Climate Tech

Climate Change
Climate Technology Initiative

Capacity Building Seminar for
03 CEE/FSU Countries
Climate Technology and Energy
02 Efficiency – Dissemination „Best
Practice“ Experience
- Seminar Proceedings -
Ostritz, Germany, 5 – 9 December 2001
Preparation and Organization by:

PD Dr. Lutz Mez
Sybille Tempel
Michael Krug
Harald Mönch
Katherina Grashof
The Environmental Policy Research Unit (FFU)
Free University of Berlin
Technical Organization by:

Claudia Domel
Heiko Ebeling
Dr. Peter Fischer
Wilhelm Kulke
ITUT
Verein zur Förderung des Internationalen Transfers
von Umwelttechnologie e.V., Leipzig
Editing of the Proceedings:

Harald Mönch
Sybille Tempel
Environmental Policy Research Unit (FFU)
UMWELTBUNDESAMT
The publisher does not accept responsibility for the
correctness, accuracy or completeness of the information,
or for the observance of the private rights of third parties.
The contents of this publication do not necessarily
reflect the official opinions.
Publisher: Federal Environmental Agency (Umweltbundesamt)

Postfach 33 00 22
14191 Berlin
Tel.: +49/30/8903-0
Telex: 183 756
Telefax: +49/30/8903 2285
Internet: http://www.umweltbundesamt.de
Edited by: Federal Environmental Agency

Section I 2.5
Dr. Peter Pichl
Environmental Policy Research Unit

PD Dr. Lutz Mez
Berlin, November 2002

Foreword
Ten years have almost passed since the Rio World Summit. United Nations’ Climate Convention has existed for the
same period of time. International awareness of the negative environmental impacts of air emissions has been grow-
ing. Energy produced by fossil fuels is the main source of the harmful emissions linked to climate change.
Therefore, focus has for a long period been on the creation of a more sustainable supply and use of energy in our
societies. Substantial efforts are needed in energy efficiency and supply of renewable energy. This has been the
main message of several international agreements, also emphasized in the Kyoto Protocol from 1997.
Clearly, it is no longer a question whether policies and measures in energy efficiency and renewable energy should
be implemented. Such policies are indispensable and their introduction should extend far beyond the efforts of a few
dedicated countries.
The climate change challenge is global. World trade is expanding. Energy consuming goods and equipment, as well
as energy itself, are truly international commodities. It is a global task to implement these policies, and it is the re-
sponsibility of all governments, industry, NGOs and other parties.
Sustainable energy solutions and technologies must be part of the rapid transformation of markets and economies.
The benefits to be gained are both economic and environmental, particularly for countries whose economies in tran-
sition offer a historical opportunity for enhanced and sustainable economic growth.
The CTI is an initiative in this direction. By creating an international focus on sustainable technologies and practices,
the CTI is supporting a development in the right direction. Although being a limited effort, CTI has important implica-
tions to the implementation process.
Ture Hammar, Representative of the Danish Presidency of CTI

Table of Contents
Seminar Program I
List of Participants V
List of Abbreviations XIV
Welcome Address on Behalf of the CTI Chairman 1
Ture Hammar
CTI Presidency
Welcome Note 4
Dr. Hanns-Joachim Neef
International Energy Agency, Paris
Results of the Last Ostritz Seminar in 1999 6

Dr. Jürgen Landgrebe
Federal Environmental Agency, Germany
U.S. Climate Change Policy 8

John P. Millhone
U.S. Department of Energy
Lessons Learned in Technology Deployment 10

Dr. Hanns-J. Neef Hans Nilsson Clas-Otto Wene
International Energy Agency
Municipal Climate Protection 16

Gotelind Alber
Klima-Bündnis - Alianza del Clima e.V.
Climate Alliance of European Cities with Indigenous Rainforest Peoples
Energy and Carbon Intensities in Central Europe: A Decade of Transition in Review 22

Diana Ürge-Vorsatz László Poizs
Central European University Budapest, Hungary
The German Energy Agency as a Partner for Energy Savings in CEE and FSU 25
Kristina Steenbock
German Energy Agency
Overview of Biomass Use for Energy in Poland 28

Prof. Piotr Kowalik
Politechnical University of Gdańsk
Faculty of Environmental Engineering, Department of Sanitary Engineering
Biomass Use in Germany 36

Peter Schrum
farmatic biotech energy ag, Germany
Economical Growth Potential of Energy Biomass Use in Slovenia 38
Franko Nemac Aleš Bratkovič
ApE – Energy Restructuring Agency, Republic of Slovenia
Biomass Success Stories in Ukraine 49

Dr. Georgiy G. Geletukha
Scientific Engineering Centre "Biomass", Kiev, Ukraine
Biomass CHP Unit in Pfaffenhofen / Germany 56

Volkmar Schaefer
eta-energy consulting, Germany
Biomass Success Stories in Romania 59

Cristian Tantareanu Joan Braga Roxana Funduca
Center for Promotion of Clean and Efficient Energy in Romania-ENERO
Best Practice: The Case of Biomass Utilization 62

Violetta Groseva
Sofia Energy Centre / OPET Bulgaria
Discussant Notes 64
Dr. Villu Vares
Estonian Energy Research Institute / OPET Estonia
EBRD and Energy Efficiency 66

Eric Herman
European Bank for Reconstruction and Development, London
Financial Tools for CEE/FSU Countries 70

Georg Kraft
Kreditanstalt für Wiederaufbau, Germany
Co-Generation and Energy Supply - The Success Story of the Netherlands 73

Gert-Jan Bakker
COGEN, The Netherlands
CHP Policy in Germany 76

Dr. Hans-Joachim Ziesing
Deutsches Institut für Wirtschaftsforschung, Berlin
Design of CHP Incentives - Based on Achievements in Denmark 82

Ture Hammar
Danish Energy Agency
Overview of Slovak Energy Systems Regarding Cogeneration Technologies 89

Ludovít Mikula
Slovak Energy Agency
The Austrian-Slovak Competence Centre for CHP Diffusion 92

Vladimir Hecl
Energy Centre Bratislava / OPET Slovakia
Best Practice: The Case of Combined Heat and Power 93
Violetta Groseva
Thermal Energy Conservation in the Building Sector 96

Dr. Felix Christian Matthes
Öko-Institut, Berlin
Implementation of Thermo-modernization Law in Poland 97

Andrzej Szajner
Baltic Energy Conservation Agency BAPE, Gdańsk, Poland
KfW-Housing Modernization Program 100

Georg Kraft
Best Practice: Thermal Energy Conservation in the Building Sector 102

Tamuna Abazadze
Georgian Operations Tebodin Georgia
Best Practice: Renovation of Heating and Ventilation System in Tbilisi Opera House 104
Paata Janelidze
National Agency on Climate Change at the Ministry of Environment of Georgia
Tamuna Abazadze
Good Energy Efficiency Practices in Bulgaria 106

