Serbia Energy Sector Overview
Energy sector is one of the largest sectors of Serbian economy and it consists of: electric power; coal production; district heating; oil & gas; production and import; and it accounts more then 10 % of GDP.
· Domestic primary energy production; 280 PJ of coal (97% of lignite); 40 PJ of oil; 20 PJ of natural gas; 40 PJ of hydro potentials and nearly 40 PJ of biomass, mainly wood, (usually not reported in Energy balance) are not enough to satisfy energy demand, so the import: 11.5 PJ of hard coal and coke, 91 PJ of oil and 58 PJ of natural gas are needed.
· The centralized electricity production system (Electric Power Industry of Serbia-EPS) with hydro and thermal power plants (about 7200 MW capacity, from which 2800 MW are hydropower plants), and transmission and distribution systems for supplying consumers with electricity. The average electricity consumption is provided by domestic production up to 33 TWh.
· The decentralized municipal district heating systems for heat production in the heating plants with boilers-only (capacity of about 6300 MJ/s).
· The decentralized energy production sources in the industrial enterprises, mainly with boilers (capacity of 5000 MJ/s) for heat production, about 50 PJ per year, and several industrial energy sources, with CHP technology (over 330 MW) for combined heat and electricity production (750 GWh per year).
· Two refineries (N.Sad 1 M.t capacity and Pancevo 3.5 M.t capacity) and pipeline system for oil transport (420 km).
· Pipeline systems for collection of domestic natural gas production, and transport of imported natural gas and pipeline system for distribution of natural gas in consumers’ areas (1500 km).
· Industrial facility for drying of domestic lignite, capacity of 0.8 M.t per year.
According to the primary energy domestic production and, import of 2.15 million t of oil and 1.75 billion of cubic meters of natural gas, from our energy conversion and transformation systems, with energy import, final energy structure, is as follows:
In the scope of socio-economic systems of Serbia, energy consumption sectors are: Industry (with 3.15 M.toe), Transport (with 1.85 M.toe), Residential (with 2.61 M.toe) and others (with 0.850 M.toe)
The power system of Serbia is interconnected to all neighbouring countries, owing to its central position in the Balkans.
Only 16% of 2.65 million of households in Serbia, are connected on DHS, 9 % consume heat from autonomous heat sources, using fossil fuels, mainly heating oil and coal. Due to the lack of fuel market during last ten years, use of electricity for space heating has been the only choice for many families in the urban areas. From the evidence of electricity distribution systems, nearly 400 000 flats consumes more than 3000 GWh per year for space heating purpose. Many of public and commercial buildings consume about 1600 GWh per year, also for space heating. Nearly the same number of households uses the coal for space heating.
Over the medium-term, it is planed to continue the activities in order to return our assets to technically reliable, economically certain, energy efficient and environmentally acceptable level, thus reducing the needs for electricity imports. This goal will be accomplished by a combination of increasing the delivery capacity of our system. To accomplish this task a focused rehabilitation program is required over next year, in order to enable considerable supply improvements to the system.
The second phase of EPS medium-term program (2003-2005) would address: the selective programs for repairs, maintenance and general overhauls in order to increase power plants availability and life extension of equipments in older power plants as well as the reconstruction and modernization of several municipal and industrial plants for combined electricity and heat production; and the increased efficiency of electricity consumption. By the voluntary measures for rational use of electricity the problem of electricity shortages would be diminished.
Over the long term, it is planned to reform the Energy Sector by adopting EU principles in the development of our energy sector in the legislative and market area. The focus of our efforts would shift from meeting our urgent needs to one of becoming competitive in an open electricity market. To enable this will require structural reforms, which are currently being addressed by advisors,, mainly through unbundling and restructuring the company which provides the conditions for profitable company on the liberalized market
DISTRICT HEATING SUBSECTOR
The district heating systems in Serbia are oversized, in the context of low yearly peak load duration, and some heating plants with combined power and heat production have very low yearly operating times. Therefore, the potential for increasing of energy efficiency as well as for improving the finances of all district heating plants is very high. In order to achieve this potential, the priority Master Plan for District Heating Plants investments is needed. However, some small investments are needed for heat sources and considerable investments for heat transport and distribution pipes, as well as for properly adjusting the heat substations.
The key short term priority is to undertake detailed repairs of district heating systems to increase the reliability of equipment and availability of plants. This will help to provide a safe heat supply and reduced heat and water losses, which are critical for keeping high residential heating standards and also for protecting the electricity generation and distribution systems, due to massive use of electricity for additional space heating. For municipalities, in the building sector, energy saving measures must be concentrated on the current refurbishment work on public and residential buildings and energy source facilities.
The Master Plan for Municipalities’ Heating Plants rehabilitation should include: improvement of C & I system by implementation of modern devices for water flow (and heat) control in distribution networks in order to provide proper water and heat distribution in whole network; reduction of heat loses by replacement of existing pipe insulation being in poor condition using pre-insulated pipe lines; reduction of heat loses by replacement of old heat exchangers using new technology; reduction of water and/or steam leaking (in heat exchangers, boiler tube leak, valves and other fittings), adjustment of boiler firing system from both fuel and air side, in order to maintain proper conditions for optimal combustion process in the furnace.
The most important improvements towards energy efficiency can be achieved by implementing combined heat and power production in district heating plants. Existing steam boilers can be sometimes reconstructed into CHP units by adding of steam turbine generating facility. But, CHP production in modern terms means all kind of gas technologies such as gas turbines and gas engines (reciprocating motors) and combined cycle gas and steam turbine technology, using natural gas as a fuel.
