Photo: USAID Better Energy (Daniel Berg)The Serbia Better Energy project was started by USAID exactly one year ago with the intention of providing financial support for energy efficiency improvement projects at the municipal level as well as changing attitudes about this kind of energy investment. Daniel Berg, the project's Chief of Party, is very proud of what the Better Energy team has accomplished in a short time and not always under easy circumstances.
"It is very correct timing for this project, given that USAID started Better Energy at a time when we can help address some of the consequences of the ongoing energy crisis and also help Serbia meet its commitments on global and local environmental measures," says Daniel Berg at the beginning of the interview.
What is the project's goal and what are the expected results?
Better Energy seeks to demonstrate that energy-efficient measures are possible and financially sensible. Our project works primarily with local public and private partners to adopt new products or practices. We are working to improve the supply of energy, for example, by helping district heating plants adopt energy-efficient technologies that allow them to deliver heating to citizens more efficiently. And we are working on the demand side, with a focus on multifamily apartment buildings. In fact, these buildings represent one of the clearest opportunities to save energy, as they often waste more than 50% of the energy received. However, in order to upgrade these buildings, it is necessary to convince homeowners that they can receive the benefits of improved efficiency. That is why we are working with the Ministry of Mining and Energy on an education campaign. And perhaps the most important issue we can address is facilitating the financing of investments in energy efficiency measures. We are therefore working with the government, donors, and commercial investors to develop sustainable financing mechanisms.
What have your major activities been so far, and are there already some examples of good practice in upgrading energy efficiency in Serbian municipalities?
We started the year by reviewing technical and financial capacities at the local level, in municipalities, District Heating Plants (DHP), and Homeowners Associations (HOA). We wanted to hear from local managers how we could help them and what obstacles they saw to investing in energy efficiency upgrades. We then designed trainings and tools that would help DHP managers consider the best investments for improving their efficiency. A similar tool has been developed for apartment buildings.
In Sombor, Niš, and Knjaževac, we implemented grants totaling about USD 200,000, which in different ways will help them reduce their fuel costs. Perhaps my favorite project is the upgrade of Knjaževac District Heating Plant’s substation servicing the city’s kindergarten, "Bajka”. The city has previously implemented energy efficiency measures on this building. The new substation will ensure the children have a comfortable and healthy setting fit for learning and playing, and should be 20–30% more efficient, allowing less use of mazut and biomass.
We are now about to implement our first small pilot grants for multifamily apartment buildings, together with grants from the Government. We hope to use these pilots as examples to demonstrate that older buildings can be efficiently upgraded and that the investment is self-financing due to the savings on energy bills.
The total fund for the project is 10 million dollars. What is this amount of money dedicated to, and on what basis do you choose which local projects to support?
The 10 million dollars are divided between technical assistance from our expert team of engineers and advisors and also distributed in the form of grants and subcontracts for work and policy support. Projects with DHPs were selected in 2022, based on proposals from a dozen DHPs. They were successfully completed in time for this year’s winter heating season. Over the course of the Better Energy project, we expect that the USD 10 million will leverage significant coinvestments. For example, our first grants were cofinanced by the DHPs themselves. The same will be the case with our first apartment building retrofit projects, which are currently under preparation. The greatest impact will be evident when we change attitudes and perceptions toward investing in energy efficiency and local renewables, leading hopefully to a significant increase in the resources going to this priority.
How can we increase the number of prosumers and use of solar energy in Serbia, and how does Belgrade, with so many apartment buildings, fit into this solar concept?
Photovoltaic energy of all types can definitely make an important contribution to Serbia’s energy mix and energy security. The price of PV systems has fallen dramatically over the past 20 years, and today countries in the region are getting an increasing share of their energy from PV and other renewable sources. Small-scale renewables such as prosumers take advantage of empty rooftops. The government can facilitate an expansion of prosumer activities by streamlining and regularizing the permitting and contracting processes. The government can also reduce any fees and alleviate unnecessary fiscal burdens on prosumers.
As to the potential, buildings with flat, open rooftops and good solar potential are prime territory for prosumer investments. Besides reducing the use of fossil fuels, the apartment owners should benefit from lower cost of electricity and therefore improved financial security. Our project seeks to support both enterprises and homeowners who are interested in investing in PV arrays. We are teaming with partners such as the Serbian Chamber of Commerce, GiZ, and NALED to jointly work on the regulatory and overall support systems for PV development.
USAID has recently launched a new five-year regional Investment in Energy project. What can Serbia expect from this project?
The USAID’s new five-year Regional Investment in Energy project, worth 20 million dollars, will help provide funds to facilitate (conducitng feasibility and project development studies) public and private energy projects, thus increasing their chances of being financed. The Investment in Energy activity will facilitate potential investments in the following areas: improving operation and management of energy and water utilities, heat and power generation, transmission and distribution networks, heat supply, citizen demand side, water supply and sanitation. We expect that the project will lead to millions of dollars of new investments in energy projects. I fully expect Serbia to benefit greatly from the program – which can improve Serbia’s energy security.
By: Jovana Nikolić
Photo: USAID Better Energy