Dr. Zdravko Genchev
Center for Energy Efficiency EnEffect
The Energy Efficiency Housing Pilot Project in Lithuania 110

Eduardas Kazakevičius
Housing and Urban Development Foundation Vilnius / Lithuania
Regional Networking to Promote EU Accession Process – RENEUER 115

Dr. Zdravko Genchev
Discussant Notes 118

Dr. Igor Bashmakov
Center for Energy Efficiency, CENEf
Prospects of Performance Contracting in CEE Countries 120

Ralf Goldmann
Berliner Energieagentur GmbH
Best Practice: Energy Service Company (ESCO) in Tbilisi (Georgia) 126

Tamuna Abazadze
Main Principles of Activity of Ukrainian Energy Service Company 128
Sergiy Bevz
The State Committee of Ukraine for Energy Conservation
Energy Audits: Lessons Learned in the Czech Republic 129

Jiří Zeman
SEVEn
Rational Energy Use in the Russian Industry 132

Dr. Igor A. Bashmakov
Center for Energy Efficiency CENEf, Russia
Energy Auditing in Estonia 134

Dr. Villu Vares
Estonian Energy Research Institute
Dr. Tiit Kallaste
SEI-Tallinn, Estonia
Efficient Lighting Initiative: Grassroots Approach in Residential Sector in Latvia 137

Dr. Dagnija Blumberga
Riga Technical University
Andra Blumberga
Ekodoma
Ivars Veidenbergs
Riga Technical University
Japanese Industry Efforts for Energy Conservation and Technology Transfer on

Climate Change 142
Prof. Morihiro Kurushima
Faculty of Technology
Tokyo University of Agriculture and Technology
Policy Planning Department NEDO
Leaking Electricity? Standby Power Losses in Bulgarian, Romanian and Hungarian

Residences 144
Prof. Diana Ürge-Vorsatz Kristina Stroukanska Szilard Asztalos
Central European University, Budapest
Really off? Stand-by Campaign by Energy Foundation Schleswig-Holstein, Germany 148

Dr. Holger Krawinkel
Energiestiftung Schleswig-Holstein, Kiel, Germany
The Kyoto Mechanisms 156

Franzjosef Schafhausen
Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, Berlin
CTI Capacity Building Seminar in Ostritz 2001 Recommendations derived from the
seminar discussions 169
Country Report: Armenia 173
Svetlana Ganjumyan
Energy Strategy Center
Country Report: Belarus 179

Vladimir Belochvostov
Deputy Chairman of Minsk City Executive Committee
Dr. Vladimir Kouzmitch
Director of Belarussian Scientific and Industrial Information Centre for Energy Saving “BelVIEC”
Country Report: Bulgaria 185

Violetta Groseva
Director of Sofia Energy Centre
Dr. Zdravko Genchev
Executive Director of the Centre for Energy Efficiency EnEffect
Country Report: Czech Republic 193

Tomaš Vorišek
SEVEn, Czech Republic
Country Report: Estonia 202

Dr. Villu Vares
Estonian Energy Research Institute/OPET Estonia
Dr. Tiit Kallaste
SEI Tallinn
Country Report: Georgia 207

Tamuna Abazadze
Paata Janelidze
National Climate Research Centre
Country Report: Hungary 213

Terez Szabo
Head of Division, Strategic Directorate “Energy Centre”
Prof. Diana Ürge-Vorsatz
Acting Head of Department of Environmental Sciences and Policy of CEU
Country Report: Latvia 220

Prof. Dagnija Blumberga
Riga Technical University, OPET Latvia
Maija Vimba
Ministry of Economy of Latvia
Andra Blumberga
Ekodoma, OPET Latvia
Claudio Rochas
Country Report: Lithuania 227
Housing and Urban Development Foundation
Vygintas Jarašunas
Energy Efficiency Center
Dr. Romualdas Škema
Lithuanian Energy Institute
Country Report: Poland 233

Prof. Piotr Kowalik
Technical University of Gdańsk, Poland
Dr Andrzej Szajner
Country Report: Romania 241

Cristian Tantareanu Roxana Funduca
Center for Promotion of Clean and Efficient Energy in Romania - ENERO
Country Report: Russia 248

Dr. Igor Bashmakov
Center for Energy Efficiency
Country Report: Slovakia 254

Ing. Ludovít Mikula
Cogeneration Centre, Slovak Energy Agency
Ing. Vladimir Hecl
Energy Centre Bratislava
Country Report: Slovenia 261

Darko Hrovatin Mojca Pipan Franko Nemac Aleš Bratkovič
Energy Restructuring Agency ApE
Country Report: Ukraine 270

Sergiy M. Bevz
State Committee of Ukraine for Energy Conservation
Dr. Georgiy G.Geletukha
Scientific Engineering Centre „BIOMASS“
Valentyn Seredyuk
Agency for Rational Energy Use and Ecology
CTI Capacity Building Seminar for CEE/FSU Countries
Climate Technology and Energy Efficiency –
Disseminating “Best Practice” Experience
Organized by
Bundesministerium
für Umwelt, Naturschutz
und Reaktorsicherheit
December 5 – 9, 2001
IBZ Sankt Marienthal
Ostritz, Germany
Seminar Program
Wednesday, December 5, 2001

Afternoon Arrival
Evening 20.00 Welcome Buffet
21.00 Introduction of the seminar participants
Thursday, December 6, 2001

Morning Session Introduction and Welcome
09.00 – 09.30 Welcome and opening address
Dr. Jürgen Landgrebe, Federal Environmental Agency, Germany
Ture Hammar, CTI Presidency, Denmark
John Millhone, US Department of Energy
Dr. Hanns-Joachim Neef, International Energy Agency, Paris
09.30 – 09.45 Results of the last and outlook at this capacity building seminar
09.45 – 10.00 US climate protection policy
John Millhone, US Department of Energy
10.00 – 10.15 Best practices in technology deployment
Dr. Hanns-Joachim Neef, International Energy Agency, Paris
10.15 – 10.30 Municipal climate protection
Gotelind Alber, Klimabündnis, e.V., Germany
II
10.30 – 11.00 Coffee Break

11.00 – 11.20 Joint implementation – institution building and projects
Franzjosef Schafhausen, Federal Environment Ministry, Germany
11.20 – 11.40 Energy and carbon intensities in Central Europe:
a decade of transition in review
Prof. Diana Ürge-Vorsatz, Central European University, Hungary
11.40 – 12.00 The German Energy Agency (dena) as a partner
for energy savings in CEE & FSU
Kristina Steenbock, Deutsche Energie-Agentur GmbH, Germany
12.00 – 12.30 Discussion
12.30 - 13.45 Lunch
Afternoon Session Biomass use

