector Development Strategy of Republic of Serbia up to 2025 with projections to 2030
Content:
I Introductory Considerations
II Energy Resources and Potentials of the Republic of Serbia
III Basic Assumptions of Serbian Energy Sector Development
IV The Strategic Priorities of Serbian Energy Sector Development
V The Development of Energy Sectors
VI Legal, Institutional and Socio-Economic Framework of Serbian Energy Sector Development
VII Serbian Energy Sector after 2030
Annex 1 – Total Energy Balances and Energy Indicators
I Introductory Considerations
Energy and economy development Driver and a key element of economic change Base for economy development Reduction of energy intensity, but increasing of energy
consumption
Sustainability as a challenge for energy development Energy efficiency Renewable energy Less negative consequences for the environment The principle of user/polluter pays Economic efficiency and energy market Social acceptability
Geological reserves of fossil fuels, (mill. toe)
Energy ResourceProved and Probable Geological Reserves
Total geological reserves and
resources
Hard coal 2,77 4.02
Brown coal 37,7 45.17
Brown-lignite coal 134,25 193
Lignite 1.583 (780*) 3.698
Oil 10,1450
Natural gas 3,37
Oil shale 0 398**
**Kerogen
* Without AP Kosovo and Metohija
II Energy Resources and Potentials
II Energy Resources and Potentials
RES (mill. toe/year)Available TP in use
Unused available TP
Total, available TP
Biomass 1,054 2,351 3,405
Agricultural biomass 0,033 1,637 1,67
Wooden (forestry) biomass 1,021 0,509 1,53
Biodegradable communal waste 0 0,205 0,205
Hydroenergy 0,909 0,770 1,679
Wind energy ≈0 0,103 0,103
Solar energy ≈0 0,240 0,240
Geothermal energy 0,05 0,175 0,180
Biodegradable waste 0 0,043 0,043
RES TOTAL 1,968 3,682 5,65
TP – technical potential
II Energy Resources and Potentials
Fossil energy resources in Serbia have not been sufficiently explored (except coal) and the data are not conclusive.
Geological reserves of the primary energy sources (coal, oil, natural gas, oil shale) are still, an important basis for the development of production and their use in the future for the energy sector of Serbia.
Renewable energy sources (excluding large hydropower plants) are at an early stage of development.
III Basic Assumptions of Serbian Energy Sector Development
Serbian energy sector in 2010
Projections of final energy consumption
SWOT analysis of Serbian energy sector
Serbian energy sector in 2010Final energy consumption 9,696 Mtoe
By sectors of consumption By energy sources
Industry 24.7%
Transport 23.1%
Agriculture 1.8%
Household 32.5%
Non-energy consumption
8.3%
Other consumers 9.6%Biomass 10.6% Oil Products 33.7%
Natural gas 11.9%
Coal 10.5%
Heat 8.8%
Electricity 24.5%
Serbian energy sector in 2010Primary energy consumption
15,531 Mtoe
By energy sources
Biomass 6.7%
Coal 50.7%Oil 23.7%
Natural gas 12.2%
Hydro energy 6.7%
Coal 64.1%
Natural gas 1.4%
Hydro energy 34.5%
Consumption for electricity generation
Serbian energy sector in 2010
Primary energy consumption structure in region
Primary energy consumption per capita
Romania29.7% Bulgaria15.2%
Serbia 13.3%
Hungary 21.9%
Albania 1.8% Bosnia and Herzegovina 5.5%
Croatia 7.3%
FYR Macedonia 2.5%
Montenegro 2.8%
Montenegro
Serbia
Bulgaria
Hungary
Romania
World
OECD
Croatia
Albania
FYR Macedonia
Bosnia and Herzegovina
toe/capita
Serbian energy sector in 2010Primary energy consumption per GDP in 2010
Electricity consumption per capita
Montenegro
Serbia
Bulgaria
Hungary
Romania
World
OECD
Croatia
Albania
FYR Macedonia
Bosnia and Herzegovina
kWh/capita
Montenegro
Serbia
Bulgaria
Hungary
Romania
World
OECD
Croatia
Albania
FYR Macedonia
Bosnia and Herzegovina
toe/1000$2005
Projections of Final Energy Consumption
Middle level of fertility is assumed for demographic projections
Average economy growth 3%
Baseline scenario („business as usual”)
Scenario with energy efficiency measures (maximal introduction of energy efficiency measures in all phases of energy cycle)
Serbian Energy Sector Model
-1
0
1
2
3
4
5
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Рас
т Б
ДП
(%
)
- Household
- Industry
- Transport
- Agriculture
- Construction
- Other consumers
- Non-energy sector
Укупно становништво Србије за три варијанте демографских пројекција: средњи, ниски и високи фертилитет
5500
6000
6500
7000
7500
8000
2002 2007 2012 2017 2022 2027 2032 2037 2042 2047 2052
пројекциони период
укуп
на п
опул
ациј
а у
хиљ
адам
а
Варијанта средњег фертилитетаВарјанта ниског фертилитета
Варијанта високог фертилитета
GDP projection
Demographic projections
Projections of Final Energy Consumption
Tables “by consumption sectors” and “by energy sources”
Baseline scenario Scenario with energy efficiency measures (EE)
Difference in 2020 is
0.920 Mtoe
Difference in 2030 is
1.359 MtoeMillion
s t
oe
SWOT analysis of Serbian energy sector
Strength (existing):
Tradition and experience in the previous Serbian energy sector development
Available resources and potentials Energy infrastructure systems
technically in relatively preserved conditionRatification and entry into force of the Treaty establishing the Energy Community
