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Institutions under the authority of the Government of Serbia, the Autonomous Province of Vojvodina, or local self-government units (LSUs) can respond to the call. For at least five selected buildings, UNDP will develop the design documentation necessary for renovations after the ESCO public-private partnership model.
ESCO, i.e., the energy services contract model, enables privately owned companies to invest their own or loaned funds in realisation of works that reduce energy consumption in public buildings. As a result of the improved energy efficiency of the renovated public building, the private company receives a return on its investment and generates a profit within the agreed-upon time frame. According to the analysis, these savings may amount to more than 50%. In this way, the public sector does not have to invest its own resources into the improvement of energy-efficiency measures, and after the contract with the ESCO company has expired, it can also save funds.
ESCO is recognised within the European Union as a way to mobilise private capital in the energy transition, as well as an opportunity to open new, green jobs.
The interested institutions and LSUs can find more details and apply to this Public Call at: https://zelena-agenda.euzatebe.rs/rs/konkursi.
This Public Call has been issued as a part of the „EU for Green Agenda in Serbia“ project, implemented by the United Nations Development Programme with the technical and financial support of the European Union and in partnership with the Ministry of Environmental Protection, and in cooperation with the Embassy of Sweden and the European Investment Bank (EIB), where additional funding has been provided by the governments of Sweden, Switzerland and Serbia.
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In Glasgow the world made progress on the 3 objectives set at the start of COP26: 1. countries increased their commitments to cut greenhouse gas emissions (GHG) to keep within the reach the global warming limit of 1.5°C; 2. developed countries pledged to reach the target of $100 billion per year of climate finance to developing and vulnerable countries, and 3.developed countries also agreed to pay equal attention to climate change adaptation, both in financial and policy planning terms, by 2025. Finally, CoP26 resulted in the adoption of “The Glasgow Climate Pact”- a roadmap for countries for reaching the Paris targets.
Glasgow’s milestone resolutions on reduction of methane and forest and land preservation set the foundation for strong and fast climate action. Over 100 countries representing 70% of the global economy, led by the USA and the EU, committed to reduce methane emissions by 30% by 2030, while more than 140 countries pledged to end deforestation in the same period. It is commendable that Serbia joined both of these important pledges.
COP26 gave us hope and confidence that we can provide a safe and prosperous space for humanity on this planet. But there is no time to relax: hard work is still ahead.
It will encompass accelerating efforts towards the phase-down of unabated coal power and inefficient fossil fuel subsidies and recognising the need for support towards a just transition for people currently working in fossil-fuel related industries such as the car and steel industries, or cement or electricity production. Countries will also have to play a transparent and fair game in reporting against the national GHG emission reduction targets. The Glasgow Climate Pact commits 197 signatories to report their progress towards more climate ambition next year, at COP27 in Egypt.
Zooming in to Serbia
At COP26, Serbia expressed a valid concern about the financing for a green transition, safeguarding energy security and supporting workers to switch to green jobs and industries.
The good news is that the financing is there. However, for “green financing” to make sense, it requires increasing the climate ambition. The climate ambition of each country is reflected in nationally determined contributions (NDCs) – plans containing targets on emissions cuts and adaptation, usually by 2030, and how they will be met. Adoption of revised NDCs, which Serbia announced prior to the COP26 – is the best way to ensure access, not only to various environment and climate change global funds and bilateral grants, but also to favourable green loans and other borrowings.
Serbia’s robust economic growth and significant investments in infrastructure are evident. However, to maintain and bring new growth, deep decarbonization and a green transformation is needed, particularly if we have in mind the country’s key export market – the EU, where consumers are already favoring goods with a low carbon footprint.
In Serbia, energy sector holds the key to a climate neutral economy and society. Increasing energy efficiency and using more renewable energy in the economy (including buildings, transport sector and industries) are the main vehicles for a clean energy transition, as it will not only create energy savings, but also reduce emissions and air pollution.
Currently Serbia spends 3 times more energy per GDP unit than the EU average. Increasing energy efficiency in public buildings by only 10% would remove the need for 1 older thermal power plant. Serbia could increase the efficient use of energy by renovating public and private buildings and by helping enterprises in Serbia spend less energy in their production process.
