Prepared for: Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. Dag Hammarskjöld Weg 1-5. Postfach/ P.O.Box 5180.

Transcription

1 ELABORATION OF TECHNICAL PROJECT CONCEPT OF THE FUEL SWITCH TO BIOMASS IN MEDVEĐA INCLUDING ECONOMICAL EVALUATION AND RECOMMENDATIONS FOR IMPLEMENTATION STRUCTURE OF DISTRICT HEATING GRID Prepared for: Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Dag Hammarskjöld Weg 1-5 Postfach/ P.O.Box Eschborn Prepared by: K.R.B. Consulting & agency Starovlaška Ivanjica September 2017

2 Table of Contents 1. EXECUTIVE SUMMARY INTRODUCTION PROJECT LOCATION EXISTING HEATING SYSTEMS BIOMASS MARKET ANALYSIS TECHNICAL DESIGN CONCEPT TECHNICAL SOLUTIONS AND SIZING THE BOILER HEATING PLANT, LOCATION AND FACILITIES CONCEPT OF DISTRICT HEATING NETWORK CONCEPT OF DISTRICT HEATING NETWORK SCHEME OF DISTRICT HEATING NETWORK CONCEPT OF HEATING SUBSTATIONS PRELIMINARY COST ESTIMATES PRELIMINARY FINANCIAL ANALYSIS PROJECT EVALUATION LEGAL FRAMEWORK ENVIRONMENTAL IMPACT ENERGY EFFICIENCY MEASURES AND CONCLUSION ANNEX

3 List of tables Table 1 - Public buildings in Medveđa... 7 Table 2 -The structure of fertile land Table 3 - Data on population of Medveđa from 1961 to Table 4 - Data on population of the town of Medveđa from 1961 to Table 5 - Microclimate data for the City of Medveđa Table 6 - Data on premises of the Technical school and the Sports hall Table 7 - Data on premises of the Medveđa Police station Table 8 - Data on the facility of primary school Gornja Jablanica Table 9 - Data on the premises of Health center Medveđa Table 10 - Data on the premises of the Cultural center Medveđa Table 11 - Data on the facility of Social welfare center Table 12 - Data on the facility of the Kindergarten Mladost Table 13 - Data on the facility of the Municipality Table 14 - Overview of data on the analyzed facilities and consumption Table 15 - Current situation, energy and fuel consumption, price, CO 2 emission Table 16 - Requirements for wood chips according to SRPS EN ISO : Table 17 - The classification of wood chips based on the moisture content according to SRPS EN ISO Table 18 - Requirements for wood chips according to SRPS EN ISO : Table 19 - Data on forests provided by SE Srbijašume, FE Šuma, Leskovac Table 20 - The energy potential of green chips from forestry, with wood waste from sawmill industry, in the municipalities of Nova Varos, Priboj and Prijepolje Table 21 - The energy potential of biomass from FE Šuma, Leskovac Table 22 - Characteristics of wood chips depending on the percentage of moisture Table 23 - Unit price of wood chips depending on the type of wood quality wood Table 24 - Comparative analysis of the costs of currently used fuels in Medveđa and costs of biomass Table 25 - Calculated capacity of future heating plant Table 26 - Sizing the pipe network by routes Table 27 - Calculation of operation point of network pump Table 28 - Selection of substations in the facilities Table 29 - Investment costs Table 30 - Operational costs Table 31 - Costs of energy production Table 32 - Unit costs of heating energy

4 List of figures Figure 1 - Location of the Jablanica District Figure 2 - Municipalities of the Jablanica District in the territory of the Republic of Serbia Figure 3 - Energy consumption per fuel types current situation Figure 4 - CO 2 emission per fuel types current situation Figure 5 - Annual energy costs per fuel types current situation Figure 6 - Unit price of energy per fuel type current situation Figure 7 - Share of forest s area in the total area of the Serbian municipalities Figure 8 - State and private forests per Municipalities and Districts Figure 9 - Annual energy costs per fuel types- comparison with biomass Figure 10 - Unit price of energy per fuel type- comparison with biomass Figure 11 - Diagram of the annual distribution of the heat capacity of the heating plant Figure 12 - Situation plan of heating plant Figure 13 - Disposition of drawings of the heating network per numbers Figure 14 - Drawing No 1 of the heating network Figure 15 - Drawing No 2 of the heating network Figure 16 - Drawing No 3 of the heating network Figure 17 - Drawing No 4 of the heating network Figure 18 - Drawing No 5 of the heating network Figure 19 - Drawing No 6 of the heating network Figure 20 - Drawing No 7 of the heating network Figure 21 - Scheme of compact substation DSA 1 Mini Danfoss Figure 22 - Substation DSA 1 Mini Danfoss.56 Figure 23 - Substation DSP-MAXI Danfoss Figure 24 - Emission of CO 2 per a fuel type Figure 25 - Comparative analysis of costs of heating energy and savings Figure 26 - Savings from fuel switch Figure 27 - Operational costs and depreciation Figure 28 - Comparison of total costs of the existing system, new heating system and new system supported by KfW Credit Figure 29 - Cash flow balance

5 List of photos Photo 1 - Sports hall Photo 2 - Wood log storage beside the Sports hall Photo 3 - Sports hall, back yard view Photo 4 - Solid fuel boiler, 2x750kW Photo 5 - Hot water collector Photo 6 - Technical school Nikola Tesla Photo 7 - Damaged radiator, reduced power Photo 8 - Police station, central facility Photo 9 - Facility with classrooms Photo 10 - Facility with service workshop and garage Photo 11 - Primary school Gornja Jablanica Photo 12 - Entrance to the boiler room Photo 13 - Wood log storage of the Primary school Photo 14 - Solid fuel boiler, 2x500kW Photo 15 - Valves and equipment behind the boilers Photo 16 - Cleaning pit and non-insulated chimney connection Photo 17 - Health center Medveđa Photo 18 - Light oil fuel boiler, kW Photo 19 - Hot water collector with damaged insulation Photo 20 - Old circulation pumps Photo 21 - Hot water tank with additional electric heater Photo 22 - Facility of the Cultural center Photo 23 - Theater hall in the Cultural center Photo 24 - Oil radiator heater Photo 25 - Facility of Social welfare center Photo 26 - Facility of Kindergarten Mladost Photo 27 - Light oil fuel boiler, kW Photo 28 - Prefabricated chimney with damaged insulation Photo 29 - Hot water collector in a good condition Photo 30 - The building of the Medveđa Municipality Photo 31 - Boiler room in the building of the Municipality Photo 32 - Solid fuel boiler Photo 33 - Wood log storage for the building of the Municipality Photo 34 - Local sawmill and wood drying company Photo 35 - Cadastral parcel No 2341/ Photo 36 - Pre-insulated pipes for the district heating network

6 List of abbreviations AMSL - above mean sea level CAPEX - Capital Expenditure CO2 - Carbon Dioxide - Euro (currency) (E) IRR - (Economy) Internal Rate of Return (E) NV - (Economy) Net Present Value FE - Forest enterprise (F) IRR - (Financial) Internal Rate of Return (F) NPV - (Financial) Net Present Value LUC - Levelled Unit Costs OPEX - Operating Expenditure RS - Republic of Serbia SE - State enterprise 6

7 1. EXECUTIVE SUMMARY This study elaborates technical concept of a fuel switch in public buildings in Medveđa municipality and introduction of biomass as a fuel, as well as the installation of a biomass boiler and construction of district heating network. Table 1 shows public buildings in Medveđa and heating related data: No Institution Type of fuel Heating estimated area capacity 1 Technical school Nikola Tesla 3, Wood 2 Sports hall 1, Police station, Medveđa Heavy oil 1, Primary school Gornja Jablanica Wood 3, Health centre Medveđa Light fuel oil 1, Cultural centre Electric heaters 1, Social welfare centre Electric heaters Kindergarten Mladost Light fuel oil Building of the Medveđa municipality Wood 1, m 2 kw Total: 14,852 2,976 Table 1 - Public buildings in Medveđa As shown in Table 1, public buildings currently have various heating systems and use different types of fuel to obtain thermal energy. All of these heating systems and boilers are functional, but in a poor condition. These systems are economically and energy inefficient, expensive to maintaining and servicing. Furthermore, they are big pollutants. Offered technical solution envisages construction of following: - Central boiler room with biomass (wood chips) heated boilers - District heating network - Heating substations, where delivered heating energy would be measured, and which would serve to managing consumption of heating energy in particular buildings. Construction of a new boiler room is envisaged in the industrial zone on the right bank of the Jablanica River. Total capacity of the boilers is 3.5 MW: capacity of one boiler is 1,500kW, and of 7

8 the other is 2,000kW. It is planned to place boilers, equipment, daily wood chips storage in the building with area of 400m 2. Wood chips storage planned in 750m 2 area building with capacity of 1,470m 3 or 440t, sufficient for 8 weeks in the coldest period of a year of operations. It is also planned construction of a storage for wood chips with capacity sufficient for supply during two coldest months in a year. Considering workforce requirements, it is planned engagement of one highly technically educated employed. Workers with lower qualifications would be replaced from existing assignments in the facilities that will be included in a fuel switch project. Planned capacity of district heating network is sufficient for the public buildings, as well as for potential connection to additional, smaller consumers. Full load hours in public buildings in Medveđa are low (719 kwh/kw) due to the heating during working hours only. The fuel switch project would enable better utilization of the facilities of the Sports hall and of Cultural centre in terms of providing commercial services, such as renting, thus generating additional income. There are forests at territory of the Municipality of Medveđa and the Jablanica District sufficient to provide biomass for district heating plant. In addition, biomass can be purchased as residues from orchards and private forests. In such way, local community could close the circle of production and consumption of heating energy. Estimated investment value for implementation of this project is 1,217,800. Expected period of return of investment is 14 years from the start of operations. If the investment were financed from KfW Bank's program, with grant of 20%, grace period of 5 years and a repayment period of 10 years, the positive business results would be achieved after 12 years from the start of operations. Prerequisites for successful operations of the plant are following: Selection of an appropriate financing model (from own funds, credit line or public-private partnership) Enter into long-term contracts for the supply of the biomass Ensuring sufficient fuel storage supply covering consumption in the coldest month of the year During the construction phase, train personnel who would take over management and maintenance of the boiler plant Ensure high quality maintenance of the specific equipment in cooperation with the supplier of the equipment. This investment will achieve the following benefits: Lower costs of heating energy Low emission of harmful substances in the exhaust gases Reduction of CO 2 emissions combustion of wood biomass releases CO 2 neutral Raising the comfort of all future consumers of the Medveđa district heating 8

