EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР : EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР EU - Russian relationship in DHS improvement Presentation by
Sergei Kishchenko
Senior Expert for Electricity
EU-Russia Energy Dialogue
Technology Centre, Moscow
Slide2 : Energy Dialogue EU – Russia
Introdaction of EU - Russia Technology Centre
District Heating in RF
Conclusion EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР
Overview : Mutual dependency of EU-Russia energy relations
Energy Strategies to 2020
EU-Russia Energy Dialogue
Background and objectives
Progress to date EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР Overview A
Importance of EU-Russia energy relations : Russia
energy sector contribution to GDP approx 25%
energy sector provides approx 50% of federal budget revenues
energy exports: 45% of Russia’s exports go to EU EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР Importance of EU-Russia energy relations A
Importance of EU-Russia energy relations : oil exports to the EU: 53% of oil exported
gas exports to the EU: 36% of gas exported
EU
21% of net oil imports from Russia (16% of EU total cons.)
41% of gas imports from Russia (19% of EU total cons.) EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР Importance of EU-Russia energy relations A
Energy Security: Indigenous energy production (Mtoe) : Energy Security: Indigenous energy production (Mtoe) Europe (EU-25) Russia 67.5 % EU-25 external energy dependency by 2030! Sources: Russian Federation : Russia’s strategy until 2020, European Commission : trends to 2030 EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР A
Energy Security: Energy imports and exports (in mtoe) : Energy Security: Energy imports and exports (in mtoe) EU Energy Imports Russian Energy Exports Sources: Russian federation : Russia’s strategy until 2020, European Commission : trends to 2030 A
Russia Energy Sector Investment requirements : Russia Energy Sector Investment requirements 2003-2020
Total requirements
€ 606 thousand million Sources : Russian Federation : Russia’s Energy strategy until 2020 and European Commission. A
The Energy Dialogue is born :
Where : The EU-Russia Summit in Paris
When : 30th October 2000
Objective : Extract from the Joint Declaration
« The European Union and Russia have decided to institute, on a regular basis, an energy dialogue which will enable progress to be made in the definition of an EU-Russia energy partnership and arrangements for it. This will provide an opportunity to raise all the questions of common interest relating to the sector, including the introduction of cooperation on energy saving, rationalisation of production and transport infrastructures, European investment possibilities, and relations between producer and consumer countries. The planned ratification of the Energy Charter Treaty by Russia and the improvement of the investment climate will be important aspects in this context.» The Energy Dialogue is born A
Energy Dialogue Overview : Energy Dialogue Overview
The EU-Russia Energy Dialogue
Technology Centre
Role, functioning and main activities
Partners
Projects B
Energy Dialogue Responsibilities : Energy Dialogue Responsibilities For Russia
– Minister of Industry and Energy of the Russian Federation – Victor Khristenko – Co-ordinator: Director of Department, Ministry of Industry and Energy of the Russian Federation – Anatoly Yanovsky
For the EU
– Director-General of Energy and Transport of the European Commission - François Lamoureux
– Co-ordinator: Director - Christian Cleutinx
Regular progress reports to the EU-Russia Summits (Presidents Putin and Prodi) B
EU-Russia Technology Centre Structure : EU-Russia Technology Centre Structure Сonsortium Partners:
EIR Development (Coordinator), Greece
VGB PowerTech, (European Association of Electricity Generating Companies), Germany
IFP Training (French Institute of Petroluem), France
Deutsche Montan Technologie GmbH (coal), Germany
InterSolarCenter, Russia
EREC (European Renewable Energies Council), Belgium
Cooperation Partners include:
EUROGAS, EUROGIF, IFP, LogIT, G&Fint, Hellenic Petroleum, and others. B
EU-Russia Technology Centre Projects : EU-Russia Technology Centre Projects Projects of common interest
are defined by Russian and EU authorities
enjoy high-level political support
decrease perceived risk of project participation for private operators
trigger public co-funding
B
EU-Russia Technology Centre Projects : EU-Russia Technology Centre Projects
The Technology Centre focuses on modern technologies in the following areas:
Oil and gas
Electricity (example: clean coal technologies)
Coal (example: coal preparation, coal bed methane)
Energy Efficiency (example: CO2 heat pumps)
Renewable Energy Sources (example: small hydropower in North Ossetia, peat fired power plant) B
Attracting funds from banks, international financial organizations and industrial partners for implementing oil and gas projects in Russia (II) : Attracting funds from banks, international financial organizations and industrial partners for implementing oil and gas projects in Russia (II) Project Funding in the Oil and Gas Sector
Modernization of refineries to increase output of light oil products
Strategic environmental evaluation of projects on oil production, pipeline transportation and construction of loading terminals
Creation of transport infrastructure and regulated access to gas transportation network
Strengthening regional cooperation in the context of energy carriers transportation
B
DISTRICT HEATING IN RUSSIAN FEDERATION: C1. STATE OF THE ART Some indicators : (sources: A.Nekrasov, I.Leonov, I. Bashmakov, others) : DISTRICT HEATING IN RUSSIAN FEDERATION: C1. STATE OF THE ART Some indicators : (sources: A.Nekrasov, I.Leonov, I. Bashmakov, others) 43 % of all fossil fuel resources were used for heat production
share of the large city with DH – 90 % EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР C
Slide17 : annually saving using DH 20 mill tonn equivalent fuel (7000 kcal/kg)
number combined heat and power plants- 485
RAO EES Rossii CHPs- 242
centralized DHS generate more than 70 % of the total heat, decentralized sector – 27-28 % (boiler plants – 1/3, individual heat generators-2/3) EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР C1
Slide18 : Large boilers >190000
Individual heat generators and boilers >600000
Heat networks 183300 km EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР C1
Slide19 : as compared to 1990 the heat production was reduced by 20%
heat production from CHP was reduced by 34 % (252 Mill. Gcal)
heat production from boilers was increased by 52 Mill. Gcal) EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР C1