Signing of the Stabilization and Association Agreement between Serbia
and the EU
Weaknesses (internal):
High external energy dependence Non-economic energy prices and disparities
in prices of energy and fuels Irrational use of energy Technological obsolescence of existing and
the lack of new facilities The inefficiency of energy public companies The legacy of nature devastation and
excessive pollution Underdevelopment of the internal electricity
and natural gas market Lack of strategy for economic and social
development of the country The lack of transparency in energy policy
making Lengthy and complex procedures to obtain
permits and licenses Underdevelopment and the inadequacy of
energy statistics
SWOT analysis of Serbian energy sector
Options (development potential):
Integration of the Republic of Serbia into the EU
Raising the overall economic competitiveness of energy systems
Improving energy efficiency Introduction of cleaner production
principles in the energy sector Construction of South Stream pipeline
Construction of gas interconnections with systems in neighboring countries
Upgrade of existing and construction of new natural gas storage
Construction of new facilities for the power transmission
Building a new system for transport and storage of oil and oil products
SWOT analysis of Serbian energy sector
Unfavorable demographic trends and population aging
Political opportunism and lack of readiness for depoliticization and professionalization in energy sector
Backwardness and slow technological development of energy systems, due to the unfavorable economic situation
Lack of harmonization of standards and regulations with the EU, or failure in implementation
The adverse effects of climate change to the energy sector
Threats (to development):
Energy crisis in the world and the possibilities of new energy "shocks"
New sudden increases in energy demand in the world, or creation of a new crisis areas
Global disagreement about climate change policy and "cleaner" energy strategies
Deepening social and economic crisis, growing poverty, indebtedness and slow economic development of the country
Falling behind changes in energy policy in the region due to unresolved social and political issues
IV The Strategic Priorities of Serbian Energy Sector Development
- Providing conditions for promoting energy efficiency in carrying out energy activities and energy consumption- Creating economic, commercial and financial conditions for generating energy from RES and combined heat and electricity generation- Creating conditions for use of new energy sources- Promoting environmental protection in all energy related areas- Creating conditions for investments into the energy sector
- Reliable, safe and quality supply of energy and energy sources- Creating conditions for the safe and reliable energy systems operation and sustainable development
- Energy market competition based on the principles of non-discrimination, publicity and transparency- Energy and energy sources’ customers protection- Electricity and natural gas market development and their connecting with the regional and internal market of the EU-Connecting the energy system of the Republic of Serbia with the energy systems of other countries
ENERGY SECURITY
ENERGY MARKET
SYSTAINABLE ENERGY
IV The Strategic Priorities of Serbian Energy Sector Development
Security of Supply
Reliability of Supply
Quality of Supply
National & RegionalMarket
Energy Efficiency
Renewable Energy Sources
Environmental Protection
IV The Strategic Priorities of Serbian Energy Sector Development
Serbian energy development should be with minimal effect to the environment.
Serbian energy sector have to be market-based and economically efficient to the extent that generate its own development, but also to be generator and secure base for the development of the country.
Activities:
More intensive exploration of energy resources; The development of the energy market based to the principles of
competition, transparency and non-discrimination; The construction of new energy facilities or the rehabilitation and
modernization of existing ones; A comprehensive and coordinated approach to the rationalization of energy
consumption and the overall increase of energy efficiency; The establishment of adequate regulatory and organizational requirements
and simplifying and accelerating the procedure for obtaining approvals and permits;
The extensive use of renewable energy sources, including of renewable energy sources in the energy plans of cities and local communities as part of a local energy strategy;
The reorganization and restructuring of the companies in energy sector Further harmonization of existing regulations with EU regulations and
standards
IV The Strategic Priorities of Serbian Energy Sector Development
Measures:
Raising capacity of financial institutions to finance energy efficiency measures and production and placement of the best available energy technologies and equipment;
Development of innovative financing mechanisms for energy services sector (ESCO concept, etc..)