9 Techno-economic indicators of the future energy system with wood chips are as follows: Heat capacity of boilers Woodchips boiler Fuel Woodchips 1, ,000 kw M30 according to SRPS EN ISO :2015, and SRPS EN ISO :2015 Annual production of thermal energy 2,140 MWh th /a Annual fuel consumption Woodchips 885 t/a Efficiency on the threshold of the heat plant 0.90 x 0.92 Annual reduction in CO 2 emission t/a CAPEX 1,217,800 OPEX (the amortization period) 1,962,532 LUC EUR/MWh 9

10 2. INTRODUCTION The program Development of a Sustainable Bioenergy Market in Serbia (GIZ DKTI) is implemented jointly by the KfW (financing component) and GIZ (technical assistance component). It is funded by the German Federal Ministry for Economic Cooperation and Development (BMZ) under the German Climate Technology Initiative (DKTI). The main implementing partner and beneficiary of the technical assistance (TA) component is the Serbian Ministry of Agriculture, Forestry and Water Management (MAFWM). The general objective of the project is to strengthen capacities and create an enabling environment for the sustainable use of bioenergy in Serbia. The TA component includes the following five activity areas: 1) Policy advice: Assessment of bioenergy potentials and regulatory framework for creating and enabling environment for private sector investment in bioenergy projects etc. 2) Biomass supply: Accompany investments in biomass-fired district heating plants in up to three pilot regions with TA to secure a reliable and cost-effective supply of biomass in a sustainable manner. 3) Efficient firewood utilization at household level: Increase the efficiency of firewood consumption for heating at household level through the promotion of firewood drying and efficient stoves/ovens. 4) Project development: Support in cooperation with the national and international private sector the development and the implementation of feasible bioenergy projects from biogas or straw combustion plants in the industry sector to wood based heating boilers in private and public buildings. 5) EU-Project BioRES Regional Supply Chains for Woody Bioenergy: BioRES aims at introducing the innovative concept of Biomass Logistic and Trade Centres (BLTCs) in Serbia, Croatia, and Bulgaria based on cooperation with technology leaders from Austria, Slovenia, Germany, and Finland. The BLTCs as regional hubs will help increasing local supply and demand for wood bioenergy products in these countries. The development of a biomass supply is required only if there are liable regional consumers of biomass. As a supporting institution, GIZ DKTI has received a Letter of Expression of Interest signed by the mayor of Serbian municipality Medveđa to declare their demand for guidance, legal and technical assistance in the process of the development of a fuel switch of public buildings in Medveđa to biomass. Heating grid will have to be planned. This fuel switch from existing fuels (electricity, wood, light fuel oil, heavy fuel oil) to biomass should provide savings in the budget of the municipality by strengthening local incomes with local produced wood fuel and should reduce emissions of the renewed heating system. The aim of this study is to establish technical concept for switching to biomass heating, the installation of a wood chip heating plant including storage recipient and design of the distribution system including grid and substations. In addition, it is necessary to estimate the investment costs of the plant, distribution system, perform financial evaluation of savings from woodchip heating system (compared to current situation) regarding fuel costs, efficiency, investment and operation costs, cash-flow analysis through savings 10

11 and sensitivity analysis regarding fuel prices, investment cost and boiler efficiency. The study includes the following: - Assessment of the current energy situation in public buildings in Medveđa regarding heated area, boiler capacity and current performance, energy consumption and cost efficiency, condition of distribution system and connections. - Techno-economic analysis of the proposed system for the production of thermal energy by burning biomass (wood chips), and distribution system with heating grid and substations which should include: Proposal of a technical concept for central woodchip heating system including boiler, feeding system, storage unit and grid installation taking into consideration future efficiency measures in the buildings. Financial evaluation of savings from woodchip heating system (compared to current situation) regarding fuel costs, efficiency, investment and operation costs, cash-flow analysis through savings and sensitivity analysis regarding fuel prices, investment cost and boiler efficiency. An assessment of CO 2 emissions reduction. The recommendation concerning the quality and availability of wood chips to supply the plant in the future, taking into account the prices and local suppliers of wood chips. Technical concept and preliminary design for heating grid in Medveđa, substations and further necessary equipment, including losses, connected to planned biomass plant. Estimation of overall investment costs for the heating grid, substations and further necessary equipment. Financial evaluation of heat prices compared to current situation taking into account fuel costs, efficiency, investment and operation costs 11

12 3. PROJECT LOCATION The Jablanica District expands in the south-eastern parts of Serbia at the area of 2,769 km 2. It borders the Pčinja District to the South; the Republic of Bulgaria to the East; the Kosovo to the West; and the Districts of Toplica, Nišava, and Pirot to the North. The Jablanica District is named after the River Jablanica, which flows throughout the District. The largest city and administrative centre is Leskovac. The Jablanica District consists of the City of Leskovac, and the Municipalities of: Bojnik, Lebane, Medveđa, Vlasotince, and Crna Trava. Figure 1 - Location of the Jablanica District Figure 2 - Municipalities of the Jablanica District in the territory of the Republic of Serbia 1 2 The Municipality of Medveđa has the area of 524 km², with 34 local communities at 42 settlements covered by 39 cadastre municipalities. Average population density is inhabitants/ km². There are 7,382 people living in the villages of this municipality, while 3,378 people live at the urban area. Most of the settlements are suffering of inadequate road connection to the centre of the municipality. Main road between Leskovac and Priština runs through Medveđa. Medveđa Municipality is one of the least developed municipalities in the Republic of Serbia. The most promising industry is mining. There are lead, zinc, and a gold mine Lece. There are big potentials for the development of cattle breeding and of fruit growing. Beside primary agricultural production, there are developed wood processing and food processing industries. There is particular potential in the processing of products of nature, such as: mushrooms, forest fruits, fruit and vegetable, as well as in the processing of milk Ibid 12

13 Main tourist potential of the Medveđa municipality is Sijarinska Banja, located at 10 km from Medveđa, 50 km from Leskovac, and 90 km from Niš. Sijarinska Banja is situated at riverbanks of the River Jablanica, at foothill of the Mountain Goljak, at 520 m above sea level. Healthy environment and 18 springheads rich with minerals are greatest tourist potentials. Each of the springheads has different physicochemical composition and temperature; and they are all spreading at a length of 800 m. The Municipality of Medveđa belongs to the group of hilly-mountainous municipalities, due to 95% of such type of terrain. Forests are covering large part of the municipal territory. State owned forests are covering 6,227 ha, with dominant beech and oak forests. Surface area of Fertile land ha 33,279 Arable land ha 9,189 Orchards ha 1,209 Forests ha 7,090 Meadows and pastures ha 15,791 Table 2 -The structure of fertile land in the Medveđa municipality 3 Medveđa belongs to hilly-mountainous area (95% of the area is between 400-1,000 m above sea level), with distinct deep river basins. The lowest elevation points of the terrain are below 400 m AMSL in the basin of the River Jablanica; the highest elevation points are on the mountains Radan and Majdan (1,376 m AMSL); and the most widespread are altitudinal areas in interval m AMSL (44% of total area). Beside dominant lower and medium mountainous areas (mountains Goljak, Radan, Majdan), the municipal territory is characterized by ramified basins of rivers Jablanica, Lepaštica, Banjska, and Tulov. Climate is moderate continental with cold winters. Basic meteorological data (average annual values) of the Jablanica District are following: - Insolation: hours/month, i.e. 1,930.7 hours/year - The amount of rainfall: 752 mm/year - Air temperature: 11.1 C, Relative humidity: 72.4 % - Daily solar radiation on a horizontal surface: 3.75 kwh/m² day - Atmospheric pressure: 93.2 kpa - Wind speed: 1.4 m/s (measured at 10 m from the ground) - Ground temperature: 10.6 C - Degree day heating: 2,625 - Heating days: Average temperature during heating days: 5.5 C Medveđa is oriented north-south. Right bank of the Jablanica River is designed as industrial zone. Within the zone, there is electric power station, deserted facility of the factory Termovent, and the

14 location of once planned boiler room for the needs of the Medveđa. Between rivers of Jablanica and Lepaštica, there is a part of urban core with storey or multi-storey houses, and public buildings. On the left bank of River Lepaštica, there is residential part with maximum five-storey buildings. Population of the administrative municipality Medveđa Number Census year of Inhabitants: 24,244 20,792 17,219 13,368 10,760 7,438 Households: 4,390 4,134 4,033 3,650 3,500 2,608 Table 3 - Data on population of Medveđa from 1961 to Population of the town of Medveđa Number Census year of Inhabitants: 2,443 2,928 3,070 3,587 3,378 3,236 Table 4 - Data on population of the town of Medveđa from 1961 to Residential buildings are heated by wood stoves or by electricity. Most of public buildings are heated by own boiler rooms, and smaller buildings are heated by electricity. The most significant energy potential, which ensures sustainable development, is the use of biomass. As agriculture and forestry are primary industries, they represent a good basis for the collection of biomass with the purpose of solving the energy needs of public and residential buildings in the town. Solution for energy requirements of buildings is based on the development of district heating network and installation of the biomass boiler. The problem is the fact that the planning acts do not include the construction of a central heating source using forest biomass as a fuel, and thus as the part of energy efficiency measures. The planning acts do not include the heating network, so the first step in establishing the heating system and using biomass is the modification of the planning acts, the development strategy and general regulation plan of Medveđa. 4 The Census of Population, Households and Dwellings in the Republic of Serbia, Ibid. 14