MINING SECTOR – COAL FOR THE THERMO POWER PLANTS.
Serbia’s coal reserves, assessed at approximately 16 billion tones, are located in three coal basins: Kolubara, Kostolac and Kosovo. These coal reserves can be mined by surface mining methods, and they are primarily lignite. The majority of Serbian energy is based on coal, predominantly coming from opencast mining at the Kolubara and Kostolac coalfields. Annual coal production necessary for regular supply of the power plants is 38 million t. The consumption of the power plants in Kolubara varies from 28 to 30 million t and the consumption in Kostolac is approximately 9 million t. Annual excavation of overburden should exceed 80 million m3. Production quantities planned for 2001. are: 26.4 million t in Kolubara and 6.6 million t in Kostolac.
OIL AND GAS SECTOR
The oil sector suffered particularly heavy damage to the refineries as a result of the 1999 bombing campaign. Some refinery reconstruction has taken place, enabling about 70% of combined capacity to be brought back online. Secondary refining remains a problem and the domestic consumption of petroleum products has shifted toward the lighter products, so that considerable new investment in the refineries will also be required.
The natural gas sector did not sustain war damage but has major deferred maintenance needs in 2000. Serbia has produced natural gas domestically since 1952, and oil since 1956, but has always been a net importer of both. Since 1996, production of natural gas has averaged around 0.7 billion cubic meters (bcm) per year. Domestic production of oil has been on a declining trend, from 1.02 million tons in 1996, to an 815,000 tons in 2003.
The oil refineries need new investments of about $600 million to repair the assets in a manner that reflects current and future needs. The goal of the refineries is to conform to Euro 2005 standards, reflecting a vision of becoming a competitive component of the broader EU oil market.
Natural gas is expected to increasingly meet Serbia’s energy requirements because of price and environmental considerations. To enable this, major new investments in pipeline improvements are required, which can best be met through private sector participation.
As Yugoslavia produces gas, there has only been a need for one import source through Hungary. However, the physical distance from the Yugoslav system to the Romanian gas system is less than 50 km in very easy terrain. The most likely connection point is Mokrin in the Northeast. Due to the large gas production and potential for cheap storage in depleted gas fields in Romania, it would be one of the most obvious interconnections to establish. This would allow physical and commercial diversification of supply for FRY, since Romania now has a connection to Hungary. The southern part of the Yugoslav system could easily be connected to the Bulgarian gas system via an approximately 100 km long interconnect.
Natural gas is expected to have an increasingly important role to play in the provision of energy over time because of its relatively favorable environmental impact. Substantial new investment in distribution networks will be required to meet space-heating needs as electricity prices are adjusted. Natural gas is expected to be the primary substitute for electric-based heating either through district heating in densely populated areas or individual boilers in the rest of the country. Extension of gas distribution networks could be offered to private investors.
There is no statistical evidence of biomass use in FR Yugoslavia, but the assumption is that the non-commercial biomass share in total primary energy production is about 10%. Biomass is used mainly in form of burning wood waste. The best results are achieved in the field of biodiesel research and biomass briquette production. Energy potential of biomass in FR Yugoslavia includes fuel wood, wood waste and waste of agriculture and farms. Biomass in FR Yugoslavia is a very important energy potential, especially forests and forest waste. Forests occupy nearly 30,000 km2, and the wood biomass is about 306 million m3. Taking into account that average heating value of wood is about 10 GJ/m3, it is easy to estimate that wood biomass energy potential is about 72.5 Mtoe. Estimation is that the wood biomass increment is about 7.5 million m3 per year and renewable annual potential is about 1.8 Mtoe. Usable energy potential of plant waste derived from agriculture is estimated to be 3.8 Mtoe per year. Animal waste is used for biogas production in biodigestors. Taking into account cattle breeding in FR Yugoslavia, the estimation is that usable energy potential of animal waste is about 0.45 Mtoe per year. Energy potential of industrial and municipal waste in Yugoslavia is estimated to be 1.4 Mtoe per year. Besides heat energy production realized by burning various industrial waste, municipal waste, and especially by burning plant waste, as well as fossil fuel savings, waste use for energy production is very important for the environment.
The priority investments in electricity sector are:
– HPP Bajina Basta (revitalization of four units and construction of fifth unit)
– TPP Nikola tesla A1 and A2 units revitalization
– TPP Kolubara B (2X350 MW) or TPP Nikola Tesla Unit B3 construction
– Small Hydroelectric Power Plants construction
The priority investments in oil and gas sector are:
– Main Gas Pipeline Nis-Dimitrovgrad
– Oil products pipeline Pancevo-Nis
– Underground Gas Storage Banatski Dvor
– Oil refineries modernization
The priority investments in mining sector are:
– Reconstruction and modernization of the Lead-Zinc Mines, specialy »Lece« In Medvedja, Serbia
– Development of the open pit Veliki Krivelj, RTB Bor – Serbia (based on the established geological copper ore reserves)
– Reconstruction and modernization of ‘Strmosten’ (underground coal mine) for exploitation of remaining coal reserves (2.200.000 t), thus providing the continued coal production for the consumption of TPP ‘Morava’, as well as for wider consumption.
The priority investments in District Heating Systems are:
– Conversion of a high capacity District Heating Plants to the CHP (Combined Heat and Power) Plants
– Modernization, increasing of the capacities of district heating plants and spreading of the district heating system networks
Because of very inefficient use of energy there are great investment opportunities for energy efficiency improvement in the all energy subsectors and in the whole energy chain.