Nova Varos to biomass-powered cogeneration plant – Municipality seeks partner to implement USD 15 million project

In order to exploit a large potential of forest remnants in the territory of Nova Varos and surroundings, the municipality decided to build a biomass-driven CHP facility. The planned capacity totals 3 MW of electricity and 10 MW of heat.

This challenge takes USD 15 mil. Since Nova Varos is grouped in the non-developed municipality category and cannot fund the projects itself, the authorities are searching for a private partner.

As people in the municipality say, when it comes to the forest cover level, forest economy, Prijepolje, is high above the average in Serbia, which is confirmed by the Study “Potentials and options of commercial wood biomass for electricity production and development of Nova Varos, Priboj and Prijepolje municipalities," developed in 2009.

- According to this Study, developed by the Faculty of Forestry, potential of wood biomass in this area is big so it is evident that CHP system implementation in the biomass-driven facilities would be remunerative while positive effects on the environment are very significant - Dimitrije Paunovic, mayor of Nova Varos municipality, says in his interview with eKapija.

For future PPP, Nova Varos provided an area of 3, 5 ha on a good location, as municipal representatives claim.

- The objective of the municipality is to provide essential conditions or investment implementation such as administrative affairs, provision of plan documents, permits, and approvals. We provided a municipality-owned lot near the main road. Apart from land, the municipality will provide usage of overall heat network – our collocutor says.

Paunovic mentions the investor will be able to sell electricity to the Electric Power Company of Serbia (EPS), on the basis of feed-in tariffs and that citizens will have cheaper heating and electricity.

The plan implies that the facility should cost USD 15 mil, out of which a million would be provided by the municipality and private investor the remaining part.

- The plan does not imply facility methodology so therefore we did not define partner. We are open for cooperation with companies building different kinds of facilities. Since the technology has not been defined, investment can range from 8 to USD 20 mi. We want to get as quality offer as possible with as short deadlines as possible – says the mayor of Nova Varos.

Set up of electricity production rom biomass will have positive effects on local community.

- Set up of the wood biomass collection system, potentially, would generate options to strengthen social and community responsible entrepreneurship because a significant number of local citizens could find alternative ways of sourcing. The incentive for the socio-economic development of the local community by implementing this project lies in the fact that apart from citizens, Nova Varos economy, both existing and potential investors, would have at their disposal efficient, economic and socially acceptable electricity supplying model with positive environmental effect – a collocutor of eKapija explains.

Paunovic says there is an option to provide breeding of plants essential for biomass production, where a significant number of people from this territory would be hired as well.

The Mayor of Nova Varos says they have been spending EUR 700.000 per year on crude oil heating of public institutions, firms and population and that, when the facility is built, these funds could be redirected into funding municipal developmental projects.

Biomass powered CHP plant in Nova Varos has been selected as one of the best at the competition “Public-private partnership as development potential” implemented by the National Alliance for Local Economic Development (NALED) supported by USAID sustainable local development project.