Encourage the development of domestic industries to follow the planned development of the energy sector
Analysis of climate change impact to the energy sector and the adoption of appropriate adaptation plans;
Systematic capacity building of scientific and educational institutions related to energy sector;
Complete and timely information to the public about the state of the sector; Education and awareness raising.
IV The Strategic Priorities of Serbian Energy Sector Development
V Energy Sectors Development
Electric Power Sector
District Heating Systems
Renewable Energy Sources
Coal
Oil
Natural Gas
Efficiency of Energy Use
Electric Power Sector Strategic Objectives
- Security of electricity supply of domestic market - Development of national and regional electricity market-Increasing of transmission capacities / corridors over the Republic of Serbia with regional and pan-european importance- Decreasing of distribution loses - Creation of opportunities for net electricity export
Current State - Growth in net electricity import
- Outdated and inefficient production capacities
- Dominant share of coal in electricity production
-Market liberalization process has started, but with strong influence of "social" component
-Low and inadequate electricity price
Strategic Activities
- Revitalization of existing electric power facilities: - Adaptation of existing facilities to obligations as Contracting Party in Energy Community - Revitalization and modernization of existing HPPs- Construction of new power plants fired by conventional fuels - Increasing of RES (hydro, wind, biomass, solar energy) use for electricity production - Revitalization of existing and construction of new transmission capacities- Modernization and construction of distribution systems- Liberalization of electricity market according to Energy Law and market price determination- Sector reorganization for more efficient operation of companies and attraction of investments- Capacity development of engineering companies for greater participation in the construction of power plants and infrastructure
Electric Power Sector
Baseline scenario Scenario with energy efficiency measures (EE)
Difference in 2020 is
3000 GWh
Difference in 2030 is
3600 GWh
Priority Actions: Reconstruction of TPPs according to LCP Directive
Construction of new, coal fired TPPs 700 MW until 2025(350 MW until 2020)
Construction of RHPP Bistrica
Construction of 450 MW CHP fired by natural gas until 2020
Construction of transmission and distribution infrastructure
Electric Power Sector - Production
Projection of electricity generation
Existing Thermal power plants
Existing Hydro power plants
New RES power plants
New Thermal power plants with conventional fuels
Existing Thermal power plants
Existing Hydro power plants
New RES power plants
New Thermal power plants with conventional fuels
Construction of new facilities
Electric Power Sector - Production
* Total power of few CHP (Pancevo, Beograd, Nis, …)** Total power of few HPPs in cascade*** Law on Ratification of the Agreement between the Government of the Republic of Serbia and the Government ofRepublic of Italy on cooperation in energy sector defined the joint implementation of these projects.
ProjectNominal Power
Estimated Time for Project
Realization
Approximate Investment
Value(mill. €)
TPP Nikola Tesla B3 750 MW 4-6 years 1600
TPP Kolubara B 2 x 375 MW 6 years 1500
TPP Kostolac B3 350 MW 4 years 450
TPP Novi Kovin 2 x 350 MW 6 years 1330
TPP Stavalj 300 MW 5 years 650 – 750
CHP Novi Sad 340 MW 2-3 years 400
CHPs – natural gas 860 MW* 4 years (realization in phases)
1500
HPP Velika Morava 147,7 MW* 3-7 years (realization in phases)
360
HPP Ibar*** 117 MW** 2-7 years (realization in phases)
300
HPP Srednja Drina*** 321 MW** 5-9 years (realization in phases)
819
PSHPP Bistrica 4 x 170 MW 5 years 560
PSHPP Djerdap 3 (I phase)
2 x 300 MW 5 years 400
Small HPPs 387 MW 6 years (191 locations)
500
Electric Power Sector - – Transmission and Distribution
Strengthening of internal transmission capacity and the capacity of the regional corridors - 400 kV transmission network in the direction of northeast - southwest
Strengthening of internal transmission capacity and the capacity of the regional corridors - 400 kV transmission network in the direction of east-west
Strengthening of strategic directions in 110 kV transmission capacity
Modernization and investments in distribution systems
Market opening until 2015
The growth of in electricity prices Why?
maintenance of existing infrastructure investment in new infrastructure environmental costs
Leads to a short-term increase in the cost of production and services Encourages the implementation of energy efficiency measures The use of other forms of energy to substitute, and where it is justified
own production Careful planning of continuing real growth in regulated electricity prices
to reach the level of prices in the region
Reorganization of energy companies based on market principles.