Chair: Dr. Peter Pichl, Federal Environmental Agency, Germany
14.00 – 14.20 Overview of biomass use in Poland
Prof. Piotr Kowalik, Politechnika Gdańska, Poland
14.20 – 14.40 Biomass use in Germany
Peter Schrum, farmatic energy ag, Germany
14.40 – 15.00 Economical growth potential of energy biomass use in Slovenia
Aleš Bratkovič, Energy Restructuring Agency, Slovenia
15.00 – 15.20 Biomass success stories in Ukraine
Dr. Georgiy Geletukha, Scientific Engineering Centre “Biomass”, Ukraine
16.00 – 16.20 Biomass CHP unit in Pfaffenhofen/Germany – power, heat and chill
based on wood chips
Volkmar Schäfer, eta Energieberatung GbR, Germany
16.20 – 16.40 Biomass success stories in Romania
Cristian Mihai Tantareanu, OPET Romania ENERO
16.40 – 17.00 Discussant
Dr. Villu Vares, OPET Estonia, Estonian Energy Research Institute
18.00 – 19.15 Dinner
Evening Session Aspects of financing successful projects
19.30 – 20.00 EBRD and energy efficiency

Eric Herman, European Bank for Reconstruction and Development, London
20.00 – 20.30 Financial tools for CEE & FSU countries
Georg Kraft, Kreditanstalt für Wiederaufbau, Germany
21.00 Tasting regional eco-wines in the wine cellar of the convent
Friday, December 7, 2001

Morning Session CHP as a climate protection technology
Chair: Prof. Piotr Kowalik, Politechnika Gdańska, Poland
Seminar Program III
09.00 – 09.20 CHP policy in the Netherlands

Gert-Jan Bakker, COGEN Nederland
09.20 – 09.40 CHP policy in Germany
Dr. Hans-Joachim Ziesing, German Institute for Economic Research
09.40 – 10.00 CHP incentives in Denmark
Ture Hammar, Danish Energy Agency, Denmark
11.00 – 11.20 The Austrian-Slovak Competence Centre for CHP Diffusion
Ludovít Mikula, Slovak Energy Agency
Vladimir Hecl, OPET Slovakia, Energy Centre Bratislava
Prof. Dagnija Blumberga, OPET Latvia, Ekodoma
12.30 – 13.45 Lunch
Afternoon Session Thermal energy conservation in the building sector

Chair: Dr. Felix Chr. Matthes, Öko-Institut, Germany
14.00 – 14.20 Implementation of the Thermorenovation Law in Poland
Dr. Andrzej Szajner, Baltic Energy Conservation Agency, Poland
14.20 – 14.40 The KfW-Housing Modernization Program.
Experiences with refurbishment of panel buildings in Eastern Germany
Georg Kraft, Kreditanstalt für Wiederaufbau, Germany
14.40 – 15.00 Best practice: Thermal energy conservation in the building sector in
Georgia
Tamuna Abazadze, Tebodin, Georgia
Paata Janelidze, National Climate Research Centre, Georgia
15.00 – 15.20 Good energy efficiency practices in Bulgaria
Dr. Zdravko Genchev, EnEffect – Centre for Energy Efficiency, Bulgaria
16.00 – 16.20 The Energy Efficiency Housing Pilot Project in Lithuania
Eduardas Kazakevičius, Lithuanian Housing and Urban Development Founda-
tion
16.20 – 16.40 Regional networking to promote EU accession process RENEUER
Dr. Zdravko Genchev, EnEffect – Centre for Energy Efficiency, Bulgaria
Dr. Igor Bashmakov, CENEf, Russia
18.00 – 19.15 Dinner
Evening Session ESCOs, energy agencies and third party financing
19.30 – 20.00 Prospects of performance contracting in CEE countries – achieved re-

sults and future strategies
Ralf Goldmann, Berlin Energy Agency, Germany
IV
20.30 – 21.00 Main principles of activity of the Ukrainian Energy Service Company
(UkrEsko)
Sherhiy M. Bevz, State Committee of Ukraine for Energy Conservation
Saturday, December 8, 2001

Morning Session Rational energy use in industry and household appliances
Chair: Dr. Lutz Mez, Environmental Policy Research Unit, Germany
09.00 – 09.20 Energy audits: Lessons learned in the Czech Republic
Jiří Zeman, SEVEn, Czech Republic
09.20 – 09.40 Rational energy use in the Russian industry
Dr. Igor Bashmakov, CENEf, Russia
09.40 – 10.00 Energy auditung in Estonia
Dr. Villu Vares, OPET Estonia, Estonian Energy Research Institute
10.00 – 10.20 Efficient Lighting Initiative – grassroots approach in the residential sec-
tor in Latvia
Prof. Dagnija Blumberga, OPET Latvia, Ekodoma
11.00 – 11.20 Japanese industry efforts for energy conservation and technology
transfer on climate change
Prof. Morihiro Kurushima, NEDO, Japan
11.20 – 11.40 Leaking electricity? Stand-by losses and appliance-related energy effi-
ciency policies in Central Europe
Prof. Diana Ürge-Vorsatz, Central European University, Hungary
11.40 – 12.00 Really off? Stand-by campaign by Energy Foundation Schleswig-
Holstein
Dr. Holger Krawinkel, Energiestiftung Schleswig-Holstein, Germany
12.00 – 12.30 Summary of the seminar and outlook
Afternoon 14.00 Departure for sightseeing tour to the city of Bautzen
Paper-bag lunch on the bus
Evening 20.00 – 23.00 Dinner at Eckberg Castle Hotel and Restaurant, Dresden
Classic Jazz
Sunday, December 9, 2001

Morning 04.00 / 04.30 Bus transfer from Bautzen to Dresden
and 09.30 Possibility for sightseeing and visiting the Christmas market
(Striezel Markt) in Dresden
Departure
List of Participants V
List of Participants
Ms. Tamuna Abazadze Address: 27 Griboedov Str, 2nd floor, apart. 3

Project Coordinator 380008 Tiblisi
Georgia
Phone: +995-32983389
Fax: +995-32983389
E-mail: t.abazadze@tebodin.ge
Ms. Gotelind Alber Address: Galvanistr. 28

60486 Frankfurt/Main
Klimabündnis e.V. Germany
Phone: +49 (0) 69 71 71 39-0

Fax: +49 (0) 69 71 71 39-93
E-mail: g.alber@klimabuendnis.org
Mr. Gert-Jan Bakker Address: Princenhoffpark 7+15+18

Director Postbus 197
3970 Ad Driebergen
COGEN Nederland The Netherlands
Phone: +31 30-693 67 68

