heat subsidy shift program in russia william u. chandler director aisu, pnnl, usa presented at u.s....
TRANSCRIPT
![Page 1: Heat Subsidy Shift Program in Russia William U. Chandler Director AISU, PNNL, USA Presented at U.S. Baltic Power Sector Investment Seminar. Vilnius, February](https://reader034.vdocument.in/reader034/viewer/2022051417/56649cf95503460f949cada6/html5/thumbnails/1.jpg)
Heat Subsidy Shift Program in Russia
William U. ChandlerDirector AISU, PNNL, USA
Presented at U.S. Baltic Power Sector Investment Seminar. Vilnius, February 3-4, 2000
![Page 2: Heat Subsidy Shift Program in Russia William U. Chandler Director AISU, PNNL, USA Presented at U.S. Baltic Power Sector Investment Seminar. Vilnius, February](https://reader034.vdocument.in/reader034/viewer/2022051417/56649cf95503460f949cada6/html5/thumbnails/2.jpg)
Major Problems of Heat Supply: Boilers
• Lack of financing and low fuel stocks
• Shortened heat supply season and lowered temperatures
• Absence of fuel and heat metering
• Shortage of qualified boiler personnel
![Page 3: Heat Subsidy Shift Program in Russia William U. Chandler Director AISU, PNNL, USA Presented at U.S. Baltic Power Sector Investment Seminar. Vilnius, February](https://reader034.vdocument.in/reader034/viewer/2022051417/56649cf95503460f949cada6/html5/thumbnails/3.jpg)
Major Problems of Heat Supply: Networks
• High degree of wear
• Frequent failures
• Heat waste and leaks
• Insulation breaks and heat losses
• Disruption of efficient hydraulic regimes
• Multiplicity of owners
![Page 4: Heat Subsidy Shift Program in Russia William U. Chandler Director AISU, PNNL, USA Presented at U.S. Baltic Power Sector Investment Seminar. Vilnius, February](https://reader034.vdocument.in/reader034/viewer/2022051417/56649cf95503460f949cada6/html5/thumbnails/4.jpg)
Major Problems of Heat Supply: Public Buildings
• Shortage of funds to pay for heat services
• Poor quality of heat supply• Lack of heat meters• Poor building insulation and
maintenance• Lack of qualified personnel• Lack of financing to improve
facilities’ energy efficiency
14 deg C indoor
temperature
Magadan
OSProf. 3
>-5.1°C
<-15.0°C
-14.0
-12.0
-10.0
-8.0
-6.0
![Page 5: Heat Subsidy Shift Program in Russia William U. Chandler Director AISU, PNNL, USA Presented at U.S. Baltic Power Sector Investment Seminar. Vilnius, February](https://reader034.vdocument.in/reader034/viewer/2022051417/56649cf95503460f949cada6/html5/thumbnails/5.jpg)
Why Subsidies?• Salaries and pensions average only
$100 and $20 per month• High fuel-labor cost ratio• Zero technical price elasticity (no
meters, no valves)• Complicated building ownership
structure• Political tool in election years
![Page 6: Heat Subsidy Shift Program in Russia William U. Chandler Director AISU, PNNL, USA Presented at U.S. Baltic Power Sector Investment Seminar. Vilnius, February](https://reader034.vdocument.in/reader034/viewer/2022051417/56649cf95503460f949cada6/html5/thumbnails/6.jpg)
Heat Subsidies Share In Municipal Budgets: from 10 to 35%
0
5
10
15
20
25
30
35
40
%
![Page 7: Heat Subsidy Shift Program in Russia William U. Chandler Director AISU, PNNL, USA Presented at U.S. Baltic Power Sector Investment Seminar. Vilnius, February](https://reader034.vdocument.in/reader034/viewer/2022051417/56649cf95503460f949cada6/html5/thumbnails/7.jpg)
Program Structure
• Regional legislation and policy• Boiler house efficiency improvement• Heat distribution system modernization• Public buildings retrofits• Residential building metering and efficiency• Buildings Thermal Performance Standards• Monitoring and verification systems
![Page 8: Heat Subsidy Shift Program in Russia William U. Chandler Director AISU, PNNL, USA Presented at U.S. Baltic Power Sector Investment Seminar. Vilnius, February](https://reader034.vdocument.in/reader034/viewer/2022051417/56649cf95503460f949cada6/html5/thumbnails/8.jpg)
Program Development Process
1. Reach agreement with city administration
2. Collect and analyze data
3. Develop efficiency projects
4. Analyze economic and financial aspects
5. Identify financial options
6. Suggest policy solutions
7. Prepare feasibility study
8. Discuss options with city officials and potential lenders
9. Develop business plan
10. Organize project management and monitoring systems
![Page 9: Heat Subsidy Shift Program in Russia William U. Chandler Director AISU, PNNL, USA Presented at U.S. Baltic Power Sector Investment Seminar. Vilnius, February](https://reader034.vdocument.in/reader034/viewer/2022051417/56649cf95503460f949cada6/html5/thumbnails/9.jpg)