15 4. EXISTING HEATING SYSTEMS Institutions of the Medveđa municipality and other public institutions those are of the importance to the residents of the municipality are located in separate buildings in the town. In these buildings, heating is enabled through individual radiator systems with existing individual boilers using wood, heavy oil, and light fuel oil. The management of the boiler rooms is carried out by qualified personnel in each of the institutions with an individual boiler room. In some of the objects, electric heaters are used. Particular problem is the use of the heavy and light fuel oil, which combustion produces negative environmental effects. Under certain microclimate conditions, the allowed emission limits would certainly be exceeded, which could lead to a closure of the heat source. In all of the buildings, radiator heating systems are designed for temperature regime of 80/60 C and the outdoor design temperature for the town of Medveđa is C. Air temperature Relative humidity Microclimate data Daily insolation Atmospheric pressure Wind speed Soil temperature ( C) (%) (kwh/m 2 ) (kpa) (m/s) ( C) January February March April May June July August September October November December Year Table 5 - Microclimate data for the City of Medveđa 6 6 RET Screen International & NASA Software, updated

16 Analysis of heating system in Technical school and in the Sports hall Technical school and the Sports hall are both heated from one boiler room. No Institution Heated area Heating capacity Calculated consumption (m 2 ) (kw) (kwh/a) 1 Technical school Nikola Tesla 3, ,188 2 Sports hall 1, ,631 Total 5,292 1, ,819 Table 6 - Data on premises of the Technical school and the Sports hall Boiler room is located in the building of the Sports hall, which is connected to the building of the Technical school by the hall. Space in front of the boiler room is used as wood storage. Open expansion tanks are set on the sides of the chimney (see Photo 3). Equipment in the boiler room is outdated, but functional. The system for chemical preparation of water does not work. Photo 1 - Sports hall Photo 2 - Wood log storage beside the Sports hall Photo 3 - Sports hall, back yard view 16

17 Photo 4 - Solid fuel boiler, 2x750kW Photo 5 - Hot water collector There are two boilers heated by solid fuel (wood) in the boiler room, with capacity of 2x750kW, produced by Eko-Star, Knjaževac. There is hot water collector in the boiler room with connection lines for the following: the radiator heating system in the school; radiator heating system in the sports hall; the system for heating sanitary water; and air conditioner for air heating system of the Sports hall. Photo 6 - Technical school Nikola Tesla Photo 7 - Damaged radiator, reduced power Several years ago, there was the radiator heating system freeze failure in the Technical school. After this failure, the radiator heating system was not fixed, but only repaired by dismantling malfunctioning radiators, and replacing them with the radiators smaller than necessary. Since the heating system had not been repaired after the failure, it is not possible to reach the designed air temperatures in the School premises; therefore, new radiators should be installed where necessary. 17

18 Analysis of heating system in the Police station No Institution Heated area Heating capacity Calculated consumption (m 2 ) (kw) (kwh/a) 1 Police station Medveđa 1, ,620 Total 1, ,520 Table 7 - Data on premises of the Medveđa Police station Police station in Medveđa is located in three facilities. The boiler room is located in central facility. Central facility, facility with classrooms, and facility with service workshop and the garage, are heated from the boiler room with mazut-heated boilers. Heating system is two-pipe radiator system without thermostatic valves. Photo 1 - Police station, central facility Photo 9 - Facility with classrooms Photo 10 - Facility with service workshop and garage 18

19 Analysis of heating system in primary school No Institution Heated area Heating capacity Calculated consumption (m 2 ) (kw) (kwh/a) 1 Primary school Gornja Jablanica 3, ,592 Total 3, ,592 Table 8 - Data on the facility of primary school Gornja Jablanica Primary school Gornja Jablanica is heated from the boiler room located within the school building. There are two solid fuel heated boilers with power of 2x500kW, produced by Šukom, Knjaževac. Water circulates through circulation pumps, which are installed behind the boilers, at hardly accessible place. There is an open expansion tank. Space in front of the boiler room is used as wood storage. Photo 3 - Primary school Gornja Jablanica Photo 2 - Entrance to the boiler room Photo 4 - Wood log storage of the Primary school Boiler room is small, which disables safe work. There is not enough space in front of the boilers for loading wood and cleaning the boilers. Connection points of the boilers to the heating system are located behind the boilers. Access to revision openings for the chimney cleaning, to the valves, and to circulation pumps is difficult due to a lack of space. Heating system is two-pipe radiator system without thermostatic valves. 19

20 Photo 6 - Solid fuel boiler, 2x500kW Photo 5 - Valves and equipment behind the boilers Photo 7 - Cleaning pit and non-insulated chimney connection 20

21 Analysis of heating system in Health centre Medveđa No Institution Heated area Heating capacity Calculated consumption (m 2 ) (kw) (kwh/a) 1 Health centre Medveđa 1, ,131 Total 1, ,131 Table 9 - Data on the premises of Health centre Medveđa Health centre Medveđa is heated by the boiler that uses light oil as a fuel. The boiler room is located in the basement of the building, and this is the boiler room for the facilities of the Health centre, as well as for the Cultural centre. There is one light oil-heated boiler, model Šukomaks 60, of kW. There is an empty space in the boiler room at which there was second boiler, dismantled after the failure. Photo 8 - Health centre Medveđa Photo 9 - Light oil fuel boiler, kW There is the system for central preparation of hot water in the facility of Health centre, so heating energy is used also for heating technical water during winter. Radiator heating systems of the Health centre and Cultural centre, as well as the system of heating sanitary water are connected to the hot water collector in the boiler room. 21

22 Photo 10 - Hot water collector with damaged insulation Heating system in the facilities of the Health centre and the Cultural centre is two-pipe radiator system without thermostatic valves. Radiator heating system in the Cultural centre is not working. Heating installations in the boiler room are functional, but they are in a bad and neglected condition. Photo 20 - Old circulation pumps Photo 11 - Hot water tank with additional electric heater 22

23 Analysis of heating system in the Cultural centre No Institution Heated area Heating capacity Calculated consumption (m 2 ) (kw) (kwh/a) 1 Cultural centre 1, ,606 Total 1, ,606 Table 10 - Data on the premises of the Cultural centre Medveđa In the facility of the Cultural centre, there is radiator-heating system, which is connected to the boiler room in the Health centre by hot water pipe. After the failure of the boiler, heating of the Cultural centre had been turned off. The facility of the Cultural centre is used by several organizations, such as the Office of the Ombudsman, Tourist organization Medveđa, Library, Radio station Medveđa. Facility of the Cultural centre is heated with electric heaters according to the needs of each of these organizations. Photo 12 - Facility of the Cultural centre Photo 23 - Theater hall in the Cultural center Photo 24 - Oil radiator heater 23

24 Analysis of heating in system in the Social welfare centre No Institution Heated area Heating capacity Calculated consumption (m 2 ) (kw) (kwh/a) 1 Social welfare centre ,006 Total ,006 Table 11 - Data on the facility of Social welfare centre Facility of the Social welfare centre is a single storey building without installation of the heating system. It is heated by electric heaters. The building has been recently reconstructed and rehabilitated in a manner to become energy efficient building. Photo 25 - Facility of Social welfare centre Analysis of heating system in the facility of Kindergarten Mladost No Institution Heated area Heating capacity Calculated consumption (m 2 ) (kw) (kwh/a) 1 Kindergarten Mladost ,431 Total ,431 Table 12 - Data on the facility of the Kindergarten Mladost Kindergarten Mladost has its own radiator heating system and the boiler room in the basement of the facility. There is one boiler, model Šukom-Primula 99, using light heating oil as a fuel, with capacity of kW. There is no system for automatic operations of the boiler. There is prefabricated chimney with steel structure. The chimney is in a bad condition because there is no insulation, which causes problems while the system is heated; furthermore, there is condensation in exhaust gases. Condensation of exhaust gases damages the boiler and the chimney and shortens their lifetime. System for maintenance of the pressure has two membrane expansion water tanks with capacity of 2x35l. 24

25 Photo 14 - Facility of Kindergarten Mladost Photo 13 - Light oil fuel boiler, kW Photo 28 - Prefabricated chimney with damaged insulation The boiler is connected to the radiator heating system through the hot water collector with connections. Installations in the boiler room are insulated, outdated, functional, and in a good condition. After recent reconstruction and adaptation of the facade, the facility became energy efficient. There is two-pipe radiator heating system without thermostatic valves in the facility. Photo 29 - Hot water collector in a good condition 25

26 Analysis of heating system in the building of the Medveđa Municipality No Institution Heated area Heating capacity Calculated consumption (m 2 ) (kw) (kwh/a) 1 Building of the Medveđa Municipality 1, ,889 Total 1, ,889 Table 13 - Data on the facility of the Municipality The building of the Medveđa Municipality has its own radiator heating system connected to the boiler room located in the building. There is one solid fuel (wood) heated boiler without technical data, in the boiler room. Photo 30 - The building of the Medveđa Municipality The boiler is in extremely bad condition. During previous years, there had been several boiler failures and discharges of water from the system. Water circulation pump is set above the boiler. Set in this way, the pump without division valves is inappropriate for managing and servicing. Photo 15 - Boiler room in the building of the Municipality 26