Fax: +31 30-693 67 69
E-mail: gert-jan@cogen.nl
Dr. Igor A. Bashmakov Address: Novocheremushkinskaya St., 54, korpus 4
Executive Director 117418 Moscow
Russian Federation
CENEf Centre for Energy Efficiency
Phone: +7-095 120-5147, 913-9526
Fax: +7-095 913-9574
E-mail: cenef@online.ru,
cenef-mailbox@mtu-net.ru
Mr. Vladimir M. Belochvostov Address: 8, F. Skorina avenue
220050 Minsk
Minsk City Energy Efficiency Agency Belarus
Phone: +375 172 27 13 35

Fax: +375 172 27 68 84
E-mail: belviec@minsk.sovam.com
Mr. Sherhiy Bevz Address: Gonty str. 1

04112 Kiyv-112
State Committe of Ukraine for Energy Ukraine
Conservation UKRESCO
Phone: +380 44 4568183
Fax: +380 44 4568183
E-mail s_bevz@hotmail.com
VI
Prof. Dagnija Blumberga Address: Kronvalda Boulvard 1

1010 Riga
Riga Technical University Latvia
OPET Latvia
Phone: +371-9419783
Fax: +371-7089923
E-mail dagnija@parks.lv
Mr. Aleš Bratkovič Address: Litijska Cesta 45

SLO-Ljubljana
Energy Restructuring Agency Ape Slovenia
Phone: +386 1 586 38 70

Fax: +386 1 586 38 79
E-mail: ales.bratkovic@ape.si
Ms. Claudia Domel Address: Euro-Asia Business Center

Messeallee 2
ITUT e.V. 043576 Leipzig
Germany
Phone: +49 341 60 87-248

Fax: +49 341 60 87-210
E-mail: domel@itut.org
Mr. Roman Doubrova Address: Baikalska 27
82101 Bratislava
Energy Centre Bratislava Slovakia
OPET Slovakia
Phone: +421 2 582 48 472
Fax: +421 2 582 48 470
E-mail: office@ec.bratislava.sk
Mr. Heiko Ebeling Address: Euro-Asia Business Center

Messeallee 2
Germany
Phone: +49 341 60 87-204

Fax: +49 341 60 87-210
E-mail: ebeling@itut.org
Dr. Peter Fischer Address: Euro-Asia Business Center
Messeallee 2
Germany
Phone: +49 341 60 87-258

Fax: +49 341 60 87-260
E-mail: fischer@itut.org
Ms. Roxana Funduca Address: 8, Energeticienilor Blvd.
3 Bucharest 79619
OPET Romania ENERO Romania
Phone: +401 3464598

Fax: +401 3464598
E-mail: femopet@icemenerg.ro
aflo@icemenerg.ro
List of Participants VII
Ms. Svetlana Ganjumyan Address: 127 Armenakyan Str.

375047 Yerevan
TACIS Energy Strategy Centre Armenia
Phone: +374-1-65 40 52
Fax: +374-1-52 57 83
E-mail: piuesc@arminco.com
Dr. Georgiy Geletukha Address: P.O.Box 964

Director 03067 Kyiv-67
Ukraine
Scientific Engineering Centre „BIO-
MASS“ Phone: +380 44 446 94 62, 441 7378 (of.),
44 484 8151 (home)
Fax: +380 44 484 81 51
E-mail: geletukha@biomass.kiev.ua
Dr. Zdravko Genchev Address: P.O. Box 85
Executive Director 1606 Sofia
Bulgaria
EnEffect – Center for Energy Efficiency
Phone: +359-2-963 17 14, 963 07 23
Fax: +359-2-963 25 74
E-mail: eneffect@mail.orbitel.bg,
zgenchev@eneffect.bg
Mr. Ralf Goldmann Address: Rudolfstr. 9
10245 Berlin
Berliner Energieagentur GmbH Germany
Phone: +49 30 29 33 30 31
Fax: +49 30 29 33 30 99
E-mail: goldmann@berliner-e-agentur.de
Ms. Katherina Grashof Address: Ihnestr. 22

14195 Berlin
FFU Environmental Policy Research Germany
Unit, Free University of Berlin
Phone: +49 30 838-54491
Fax: +49 30 838-56685
E-mail: k.grashof@berlin.de
Ms. Violetta Groseva Address: 51, James Boucher Blvd, 15th floor
Director 1407 Sofia
Bulgaria
Sofia Energy Centre
OPET Bulgaria Phone: +359-2-96 25 158, 68 35 42
Fax: +359-2-68 14 61
E-mail: ecencentre@enpro.bg
Mr. Ture Hammar Address: Amaliegade 44

1256 Kobenhavn K
Danish Energy Agency Denmark
Phone: +45 33 92 67 00
Fax: +45 33 11 47 43
E-mail: tha@ens.dk
VIII
Mr. Andrej Hanžić Address: Smetanova 17

Faculty of Electric Engineering and 2000 Maribor
Computer Science of the University of Slovenia
Maribor
Phone: +386-(02) 220-7056
Fax: +386 (02) 251-1178
E-mail: andrej.hanzic@uni-mb.si
Mr. Vladimir Hecl Address: Bajkalská 27

82799 Bratislava
Energy Centre Bratislava Slovakia
OPET Slovakia
Phone: +421 7 58 248 472
Fax: +421 7 58 248 470
E-mail: hecl@ecbratislava.sk, office@ecbratislava.sk
Mr. Eric Herman Address: One Exchange Square

London, EC2A 2JN
European Bank for Reconstruction and United Kingdom
Development
Phone: +44 207 338 71 55
Fax: +44 207 338 69 42
E-mail: hermane@ebrd.com
Mr. Paata Janelidze Address: 150a, David Agmashenebeli Ave.

380012 Tbilisi
National Agency on Climate Change Georgia
Phone: +995 32 940 226

Fax: +995 32 941 536
E-Mail: janelidze@caucasus.net
Mr. Vygintas Jarašūnas Address: Gedimino ave. 2/1-28

2600 Vilnius
Energy Efficiency Centre Lithuania
Phone: +370-222-5776
Fax: +370-222-5817
E-Mail: jarasunas@eec.lt
Mr. Eduardas Kazakevičius Address: Juozapaviciaus 9

2005 Vilnius
Lithuanian Housing and Urban Devel- Lithuania
opment Fund
Phone: +370-2-728002
Fax: +370-2-722784
E-Mail: e.kazakevicius@hudf.lt
Dr. Vladimir V. Kouzmitch Address: P.O. Box 154

Director 220002 Minsk
Republic of Belarus
BelVIEC-Energy Centre
Phone: +375-296-02 53 07
Fax: +375-172-20 49 40
E-mail: belviec@minsk.sovam.com
List of Participants IX
Prof. Piotr Kowalik Address: ul. Majakowskiego 11

