1. SEE Energy Poverty Nexus Aleksandar Kovacevic

2. 2 Concept of Affordable Energy compromises: Total social costs of energy that could be covered by productivity gains facilitated by suitable and secure energy supply In a way that the people could conduct economic activity to support Appropriate standard of living for themselves and their families within A healthy environment

3. 3 Energy Use in SEE Countries

4. 4 Energy Indicators for SEE countries

5. 5 Reduction of living space during a Winter period – Kosovo example

6. 6 Fuel wood – main source of space heating in the region For most of population in Serbia, FYR Macedonia, Montenegro, Bosnia & Herzegovina and UNMIK fuel wood is main source of space heating. Residential energy mix in Croatia somewhat different.

7. 7 Average energy consumption per square meter of living space is about 2-3 times greater than in Northern Europe, yet in more than one in four households the amount of heated space per person is below minimum health standards while available heating device is 2-3 times more fuel intensive than usual technical standard

8. 8 Electricity Consumption in Serbia & Montenegro 1995 - 2002 Unsustainable seasonal trends and households electricity consumption

9. 9 Spatial density of fuel wood / lignite burning creates environment problems in dense human settlements. Smaller land plots per household in poor suburbs or villages imply higher density. Note: Map is not accurate with changes in political set up of the region as Montenegro is now separate state while Kosovo is under the UN mandate administered by UNMIK according to UN SC Resolution 1244. The boundaries eventually displayed on the map, does not imply any political or other preferences of the author or any institution or organization. Source: UNDP, 2004

10. 10 Consequences are visible through poverty, social and health surveys: Excessive winter mortality and morbidity Lower working capabilities than actually possible Higher medical and energy expenditures than necessary Lower demand for local goods and services and therefore Limited employment opportunities and Low utilization of available infrastructure and capital Covered by excessive growth of financial intermediation and retailing in terms of GDP share That all creates …

11. 11 Lack of aspirations and capacity to make use of additional resources including social welfare

12. 12 If minimally required comfort of living is to be achieved at 10% of income available to the poor and taking into account limited capabilities to improve international competitiveness of local industries in the short term, there is a need to boost the energy efficiency

13. 13 Intervention to reduce poverty could be structured as follows: Short term intervention to replace heating devices and improve use of fuel: –Provide 320000 efficient stoves to poor households in Bosnia &Herzegovina, Serbia, Montenegro, FYR Macedonia, UNMIK and Albania during 2 years –Provide another 2300000 efficient stoves to not-so-poor households on 24 months lease during next 10 years In longer term provide effective advice to assist clients to use savings for basic improvements in their housing and domestic hot water production Assist SME development to facilitate the process

14. 14

15. 15

16. 16 Costs, time and benefits Direct assistance to Governments to provide efficient stoves to poor – about 100 m Euros. About 70 m Euros in credit facility to finance lease of new stoves to not-so-poor About one year for technology selection and dissemination, training and first installations that might involve about 20 m Euros in credits to local manufacturers to adopt their production lines and administrative costs Another year for actual installations and collection of old stoves, recycling of scrap metal etc.

17. 17 Benefits of direct assistance component only Saving of half of fuel wood (and lignite) from current consumption that gives pay back period of one year at given market value Certain increase in heated space per household member and better comfort with lower health and risk related expenditures Energy equivalent of about 300000toe per year of wood biomass available to replace imported fuels within local institutions Lower electricity bills and some additional employment opportunities as secondary effects

18. 18

19. 19 Housing technical standards …

20. 20 … and long term impact these standards could have

21. 21 Performance Benchmarking System Needed! There is a need for benchmarking system to measure poverty reduction and human development gains against improvements in the energy use Biannual surveys, analyses and comparisons between regions / countries Could strengthen efficiency of intervention, improve governance and add credibility