27 Photo 16 - Solid fuel boiler There is masonry chimney with numerous cracks, which causes problems while the system is heated; furthermore, there is condensation in exhaust gases. Condensation of exhaust gases damages the boiler and the chimney and shortens their lifetime. There is an open water expansion tank in the facility. Wood storage is under the porch near the boiler room. Photo 17 - Wood log storage for the building of the Municipality 27

28 Overall analysis Based on the displayed, heating systems differ by fuel type and by the type and number of users. Heating systems with electric heaters in buildings are not connected to a separate line of electricity. Due to the complex heating system, it is not possible to collect data of energy consumption; therefore, energy consumption is calculated according to the following: H 24 QC t t i ep HDD e y H - Estimated consumption (kwh) QC - Capacity of heating installation (kw) ti - internal temperature (20 C) tep - external project temperature (-15 C) HDD - Degree days of heating (2,599) e - correction for the effect of wind and heating switch y - correction for the effect of daily consumption profile Based on these equations calculated values are shown in the following table: No Institution Boiler room Time of Days of operation Type of Operation Calculated A Q q Energy From to consumption H h m 2 kw W/m 2 kwh/a Technical school , ,188 Nikola Tesla In the building Wood of sport hall 2 Sports hall , , Police station Medveđa Primary school Gornja Jablanica Health centre Medveđa 6 Cultural centre Social welfare centre Kindergarten Mladost Building of the Municipality In the building Heavy oil , ,620 In the building Wood , ,592 In the building of health centre In the building Light fuel oil Local el. Heaters Local el. Heaters Light fuel oil , , , , , ,431 In the building Wood , ,889 14,852 2, ,140,093 Table 14 - Overview of data on the analysed facilities and consumption 28

29 Energy produce by Current situation Unit Heavy Light Fuel Total oil oil Electricity Wood Energy Annual (kwh) 410, , ,611 1,112,300 2,140,093 consumption Unit (kwh/m 2 ) Emission CO 2 (kg) 114, ,797 58,942 23, ,250 Efficiency of system (%) 83% 85% 98% 63% Consumption of fuel (t, m 3 ) ,681 Heated area (m 2 ) 1,510 2,300 1,370 9,672 14,852 Unit fuel price ( /t, /kwh, /m 3 ) 410 1, Annual energy cost ( ) 17,638 45,763 16,075 60, ,009 Unit price of energy ( /m 2 ) ( /MWh) Table 15 - Current situation, energy and fuel consumption, price, CO2 emission Facilities of public institutions are very energy-inefficient. This is presented by power density, which is 200 W/m 2. Reasons to that are building structure and purpose of the facilities. Facilities with higher floor-to-floor heights, such as the Municipal building and the Sports hall, bear bigger thermal load (over 190 W/m 2 ). Compact buildings with smaller heights, with glass surfaces, and smaller surface of the facade, such as the Medveđa Health centre and Social welfare centre, bear thermal load of 160 W/m 2. Consumption of energy (kwh) 2,500,000 2,140,093 2,000,000 1,500,000 1,112,300 1,000, , , , ,611 0 Heavy oil Light fuel oil Electricity Wood Total Figure 1 - Energy consumption per fuel types current situation 29

30 Emmision CO 2 (kg) 350, , , , , , , , ,000 50,000 58,942 23,358 0 Heavy oil Light fuel oil Electricity Wood Total Figure 2 - CO2 emission per fuel types current situation Annual energy cost ( ) 160, , , ,000 80,000 60,000 40,000 20, ,009 60,533 45,763 17,638 16,075 Heavy oil Light fuel oil Electricity Wood Total Figure 3 - Annual energy costs per fuel types current situation Demand for heating energy in any facility is determined by working hours of the tenant of the facility. Due to the heating during working hours only, the heating energy consumption of 144 kwh/m 2 is low. If the facilities would be used longer than during working hours, annual consumption of heating energy would be over 200 kwh/m 2, which is extremely high value. 30

31 Unit price of energy ( /m 2 ),( /MWh) Heavy oil Light fuel oil Electricity Wood Averge ( /m2) ( /MWh) Figure 4 - Unit price of energy per fuel type current situation According to energy efficiency indicators, local heating systems in Medveđa are very inefficient. Energy efficiency of local heating systems depends on efficiency of following systems: - System for production of heating energy- heating energy source - Pipe systems for distribution of hot water - Heating systems in the buildings - Energy efficiency of the buildings Systems for production of heating energy with boilers that use mazut, fuel oil, or electricity as a fuel, are energy efficient, but economically unsustainable systems. Almost all of the buildings in Medveđa, except for Kindergarten Mladost and Social welfare centre, are not thermally insulated; there is neither the control of the heating system, nor the control of the air temperature, which makes all of these buildings and their heating systems inefficient. It is recommended the implementation of energy efficiency measures aimed to reconstructing thermal insulation of the buildings, which would certainly result in reduced consumption of heating energy. Boilers using solid fuel, mazut, and oil as fuel, are inacceptable in central city area due to environmental pollution and high CO 2 emissions. Increase of energy, economic, and environmental efficiencies of heating systems in public buildings in Medveđa could be achieved through following activities: - Installation of central boiler for the city, which will use cheaper fuel with low CO 2 emissions - Establishment of remote district heating system for all city zones - Connection of larger number of residential buildings to the remote district heating system aimed to better utilizing remote heating system used during longer working hours. Using biomass as a fuel instead of mazut, fuel oil, and electricity, will result in higher economic efficiency of the system, as well as in decrease of environmental pollution. 31

32 5. BIOMASS MARKET ANALYSIS Biomass represents a renewable energy source, which is defined as the organic matter of vegetable or animal origin (wood, straw, vegetable residues from agricultural production, manure, organic fraction of communal solid waste). Biomass is used in combustion process and converted in power plants into the heat, electricity, or both- heat and electricity. Biomass is used for the production of liquid and gas fuels. Only the biomass of wood origin in the form of wood chips will be considered as a part of this study. Biomass is one of the renewable sources of energy and as such is considered as CO 2 neutral. Since biomass combustion emits exact amount of carbon dioxide as the plant binds during the process of photosynthesis during growth, in that sense coefficient of carbon dioxide emissions of biomass equals zero. However, this information is valid only when exploitation of biomass is accompanied by a forestation, otherwise CO 2 emissions should be taken into account. Wood chips are intended as the biomass for combustion in heating plants. The quality of wood chips is defined by the standard for solid fuel SRPS EN ISO :2015, and SRPS EN ISO :2015 determines the fuel quality classes and specifications of graded wood chips. The following table shows the requirements defined by the standards in Serbia: Standard Particles size Moisture content Bulk density Calorific value Wood chips SRPS EN ISO :2015 SRPS EN ISO :2015 Amax = 6 cm 2 L = 10 cm (max 10% - 35cm) W10 W60 suitable: 40% max < 350 kg/m kwh/kg Table 16 - Requirements for wood chips according to SRPS EN ISO :2015 Moisture content % M10 M15 W20 W25 W30 W35 W40 M<10 10<M 15 15<M 20 20<M 25 25<M 30 30<M 35 35<M 40 Table 17 - The classification of wood chips based on the moisture content according to SRPS EN ISO

33 Dimensions (mm) The fracture >60% by weight Fine fracture Rough fracture Maximum particle length P P 16 mm < 3.15 mm < 15% <6% > 31.5 mm < 45 mm P P 31.5 mm < 3.15 mm < 10% <6% > 45 mm < 150mm P P 45 mm < 3.15 mm < 10% <10% > 63 mm < 200mm Moisture (%) M10 10% M15 15% Dried M20 20% M25 25% M30 30% Suitable for storage M35 35% Limited for storage M40 40% M50 50% M55 55% Unsuitable for storage M60 60% Wet Ash content (%) A % A % A % A % A % A % Table 18 - Requirements for wood chips according to SRPS EN ISO :2015 Total forest area in the municipality of Medveđa is 7,090 ha. The forest area covers 14% of the territory of the municipality; the degree of utilization of resources is far below the national average. State owned forests represent 71%, and privately owned forests are 29% of total forest area in the municipality. Forest enterprise Šuma, Leskovac, manages following forest administration offices: Vučje, Predejane, Vlasotince, Medveđa, Lebane, and Crna Trava, with total forest area of 37,026 ha. Forest farm Forest Total volume Annual Annual area of wood growth increment Šuma-Leskovac ha m 3 m 3 /ha m 3 Vučje 6,225 1,595, ,864 Predejane 7,451 1,731, ,106 Vlasotince 4, , ,447 Medveđa 6, , ,695 Lebane 5,331 1,110, ,730 Crna Trava 7,616 1,439, ,996 Total 37,026 7,436, ,838 Table 19 - Data on forests provided by SE Srbijašume, FE Šuma, Leskovac

34 Figure 7 - Share of forest s area in the Figure 8 - State and private forests 8 total area of the Serbian municipalities per Municipalities and Districts 9 Calculation of the potential of forest waste in the municipality of Medveđa is based on the study Potentials and Possibilities of Commercial Use of Wood Biomass for Energy Production and Economic Development of the Municipalities Nova Varoš, Priboj and Prijepolje 10. This Study was carried out as the analysis of the availability of wood waste from the sawmill industry and forestry in the municipalities of Nova Varoš, Priboj and Prijepolje. The results showed that following amounts are available to meet energy needs: 8 Statistical Yearbook of the Republic of Serbia Ibid. 10 Potentials and Possibilities of Commercial Use of Wood Biomass for Energy Production and Economic Development of the Municipalities Nova Varoš, Priboj and Prijepolje, 2009, author: Branko Glavonjić, PhD 34

