Bioenergy association of Ukraine appealed to the Vice-prime minister  Gennadiy Zubko on the necessity of correcting the Concept for the implementation of the state policy in the heat supply sector, introduce to public discussion on January 31, 2017. UABio experts looked through and analyzed the document and agree with the topicality and necessity of the problem issues, risen in the Concept. The proposed Concept is generally positive for the existing heat supply system, since foresees, in particular, the following:

  • review and improvement of the tariff policy, the introduction of incentive regulation;
  • improvement of payment discipline on payment for centralized heating and hot water supply;
  • improving the system of payments between the subjects in this area, including the subsidies;
  • simplification of the procedures for investment projects;
  • reconstruction and modernization of heat supply systems at all stages of the process;
  • improvement of information management software for municipal district heating companies and automation of technological processes;
  • encourage investment in energy saving;
  • development of cogeneration.

In addition, the expected increase in the share of thermal energy from alternative energy sources to 30% in 2025 and to 40% in 2035, for which provided for the strengthening of legislative support in this direction.

Generally, supporting solutions to industry problems, mentioned in the Concept, Bioenergy Association of Ukraine (BAU) considers one of the most effective ways of further development of district heating competitive market introduction of heat energy, meaning thereby above all the development of competition during its production. It is pleasant to note that the Concept has a number of provisions to tackle potentially competitive relationship in the field of heating, including:

  • the negative impact of tariff system "cost plus" is pointed out as a factor that inhibits private investment in the sector and demotivates the producers to reduce costs;
  • a transition to stimulating tariff setting is proposed;
  • it is proposed to allow the privatization of heat energy generation sources;
  • it is proposed to the development of a competitive environment and transition to the market functioning of municipal heating enterprises (2019-2025 years).

According to UABio experts, just the introduction of a competitive market of heat energy is able to raise funds from private investors at least in the area of thermal generation.

Plans to "create" road map "on the possible transfer of settlements from district heating system to independent heating system or to individual (per-apartment) heating" cause concern. In our opinion, the refusal of the district heating significantly reduces the opportunities for the introduction of alternative and renewable energy sources in district heating, most of which could not be implemented in terms of per-apartment heating of apartment buildings (eg, thermal energy production from biomass). It also reduces the opportunities of co-generation, the development of which, according to the Concept is one of the priorities.

In general, the rejection of district heating, particularly if it actually exists in a certain territory, requires a comprehensive justification with analysis of the positive and negative aspects, including issues such as substantiated estimate of costs for residents in the transition to individual heating, requirements of reliability and safety of service of individual heating and necessary means of preventing injury to users. It is necessary to develop clear criteria for determining the effectiveness of district and other types of heating. At this, the validity of the use of specific values of certain criteria raises doubts, such as linear heat load (MWh / m) used in the reports of some international consulting organizations. This criterion could be applied in case if it was calculated specifically for the conditions of Ukraine, taking into account energy prices, capital and operating costs of implementation and maintenance of various variants of heat supply systems.

Read the UABio letter on completion of the heat supply policy concept in full (in Ukrainian)