POTENTIAL OF BIOMASS PLANTS IN SERBIA – An investment for the future or just expensive energy?

With the recent establishment of the biomass e-stock market in Serbia, the question that raises back is: Is the biomass really the most underrated and unused resource for energy generation in Serbia and WB?
While the few existing energy producers claim that procedures and framework of biomass market in Serbia are not completely set yet, experts agree that the generation of energy from this source will be more and more interesting for investors, as the region is approaching EU membership.

Background

The Serbian Chamber of Commerce has recently announced that further trading between the subjects active on the biomass market will be significantly improved with the development of the first biomass e-stock market. The transactions may be executed on the Green Energy Portal and it is estimated that the new technology will lead to better and easier connecting between the relevant subjects in the local and regional market. But is the biomass potential as solid as it seems and are the biomass plants actually that tempting and cost-effective for investors?

Natural Potential

The Biomass potential in Serbia may be described as insufficiently utilized. Among other resources, biomass residues from agricultural production and forest biomass are recognized as the main biomass resources of the entire region. And while the agriculture market operators started to develop both individual and collective activities through the development of production facilities and connecting through professional associations, the status of forests remains uncertain, due to various reasons. Forests are dominantly owned by the state and municipalities and forest management is at a very low level.

Legal Perspective

The Serbian Energy Law recognizes biomass as a form of renewable energy and the owners of biomass plants as potential privileged producers. The status of a privileged producer triggers various incentives, such as mandatory electricity purchase (from the privileged producer), regulated purchase prices, balanced responsibility, etc. However, although feed-in-tariffs for generation of electricity from biomass exists, the procedure for granting the status of a privileged producer is rather complicated. The bylaws are fairly vague and require both in-depth legal and industrial knowledge for proper interpretation.

Reality

Despite its massive green energy and natural potentials, Serbia is still highly depended on imported energy, while the entire electricity generation sector is essentially dominated by coal. Also, when discussing the entire renewable energy market, it should be noted that the solar, hydro and wind potentials are recognized as the better investments by most of investors, ahead of biomass. Energy facilities are rather old and in bad condition, while the new investments in this field require serious funding and cooperation between private and public sector, which have lacked so far. Due to this, regardless of general EU de-carbonization strategy, almost all of the WB countries continue with further development of the coal and lignite plants, due to the economic reasons, intending to improve these capacities even further, for additional 6 GW in the forthcoming period. Having in mind all of the above said, it seems that full utilization of biomass potentials in Serbia and the entire WB region will have to wait for significant economic growth.

 

 

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