Prague

Igor BashmakovRussiaDistrict Heating Capacity and Demand In Russia Policy Approaches for Improvement District Heating Policy in Transition EconomiesIEA/OECD Seminar. Prague, February 22-24, 2004: 

Igor Bashmakov Russia District Heating Capacity and Demand In Russia Policy Approaches for Improvement   District Heating Policy in Transition Economies IEA/OECD Seminar. Prague, February 22-24, 2004

Russian District Heating Indicators: 

Russian District Heating Indicators

Fuzzy image of Russian Heat Balance. 2000-2001 (million Gcal). Supply side : 

Fuzzy image of Russian Heat Balance. 2000-2001 (million Gcal). Supply side

Russian Heat Balance. 2000-2001 (million Gcal). Demand Side: 

Russian Heat Balance. 2000-2001 (million Gcal). Demand Side

Heat supply systems design problems: 

Heat supply systems design problems Substantial supply overcapacity; Excessive estimates of consumers’ heat loads; Excessive centralization of DHSs; Low density of heat loads and corresponding high level of loses in networks; Lack of heat supply parameters regulation; Absence of effective cost allocation procedures and misleading indicators for investment decisions to rehabilitate different parts of DHSs; Clear dominance of reliability criteria in assessing DHS managers performance; Lack of incentives to improve efficiency and shortage of qualified personnel especially in small-scale

Installed heat capacity surplus (shortage) for the sample of 210 local DHSs (assuming normal capacity reservation 35%): 

Installed heat capacity surplus (shortage) for the sample of 210 local DHSs (assuming normal capacity reservation 35%)

Heat losses in the DHSs as a function heat load density (sample of 190 Russian DHSs): 

Heat losses in the DHSs as a function heat load density (sample of 190 Russian DHSs)   High heat supply centralization efficiency zone Marginal heat supply centralization efficiency zone Effect of low heat supply networks maintenance quality

Heat sources operation faces a long list of problems: 

Heat sources operation faces a long list of problems High specific fuel consumption; Shortage of both metering fuel consumption and heat generation; Low remaining life time of equipment; Lack of regular boilers tuning; Low fuel quality leading to burner failures; Insufficient possibilities to regulate heat supply parameters; Lack or poor quality of water preparation systems; High fuel costs; Shortage and low quality of personnel

At the heat transportation stage additional problems are appearing: 

At the heat transportation stage additional problems are appearing Actual losses in 70% of heat supply systems are in the range of 20-70% (see Fig. 2); Expensive maintaining of heat supply networks – about 50% of total DHS costs; Excessive centralization in 75% of DHSs; Low replacement rates: annually only 2% of pipes are replaces while 5-8% are required; Critically low level of heat networks physical reliability and high frequency of failures – 0.6-4 accidents/km/year; High leakages ratio, lack and low quality of insulation; Failure to provide required hydraulic regimes and temperature schedule. So buildings are as a rule either overheated or under-heated

Consumer’s behavior at the heat market is poorly known: 

Consumer’s behavior at the heat market is poorly known Uncertainty with the product on sale; Deprivation of households “market rights” to determine the quality and quantity of product they buy and to negotiate price; Substantial over billing for heat, which was not delivered; Low heat meters and regulation devices saturation rate (below 10%); Low flat-level water consumption meters saturation rate (below 10%) Poor insulation of buildings and insufficient development of services to weatherize flats and houses; Lack of incentives to use energy more efficiently for not metered consumption; Limits in ability and willingness to pay for escalating energy cists and strong opposition to any price increase.

Limits of purchasing power: Bashmakov’s wing: 

Limits of purchasing power: Bashmakov’s wing Threshold 2: rigidity of collecting payments actions brings no results Threshold 1: collection rate starts declining  

Heat costs and tariffs : 

Heat costs and tariffs DHS companies are evaluated mainly on reliability of heat supply irrespective costs. Those costs are in the range from 8 to 300 US$ per Gcal.; Cross-subsidies send wrong signals to customers and investors; Costs to generate and to transport heat are as a rule not allocated; I allocated costs to transport heat in many DHS exceed generation costs; In many DHS fuel efficiency improvement is not a crucial factor for general DHS efficiency improvements due to low - 10-25% - share of fuel costs; Effective system to control costs does not exist as well as build-in cost reduction motivation

Ten steps to reform Russian DHS markets : 

Ten steps to reform Russian DHS markets Mandatory formation of a sustainable municipal energy plans; “Menu” of well designed heat market models to select from; Regional and municipal heat supply reliability and efficiency standards; Transition, where is necessary, to accounting for really consumed and metered heat, gas and water, and to more accurate norms for consumers not equipped with meters: Transforming heat consumer to heat buyer by setting association of communal services payers (ACSePs) and attract ESCOs at competitive basis to provide heat comfort to ASERS with least costs;

Ten steps to reform Russian DHS markets: 

Ten steps to reform Russian DHS markets Launching “profits-form-savings” mechanisms to generate revenue source to repay DHS rehabilitation investments; Providing more operational freedom to DHS companies; Elimination of cross-subsidies and setting right price signals to inspire the rational level of DHS centralization; Transition form the “cost plus” principle to sustainable “upper limits” tariffs given transparent correction rules set by “pricing formula”; Development of powerful information instruments: “IKEA-like” prefabricated technical and managerial guidelines.