80-952 Gdańsk
Head of the Department of Sanitary En- Poland
gineering
Politechnika Gdańska Phone: +48 1033 58 347 24 21
Fax: +48 58 347 93 16
E-mail: pkow@pg.gda.pl
Mr. Georg Kraft Address: Palmengartenstr. 5-9

60325 Frankfurt/Main
Central Environment Unit Germany
Kreditanstalt für Wiederaufbau
Phone: +49 69 74 31 28 13
Fax: +49 69 74 31 37 96
E-mail: georg.kraft@kfw.de
Dr. Holger Krawinkel Address: Dänische Str. 3-9

24103 Kiel
ESSH Energy Foundation Germany
Schleswig-Holstein
Phone: +49 (0) 431 98 05-600
Fax: +49 (0) 431 98 05-699
E-mail: h.krawinkel@essh.de
Mr. Michael Krug Address: Ihnestr. 22

14195 Berlin
Phone: +49 30 8385-4491
Fax: +49 30 8385-6685
E-mail: mikrug@t-online.de
Mr. Wilhelm Kulke Address: Euro-Asia Business Center

Messeallee 2
Germany
Phone: +49 341 60 87-222

Fax: +49 341 60 87-210
E-mail: kulke@itut.org
Prof. Morihiro Kurushima Address: Sunshine 60 Bldg., 28th floor
3-1-1 Higashi-Ikebukuro Toshima-ku
NEDO Tokyo 170-6028
Japan
Phone: +81-3-3987-91 68
Fax: +81-3-5391-17 44
e-mail kurushimamrh@nedo.go.jp
Dr. Jürgen Landgrebe Address: Bismarckplatz 1
14193 Berlin
Federal Environmental Agency Germany
I 2,5 Environment and Energy
Phone: +49 30 8903 21 42
Fax: +49 30 8903 29 06
E-mail: juergen.landgrebe@uba.de
X
Mrs. Ruta Landgrebe Address: Bismarckplatz 1

14193 Berlin
Germany
Phone: +49 30 8903 21 42

Fax: +49 30 8903 29 06
E-mail: ruta_trinkunaite@hotmail.com
Dr. Felix Matthes Address: Novalisstr. 10

10115 Berlin
Öko-Institut Berlin Germany
Phone: +49 30 28 40 86-81

Fax: +49 30 28 40 86-88
E-mail: matthes@oeko.de
PD Dr. Lutz Mez Address: Ihnestr. 22

14195 Berlin
Phone: +49 30 838-55585
Fax: +49 30 838-56685
E-mail: umwelt1@zedat.fu-berlin.de
Mr. John Millhone Address: 1000 Independence Avenue, SW

Wadhington, DC 20585
US Department of Energy USA
Phone: +1-202- 586 9275

Fax: +1-202-586 1640
E-mail: john.millhone@ee.doe.gov
Mr. Ludovít Mikula Address: Bajkalska 27

82799 Bratislava
Slovak Energy Agency Slovakia
Phone: +4217-58 24 83 25
Fax: +4217-53 42 10 19
E-mail: ludovit.mikula@sea.gov.sk
Dr. Hanns-Joachim Neef Address: 9, rue de la Fédération

75739 Paris Cedex 15
Head of Energy Technology Collabora- France
tion Division IEA
Phone: +33 14057 6760
Fax: +33 14057 67 59
E-mail: neef@iea.org
Dr. Peter Pichl Address: Bismarckplatz 1

14193 Berlin
Phone: +49 30 8903 2668

Fax: +49 30 8903 3993
E-mail: peter.pichl@uba.de
List of Participants XI
Mr. Aleksandar Prvanović Address: Djušina 7

11000, Beograd
Institute of Hydrogeology Yugoslavia
University of Belgrade
Phone: +381 11 3238- 833-180
Fax: +381 11 3229-751
E-mail: allek@eunet.yu
Mr. Volkmar Schäfer Address: Raiffeisenstr. 19

85276 Pfaffenhofen a.d. Ilm
eta Germany
Energieberatung GmbH
Phone: +49 84 41 49 46 31
Fax: +49 84 41 49 46 40
E-mail: Volkmar.Schaefer@eta-Energieberatung.de
Franzjosef Schafhausen Address: Alexanderplatz 6

11055 Berlin
Bundesministerium für Umwelt, Natur- Germany
schutz und Reaktorsicherheit
Phone: +49 (0) 30 01888 305-23 50
Fax: +49 (0) 01888 305-
E-mail: schafhausen.franzj@bmu.de
Mr. Peter Schrum Address: Kolberger Str. 13

24589 Nortorf
farmatic energy ag Germany
Phone: +49 43 92 91 77-0

Fax: +49 43 92 58 64
E-mail: schrum@farmatic.com
Mr. Valentin V. Serediuk Address: 1 Laboratorny St.

P.O. Box 48
Marketing Manager Kyiv, 01133
Agency for Rational Energy Use and Ukraine
Ecology (ARENA Eco)
Phone: +380 44 268-8088
Fax: +380 44 268 8451
E-mail:: arena@arena.viaduk.net
Dr. Romualdas Škėma Address: 3 Breslaujos str.
3035 Kaunas
Lithuanian Energy Institute Lithuania
(OPET LEI Lithuania)
Phone: +370-7 40 18 02
Fax: +370-7 35 12 71
E-mail: skema@isag.lei.lt
Mr. Nikolay Smirnov Address: Polyustrovsky Prospect 15, Block 2

195221, St. Petersburg
St. Petersburg Energy Centre Russian Federation
Phone: +7-812-327 15-17

Fax: +7-812-327 15-17
E-mail encenter@mail.wplus.net
XII
Ms. Anna Soehl Address: Nador utca 9

1051 Budapest
Hungary
Phone: +36-1-351-3886
Fax: +36-1-327-3031
E-mail e01soa01@ceu.hu
soehla@hotmail.com
Ms. Kristina Steenbock Address: Chausseestr. 128a
10115 Berlin
Deutsche Energie Agentur (dena) Germany
Phone: +49 30 72 61 656-0

Fax: +49 30 72 61 656-99
E-mail: info@deutsche-energie-agentur.de
Ms. Terez Szabo Address: Raday u. 42-44

1092 Budapest
Head of division Hungary
Strategic Directorate “Energy Centre”
Phone: +36-1 456 43 17
Fax: +36-1 456 43 33
E-mail: terez.szabo@energycentre.hu
Dr. Andrzej Szajner Address: Straganiarska 24/27

80-837 Gdańsk
Baltic Energy Conservation Agency Poland
(BAPE)
Phone: +48 58 30 58
Fax: +48 58 30 58 436
E-mail: aszajner@sigma-audyt.gda.pl
Mr. Cristian Mihai Tantareanu Address: 8, Energeticienilor Blvd.