Electric Power Sector – Market
Electric Power Sector Challenges:
Required resources
Year Until 2020 Until 2025 Until 2030
Reconstruction of TPPs according to LCP Directive
634 - -
Modernization of existing HPPS 200 100 100
Construction of new TPPs fired by conventional fuels
1100 500 500
Construction of PSHPP 360 300 300
Construction of RES plants 2323 520 750
Investments in transmision systems 200 170 -
Investments in distribution systems 500 250 250
Cumulative investment (million €) 5317 7157 9057
Electric Power Sector
Challenges:
Limit in СО2 emission and ETS
Electric power resources and projects at AP Kosovo and Metohija
Rights for RES use and “green energy” export
District Heating SystemsStrategic Objectives
Priority Actions:
Strategic Activities- Security of heat supply with strictly respect of environmental
limits in heat production
- Increasing of energy efficiency in production, trasport, distribution and use of heat
- Increasing RES use for heat production
- Sustainable operation of district heating companies
- System based only to fossil fuels (natural gas 48%, coal 23%, 29% oil derivates)
- Average age of facilities is 25 years - High specific energy consumption- Absence of market, inconsistent and inadequate method of payment
- Continual modernization of existing district heating systems
- Creation and application of uniform tariff system for heat production, distribution and supply
- Institutional connection of DH companies
- Expansion of existing DHS
- Promotion of fuels swich and their more efficient use:
- Less share of oil derivatives and coal
- Higher share of biomass (including co-firing in existing heat plants)
- Higher share of communal waste
- Increased use of sanitary hot water
- CHP in heat plants
- Capacity building in municipalities related to market regulation
Reduction of energy losses in the networks
Introduction of heat consumption measurement and payment according to energy consumed
Current State
District Heating Systems
Oil products
Natural gas
Coal
Biomass
Projected changes in the structure of energy sources for heat production
Year 2020 2025 2030
Reconstruction, modernization and building of district heating plants
85 45 65
Rehabilitation of the distribution network 95 45 65
Rehabilitation of heating substations 40 25 30
Cumulative investment (million €) 220 335 485
Renewable Energy Sources
Strategic Objectives
Current State
Strategic Activities
Priority Actions:
- Share of RES in gross final
consumption is 20.1%
- Dominant share in consumption has traditional biomass use and large HPPs
- Feed/in tariff was
introduced
- Increase in RES use for less dependence of energy import and increasing energy security
- Adoption and implementation of National renewable
energy action plans- Determination of national targets for RES utilization and monitoring of realization: - RES use for electricity production - RES use for heat production and in final consumption: - Substitution of fossil fuels (coal, oil derivatives and natural gas) in heating - Substitution of electricity in sanitary hot water preparation - Introduction of RES in building sector (primary in public buildings) - RES use in transport- Development of distributive network for connection of small electricity producers- Production and use of equipment for more efficient RES use-Informing and education of the public
Realization of National renewable energy action plan until 2020
Hydro power plants (<10 MW)
Hydro power plants (>10 MW)
Solar power plants
Wind power plants
Geothermal power plants
Biogas power plants
Biomass power plants
Renewable Energy Sources
Projection of new capacitiesfor electricity production using RES
Projection of energy consumption from RES
Existing Hydro power plants
New RES power plants
Final consumption
District heating plants
thousand toe
CoalStrategic Objectives
Current State
Strategic Activities
Priority Actions:
- Secure and reliable supply of thermal
power plants
- Ensuring necessary amounts of coal for final consumption and heat production
- Old facilities and equipment, revitalization needs- Problems with expropriation of land necessary for opening new open pit mines-Underground coal mining is unprofitable and its operation depends of state suport
- Intensification coal deposits exploration on the territory of Serbia -Opening of new open pit mines for the replacement of the existing ones and for operation of new TPPs
- Optimization and concentration of underground coal production in profitable mines
- Introduction of systems for coal quality control
Opening of new open pit mines in Kolubara basain
Increase of Drmno open pit mine capacity
Coal
Basin Kolubara Tamnava - West Field, Fields C and D, displacement of Vreoce - 470 mil. € Field E opening (replacement of Field D) - 532 million € Field G opening (replacement of Veliki Crljeni) - 161 million € Opening Radljevo open pit mine - 600/1.232 million €
Basin Kostolac Open pit mine Drmno 100/230 million €
Basin Kovin - € 500 million Underground coal mining - € 330 million
Thermal power plants
District heating plants
Final consumption
thousand toe
OilStrategic Objectives
Current State
Strategic Activities
Priority Actions:
- Security of supply with oil derivatives with quality that matches EU standards
- Decrease of import dependence
- Ensure of new directions for crude oil supply
