Overview:

Renewable energy, such as biomass, wind, and mini-hydro, is receiving greater attention from governments, potential investors, and consumers.  In2007, the European Union (EU) set a combined member country target that 20% of overall energy consumption will come from renewable sources by 2020. The Serbian government set its own target of 12% overall energy consumption from renewable sources by 2010.

Serbiahas significant renewable energy resources to meet this emerging demand, and the Serbian Government has developed a strategy to leverage this opportunity. To support sector growth and investment, and to meet their commitment to the Southeast Europe Energy Treaty, the Serbian government ratified several landmark directives in November 2009, including:

• Establishment of a “Feed-in Tariff” system whereby the Serbian government will subsidize the cost of renewable energy production;
• Defined the requirements and financial incentives of becoming a “Privileged Electric Power Producer” who uses renewable energy sources to generate electricity;
• Defined the requirements for becoming an independent energy producer

Strategic Objectives:

The Serbia Competitiveness Project is supporting growth of the renewable energy sector by collaborating with the government to improve the regulatory environment, facilitating local and foreign investment, and promoting awareness of renewable energy sources.The strategic approach for the renewable energy sector addresses these key objectives:

• Increase awareness of the benefits and sources of renewable energy and energy efficiency gains
• Create local demand for renewable and energy efficient fuels and technologies;
• Support foreign and local investment in the sector
• Advance access to finance mechanisms for renewable energy and energy efficiency projects
• Advocate for policy reforms that continue to develop the sector

Key Activities:

Government Policy Reform — The Competitiveness Project is facilitating dialogue between the private sector and the government to identify and address barriers to the growth and financial viability of the sector. Currently, the Project is facilitating private sector involvement in the development of the National Biomass Action Plan, supporting a law on rational energy use, and advancing other policy reforms to remove barriers to growth in the sector.

Building Awareness of Biomass as a Renewable Energy Source — The Project’s initial focus has been to develop awareness of Serbia’s potential and the benefits of biomass as heating source. With forests covering two million hectares, or one fourth of the country’s land mass, wood accounts for 63% of Serbia’s potential renewable energy resources. Given the potential of wood biomass, the Project supported a feasibility study in 2008 which estimated that Serbia has the capacity to supply €50 million annually to regional renewable energy markets through biomass. The Competitiveness Project has leveraged key local events, such as the Supernatural and EXIT festivals, to build awareness among suppliers, consumers and investors of the benefits of wood biomass energy. A nationwide multi-media campaign using local TV, print media and YouTube has also beenimplemented to increase awareness of the advantages of switching to wood biomass.

Investment Promotion— With the Serbian government’s ratification of “feed-in tariffs” and several other key directives, the Project is now preparing to provide technical assistance to prospective investors in the renewable energy sector. This includes technical assistance in accessing finance from international and local sources dedicated to renewable energy and supporting creation of investor roadmaps that outline the permitting and approval processes. The Project has met with several investors and is providing technical assistance to advance specific projects.

Local Manufacturer Energy Audits — In July 2009, the Competitiveness Project, together with the Energy Saving Group Company (ESG), began a pilot to audit local manufacturers to help lower costs through more efficient use of energy and production process improvements. Ten firms were selected in the building materials, wood processing and renewable energy sectors for preliminary on-site energy audits. ESG ranked the firms according to their energy saving potential and the Project offers cost share grants to companies interested in more in-depth audits to determine energy savings potential of specific recommendations. As a result, ESG is now a certified energy auditor that can provide audit services to local manufacturers. 

The Competitiveness Project also provides Access to Finance Expert who will use these detailed energy audits to provide assistance to firms in applying for loans to finance energy efficiency investments. 

Click here for more information on how the Competitiveness Project can help you become more energy efficient.

Consumer Access to Financing Support — The Project together with several biomass technology manufacturers and banks started a program to support consumer access to finance to purchase biomass residential heating stoves and boilers at subsidized rates. As of late August 2009, promotional leaflets were distributed through banks’ branch offices and retail stores and other points-of-sale for biomass stoves and boilers.   

For more information on how to apply for the Residential Heating Finance Program, click here.