3 Bucharest 79619
OPET Romania ENERO Romania
Phone: +401 3464598

Fax: +401 3464598
E-mail: crit@icemenerg.ro
Ms. Sybille Tempel Address: Ihnestr.22

14195 Berlin
Phone: +49 30 8385 49 90
Fax: +49 30 8385 66 85
E-mail: sytempel@zedat.fu-berlin.de
Prof. Diana Ürge-Vorsatz Address: Nador utca 9

Acting Head of Department 1051 Budapest
Hungary
Central European University Budapest
Dept. of Environmental Sciences and Phone: +36-1-327-3095
Policy Fax: +36-1-327-3031
E-mail: vorsatzd@ceu.hu
List of Participants XIII
Dr. Villu Vares Address: 1, Paldiski Road

10137 Tallinn
Estonian Energy Research Institute Estonia
OPET Estonia
Phone: +372-2-450303/ +372-6-311171
Fax: +372-6-311-570
E-mail villu@eeri.ee
Mr. Milenko Vasović Address: Masarikova 5/VIII

11000 Beograd
Blic Press D.o.o. Yugoslavia
Phone: +381 11 36 19-148, 3325-059

Fax: +381 11 36 19-271
E-mail vasodam@ptt.yu
vasovicm@yahoo
Ms. Maija Vimba Address: Ministry of Economy of the Republic of Lat-
via
Head of Division in Energy Department 55 Brivibas Str., room 519
of the Ministry of Economy of Latvia Riga, LV-1519
Latvia
E-mail: vimbam@lem.gov.lv
Mr. Tomaš Vorišek Address: Slezska 7

12056 Praha 2
SEVEn The Energy Efficiency Centre Czech Republic
Phone:
Fax:
E-mail tomas.vorisek@svn.cz
Ms. Kathrin Werner Address: Bismarckplatz 1

14193 Berlin
Phone: +49 30 8903-23 36

Fax: +49 30 8903-28 90
E-mail: kathrin.werner@uba.de
Mr. Jiří Zeman Address: Slezska 7

12056 Praha 2
SEVEn The Energy Efficiency Centre Czech Republic
Phone: +420-2-2425 2115

Fax: +420-2-2424 7597
E-mail: jirka.zeman@svn.cz
Dr. Hans-Joachim Ziesing Address: Königin-Luise-Str. 5

14195 Berlin
Deutsches Institut für Wirtschaftsfor- Germany
schung
Phone: +49 30 897 89-683
Fax: +49 30 897 89-200
E-mail: hziesing@diw.de
List of Abbreviations XIV
List of Abbreviations
AIJ Activities Implemented Jointly
ALTENER EU Program Promoting the Use of Renewable Energy Sources
APEC Asia Pacific Economic Cooperation
ARCE Romanian Agency for Energy Conservation
ARENA-Eco Agency for Rational Energy Use and Ecology (Ukraine)
AURE Agency for Energy Efficiency (Slovenia)
Baltic CHAIN Baltic Clearing House And Information Network
BAPE Baltic Energy Conservation Agency
BelVIEC Belorussian Scientific and Industrial Information Centre for Energy Saving
BMU German Federal Ministry of Environment, Nature Conservation and Reactor Security
BOM Board Of Management
BSR Baltic Sea Region
CC-CHP Combined Cycle – CHP
CDM Clean Development Mechanism
CEA Czech Energy Agency
CEE Central and Eastern Europe
CEEC Central and Eastern European Countries
CENEf Center for Energy Efficiency, Moscow
CFL Compact Fluorescent Lamps
CH4 Methane
CHP Combined Heat and Power Generation
CIS Commonwealth of Independent States
CO Carbon Monoxide
CO2 Carbon Dioxide
COP Conference of the Parties of UNFCCC
CR Czech Republic
CTI Climate Technology Initiative
CTIP Cooperative Technology Implementation Plan
CZK Czech Crown
DCA Development Credit Authority
DEA Danish Energy Agency
dena Deutsche Energie Agentur
DH District Heating
DHC District Heating Company
DHP District Heating Plant
DIW German Institute for Economic Research
DSM Demand Side Management
EAES Environmentally Adapted Energy System in the Baltic Region and Europe
EBRD European Bank for Reconstruction and Development
EC European Community
EC BREC EC Baltic Renewable Energy Center
ECCJ Energy Conservation Center, Japan
List of Abbreviations XV
EE Energy Efficiency
EEC Energy Efficiency Center
EEF EBRD Energy Efficiency Fund
EEHPP Energy Efficiency Housing Pilot Project in Lithuania
EEK Estonian Crown
EERI Estonian Energy Research Institute
EIA US Energy Information Agency
EIT Economies in Transition
ELI Efficient Lighting Initiative
EMA Emissions Marketing Association
ENERO Center for the Promotion of Clean and Efficient Energy in Romania
ENSVET Energy Advisory Network in Slovenia
EPC Energy Performance Contracting
ESC Energy Strategy Center (Armenia)
ESCO Energy Service Company
ESF Energy Saving Fund
ESI Electricity Supply Industry
ET Emissions Trading
EU European Union
FFU Environmental Policy Research Unit
FSU Former Soviet Union
Gcal Giga calory
GDP Gross Domestic Product
GEF Global Environmental Facility
Gg Gigagramm
GHG Greenhouse Gas
GHGM Greenhouse Gas Mitigation
GJ Giga Joule
GNP Gross National Product
GPO Gross Production Output
GT-CHP Gas Turbine CHP
GWh Giga Watt hour
GWP Global Warming Potential
GWth Gigawatt thermal
HFC Hydrofluorocarbons
HOB Heat Out Boilers
HPP Hydro Power Plant
HUF Hungarian Forint
ICECC Intergovernmental Commission of Experts on Climate Change
ICEU International Center for Energy and Environmental Technology
IEA International Energy Agency
IEEN Lithuanian Energy Efficiency Network
IFC International Finance Corporation
IISD International Institute for Sustainable Development
IJS Institute Jozef Stefan, Ljubljana
XVI
IPCC Intergovernmental Panel on Climate Change

