Serbia Heating and Energy Efficiency Program
In the immediate aftermath of the resignation of President
Milosevic in October 2000, the new government of Serbia faced
critical shortages of
electricity in large part caused by extremely low prices that artificially
increased demand. Serbia’s use of electric heating is much higher
than elsewhere, where it is usually more expensive than other heating methods.
In March 2001, USAID funded a Heating and Energy Efficiency program to
help citizens deal with energy shortages as well as with the large increases
in prices that were widely understood to be inevitable. The USAID program
developed energy efficiency demonstration projects in municipal buildings
such as schools, hospitals, senior citizen centers and municipal offices,
as well as a national information campaign to educate the public on how
to save energy. To encourage replication throughout the country, a dissemination
program with Serbia’s municipal association, the Standing Conference
of Towns and Municipalities, was also included.
The initial set of activities was successfully completed in early 2002,
and since then the program has spawned a succession of energy efficiency
improvements being carried out in many cities in Serbia with reduced or
no direct grant funding required by donors. These follow-up activities
include commercial financing for investments in 11 cities, and development
of a World Bank revolving loan fund for upgrades of residential and municipal
buildings.
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| All the incandescent
light bulbs at the Stefan Nemanja Primary School in Novi Pazar,
have been replaced with high efficiency fluorescent tubes. |
The results from the Winter of 2001-2002 are in. Electricity prices
were increased sharply, and continued to increase between the Winters of
2001 and 2002. On average, electricity prices have nearly quadrupled, yet
still don’t fully cover the costs of supplying power. The electricity
tariff was also revamped in 2001 to discourage electric heating by devising
a rate that increases with higher levels of consumption. To help the public
prepare for the increases, a large public awareness campaign aimed at educating
the public on the benefits of energy conservation was launched by the Ministry
on Mining and Energy together with the Serbia electric company EPS, with
considerable assistance from USAID. According to the Ministry of Energy,
by the end of 2002 the following measurable results were achieved:
- Electricity consumption for heating decreased by 1700 GWh or 22% from
the previous winter (using weather-adjusted data).
- About 10% of households switched from electric heat to another source
of heat.
- Total winter electricity consumption (for all uses, not just heat)
dropped by 5.5% and peak demand by 7% (500 MW).
- According to surveys, about 400,000 households improved window insulation.
 |
| All single
pane glass panels, forming large portions of the building envelope
of the Health Center for Children and Women in Krusevac, have
been replaced with double pane glass panels mounted in the
existing steel frames. |
USAID-funded demonstration projects: Twelve energy efficiency projects
were implemented in five cities. Insulation, new windows, new heating systems,
lighting, motor drives, controls, and associated equipment were installed
in several municipal buildings, schools and hospitals, a senior citizens
center, and a district heat system. In addition, street lighting was improved.
Work began in late spring 2001, and was largely completed before the winter,
2001-2002. About $1 million was spent on materials, equipment and labor.
Annual energy cost savings are estimated as $306,000, for a total payback
of about 3.2 years. Serbian subcontractors did all the installations and,
to a large extent, Serbian materials and equipment were used. The building
occupants – schoolchildren and teachers, nurses and doctors – reported
significant comfort improvements.
 |
| All the old
windows at the Health Center for Children and Women in Krusevac,
have been replaced with locally manufactured double pane windows
with PVC frames. |
Results of Training and Dissemination Activities – Replication
in other Cities: USAID-funded training for 11 municipalities expanded
the installation of energy efficiency upgrades and featured commercial
financing. In 2002, the City of Novi Pazar secured financing to upgrade
windows and replace boilers in one of its buildings in which the $105,000
efficiency upgrade was financed in part by the city, in part by a Swiss
grant, and in part by a groundbreaking five-year loan from Delta Bank
at an interest rate of 10%. Since then, Delta Bank agreed to lend the
other cities a total of $417,000 for energy efficiency upgrades at ten
facilities, with the cities providing from their own budgets a total
of about $200,000 to complete the funding. The cities of Cuprija, Pirot
and Zrenjanin have formally signed loan agreements with Delta Bank, and
approval by the other cities is expected early in 2003. Throughout the
world, lack of experience by banks is often cited as a major hurdle to
lending to municipalities for energy efficiency and, given the challenges
of financing investments in Serbia, the experience gained by Delta Bank
in administering the loans is a significant achievement.
 |
| This upgrade
at the Health Center for Children and Women in Krusevac, includes
a thermal shield installed on an existing radiator. |
Preparation of a World Bank Revolving Loan Fund: The World Bank
cited the successful USAID program experience as a key factor in its current
efforts to prepare a $10 million revolving fund to make loans for energy
efficiency investments to municipalities and homeowners. USAID regional
funding is being used for technical assistance to design the loan and prepare
documents needed for final World Bank approval.
Residential Energy Efficiency Film: As part of the public awareness
campaign, USAID funded the creation of a television documentary aimed at
educating the public on energy efficiency to help mitigate the increases
in electricity prices. The documentary, entitled “How to Pay Less
for Energy”, played on 85 television stations across Serbia from
December 1, 2001 to March 31, 2002. It featured a well-known Serbian stage
actor. The video was shown numerous times before and after major television
shows, including the news. USAID funded the production of the documentary,
while actual placement of the video was made possible by air time valued
at $3.5 million, which was donated by the television stations. The film
was subsequently translated for use in several other countries. Additional
specialized documentaries
on energy efficiency improvements in schools, hospitals, and administrative
buildings were prepared for municipal officials and building energy managers – these
documentaries featured filming of USAID-funded demonstration projects to
show officials throughout the country the benefits of such improvements
and how to achieve them.
Green School Curriculum Development: In August 2002, USAID-funded
energy efficiency school curricula was developed for the first and fourth
grades in 100 schools in conjunction with the Serbian Ministry of Education
and Sport. The Green Schools class, which teaches children about the general
concepts of energy efficiency and environmental issues, was listed in the
official Ministry curriculum book in July, meaning that any first or fourth
grade teacher in Serbia may elect to teach the class in addition to their
core classes. At the same time, a year-long Green Schools program was initiated
for 70 schools in southeast Serbia, including as many as 15 Albanian language
schools.
EE Tips and Leaflet: Encouraging people to switch from electric
heating to other sources is a major goal of the Ministry that has been
supported by USAID’s efforts. In fall, 2002, the national utility
EPS disseminated through its electric bills a USAID-funded leaflet, "Ten
Ways to Save Energy and Money", to 2.5 million households in Serbia.
The leaflet provides information about the easiest and least costly ways
to maximize energy savings over the winter. The leaflet also contains information
about the cost of various heating sources, encouraging consumers to switch
to lower cost heat options.
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