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The Macedonian Geothermal Association has prepared a list of eight projects for expansion and rehabilitation of the existing geothermal schemes in Macedonia, mainly for use of geothermal heat in greenhouses and for space heating. The projects appear to be financially viable (pay-back time less than seven years) but many face substantial institutional problems (e.g. public ownership of the near-bankrupt spas that own the existing boreholes).

ESM is interested in developing a measurement program to determine the potential for wind energy in Macedonia. Such a program would need to be put in place before it would be possible to estimate the financial viability of wind power in Macedonia.

In Kavadarci, center for the wine production in Macedonia, there is interest in projects to prepare fuel briquettes from vineyard waste. The project sponsors have calculated that at current energy prices such a project would have a pay-back time of five to six years. Several other options for biomass use exist.

Removing barriers for use of these renewable energy supply options would increase the supply from indigenous energy sources, create local employment options and mitigate the adverse environmental impact of energy production. The World Bank will assist the GOM in the removal of barriers for renewable energy as part of the new GEF project.

District Heating

District heating in Macedonia is largely confined to Skopje14, where there is currently 487 MW of hot water generation capacity and 26 MW of steam capacity. Annual heat production is around 685 GWh, predominantly for residential and commercial consumers. System losses of around percent are not unduly high by regional standards, although there may be scope for economically viable loss reduction projects.

A study carried out by Exergia for the Government of Macedonia suggested that scope for extending the Skopje district heating network is limited. Potential for improved performance of the district heating sector in Skopje will depend largely on the economic viability of the proposed CHP plan (discussed above). A viable CHP plant would allow lower cost supply heat supply as the plant would supply the district heating network with most of the costs of producing the heat paid by the electricity consumers.

Exergia also assessed the scope for district heating outside Skopje. Based on pre feasibility studies carried out for six cities in Macedonia, two of these – Bitola and Kocani - were identified as preferred candidates for district heating projects. Feasibility studies for two projects were carried out by Exergia. The studies suggested that positive economic returns would yield from investments of the order Euro 6 million in Bitola and Euro 6 million in Kocani. Noting that the small project sizes may be an obstacle to securing of finance, one option would be to roll district heating in to wider municipal investment programs; financing could then be sought on a consolidated basis (i.e. for the program as a whole rather than individual projects).

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