IPP Independent Power Producer
ISO International Organization for Standardization
JI Joint Implementation
JICA Japanese International Cooperation Agency
KAPE Polish Energy Conservation Agency
KfW Kreditanstalt für Wiederaufbau
LDA Latvian Development Agency
LFO Light Fuel Oil
LPG Loan Portfolio Guarantee
LVL Latvian Lat
MAOP Maximum Allowable Operation Pressure
MAPPM Romanian Ministry of Waters, Forests and Environmental Protection
Masut Heavy Oil
MEA Ministry of Economic Affairs
MEEN Municipal Energy Efficiency Network
MW Mega Watt
Mwe Megawatt electric
MWth Megawatt thermal
N2O Nitrous Oxide
NCRC National Climate Research Center
NEDO New Energy and Industrial Technology Development Organisation
NGO Non Governmental Organization
NIB Nordic Investment Bank
Nox Nitrogen Oxide
NPP Nuclear Power Plant
NUTEK National Board of Industry and Technology of the Swedish Kingdom
OECD Organisation for Economic Cooperation and Development
OPET Organisation for Promotion of Energy Technologies
PC Performance Contracting
PFC Perfluorocarbons
PHARE Poland and Hungary: Assistance for Reconstruction of the Economy
PJ Peta Joule
PLN New Polish Zloty
PNNL Pacific Northwest National Laboratory, USA
PPC Project Preparation Committee
ppm parts per million
PPP Purchasing Price Parity
PR Public Relations
QP Qualified Producer
R&D Research and Development
RA Republic of Armenia
RD & D Research, Development and Demonstration
RE Renewable Energy
REC Regional Energy Center
List of Abbreviations XVII
REEF Renewable Energy and Energy Efficiency Fund of the World Bank
Ref. References
RENEUER Regional Network for Efficient Use of Energy Resources
RES Renewable Energy Sources
RF Russian Federation
SAVE Special Actions for Vigorous Energy Efficiency
SECI South East European Cooperative Initiative
SEF State Environmental Fund
SEI Stockholm Environment Institute
SEVEn The Energy Efficiency Center, Prague
SHPP Small Hydro Power Plant
SIDA Swedish Development Agency
SIT Slovenian Tolar
SME Small and Medium-sized Enterprises
SO2 Sulfur Dioxide
SOCER Society for the Optimization of Energy Consumption in Romania
STEM Swedish National Energy Administration
STL Street Lighting
SWOT Strengths, Weaknesses, Opportunities, Threats
SYNERGY Energy Framework Program 1998-2002 of the EU
TACIS Technical Assistance for CIS
TFC Total Final Consumption
tfe tons of fuel equivalent
THERMIE Technologies Européennes pour la Maîtrise de L’Énergie
toe tons of oil equivalent
TPES Total Primary Energy Supply
TPF Third Party Financing
TPP Thermal Power Plant
TWh Tera Watt hour
UBA Federal Environmental Agency, Germany
UCPTE Union for the Coordination of Production and Transmission of Electricity
UN United Nations
UNCED UN Conference on Environment and Development
UNDP United Nations Development Program
UNFCCC United Nations Framework Convention on Climate Change
UNITAR United Nations Institute for Training and Research
US DOE US Department of Energy
US EPA US Environmental Protection Agency
US AID US Agency for International Development
VAT Value Added Tax
WB World Bank
Welcome Address on Behalf of the CTI Chairman
Ture Hammar
CTI Presidency
On behalf of the Chairman of the Climate Technology Initia- portunity to meet and to discuss and exchange views on
tive I would like to welcome everyone here this morning at energy efficiency and environmental aspects related to it; to
the workshop “Climate Technology and Energy Efficiency – share views about technologies and practices, to look at
Disseminating ‘Best Practice’ Experience”. novel financing schemes.
With us today we have the representatives of the govern- We would like to thank our hosts, the German government,
ments, financing organizations, the representatives of the for their hospitality and for having us all here for their sup-
private sector and energy efficiency organizations from the port in organizing the event. I would like now to take couple
many countries of Central, Eastern and Western Europe. of minutes to give a brief overview of the Climate Technol-
We believe that this Seminar will provide an excellent op- ogy Initiative
2 Ture Hammar
The Climate Technology Initiative was launched at the First transfer under Article 4.5 of the Convention, fragment of
Conference of the Parties to the United Nations Framework which reads: Annex II (Parties) shall take all practical steps
Convention on Climate Change (UNFCCC) in March 1995. to promote, facilitate and finance, as appropriate, the trans-
Twenty-three OECD countries and the European Commis- fer of, or access to, environmentally sound technologies
sion created it to help meet their commitment to technology and know-how…”
CTI organizes its activities through the Working Group on nologies through the establishment of world-wide frame-
Technology Assessment and Capacity Building, Working works and networks of technology experts.
Group on Research and Development, Steering Committee
The CTI Awards Panel recognizes the outstanding
on Industry Seminars, CTI Awards Panel and CTI Secre-
achievements of those that have helped to promote cli-
tariat.
mate-friendly technologies.
The Working Group on Technology Assessment and Ca-
The CTI Secretariat, housed at the International Energy
pacity Building promotes technology needs assessment
Agency, contributes to achieving the CTI's goals by sup-
and the effective diffusion of climate-friendly technologies
porting the activities of the Working Groups and the Awards
and practices. The Working Group on Research and De-
Panel.
velopment concentrates on promoting and accelerating the
research and development of new climate-friendly tech-
Welcome Address on Behalf of the CTI Chairman 3
CTI Awards Program
The CTI annually gives several World Climate Technology high profile recognition for their valuable work. CTI hosted
Awards to recognize the outstanding achievements of indi- its third annual awards ceremony at COP-7 in Morocco.
viduals and organizations that have helped to promote cli- Next event at the COP8.
mate-friendly technologies. Award winners receive global,
CTI Website and search engine
Our located at www.ClimateTech.net is an excellent re- coming events. For more information on the Climate Tech-
source for information. The site features a powerful search nology Initiative, you are welcome to contact the CTI Se-
engine specialized on climate-friendly technologies and cretariat in Paris, at the International Energy Agency, at
practices. It also offers a chat room and a calendar of up- these numbers and addresses.
4 Hanns-Joachim Neef
Welcome Note
Climate Technology and Energy Efficiency –Disseminating “Best Practice” Experience
Dr. Hanns-Joachim Neef

