Providing people and other consumers with district heating (DH) has become of national importance for Ukraine and relates to energy security.To date, there has been a significant reduction in the share of DH. The population is switching to individual or autonomous heating systems. If these negative trends continue, Ukrainian cities may be left completely without DH systems.
We need changes, which provide for the creation and operation of competitive heating systems, as well as ensuring non-discriminatory access to heating networks.
Full text of the letter UABIO № 506 on the introduction of a competitive heat market and amendments to the Law of Ukraine “On Amendments to Certain Laws of Ukraine on the introduction of competition in district heating systems”.
The reasons for the degradation of DH systems:
- lack of a clear state strategic policy for further development of the DH sector;
- wear and tear of heating networks;
- the monopoly position of municipal heat supply organizations in DH systems, the lack of competition with independent heat producers and, as a result, their low interest in improving efficiency, switching to cheaper fuels and reducing the cost of their services;
- the existence of barriers to access to the heating networks for independent heat producers;
- lack / insufficiency of investments as a consequence of imperfection of existing tariff formation mechanisms.
It is possible to overcome the negative trends in DH systems due to the introduction of a competitive heat energy market.UABIO
Bioenergy Association of Ukraine has developed a draft Law of Ukraine “On Amendments to Certain Laws of Ukraine on the introduction of competition in district heating systems” which provides for the creation and operation of competitive heating systems, as well as ensuring non-discriminatory access to heating networks.
- Recognize district heating systems with a combined heat load of consumers exceeding 50 Gcal/h as competitive district heating systems and ensure mandatory annual bidding for the purchase of thermal energy in accordance with the rules provided by the draft Law.
- Create legal preconditions for ensuring non-discriminatory access to heating networks.
- It is necessary to establish separate tariffs for types of activity for economic entities in the field of heat supply, prohibition of cross-subsidization.
- Pass a number of bylaws to ensure the efficient operation of competitive heat supply systems.
Each proposal is substantiated in a letter to the Minister of Energy of Ukraine Olga Buslavets, the Minister of Development of Communities and Territories of Ukraine Oleksiy Chernyshov, Acting Head of the State Agency for Energy Efficiency Konstantin Gura.
UABIO’s position has been prepared, discussed and agreed by UABIO members, who generate more than 50% of all energy from biomass and biogas in Ukraine.