Boiler-house efficiency
Improve management (data collection, certification & regulation of heat tariffs)
Equip boiler-houses with fuel and heat meters
Modernize boiler-housesSwitch to gas
![Page 10: Heat Subsidy Shift Program in Russia William U. Chandler Director AISU, PNNL, USA Presented at U.S. Baltic Power Sector Investment Seminar. Vilnius, February](https://reader034.vdocument.in/reader034/viewer/2022051417/56649cf95503460f949cada6/html5/thumbnails/10.jpg)
Heat distribution system modernization
Meter heat provided by electric utilities and enterprises
Modernize heat distribution systemUpgrade heating points and pump-housesProvide distribution system diagnostics
and operations feedback
![Page 11: Heat Subsidy Shift Program in Russia William U. Chandler Director AISU, PNNL, USA Presented at U.S. Baltic Power Sector Investment Seminar. Vilnius, February](https://reader034.vdocument.in/reader034/viewer/2022051417/56649cf95503460f949cada6/html5/thumbnails/11.jpg)
Energy efficiency in public buildings
• Building certification
• Energy audits
• Metering
• Thermal efficiency improvements
• Electrical efficiency improvements
![Page 12: Heat Subsidy Shift Program in Russia William U. Chandler Director AISU, PNNL, USA Presented at U.S. Baltic Power Sector Investment Seminar. Vilnius, February](https://reader034.vdocument.in/reader034/viewer/2022051417/56649cf95503460f949cada6/html5/thumbnails/12.jpg)
Conducted All Over the Russian Federation
Cheliabinsk Izevsk
Yu.-Sakhalinsk Zheleznogorsk
![Page 13: Heat Subsidy Shift Program in Russia William U. Chandler Director AISU, PNNL, USA Presented at U.S. Baltic Power Sector Investment Seminar. Vilnius, February](https://reader034.vdocument.in/reader034/viewer/2022051417/56649cf95503460f949cada6/html5/thumbnails/13.jpg)
Shaking the Money Tree
• Subsidy shift--from fuel to capital
• Oblast budgets and regional efficiency funds
• Heat supply company investments
• Russian, foreign, and multilateral banks
• Consumer expenditures
25%
7%
2%16%
40%
10%
Loan Energy efficiency fund
Oblast budget City budget
Heat supply companies Population
![Page 14: Heat Subsidy Shift Program in Russia William U. Chandler Director AISU, PNNL, USA Presented at U.S. Baltic Power Sector Investment Seminar. Vilnius, February](https://reader034.vdocument.in/reader034/viewer/2022051417/56649cf95503460f949cada6/html5/thumbnails/14.jpg)
The CENEf Subsidy Shift Mechanism
• Maximizes use of internal city financial resources
• Avoids additional tax burden and tariff increases
• First case: In 1997, Kostroma re-allocated $1.2 million to new budget item, “Energy conservation program”
• Replication: Many Russian cities now use the subsidy shift mechanism
![Page 15: Heat Subsidy Shift Program in Russia William U. Chandler Director AISU, PNNL, USA Presented at U.S. Baltic Power Sector Investment Seminar. Vilnius, February](https://reader034.vdocument.in/reader034/viewer/2022051417/56649cf95503460f949cada6/html5/thumbnails/15.jpg)
Costs and Benefits: 15 Cities
Annual heat subsidies 210 million $US
Total recommended six-year investment
340 million $US
Estimated annual savings 105 million $US
![Page 16: Heat Subsidy Shift Program in Russia William U. Chandler Director AISU, PNNL, USA Presented at U.S. Baltic Power Sector Investment Seminar. Vilnius, February](https://reader034.vdocument.in/reader034/viewer/2022051417/56649cf95503460f949cada6/html5/thumbnails/16.jpg)
Savings Monitoring and Verification
• CENEf developed monitoring and verification systems for three Russian cities
• Each locality requires specific modifications in municipal budget planning, heat supply contracts, and program design
• These systems permit loan repayment from savings and to account for a balance between shifted subsidies and program savings.
![Page 17: Heat Subsidy Shift Program in Russia William U. Chandler Director AISU, PNNL, USA Presented at U.S. Baltic Power Sector Investment Seminar. Vilnius, February](https://reader034.vdocument.in/reader034/viewer/2022051417/56649cf95503460f949cada6/html5/thumbnails/17.jpg)
Ending Financial Eclipse
The Subsidy Shift Program:
• Eases municipal budget crisis
• Improves utility balance sheets
• Reduces economic waste
• Mitigates greenhouse gas emissions--as a side effect
Last Eclipse of the Millennium (Photo: W. Chandler)Last Eclipse of the Millennium (Photo: W. Chandler)