12th International Symposium on District Heating and Cooling

The <strong>12th</strong> <strong>International</strong> <strong>Symposium</strong> on District Heating and Cooling,September 5 th to September 7 th , 2010, Tallinn, EstoniaWhile energy service companies are expanding inthe commercial building energy conservationarena, they have not yet entered the CHP/DHCarea. There is some room for these types of thirdpartyplayers to come up with innovative means tofinance projects.TECHNICAL BARRIERSWhile CHP/DHC are proven, existing technologies thatdo not require major research and development, thereare some advanced technologies that could beintroduced from IEA Member Countries to improveefficiency and operational benefits. In addition, there iscurrently some debate about the relative merits of DCtechnology. China-specific research studies could beconducted to confirm the primary energy conservationperformance of these technologies.ORGANIZATIONAL BARRIERSThere are some organizational barriers for optimaldevelopment as well.Scattered organizations with several heat suppliersand distributors prevail in one city. In the same DHsystem, the heat supplier is responsible foroperation and maintenance until the groupsubstations that serve several buildings throughthe secondary network, and the distributors beingresponsible from the substations to the indoorheating elements. Therefore, the holisticoptimization can be often compromised by partialoptimizations.The DHC companies are operation andmaintenance companies only, whereas investmentdecisions and financing depends on the municipaland provincial budgets. This is one more reason forthat there is little business minded atmosphere inthe extensively staffed DHC companies.2.4. Current ActivitiesThe DH systems are expanding fast in China,simultaneously restricting coal consumption andreducing overall GHG emissions of the heatingservices.The Ministry of Construction has issued the Housingand Building Reform on Energy Efficiency (HRBEE),which requires more efficient buildings to be built aswell as introduction of heat metering and consumptionbased billing. The first consumption based billing pilotwas initiated in Tianjin a few years ago with a two-tierheating tariff. Such billing systems are slowlyexpanding to other regions.3. Ukraine3.1. Status of DHCUkraine is one of the largest DH countries in Europe.Currently almost 80% of urban housing is supplied withDH through extensive grids of hot water pipes.The DH sector is rather saturated, but in some eastern(Donbas) cities the DH systems are deteriorating fast,and customers are either adopting apartment level gasboilers or even remain without heating, thus enjoyingon the heat losses penetrating to them through wallsfree of charge from their heated neighbours. Even themunicipalities are offering investment subsidies to theapartment owners to purchase apartment level gasboilers while disconnecting the DH services.Such practices have led to extremely poor quality ofDH services: low water and room temperatures a wellas periodical heating are used to minimize fuel costs.There are coal (and anthracite) mines in Ukraine, butlittle used for providing fuel for DH: Most DH is basedon natural gas imported from Russia. The costs of gascomprise 50–70% of the DH, which explains why theDH is vulnerable to gas price changes.Ukrainian heat generating facilities are ineffective formany reasons. The most important reasons are asfollows:technology used for heat generation is outdatedand inefficient;key assets are heavily deteriorated;equipment is being used in a switching mode onunspecified fuel;delays and failures to carry out regular repairs.According to the Ministry of Fuel and Energy, morethan 90% of energy units have worked out theirprojected service life (100 000 hours), more than 60%have been in service longer than 200 000 hours.Heat tariff for final consumers is defined as a sum oftariffs for production, transportation and supply.Tariffs for heat that is produced by CHPs, cogenerationor alternative/renewable energy sources areset by the National Energy Regulatory Commission(NERC) but they should not be higher than heatproduced by other sources.Tariffs for heat production, transportation and supplyother than CHPs, co-generation or alternative/renewable energy sources are approved by localgovernments. Due to that the tariffs differ much acrossthe territory of Ukraine.According to the Law of Ukraine ―On Heat Supply‖,heat tariffs should cover all the economically soundexpenses for heat production, transportation andsupply. Tariffs should include full costs of heat218