Adapting to new climate reality
In parallel, we need to start working together on adapting to an already changed climate. Serbia and South Eastern Europe are heating up faster than the global average. This region will be strongly affected by climate change. Children born today may well experience the dramatic effects of intensified floods, wildfires, droughts and harsh economic impacts. Farmers will lose incomes, roads and railways could be heavily affected. Through it all, the cost of not acting will be higher than the cost of acting. Serbia could face $13 million in losses and damages by the end of this decade.
To ensure resilience of the economy and society, we need to focus on irrigation, water management and tackling droughts. UNDP reports indicate that, without irrigation measures, maize yields are expected to decrease up to 58% and wheat yield will decrease as much as 16% by 2030. Small agricultural producers and seasonal workers would be hit the hardest. The entire population would be impacted through reduced availability of food, and the possible rise in food prices.
To have enough water supplies for food production and energy generation, Serbia needs more resilient types of crops, water storage systems (such as dams and water reservoirs), as well as drainage systems. Building wastewater treatment facilities would reduce organic pollution of watercourses and lakes and maintain their viability under increased temperatures and expected water shortages.
Also, numerous small-scale innovative solutions are becoming increasingly affordable and easily deployable to help Serbian farmers adapt. For example, Serbian scientists at the Institute Mihajlo Pupin have developed innovative technology to ensure resource-efficient and climate resilient farming.
The EU and UNDP encourage further investments into innovative technologies and businesses and the transfer of innovative technologies to Serbia – to reduce GHG emissions, strengthen community resilience to the impacts of climate change and create green jobs.
Financial infusion for green transformation
To kick-start the green transformation, the EU has prepared The Green Agenda for the Western Balkans, as part of the EU’s Economic and Investment Plan. The Western Balkans economies have endorsed it fully, and recently adopted its regional Action Plan. The Agenda tackles 5 broad areas covered by the Green Deal: decarbonisation, depollution of air, water and soil, circular economy, farming and food production, and protecting biodiversity.
The EU and UNDP intend to start a 2-year initiative in 2022, in cooperation with the Swedish International Development Cooperation Agency (SIDA) and European Investment Bank. It will help Serbia precisely in these areas, to improve policies, take concrete actions and scale-up investments for green transformation. Through IPA 2020 programme, the EU and Serbia have earmarked €8M to abate air pollution, fight against biodiversity loss and support businesses to become more circular. One part of this support will fund scaling up of green projects. We welcome other donors, banks, and development partners to join us in implementation of the Green Agenda in Serbia.
Besides contributing to decarbonization of the economy, we hope that this initiative will trigger a small green industrial revolution in Serbia, run by national and local governments, industries, public and private companies, as well as CSOs. It will also accelerate harmonization with EU standards and norms.
Many people in Serbia have become increasingly concerned about the environment. The EU has the strictest environmental legislation in the world. When well enforced, it allows to decrease air pollution and emissions, and provide clean water, while creating jobs and growth. We believe that strict enforcement and full implementation of the respective EU legislation transposed in Serbian law will also help to improve environmental protection in Serbia.
Despite the undeniable health and environmental benefits of a green transition, recent global energy shortages and rising gas prices have given rise to the question whether it is too risky and costly to abandon fossil fuels. On the contrary, such crises should make us turn to renewables and green solutions even faster. One of the key takeaways from the COP 26 is that financing of clean energy will only become cheaper, while financing of fossil fuels will be increasingly expensive.
In the long run it is simply smarter to go green. In parallel, it’s the only way to go, for the people, the economy and the planet. A lot is at stake.
Text originally published in Vreme weekly.
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Belgrade, 16 September 2022 – UNDP completed the first ever geothermal resource research on the site of the SIV 3 building and began an identical survey on location of the Palace of Serbia. These surveys are conducted in partnership with the Republic of Serbia Ministry of Mining and Energy and in cooperation with the Administration for Joint Services of the Republic Bodies and the Council of Europe Development Bank (CEB). Preliminary research results confirmed that there is potential to apply geothermal power in these two buildings. The financial feasibility of this potential remains to be verified through a feasibility study.
Geothermal resource surveys provide an opportunity to estimate local potentials for the utilisation of underground waters and petro-geothermal resources as renewable energy sources for indoor heating and cooling, as well as sanitary water heating. This is also the first step in the energy rehabilitation of these buildings. It will be followed by the Building Energy Rehabilitation Feasibility Study that will include the scope, type and manner of use of the renewable energy source systems, to be supplemented later with appropriate technical documentation. Planned geothermal resource research will be completed by November 2022.