- High import dependence- The dominant import from one direction- Oil Industry of Serbia is joint stock company with majority share of foreign partner
-Provision of required reserves of oil and oil products (reconstruction of existing and building of new storages)
- Exploration aimed at finding new deposits
- Maintaining the high level of crude oil production in the country
- Refineries modernization
- Ensuring of more efficient oil product transport by pipelines
- Competition in the sector for ensuring the most favorable prices for the consumers
Reconstruction of existing and building of new storages
The increase in refinery processing depth
Oil
Sub-sector ActivitiesInvestments
(mill. €)
Exploration and production of oil and natural gas
Exploration in the country and in the region aimed at finding new depositsApplication of new technologies and methods of exploitation
800
Refinery processing
The increase in processing depth and further modernization of refinery in Pancevo and Novi Sad
750
Trade of oil derivatives
Modernization of gas stations and building of new onesConstruction of storage capacitiesModernization of filling stationsProcurement of new transport facilities
160
Transport of crude oil and oil products
Construction of pipeline network for oil product transport
170
Oil and oil derivativesBiofuels
Thousands toe
Natural GasStrategic Objectives
Current State
Strategic Activities
Priority Actions:
- Ensuring security of supply of domestic market- Establishment of national and regional natural gas market
- Single supply route with technical import limits- Underground storage meets the current consumption- Inadequate natural gas prices of public supply
- Research in the country with the aim of discovering new deposits of natural gas, (including unconventional gas)- The use of natural gas as a substitution for electrical energy consumption for heating purposes- The use for the combined production of electric and heat energy in industry and cities- Participation in international projects for natural gas supply- Regional interconnection
South Stream pipeline construction
Establishment of at least two regional interconnections up to 2020
Completion of the gasification of Serbia
Natural Gas
ProjectUntil 2020
Until 2025
Until 2030
South Stream pipeline 1700 - -
Regional interconnection 120 60 20
New gas storages 100 100 100
Completion of the gasification of Serbia and rehabilitation of existing system
500 500 200
Cumulative investment (million €)
2420 3080 3400
Efficiency of Energy UseStrategic Objectives
Current State
Strategic Activities
Priority Actions:
Enhancing energy efficiency in all consumption sectors
Energy indicators in 2010:- energy intensity 0,452 kg oe/€2005
- ratio of primary energy consumption and GDP, adjusted to the purchasing power parity 0,223 kg oe/$2005
- Primary energy consumption per capita 2.140 kg oe
- Consistent implementation of the Law on efficient energy use- Adoption and implementation of the National Action Plans for Energy Efficiency - definition of national energy saving targets, total and by sector, and monitoring of realization- The use of combined electric and Heat energy production in industry- Introduction of energy management- Capacity building of energy statistics- Informing and public education
Energy intensity
Introduction of energy management in the public sector
Energy reconstruction in the building sector
Ratio of primary energy consumption and GDP,
adjusted to the PPP
Primary energy consumption per capita
SerbiaEUindex= 100
VII Legal, institutional and socio-economic framework
The impact of international obligations
Development of institutional framework
Legal and market framework of energy sector
Social and economic aspects of planned development
Energy and related sectors – horizontal harmonization
The impact of international obligations
The Energy Community Treaty
The Stabilization and Association Agreement
Agreement with Russian Federation on cooperation in the oil and gas sector
United Nations Framework Convention on Climate Change
Other regulations
Development of institutional framework
Capacity building of the Ministry in charge for energy sector
Establishment of the Institute for Energy in Serbia
Coordination with the Ministry in charge for Science and Education
Capacity building of Energy Agency
Co-ordination with the Statistical Office of Serbia
Legal and market framework of energy sector
Electric Power sector
Natural gas sector
Oil and oil derivates sector
Heat energy sector
RES
Energy efficiency
Social and economic aspects of planned development
Energy development in the function of social growth Faster development of existing branches of economy New economic and service activities Employment increase
Energy sector based on market principles Prices of energy Influence on the budget deficit reduction Reductions in material and energy intensity of the economy
Local Economic Development
Social aspect Social dialogue Delicate and socially vulnerable groups of consumers
Energy sector and related sectors – horizontal harmonization
Environment and climate change
Participation of the public in decision-making
The concept of "public goods"
The principle of competitiveness and state aid
Energy sector in Serbia after 2030
“Energy Roadmap 2050”
Energy efficiency
Renewable Energy Sources
“Clean coal” technologies