Fossil fuels are still being burned in district heating networks across the Western Balkans, despite the pressing need to prepare for the transition to green energy. 

A report from CEE Bankwatch Network finds that 97% of heat supplied in district networks in the region is currently produced from fossil fuels, with only around 3% originating from renewables, primarily unsustainable forest biomass.

The transition to renewable energy in district heating systems is crucial not only for environmental sustainability but also for achieving broader decarbonisation goals, says the NGO. However, financing for such projects remains limited, with current streams primarily accessible to well-established cities with proven renewable energy sources.

Nataša Kovačević, campaigner for district heating for the Western Balkans at CEE Bankwatch Network, told a webinar on May 9 that when it comes to the energy transition the Western Balkans are “quite far from their targets, especially when speaking of renewable energy progress and district heating”.  

District heating networks present a promising avenue for the large-scale utilisation of renewable energy for heating, offering efficiency and cost-effectiveness. However, their potential in the Western Balkans remains largely untapped. Despite some initiatives, all countries and cities in the region are falling short in significantly scaling up investments in renewable district heating systems and improving energy efficiency.

Instead, says Kovačević, “Solutions promoted 20 years ago such as coal are still being promoted even though they are not cost effective or environmentally friendly,” she adds. 

Time to change 

While most of the Western Balkan countries, with the exception of hydropower-rich Albania, have a relatively large share of coal in their energy mixes, all ultimately aim to phase out fossil fuels. 

But given the time needed to build alternative power generation facilities, experts warned that a crisis looms in the district heating sector if action is not taken soon. 

Denis Žisko, energy transition coordinator at Aarhus Centre, Bosnia & Herzegovina, expects thermal power plants (TPPs) to be shut down within a decade, not just because of the green agenda but because they will no longer be economically viable as renewables costs fall. 

“Then we will see the problems, especially in towns dependent on TPPs for heating. We have no solution. [Changes] can’t be implemented overnight. Now is the time to start working on these solutions to have systems operating in 10 years’ time with renewable sources to replace TPPs,” he says.  

Such problems have already become apparent in the Bosnian city of Tuzla, home to the huge Tuzla TPP. Žisko says that for 10 years “resources were wasted” because of the efforts – ultimately abandoned – to build Block 7 at the Tuzla thermal power plant. This would also have supplied district heating for parts of Tuzla Canton.

However, according to Žisko, the project was “a fairytale, it was not sustainable and was never going to happen”. 

Now it has been confirmed by the authorities in the Bosnian Federation that the new block will not be built, he says, “we are in a difficult position. The question is how to provide heating for Tuzla which has so many apartments connected to the district heating.” 

Striving for change 

Support from international bodies such as the European Union, through initiatives like the Western Balkan Investment Framework (WBIF) and partnerships with organisations like the European Bank for Reconstruction and Development (EBRD), has already been instrumental in driving renewable heating projects in the region. Projects like the Big Solar Pristina initiative in Kosovo and the capital district heating project in Sarajevo Canton, Bosnia, demonstrate the potential for renewable energy in district heating.

To fully harness this potential, governments must prioritise heating decarbonisation in their long-term strategies, establish ambitious targets for building renovation and renewable heating technologies, and implement financial incentives for energy savings, says the Bankwatch report.

“There is a huge number of cities in the Balkans planning to use renewable sources and optimise their heating systems. [However] to accelerate the shift to renewables they need grants and more favourable legal conditions,” says Kovačević. 

A survey conducted among stakeholders in the region highlighted financial and policy barriers as critical obstacles to scaling up investment in modern district heating and cooling. Addressing these barriers will be essential in accelerating the transition to sustainable energy and achieving climate neutrality by 2050.

Exploring the options 

Municipalities across the region are already exploring the options to green their district heating systems. 

Looking beyond solar and wind power, Bosnia’s Kakanj municipality plans to explore the potential to harness geothermal energy. 

With a population of 37,000, Kakanj has a coal mine and TPP on its territory, albeit a plant dating back to 1956. Moreover, mayor Mirnes Bajtarević tells the briefing, “The district heating in Kakanj is obsolete. It has been operating for 40 years.” 

However, he adds, “Kakanj has an advantage over other municipalities. We have a source of geothermal water here. But we need money and technical assistance to take advantage of this potential source of heating.” 

The terrain of the region poses further challenges. One of the speakers was Radoje Žugić, mayor of Žabljak in Montenegro, which at 1,451 metres above sea level is the highest populated town in the Balkan peninsula. Given the high altitude, the heating season lasts 12 months. 

Since Žugić and his team took office in January 2023, they have renewed efforts to explore alternatives to fossil fuel; most of the heating currently comes from the neighbouring municipality, Plejveia, which has a coal-fired power plant. Overall, consumers using pallets, coal and biomass accounts for 95% of heating. 

Forests at risk 

For now, municipalities that do not use coal to power district heating have often turned to biomass. However, several speakers on the webinar raised concerns about biomass use. 

“There is pressure to build huge plants that will be using forest biomass. 30 new plants are planned, of sizes between 10 MW and 50 MW, the majority in Bosnia and Serbia,” says Kovačević. 

“The forecasts are quite worrying because there is not a sufficient amount of secondary biomass collected, which means health trees will be cut in the future.” She adds that investing in huge biomass plants is not cost-effective given the increase in prices in the market for pellets. 

“Forests are being destroyed … cutting of trees and forests is not in line with the direction we try to take, and that is a net-zero society,” adds Žisko. 

He also spoke out against plans for waste to energy incinerators, saying these are not in line with the circular economy. 

“This is not circular because you use once use and then incinerate, then have to extract more oil to produce plastic. It's high time to leave behind that obsolete way of thinking. Let's not be cave people using fire and incinerating something,” he adds. 

“We have to start thinking seriously about sustainable solutions for sustainable heating.” 

Žisko also stresses the importance of energy efficiency to reduce the quantities of energy needed for heating. As well as, for example, making buildings more energy efficient, Žisko points to one very simple change that is needed in Tuzla. 

“People are wasting energy in Tesla. They are turning on heating but they open the window. We have to start thinking about energy as something that is not cheap,” he says. 

Bajtarević makes a similar point; “In Kakanj, we have the same problem as Tuzla; if apartments are overheated, we open the windows. We have not sufficiently raised awareness to [persuade people to] save some energy.”

The consequences of the continued use of coal power, and slow efforts on raising energy efficiency go beyond the financial.  “We paid the price with our health,” says Žisko. “The pollution is killing people.”