35 Nova Varoš Priboj Prijepolje Total Forest (ha) 22,400 30,400 44,000 96,800 Chips from forestry 3,100 4,300 5,400 12,800 Wood waste volume (m 3 Wood industry 9,364 1,194 11,739 22,297 ) Total 12,464 5,494 17,139 35,097 Wood waste mass (t) Annually available energy value (MWh/a) Chips from forestry 1, , , ,488 Wood industry 5, , , ,482 Total 7,291 3,653 10,026 20,970 Chips from forestry 4, , , ,485 Wood industry 15, , , ,142 Total 19,905 8,840 26,883 55,628 Table 20 - The energy potential of green chips from forestry, with wood waste from sawmill industry, in the municipalities of Nova Varos, Priboj and Prijepolje 11 Calculated energy value of forest waste, without the waste of the sawmill industry of SE Srbijašume' and FE Šuma, Leskovac (which is not far from the municipality of Medveđa) is shown in the table below: Area Forest area Wood waste Annually available energy Ha m 3 t MWh/a Prijepolje, Priboj, Nova Varoš 96,800 35,097 20,970 55,628 FE Šuma, Leskovac 37,026 13,425 8,021 21,278 Table 21 - The energy potential of biomass from FE Šuma, Leskovac 12 In the Jablanica District, many companies are producing wooden packaging; there are also sawmills, wood drying companies and production of furniture. In the near future, in the municipality of Medveđa, there is planned an investment from Slovenia into a wood pellet plant and the production of wood packaging. Photo 34 - Local sawmill and wood drying company 11 Ibid. 12 Own calculation 35

36 Biomass of wood origin in the form of pellets available on the market is not suitable for analysis due to the high purchase price. Some of the benefits of wood chips compared to wood pellets are lower prices and lower level of wood processing. Domestic market transactions are performed on a small scale between manufacturers and wholesalers, where price reaches 180 /t of wood pellets. Depending on the time of purchase, end customers pay between 200 and 220 /t. The advantage of pellets is higher bulk density, which means lower transportation costs and smaller storage for the same amount of fuel in terms of energy produced. Due to lower processing degree than pellet, wood chips have lower price, but higher percentage of moisture, which affects its energy value, bulk density, and price. Characteristics and unit price of wood chips depending on the percentage of moisture are presented in the table. Wood chips Moisture Energy value Bulk density Cost (%) (kwh/m 3 ) (bulk-kg/m 3 ) ( /t) , Table 22 - Characteristics of wood chips depending on the percentage of moisture 36

37 6. TECHNICAL DESIGN CONCEPT 6.1 TECHNICAL SOLUTIONS AND SIZING THE BOILER Aimed to decreasing fuel costs for heating public buildings in the Medveđa municipality, it is designed the concept of the construction of central boiler room with biomass- wood chips heated boiler, remote district heating pipe system, and substations. Comparative analysis of annual fuel costs in existing systems, and in case of using wood chips is shown in the Table 24. Following Table shows variation of energy value and unit price of energy, depending on percentage of moisture. Due to large contact surface, wood chips easily exchanges moisture with environment, which affects its energy value and unit price of energy. Biomass, wood chips Caloric Moisture Unit price value (%) (kwh/t) ( /t) ( /kwh) 30 3, , Table 23 - Unit price of wood chips depending on the type of wood quality wood Energy produce by Unit Heavy Light Biomass oil Fuel oil Electricity Wood Total Energy consumption (kwh) 410, , ,611 1,112,300 2,140,093 2,140,093 Emission CO 2 (kg) 114, ,797 58,942 23, ,250 0 Efficiency of system (%) 83% 85% 98% 63% 0 83% Increase for heating up the (%) 0% 0% 0% 0% 5% system Consumption of fuel (t), (m 3 ) , Heated area (m 2 ) 1,510 2,300 1,370 9,672 14,852 14,852 Unit fuel price ( /t), ( /kwh), ( /m 3 ) 410 1, Annual energy cost ( ) 17,638 45,763 16,075 60, ,009 46,909 Unit price of energy ( /m 2 ) Unit price of energy ( /MWh) Table 24 - Comparative analysis of the costs of currently used fuels in Medveđa and costs of biomass Based on collected data, calculated annual fuel costs in buildings used by public institutions in Medveđa are estimated to be around 140,000. If the analysed facilities used biomass-wood chips for heating, annual fuel costs would come to amount of approximate 47,000. The use of biomass for the heating of analysed facilities can reduce annual fuel costs by the amount of 90,000-95,

38 Annual energy cost ( ) 160, , , ,000 80,000 60,000 40,000 20, ,009 60,533 45,763 24,382 17,638 9,613 16,075 9,001 3,915 Heavy oil Light fuel oil Electricity Wood Total Existing fuel ( ) Biomass, ships ( ) 46,911 Figure 5 - Annual energy costs per fuel types- comparison with biomass Unit price of energy ( /m2),( /MWh) Heavy oil Light fuel oil Electricity Wood Biomass ( /m2) ( /MWh) Figure 6 - Unit price of energy per fuel type- comparison with biomass The program of switching existing fuels with biomass in buildings used by public institutions of Medveđa requires a complex analysis in order to select the best technical and economic solutions. Facilities of public institutions are dispersed all around the town, so replacement of individual boilers requires the construction of a new central biomass boiler room with pipe system for district heating. Switching from existing fuels to a new biomass heated boilers is not technically feasible, given the following: 38

39 - Lack of space for boilers - Lack of storage space for fuel Even if technical solutions for the establishment of individual boiler rooms in each building did exist, the cost of such solution would be unjustifiably high. The solution of this problem is the establishment of a new biomass plant and the district heating network. Construction of district heating network should enable the connection of the considered public facilities, with the possibility of connecting residential buildings in the future. This district heating system represents an investment in infrastructure. The required installed capacity of the boiler and level of efficiency of the heating system is calculated using the formula: Q B Q C Q B (kw) Installed boiler capacity Q C (kw) Net consume (capacity) η System efficiency η = ηb ηc η B η C τ Boiler efficiency Efficiency of district heating system Simultaneity factor The calculated heat demand would be covered by installing heating plant of nominal heat output presented in the next table: Capacity Calculate Sizing of Qc ηb ηc τ QB the boiler (kw) (kw) (kw) ,9 0,92 0, Table 25 - Calculated capacity of future heating plant 39

40 kw Heating Capacity (kw) - Heat Load Curve Working hours Figure 7 - Diagram of the annual distribution of the heat capacity of the heating plant The number of hours of boiler operations can be determined using Sochinsky formula: Q b m Qmax Q 0 Q min max m Q m Q max Q - heating capacity at the time, - time, Q min - minimum heating capacity of boiler Q max - maximum heating capacity of boiler Q m - required capacity During winter, every heating system is a subject to great fluctuations that depend on the weather and user s habits. The maximum output power is utilized very shortly during periods of very cold weather. Regularly, the boiler is operating for long intervals of time at low load. Therefore, it is important for the boiler to be operated efficiently during off-peak periods. This can be achieved in one of the following ways: 40

41 1. The biomass boiler can provide the maximum capacity, while a buffer (a hot water tank) covers short-term load fluctuations and ensures that the boiler can be operated efficiently during off-peak periods. This solution has the advantage that only one fuel is required. 2. Combination of more biomass boilers. More boilers increase the reliability of supply and ensure that the heating operates efficiently, even in off-peak periods. Optimal model for biomass plant would be the solution with two wood chips heated boilers, 2000kW kW, and hot water tank. The smaller boiler of 1500kW would be used at higher outside temperatures. In this way, the system would be efficient even in lower operating modes. Existing boilers in aforementioned facilities would serve as a backup solution. Comparison of biomass and existing fuels is based on the full load hours of 719 kwh/kw. This consumption value implies that the heating systems are in a maintenance mode after working hours and in schools during winter holidays. According to this data, it is necessary to produce yearly consumption of 2,140 MWh. The unit production cost of the heating energy, according to the solution with wood chips as a fuel, is about /MWh. Current unit cost for buildings described in this study, with existing heating systems, is up to /MWh. 41

42 6.2 HEATING PLANT, LOCATION AND FACILITIES The plot intended for the construction of a new power plant is located on a part of cadastral plot 2341/2 CM Medveđa with surface of 4,000m 2. The location is in the industrial zone on the right bank of the Jablanica River. Figure 8 - Situation plan of heating plant Photo 18 - Cadastral parcel No 2341/2 42

43 Planned facilities: Building A: - Space to install biomass boilers, 120 m 2 is needed for installation of following boilers: a) one boiler with capacity of 1,500 kw. Space necessary for operations of such boiler has following dimensions: width x length x height = 6,2 x 9,2 x 4,8m b) one boiler with capacity of 2,000kW. Space necessary for operations of such boiler has following dimensions: width x length x height = 6,8 x 9,2 x 5,8m The rest of a space is manipulative space for access to maintaining and safe passage. - Space to install daily tank of woodchips, 100 m 2 and capacity of 40 m 3, i.e. 12 t, and space for daily fuel storage sufficient for 3 days of operations. - The area of processing equipment (buffers, pumps, collectors) of 130 m 2 - Office space of 50 m² Building B: - Wood chips storage, area of 750 m 2, and minimal useful height of 6 m. Capacity of the storage is 1470 m 3, or 440 t of wood chips, which is average 8 weeks consumption in the coldest period of a year. The total area of buildings is 1,150 m 2 ( m 2 ) and the degree of availability of cadastral parcel is 29%. The heat source consists of two boilers for combustion of biomass with total nominal thermal capacity of 3,500 kw: one boiler with capacity of 2,000kW, and other boiler of 1,500kW. In the plant with two boilers, stable operations are ensured with low outdoor temperatures, as well as with higher outdoor temperatures. In cases of higher outdoor temperatures, one boiler can provide sufficient heating, without the risk of cooling entire system. The regime of the boiler temperature is 100/70 C. Maximum operating pressure is 6 bars. The minimum temperature return to boiler is 60 C. It is planned to install a buffer tank with volume of 50 m 3 in order to optimize the operation of the heat source. Circulator pumps are located between the boiler and buffer tank, as well as three-way mixing valve in order to provide protection for the cold parts of boilers. For the purposes of technical calculation, the documentation was used made by Topling-heating Beograd, including additional mechanisms for feeding fuel, extracting exhaust gases and ash. For the purposes of circulation in the distribution system, circulation pump with inconstant flow and pressure sensors is planned. It is necessary to build the appropriate facility for biomass boilers and processing equipment, with the useful area of 250 m², and with necessary height of the boiler room. Next to the building with the boiler, facility for the storage of fuel - wood chips is needed. 43