The application of geothermal power to provide for some of the energy needs of SIV 3 and Palace of Serbia buildings would help reduce primary power consumption and cut down CO2 emissions. It would also improve working conditions for the staff and enable savings on energy-related operating costs. Finally, it would address the rising need for introducing newer and cleaner energy sources, and contribute to the green transition of the Serbian economy and society.
The geothermal resource research conducted at the Palace of Serbia was made possible owing to financial support from the West Balkans Investment Framework (WBIF) and CEB trust funds financed by the Slovak Republic and the Kingdom of Spain. The geothermal resource research at the SIV 3 building was financed from grants provided by the Government of the Slovak Republic via the UNDP fund.
These surveys are part of a series of preparatory activities aimed at improving energy efficiency in central government buildings. The activities represent first steps in the implementation of the € 40 million multi-annual programme, ‘Energy Efficiency in Central Government Buildings’, that will include 28 buildings.
UNDP Serbia
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The first in a series of preparatory activities is the preparation of baseline energy certificates, after which detailed energy audits of buildings will be conducted in accordance with the methodology used in the EU, respectively in accordance with the Energy performance of buildings directive.
Based on the results of the conducted energy audits, possible savings will be assessed. Three investment packages of energy efficiency measures and the use of renewable energy sources for each building will be proposed. For each package, a financial analysis and evaluation of other social benefits they bring will be conducted.
After these deliberations, the optimal package of measures will be selected for each building, on the basis of which the appropriate project documentation for energy rehabilitation will be prepared. Geothermal potential explorations will be performed for the two most complex buildings, „Palace of Serbia“ and „SIV 3“, which will give a precise picture of the possibility of using geothermal energy for heating and cooling of these facilities.
Additionally, detailed feasibility studies will be prepared for these buildings in accordance with the regulations on capital project management.
Until now, several teams of national and international experts have inspected 18 buildings, and it is planned to conclude the inspection of all facilities by the end of June. The selected central government buildings cover a total of 208,000 m2, and one half of them are categorized as cultural heritage. Among them are some of the most significant cultural monuments of Belgrade, such as the Office of the President of the Republic on Andrićev venac Street and the building of the Government of the Republic of Serbia.
The expected results of the “Energy Efficiency in Central Government Buildings” project worth EUR 40 million are: reduction in primary energy consumption in renovated buildings by about 30%, reduction in CO2 emissions by about 20%, improved working conditions, improved occupational safety and about 29% savings in operating cost for energy. In addition, the project should contribute to the protection and preservation of cultural heritage buildings.
Preparatory activities are part of UNDP’s efforts and aspirations to help the green transition process in Serbia. On the occasion, the UNDP Resident Representative in Serbia, Ms Francine Pickup, pointed out:
„In Serbia, 40% of GHG emissions come from the energy consumption in buildings, of which 15% are attributed to public institutions. The rehabilitation of old, energy-inefficient public buildings will lead to a reduction in GHG emissions, improve air quality at the local level and conditions for the people who use the buildings. It will also create new jobs for local construction companies, building maintenance companies, improve resilience to climate change and preserve the historic value of these facilities. ”
A major development challenge for Serbia is the inefficient use of energy, which is mostly obtained by burning fossil fuels, which results in high emissions of harmful substances, including those that cause the greenhouse effect.
Numerous studies indicate that Serbia has great potential for improving the energy efficiency of its building stock. When it comes to public buildings, the significant potential for energy savings is related to the technical systems of buildings (heating, air conditioning, interior lighting, etc.), building management systems, and the behaviour of the users themselves. That is why it is necessary to assess the current state of energy efficiency of buildings and thus provide the information needed to define the proposed package of various energy efficiency measures that will be included in an energy efficiency renovation plan for each of the facilities.
The planned preparatory activities will be completed by May 2023 and realised thanks to the financial support from the Western Balkans Investment Framework (WBIF) and Council of Europe Development Bank (CEB) Trust Fund donors – Kingdom of Spain and Republic of Slovakia.
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The agreement was signed by the Minister of Mining and Energy of Serbia, Zorana Mihajlović, and the Resident Representative of the UNDP in Serbia, Francine Pickup.
The Minister of Mining and Energy, Zorana Mihajlović, said that half of the buildings to become energy efficient were under the offices of the state, and that these were mostly old and consumed a lot of energy.