Slide20 : fuel efficiency of the Russian DHS is 71-72 %
heat tariffs, average 14 $/Gcal (range 8-300 $/Gcal)
heat sales – 30 bln $ EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР C1
EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР : EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР
EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР : EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР
EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР : EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР
EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР : EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР
EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР : HOUSING AND COMMUNAL SECTOR
155 billion roubles is bill receivable (share of the inhabitants nonpayment – 22%)
200 billion roubles is bill paybable (60% debts to energy and water producers)
65 % of communal enterprises are bankrupt
The average level of payment – 82,5% EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР C2
POLICY ISSUES : POLICY ISSUES State left the Russian DH transferred it to the municipal level not establishing the legislative & organizational mechanisms to provide the reliable DH
The lack of a clear policy toward DH has led to problems of the sector EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР C3
Slide27 : Policy at the present time:
state is afraid to touch DH
socialist principle “work worse-get more”
is focused on “producer side”
In transition economies countries policy is focused on the technology modernization + investment attraction EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР C3
Slide28 : Policy should be changed and should be focused on “consumer side” and quality but not forgotten with the balancing supply and demand rights
The Russian law “District Heating” which is under consideration
consumer side priority
quality of DH and responsibility of DHC
a new types of a contracting
transparency
EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР C3
Slide29 : Policy and regulatory framework should manage of incentives of the DH players
First expierence of the private companies which have came to DH showed that private business would like to be a mini-state when it deals with monopoly sectors EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР C3
Technical problems : Technical problems Heat sources
high specific fuel consumption
accumulated depreciation (more than 30-40%)
shortage of both metering fuel consumption and heat generation
lack of regular boiler tuning EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР C4
Slide31 : poor quality of water preparation system
production of the electricity at CHP on the basis of condensate regime- 12-13 % of the total electricity production- sourse of the tariff rising
boilers with capacity more than 100 Gcal/h:
1990 (n=921, Nav=204 Gcal/h)
2003 ( n=628, Nav=316 Gcal/h)
EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР C4
Slide32 : Heat supply networks
municipal heat network is ab. 70% of the total length
actual losses in 70% of heat supply systems are in the range of 20-70%
expensive maintaining of heat supply networks – about 50% of total DHS costs
excessive centralization in 75% of DHSs EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР C4
Slide33 : low replacement rates: only 2% of pipes are replaced every year, while the replacement need is 5-8%
critically low level of physical reliability of heat networks and high frequency of failures
1980---0.1 accidents/km/year
2003---3-5 accidents/km/year
high leakage ratio
lack or low quality of insulation. EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР C4
Heat consumers : Heat consumers consumers don’t determine the quality and quantity of product they buy and to negotiate price
substantial overbilling for heat, which was never delivered. Just for indoor heat released by appliances and residents households are billed extra 20%
low heat meters and regulation devices (below 10%) EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР C4
Slide35 : low flat-level water consumption meters saturation rate (below 10%), and frequent inability to use those already installed. In Moscow alone over 400,000 water meters are installed, but residents are not billed based on meter readings
lack of incentives to improve energy end-use efficiency, given lack of metering. EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР C4
Financing : Financing INVESTMENT, TARIFFS
HS and demand market have potential for energy efficiency improvement – 50 bill.$ for 10 years
Presently only 500 mill.$ are invested in heat supply modernization EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР C5
Slide37 : low tariffs for fuel lead to low tariffs for heat which don’t cover the production cost
“cost +” tariff system doesn’t stimulate to reduce costs
the higher tariff – the lower efficiency, in other words the lower efficiency defines the higher tariff
cross-subsidies – wrong signals for customer and investor EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР C5
EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР : there is no other way out – effective market should be established with state regulation which manages the stimulus of the players
market consumer should appear which buy not abstract Gcal but concrete service (quality, comfort, etc.): heat consumer transmute to heat buyer
rejection from “cost+” system to “upper +” one: tariff should be structured to provide efficiency, not higher costs
before investment - planning and energy concept should come EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР WHAT TO DO C6
EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР : but it’s necessary to reform all sectors (electricity, gas) to avolid market inbalances
EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР WHAT TO DO C6
EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР : Russian literary hero O. Bender: “West help us”
How?
Russian side could take from EU expierence in the field of :
effective management
energy planning
it’s very important to estimate correctly heat load in future f e EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР C7
EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР : successful policy regulatory framework
using of the modern technologies
please add …
but international assistance cannot replace effective national hard daily routine for the long period of time EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР C7
Slide42 : D. Conclusion
Thank You!
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http://europa.eu.int/comm/energy/russia/index_en.htm EU-Russia Energy Dialogue TECHNOLOGY CENTRE Энергетический диалог Россия-ЕС ТЕХНОЛОГИЧЕСКИЙ ЦЕНТР