44 6.3 CONCEPT OF DISTRICT HEATING NETWORK CONCEPT OF DISTRICT HEATING NETWORK Heating network is designed to connect aforementioned public buildings, and to enable the future connection of residential buildings. The pipe network consists of pre-insulated steel pipes that are installed directly in the prepared soil. Distribution network will contain chambers with bulkhead valves. Photo 19 - Pre-insulated pipes for the district heating network 13 The quality of the pipes corresponds to i.e. P235 TR1 according to EN10217 T1 (or St.37.0 of the technical requirements and delivery conditions according to DIN1626). The operating temperatures at the threshold of the heat source are: - The flow temperature is 100, - The return temperature is 70 The difference in altitude between the highest point of the town (on the outskirts) and the lowest point is less than 20 m, so the lowest required operating pressure in the pipeline is 6 bar. Before designing the heating network, it is necessary to prepare a document on the municipal level, which will define the Medveđa construction strategy and direction of the future development of the town centre. Concept plan of the heating network is preliminary, and designed for the planning of the budget expenditures. 13 Source: Website of the company Konvar d.o.o., Belgrade 44

45 6.3.2 SCHEME OF DISTRICT HEATING NETWORK Based on the position of public institution buildings, as well as on the position of the main town streets, residential buildings and individual houses, heating network plan would be: Figure 9 - Disposition of drawings of the heating network per numbers 45

46 Figure 10 - Drawing No 1 of the heating network 46

47 Figure 11 - Drawing No 2 of the heating network 47

48 Figure 12 - Drawing No 3 of the heating network 48

49 Figure 13 - Drawing No 4 of the heating network 49

50 Figure 14 - Drawing No 5 of the heating network 50

51 Figure 15 - Drawing No 6 of the heating network 51

52 Figure 16 - Drawing No 7 of the heating network 52

53 Dimensions of heating pipes for the network calculated with the planned reserve for future additions to the network: D in 4 Q w c p Q - The amount of heat transported by the pipeline w - Velocity of flow of the working fluid ρ - Density of the working fluid c p - Specific heat capacity Δθ - Temperature difference Within the analysis, heating network is divided by the routes and transparent points, as shown on the drawings: Type Route Distance Capacity of Unit of from to heat substations Dimension price of Total network route (m) (kw) main A B DN ,000 main B D DN ,100 main D F DN ,875 main F H DN ,300 main H K 380 1,780 DN ,800 main K M 75 2,080 DN ,250 main M O 310 3,380 DN ,150 connection C DN ,200 connection E DN ,250 connection G DN ,500 connection J DN ,200 connection L DN ,800 connection N 50 1,300 DN ,250 TOTAL 399,675 Table 26 - Sizing the pipe network by routes According to the prices of units needed to construct a network of pre-insulated pipes, the costs of the construction of heating network are estimated to 400,000. The additional costs of the construction of the chamber with necessary fittings and installation of the fittings increase estimation for 10%, leading to total costs of the heating network of 440,

54 Calculation of operating point of the network pump is shown in the following Table: Route Flow Lenght Dimension of pipe Speed Pressure drop Capacity from to diemeter wall unit total friction local TOTAL kw l/h m mm mm m/s Pa/m kpa kpa kpa O M ,0 6,3 0,520 9,23 2,861 1,966 4,827 M K ,0 6,3 0,320 3,61 0,3 0,3 0,618 K J ,1 5,9 0,432 8,53 3,2 0,6 3,876 J G ,1 5,9 0,238 2,71 0,1 0,2 0,246 G F ,1 5,9 0,104 0,57 0,0 0,1 0,093 F D ,9 3,2 0,659 61,30 3,4 1,5 4,845 D B ,3 2,9 0,632 95,70 6,7 1,4 8,055 B A ,3 2,6 0, ,77 45,4 2,4 47,761 MAX: SUM: 70,3 10% Security increase: 25% 17,6 Total for calculate: heat excanger: 30 Adopted value: (l/h) reserve: 10 Total for calculate: 127,9 Adopted for calc. (kpa): 130 Table 27 - Calculation of operation point of network pump The operating point of the network pump (or a pair of network pumps, depending on the solution adopted in the preliminary design) is as follows: - V = 110 m 3 /h - H = 130 kpa The operating point is selected on a basis of the pressure drop in the hydraulically least favourable heating substation. Aimed to saving electricity for pumping the working fluid, it is necessary to incorporate the engine frequency controls in order to optimize the operation of network pumps and synchronize it with the actual required thermal energy to be delivered to the consumer. 54

55 6.3.3 CONCEPT OF HEATING SUBSTATIONS District heating transfer stations provide the link between district heating suppliers and the customers systems. They incorporate the necessary equipment to tailor the supplied heat to the needs of the user. Indirect connections (in which district heating and in-house systems are hydraulically isolated) incorporate components to separate the systems (heat exchanger), to limit the flow volume, regulate the secondary supply temperature and measure the energy consumption. Substations are designed for installation in already existing boiler rooms. The existing boilers will be reviewed in terms of functionality. Those that do not meet the minimum requirements for safe operations will be removed from the substations (i.e. from the existing boiler rooms). Those that meet the minimum technical requirements will remain as a backup heat source in case when, for any reason, the heating system goes into breakdown of operational mode; or to serve as back up heating source if there is an increase of heat consumption that cannot be foreseen at this moment. The operating pressure in the primary part of the substation will be up to 6 bars max., and will correspond to the parameters of the heating network, while the temperature range will be 100/70 in the primary part and 80/60 in the secondary part. The further development of the heating system, with a focus on the connection of residential buildings, would involve the installation of heating substations of the packet type in each building, with identical operating parameters as for heating substations in public institutions or business facilities. 1- External sensor 2- Thermometer 3- Manometer 4- Sensor 5- Air vent 6- Drainage 7- Prim. Connection DHW 8- Safety thermostat 9- Connection to expansion 10- Controller 11- Strainer 12- Heat meter 13- Ball valve 14- Safety valve 15- Heat exchanger Figure 17 - Scheme of compact substation DSA 1 Mini Danfoss

56 Figure 19 - Substation DSA 1 Mini Danfoss 15 Figure 18 - Substation DSP-MAXI Danfoss 16 Substations models DSP-MAXI are designed for power stronger than 100 kw. Substations DSA1- Mini are designed to power up to 100 kw and can be mounted on the wall. Heat substation should be dimensioned according to the size of the heat loss of the building. The reconstruction of the existing boiler rooms should be executed in a way that does not change the working fluid distribution system and the heating substation is connected to the existing supply and return collectors. The existing circulation pumps should be replaced by more energy-efficient units with motors of variable frequency, in order to achieve savings in power consumption and reduce heat dissipation in the buildings. No Institution Position on the drawing Type of substation No of subst. Power Price (kw) ( ) 1 Technical school Nikola Tesla N-1 DSP-MAXI ,000 2 Sports hall N-2 DSP-MAXI ,000 3 Police station, Medveđa L-3 DSP-MAXI ,500 4 Primary school Gornja Jablanica J-4 DSP-MAXI ,000 5 Health centre Medveđa G-5 DSP-MAXI ,500 6 Cultural centre G-6 DSP-MAXI ,000 7 Social welfare centre C-7 DSA ,500 8 Kindergarten Mladost A-8 DSP-MAXI ,300 9 Building of the Medveđa municipality E-9 DSP-MAXI ,000 Table 28 - Selection of substations in the facilities TOTAL: 62, Ibid. 56

57 7. PRELIMINARY COST ESTIMATES The task of this study has a number of levels: Fuel switch to biomass of existing heating systems in public buildings in Medveđa, by construction of the central biomass heating plant Construction of district heating distribution system to connect the public buildings Fuel switch to biomass of heating systems in public buildings in Medveđa should provide lower costs of heating energy, reduce CO 2 emissions, contribute to environmental protection, and enhance local economic development in terms of growing and processing biomass. Implementation of the project should provide savings in the Medveđa municipal budget, and thus a quick return of the investment. The preliminary cost estimates includes annual investment and operating costs. Investment would include the purchase of equipment and boilers, necessary construction works, mechanical works, and electrical works on the construction and installation of a new boiler, the heating network, heating substations; and connecting the buildings to the new distribution system. Position Investment costs - Description ( ) 1. Access road and landscaping plots for the new building and for the route of new pipeline. 40, Construction of a technical bridge for pipes over the Jablanica river 10, Construction of the new boiler room the total area 400m2 80, Construction of the fuel storage facility area 750m2 40, Energy plant, mechanical and electrical equipment works (except boilers) 70, Biomass boilers and associated equipment 1,500+2,000kW 375, Chimneys 15, Construction of heating grid - distribution network 440, Heating substations for public administration buildings 62, Adaptation of spaces for heating substations in public buildings 15, Drum wood chipper 10, Documentation, construction management, commissioning of the plant and heating grid 40, Unforeseen costs 20,000 CAPEX (Capital Expenditure) 1,217,800 Table 29 - Investment costs 17 The composition of operational costs (OPEX) is diverse and affected by many factors. In order to calculate operational costs, there will be reviewed analysis of all annual expenses. After reconstruction, energy rehabilitation and modernization of the buildings, it is expected reduction of annual energy consumption for 0.1%. For the period of 10 years, the price of heating wood is assumed to increase from 23%. 17 Own calculations 57