She specified that the technical documentation of the project should be completed by March or April next year, while the corresponding renovations should start in the second half of 2022.
„The project means that energy consumption will be reduced by 30 percent overall, while the emission of harmful gases, primarily CO2, by about 20 percent,“ stated Mihajlović.
She asserted that the goal of the Government of Serbia is that every decision and project that is contracted must have a positive effect towards protecting the environment and must enable the reduction of CO2 emissions and other harmful substances into the atmosphere.
„Energy efficiency is a way to ensure a safer environment, and the state’s goal is to reduce energy consumption for heating by at least 20 to 30 percent in the next few years, as today Serbia consumes 40 percent more energy for heating than do EU countries,“ said Mihajlovic.
The UNDP Resident Representative in Serbia, Francine Pickup, said that the project is important not only for the state, but also for its citizens, as energy savings reduce dependence on imports and enhance national energy security, while at the same time reducing adverse impacts on the environment. In addition, she stated that this makes the Serbian economy more competitive on the world market.
„In the Western Balkans region, 36 percent of all CO2 emissions come from public and private buildings. Buildings are also the largest consumers of energy, but when designed or adapted for more efficient energy consumption, buildings represent a great potential for energy savings,“ Pickup said.
She added that as part of the project, the Ministry of Mining and Energy and the UNDP had conducted a study on energy savings in public buildings of the central government, which served as the basis for loans being approved from the Council of Europe Development Bank.
„The expected reduction in primary energy consumption in these buildings could be 260 million kWh, which is equal, for example, to the amount of electricity that the City of Novi Sad consumes for public lighting over ten years. It has been shown that the energy-efficiency renovations of these 28 buildings could reduce CO2 emissions by 58,000 tons over 10 years – this, for comparison, is the same as burning 320 coal wagons,“ said Pickup.
With this project, the Ministry of Mining and Energy envisages the preparation of energy certificates and detailed energy inspections of buildings, as well as feasibility studies and project documentation for the energy renovation of the buildings in Belgrade, comprising a total area of 208,000 square meters, half of which falls under state administration.
As stated by the Minister of Mining and Energy of Serbia, Zorana Mihajlović, this documentation will serve, among other things, to establish the current condition of buildings when it comes to energy consumption and to assess where potential savings could be greatest for each of the buildings, i.e. how exactly the buildings should be upgraded to maximize energy efficiency.
The next step, as Mihajlović indicated, would be the realization of the energy renovation of the buildings, for which the Government of Serbia and the Ministry of Mining and Energy agreed on a loan of 40 million euros from the Council of Europe Development Bank, approved by the CEB Board of Directors in November 2019. The loan was signed by the Minister of Finance of Serbia in March 2020 and ratified by the Assembly of Serbia in November 2020.
As Mihajlović specified, the energy renovation would include the building of the Government of Serbia, i.e., the former Palace of the Ministry of Finance and the Kingdom of Yugoslavia, the Palace of the President of the Republic, the Palace of Serbia, the economic headquarters of the Government of Serbia (SIV 3), the National Assembly of Serbia, the Republic Property Directorate for European Integration, the Republic Commission for the Protection of Rights in Public Procurement Procedures, the Anti-Corruption Agency, and the Club of People’s Deputies, as well as a number of buildings belonging to specific ministries.
The renovation of the building of the High Judicial Council and the State Prosecutors’ Council is also planned, as is the Palace of the Main Post Office in Belgrade, which houses the Commissioner for Information of Public Importance and Personal Data Protection, the Constitutional Court, the Institute for the Protection of Nature of Serbia, and the Institute for Education and Development.
Other buildings for which energy renovations are planned include the Intellectual Property Office, the Republic Agency for the Peaceful Settlement of Labor Disputes, the Directorate for Measures and Precious Metals, the Agricultural Land Administration, the Office of the National Council for Coordination of Cooperation with Russia and China, and the Agency for Environmental Protection.
Additionally, there are the Republic Directorate for Commodity Reserves, the Directorate for Electronic Administration, the Administrative Inspectorate, the building of the Ministry and Judicial Bodies, the building of the Commissioner for the Protection of Equality, and the Payments Administration.
It is envisaged that the Energy Efficiency Program of the Central Government Buildings will be implemented by the Ministry of Mining and Energy and the UNDP, in cooperation with the Directorate for Joint Affairs of the Republican Bodies, over a five-year period.
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