58 Based on the forecast of the World Bank 18, expected variations of fuel prices in a period of 10 years are following: - Liquid fuels: 57% - Wood chips 23% Description Unit Heat energy consumption (MWh/a) 2,140 2,139 2,138 2,137 2,136 2,135 2,134 2,133 2,132 2,130 Wood chips consumption (t) Price of wood chips ( /t) Unit price of energy from ( /MWh) wood chips Heavy fuel oil price ( /t) Light fuel oil price ( /t) 1,020 1,078 1,140 1,205 1,273 1,346 1,422 1,504 1,589 1,680 Electricity price ( /MWh) Wood price ( /m 3 ) Unit price of energy from existing fuels ( /MWh) Maintenance of equipment and installation % CAPEX / a Cost ( /a) 4,739 4,739 4,739 4,739 4,739 9,478 9,478 9,478 9,478 9,478 Insurance % CAPEX / a Cost ( /a) 6,001 5,891 5,784 5,680 5,580 5,482 5,388 5,296 5,208 5,123 Electricity - costs of the plant kwh el / MWh th Cost ( /a) Labour costs ( /a) 6,700 6,801 6,903 7,006 7,111 7,218 7,326 7,436 7,548 7,661 Removal and disposal of ash (t/a) Cost of Removal and disposal of ( /a) ash Chemical treatment of circulating water Volume (m 3 ) Losses (m 3 / a) Unit price ( /m 3 ) Cost ( /a) Depreciation of equipment and installations % / a Cost ( /a) 20,034 19,433 18,832 18,231 17,630 17,029 16,428 15,827 15,226 14,625 Depreciation of buildings % / a Cost ( /a) 2,600 2,574 2,548 2,522 2,496 2,470 2,444 2,418 2,392 2, World Bank Commodity Forecast Price Data, July

59 Description Unit Heat energy consumption Wood chips consumption Price of wood chips Unit price of energy from wood chips Heavy fuel oil price Light fuel oil price (MWh/a) 2,129 2,128 2,127 2,126 2,125 2,124 2,123 2,122 2,121 2,120 (t) ( /t) ( /MWh) ( /t) ( /t) ,697 1,714 1,731 1,748 1,766 1,783 1,801 1,819 1,837 1,856 Electricity price ( /MWh) Wood price ( /m 3 ) Unit price of energy from existing fuels ( /MWh) Maintenance of equipment and installation % CAPEX / a Cost ( /a) 14,217 14,217 14,217 14,217 14,217 18,956 18,956 18,956 18,956 18,956 Insurance % CAPEX / a Cost ( /a) 5,042 4,963 4,887 4,815 4,746 4,679 4,616 4,557 4,500 4,446 Electricity - costs of the kwh el / MWh th plant Cost ( /a) Labour costs ( /a) 7,776 7,892 8,011 8,131 8,253 8,377 8,502 8,630 8,759 8,891 Removal and disposal of ash (t/a) Cost of Removal and ( /a) disposal of ash Chemical treatment of circulating water Volume (m 3 ) Losses (m 3 / a) Unit price ( /m 3 ) Cost ( /a) Depreciation of equipment and installations % / a Cost ( /a) 14,024 13,423 12,822 12,221 11,620 11,019 10,418 9,817 9,216 8,615 Depreciation of buildings % / a Cost ( /a) 2,340 2,314 2,288 2,262 2,236 2,210 2,184 2,158 2,132 2,106 Table 30 - Operational costs 19 Estimation of operational costs (OPEX) predicts that after first 10 years, prices will stabilize and 19 Own calculations 59

60 achieve small growth of 1% annually. In following 10 years, it is expected wood chips price increase up to 65 /t. After this period, the price would continue growing per 1% annually. For the price of electricity, it is foreseen annual growth at a rate of 2.5%. Insurance costs are estimated for all of facilities, equipment, and installations built by the investment. Considering workforce, it is planned engagement of one highly technically educated employed. Workers with lower qualifications would be replaced from existing assignments in the facilities that are the subject of this study. Salaries costs would increase per annual rate of 1.5%. Costs of cleaning exhaust systems and ash disposal are proportional to quantity of ash (2%) in burned wood chips. Unit price of these costs would increase per annual rate of 1.5%. 60

61 8. PRELIMINARY FINANCIAL ANALYSIS Sustainability of the plant will be analysed for a period of 20 years. Variations of operational costs according to the structure for a period of 20 years are shown in tabular form. Analysis of operational costs considers forecasts of price variations for each item. Preliminary financial analysis consists of the table of costs of energy production, and following figures, (enclosed in the Annex): comparative analysis of costs of heating energy and savings; savings resulted by a fuel switch; operational costs and depreciation; comparison of total costs of the existing and a new heating system; and cash flow Biomass - wood chips 46,909 47,945 49,004 50,086 51,193 52,323 53,479 54,660 55,868 57,102 Ash Electricity Water Summary 47,848 48,905 49,982 51,083 52,236 53,385 54,561 55,762 56,989 58,274 Employee Labour costs 6,700 6,801 6,903 7,006 7,111 7,218 7,326 7,436 7,548 7,661 Maintenance 5,664 5,664 5,664 5,664 5,664 10,773 10,773 10,773 10,773 10,773 Insurance costs 5,638 5,540 5,444 5,351 5,262 5,175 5,091 5,009 4,931 4,856 Summary 18,002 18,004 18,011 18,021 18,037 23,166 23,190 23,218 23,252 23,289 Depreciation 20,234 19,664 19,094 18,524 17,954 17,384 16,814 16,244 15,674 15,104 Total costs 86,084 86,573 87,087 87,628 88,226 93,935 94,564 95,224 95,915 96, Biomass - wood chips 57,644 58,191 58,744 59,302 59,865 60,433 61,007 61,586 62,171 62,761 Ash Electricity Water Summary 58,837 59,406 59,981 60,562 61,179 61,771 62,369 62,973 63,584 64,200 Employee Labour costs 7,776 7,892 8,011 8,131 8,253 8,377 8,502 8,630 8,759 8,891 Maintenance 16,067 16,067 16,067 16,067 16,067 21,731 21,731 21,731 21,731 21,731 Insurance costs 4,783 4,713 4,646 4,582 4,521 4,462 4,407 4,354 4,304 4,257 Summary 28,626 28,672 28,724 28,780 28,840 34,570 34,640 34,715 34,794 34,879 Depreciation 14,534 13,964 13,394 12,824 12,254 11,684 11,114 10,544 9,974 9,404 Total costs 101, , , , , , , , , ,482 Table 31 - Costs of energy production 20 Financial analysis shows that future plant can generate positive cash flow after the period of 14 years from the start of operations. Such long period needed to achieving the sustainability of the project is caused by high initial investment costs and by low full load hours (719 kwh/kw) in public buildings. 20 Own calculations 61

62 Low biomass price, compared to currently used fuels, would enable better utilization of public buildings- the Sports hall and the Cultural centre, to the general benefit of local community. Offered technical solution provides to the municipality the establishment of a sustainable heating system, which would increase the quality of life, and create a positive impact to the environment. If the investment was financed from KfW Bank's program, with grant of 20%, grace period of 5 years and a repayment period of 10 years, the positive business results would be achieved after 12 years from the start of operations. 62

63 9. PROJECT EVALUATION Evaluation of the project is based on the collected and calculated data; costs of the construction of the biomass plant with two wood chips heated boilers and district heating system; and operational costs (OPEX). Analysis included variations of fuel prices and operational costs throughout whole period of analysis. Based on investment costs (Table 29) and operating costs for the period of 20 years (Table 30) economic indicators are given in the Table 31 above. Economic indicators necessary for the investment plan are following: (F) IRR - (Financial) Internal Rate of Return (E) IRR - (Economy) Internal Rate of Return (F) NPV - (Financial) Net Present Value (E) NPV - (Economy) Net Present Value DR - Discount Rate Unit costs of heating energy Unit Value The investment value Capex 1,217,800 Annual production of heat energy (first year of operation) MWh / a 2,140 Total heat production (20 years) MWh 42,599 The operation value (20 years) - OPEX 1,960,532 LUC - Levelled Unit Costs / MWh 74.6 NPV DR % 1 IRR % Sensitivity to changes in the price of fuel (biomass) IRR% Price biomass decreased 5% 1.343% Price biomass increased 5% 0.706% Price biomass increased 10% 0.380% Price biomass increased 15% 0.268% Table 32 - Unit costs of heating energy 21 Based on the results of the analysis of techno-economic indicators, it is concluded that the investment in the construction of a new biomass plant with district heating system for public buildings in Medveđa is acceptable. IRR = 1.027% > DR = 1 % Financial indicators of sustainability are stable related to change of the price of biomass. Increase of the price of biomass, more than calculated, even up to 5% would affect sustainability of the project, and such increase would prolong a period of the return of the investment. Increase of the prices of fossil fuels and of electricity, more than calculated, would affect shortening a period of the return of the investment to less than 14 years. 21 Own calculations 63

64 10. LEGAL FRAMEWORK EU Directive 2009/28/EC promotes the use of energy from renewable energy sources. It sets binding national goals for the overall share of energy from renewable sources in final energy consumption (less than 20%), as well as the share of RES in transport (10% of energy from renewable sources in transport by 2020). In order to support investments in renewable energy sources, the Republic of Serbia adopted a number of laws and bylaws related to the use of biomass and other renewable energy sources. These are the following acts: - Energy Law (Official Gazette of the Republic of Serbia 145/2014) - Energy Sector Development Strategy of the Republic of Serbia for the period by 2025 with projections by 2030 (Official Gazette of the Republic of Serbia 101/2015) - Solid biofuels Fuel specifications and classes SRPS EN ISO ,4: Law on Planning and Construction (Official Gazette of the Republic of Serbia 72/2009, 81/2009-corr, 64/2010 Decision of the Constitutional Court, 24/2011, 121/2012, 42/2013 Decision of the Constitutional Court, 50/2013 Decision of the Constitutional Court, 98/2013 Decision of the Constitutional Court) - Law of efficient energy consumption (Official Gazette of the Republic of Serbia 25/2013) - Law on Environmental Protection (Official Gazette of the Republic of Serbia 135/2004, 36/2009, 36/2009 and other law, 72/2009 and other law, 43/2011 Decision of the Constitutional Court, and 14/2016) - Law on The Strategic Assessment of Environmental Impact (Official Gazette of the Republic of Serbia 135/2004 and 88/2010) - Law on Integrated Prevention and Control of Environmental Pollution (Official Gazette of the Republic of Serbia 135/2004, 25/2015) - Law on Waste Management (Official Gazette of the Republic of Serbia 36/2009, 88/2010, 14/2016) - Law on Air Protection (Official Gazette of the Republic of Serbia 36/2009, 10/2013) - Law on the Ratification of the Kyoto Protocol to the UN Framework Convention on Climate Change (Official Gazette of the Republic of Serbia International Contracts, 88/2007 and 38/2009- other law) National Renewable Action Plan of the Republic of Serbia (Official Gazette of the Republic of Serbia 53/2013). 64

65 11. ENVIRONMENTAL IMPACT Implementation of the project affects the area where the biomass is collected, prepared for transportation, and transported at territory of the Medveđa municipality and at territory of the immediate surroundings. The environmental impact may be registered as noise, vibration, emissions of particulate matter from the exhaust gases, etc. During the construction of the plant, adverse impacts on local environment may occur due to construction and installation works. Particularly negative impact would produce preparation works for the construction of the boiler room and storage of wood chips where it would be necessary to clear and level the ground. Construction works will cause noise and vibration generated by using construction machinery, as well as increased dust emissions due to the works on the excavation of foundations, levelling the ground, and the construction of access roads. All of the effects listed above are of low intensity, and relatively short in duration. The construction site will be surrounded by the fence, so adverse environmental impacts outside of the fence will be negligible. Prior to the beginning of works, the Investor is required to prepare a study on the organization of the site which will display the work areas, corridors for internal transport, temporary storage of equipment and materials, temporary site landfill, manner and place of storage of flammable and hazardous materials. The study will show the connection to the outside infrastructure and installations, usage of protective agents, the method of disposal of solid and liquid waste and other specific measures, which will be implemented to reduce risks to health and safety of the personnel engaged; as well as environment protection actions. During the operations of the energy block, the harmful substances contained in the exhaust gases will exert the highest impact on the environment. In addition to dust from the fuel, the exhaust gas also contains solid particles. Adding a cyclone device as a part of a boiler for combustion of biomass would have effects on the following: - Nitrogen oxides (NOx) in the case of combusting low moisture biomass: the temperature of combustion is high in this case, and NOx content is significantly higher than in case of combusting biomass with high percentage of moisture - Sulphur oxides (SOx) are low because of the low sulphur content in the biomass - Carbon dioxide (CO 2) is considered neutral because the biomass is a renewable energy source, so that the entire amount of the carbon emitted in the exhaust gas has been previously taken from the environment in which the tree grew - Carbon monoxide (CO) in practice does not occur due to the structure of the boilers and constant monitoring of the combustion process. In any case, the planned biomass plant should replace the existing local boilers which use fuel oil, wood and electricity, and which are extremely unfavourable for the environment. The heating plant itself does not require a significant amount of water. While in operation, the heating plant does not have losses and uncontrolled water runoff except in the cases of emergencies (failures). Such situations are extremely rare with this type of plants, so it is safe to say that there 65

66 is no risk of environmental pollution, as well as of pollution of surface and/ or groundwater. The existing sewerage system is able to accept the wastewater that may be of atmospheric origin; from washing facilities and equipment with a negligible content of oils and grease; waste and sanitary sewage. In the cases of discharging the installations, a coolant tank is used with a grease separator, and after the deposition, water is discharged into the sewer system. The exhaust gases contain solid particles of ash, which are retained in the cyclone device prior to entering the chimney and discharged into the atmosphere. A metal cartridge is placed into the cyclone where the separated ash is deposited. In addition, the boiler unit has a cartridge for the disposal of ash that occurs as a solid residue of the combustion process. The total amount of ash deposited is 42 t/a, i.e. between 200 and 250 kg per day during the heating season. The ash will be disposed in a safe place and once a week transported to the landfill under a contract with the local utility company. The amount of ash is relatively small and does not represent a risk to the environment. The operations of the boilers and electric motor drives in the boiler room represent a source of constant noise and vibration. All equipment that emits noise and vibration is located within the area of the boiler room so that the sound is quite absorbed by the walls of the building. After commissioning the boiler room, the measures will be implemented to eliminate or reduce the noise to the acceptable level according to the Law on the protection of environmental noise 22. According to this Law, the maximum allowable noise level is 35 db (A) during the day and 30 db (A) during night. The user of this space will implement specific measures to minimize the negative impact on the environment. These measures will be applied to the control of air emissions, as well as to the management of wastewater, solid waste and noise. Thermal energy for public institutions in the municipality of Medveđa is obtained from different types of fuel, so the production of CO 2 is different for each heat source. Existing heating systems in public buildings in Medveđa produce up to 320 t of CO 2 annually. 22 Official Gazette of the Republic of Serbia No 36/2009 and 88/

67 Average Emission CO 2 (kg), Comparasion to fuel 350, , , , , ,000 50,000 0 Emision CO2 (kg) - Existing fuel Emision CO2 (kg) - Biomass Figure 20 - Emission of CO2 per a fuel type If the biomass for combustion were obtained by deforestation and without reforestation, an emission of CO 2 by biomass combustion would be 3.5 times less than from the combustion of heavy oil. If the biomass for combustion were provided from wood waste or from forestation, then reduction of CO 2 emissions would be lower for 320 t per year. 67

68 12. ENERGY EFFICIENCY MEASURES AND CONCLUSION Public buildings in the Medveđa municipality are heated by electric heaters or by light fuel oil, mazut, or wood used as a fuel in individual boiler rooms located in the buildings. These heating systems require high fuel expenses and a lot of engagement on purchase and storing the fuel; as well as on regular maintenance and servicing. Heating systems that use wood as a fuel (Technical school Nikola Tesla and Primary school Gornja Jablanica ) are very inert, requiring long period of gradual warming of facilities, as well as long period of cooling. There is no reliable regulation system of water temperature in these systems. Furthermore, during the heating period, there is a lot of work on firing and cleaning the boilers, which is a big expense. Described heating systems that use wood as a fuel are very inefficient for the following reasons: low efficiency of the boilers; large storage area necessary for storing the fuel; there is no reliable regulation system of the temperature; frequent work interruptions due to the cleaning of the boilers. Heating systems that use light fuel oil and mazut have higher level of automation in terms of maintaining water temperature. In spite of higher efficiency- compared to wood heated systems, they are big pollutants, and the fuel expenses are high for such systems. Facilities heated by electricity are energy very inefficient, even though the heating is easily managed, and desired air temperatures are easily reached. In respect to the above, the existing heating systems in public buildings in Medveđa are energy very inefficient, and they require high expenses related to the following: the purchase of the fuel; maintenance; servicing. Furthermore, these systems are big environmental pollutants. Construction of central boiler room with biomass heated boilers of 3,5MW and of heating network will enable sustainable, cheaper, more reliable, manageable, and ecologically acceptable heating system to public buildings in Medveđa. Heating systems in the buildings would be connected to the district heating network in the heating substations, which would enable measuring of delivered heating energy and management of consumption in accordance with the requirements of specific facility. Construction of biomass heating plant and of district heating network will enable following: lower costs of the heating, reduction of fuel consumption, reduction of CO 2 emission, reduction of environmental pollution, increased comfort, and increased quality of services, decrease of a fuel expense and of maintenance costs. 68

69 There are forests at territory of the Municipality of Medveđa and the Jablanica District sufficient to provide biomass for district heating plant. In addition, biomass can be purchased as residues from orchards and private forests. In such way, local community could close the circle of production and consumption of heating energy. 69

70 13. ANNEX 70

71 220,000 Comparative analysis of cost heat energy and saving - ( ) 200, , , , , ,000 80,000 60,000 40,000 20, Existing fuels x ,2 140,9 143,6 146,4 149,3 152,2 155,1 158,2 161,2 164,4 167,6 170,9 174,2 177,6 181,0 184,6 188,2 191,8 195,6 199,4 Wood chips x ,90 47,94 49,00 50,08 51,19 52,32 53,47 54,66 55,86 57,10 57,64 58,19 58,74 59,30 59,86 60,43 61,00 61,58 62,17 62,76 Saving x ,29 92,95 94,64 96,36 98,10 99,88 101,6 103,5 105,4 107,3 109,9 112,7 115,4 118,3 121,2 124,1 127,2 130,2 133,4 136,6 Figure 21 - Comparative analysis of costs of heating energy and savings 71

72 Saving from fuel switch - ( ) 140, , ,000 80,000 60,000 40,000 20, Saving x ,2 92,9 94,6 96,3 98,1 99,8 101, 103, 105, 107, 109, 112, 115, 118, 121, 124, 127, 130, 133, 136, Figure 22 - Savings from fuel switch 72