International Energy Agency, Paris
On behalf of the International Energy Agency and the Cli- today are already the member countries of the IEA, the
mate Technology Initiative Secretariat I would like to wel- others, we hope, will become members in the near future.
come everyone to the workshop Climate Technology and
IEA collaborates very closely with the Climate Technol-
Energy Efficiency – Disseminating “Best Practice” Experi-
ogy Initiative. We work in close consultation on the pro-
ence. At the same time, I would like to express our thanks to
jects with the economies in transition and developing
the Government of Germany for hosting and supporting this
countries in deployment of clean-energy technologies
event.
and practices. The CTI workshops have become a
As it was already mentioned here this morning, this is a next trademark of that collaboration. We try to join our re-
seminar organized under the auspices of the Climate Tech- sources and expertise as much as possible, and dwell on
nology Initiative. As the Head of Energy Technology Collabo- the wealth of technology and policy information re-
ration Division of the International Energy Agency , I am also searched by the IEA and available there.
overseeing the activities of the CTI Secretariat which is
When considering deployment of clean technologies and
hosted by the International Energy Agency.
practices, it is of the utmost importance to bear in mind
It is very encouraging to see with us today so many repre- the interaction between the sector approach and policy
sentatives from of the economies in transition. We are happy development.
you could come here and share with the others your experi-
We believe that proper policies that create positive
ences on best practices.
framework for energy efficiency ensure sustainability of
This seminar, we believe, will be another milestone in the all sector projects. We will certainly hear about these in
process of capacity building and networking among energy the coming sessions, and certainly we will be able to see
efficiency and renewable energy organizations and experts various approaches. Yet, while the approach may differ
from Central and Eastern Europe (CEE) and Commonwealth per country, the proper mix of policy instruments and the
of Independent States (CIS). We hope, that the seminar will implementing structures and organizations may be the
be an opportunity to assess progress, exchange experiences key to a future sustainable implementation of technolo-
and share projects results. gies. In some cases, the very lack of appropriate policies
and structures severely hinders implementation of pro-
We believe that sharing the information and learning from
jects.
each other is of the key importance in the process of de-
ployment of clean technologies and practices. Capacity building and institutional development, often in
the framework of international initiatives, create the nec-
The International Energy Agency promotes efficient energy
essary boundary conditions for the energy efficiency and
markets and energy efficiency. The co-operation program in
climate change projects. As we understand, the experi-
Central and Eastern Europe aims at assisting the countries to
ences of local energy efficiency organizations from Pra-
achieve market-oriented, long-term energy policy goals, and,
gue to Tbilisi as well as of various international programs
in particular, a more energy efficient economy with increased
demonstrate that technology issue should always be
energy security. The IEA activities include energy policy re-
considered along with policy and institutional building.
views, workshops, statistical harmonization and research and
development work. Some of the countries represented here And now couple of words about the CTI training courses
and seminars.
Welcome Note on Behalf of the IEA 5
CTI training courses and seminars have been providing spe- commitments to facilitate technology transfer. In the
cialized training to decision-makers and practitioners in com- European region the workshops and training courses
panies, and to government specialists who perform the tech- have been held in Estonia, Hungary, Slovakia, Poland,
nical analysis behind regulatory policies and incentive pro- Italy and of course in Germany, here in Ostritz. In other
grams. Energy efficiency options that make both good busi- regions the workshops and courses were held in Japan,
ness and environmental sense are often a focus of the train- Argentina, Mexico, and the United States.
ing courses. How to access information sources on clean
Copies of three CTI workshop proceedings from the
technologies is also featured.
workshops that were held in Estonia, Slovakia and Po-
CTI training courses and seminars have a regional focus. land are available here for the seminar participants.
Participants learn first-hand from specialists. In Central and
There are more events planned ahead for the European
Eastern Europe, for example, a series of capacity building
region. The detailed information can be found on the CTI
seminars has strengthened a network of energy efficiency
website, I will list just the headlines:
centers where data and experiences are shared among pro-
fessionals. • CTI Workshop on Clean Technologies and Best Prac-
tices Relating to Fossil Fuels, Stavanger, Norway,
The training courses are designed to “train the trainer”. They
early in 2002
encourage participants to take their new knowledge back
• Regulatory Framework for Third Party Financing in
home and train others. To facilitate this, the CTI is developing
Central Europe, just completed couple of days ago in
lesson plans and reference materials that are available on
Budapest - but please watch for the follow up in spring
CD-ROM and at the CTI website. Feedback from training
2002
course alumni help to modify the curriculum.
• Symposium: The Impact of Electricity Network Or-
The training courses are held over three or four days, which ganization, Regulation and Pricing on Renewables
allows participants to explore concepts in detail. Participants and Distributed Generation in the Baltic Sea Region.
typically have a technical background.
We hope to see you at those events as well.
The training courses and capacity building seminars deliver
And for now, I am convinced that we will see a lot of very
technical assistance and help to disseminate climate-friendly
interesting presentations and I wish all a very informa-
technology information. As a multilateral initiative, these
tional and fruitful seminar.
courses are a communal Annex I response to UNFCCC
6 Jürgen Landgrebe
Results of the Last Ostritz Seminar in 1999

– and what we expect of the Second CTI Capacity Building Seminar
for CEE/FSU Countries on “Climate Technology and Energy Efficiency”
Dr. Jürgen Landgrebe
Federal Environmental Agency, Germany
Dear Mr. Hammar (CTI Presidency), This chapter goes far beyond the classic dimensions of
dear colleagues and energy experts
• increasing energy efficiency,
from almost all over the world!
• saving energy,
On behalf of the German Federal Minister for the Environ- • switching to alternative fuels or
ment Jürgen Trittin, and the President of the Federal Envi- • increasing usage of renewable energies.
ronmental Agency, Prof. Andreas Troge, it is a great pleas-
Technology itself is of no use if people refuse to change !!
ure for me to welcome you to the Second CTI Capacity
Building Seminar for Central and Eastern European and Therefore, our strategy on sustainable energy use also in-
Former Soviet Union Countries on “Climate Technology cludes efforts to change the behavior of consumers, en-
and Energy Efficiency – Disseminating “Best Practice Ex- courage the use of particularly energy-efficient household
perience” here in Ostritz, Germany. appliances and implement our information and communica-
Unfortunately, the representative of the Federal Ministry for tion strategy.
the Environment whom we were expecting, Mr. Schaf- As soon as our report is finalized, I will let you know and
hausen - some of you know him from the last seminar - , send you copies of it.
cannot be with us today. At the present time he is on a
During our get-together last night, by the cozy open fire-
mission to the Ukraine, helping us combat climate change
place,
at a different place on this planet.
we found out that most of you also attended our first Semi-
He asked me to give all seminar participants the Federal
nar in 1999, when we discussed
Minister’s best regards and his best wishes for an intensive
dialogue and a fruitful discussion on the energy and envi- • ·Climate change and energy efficiency policies in OECD
ronment themes we will be dealing with in the coming days. and CEE countries,
Mr. Schafhausen will join us on Friday, so his presentation, • Climate technology databases on the internet,
originally scheduled for today, will simply be postponed to a • Energy efficiency in the supply sector, the building and
later stage of our meeting. end-use sector and in the industrial and commercial
sector,
My name is Jürgen Landgrebe. I work with the Federal En-
• Strategies to finance investments in energy efficiency.
vironmental Agency in Berlin, Germany, as head of the unit
“Environment and Energy, and New Energy Technologies”. We had an exchange of experience on energy efficiency
centers, debated future tasks and challenges for energy ef-
I want to spare you a boring talk about all the activities of
ficiency networks, and developed recommendations at the
the 11 colleagues in my unit. The name of our unit will al-
end of the Seminar.
ready give you an idea of what we are concerned with.
The results of the first Ostritz Seminar were very promising:
I simply would like to inform you about our most recent ac-
The examples and the discussion showed that many of the
tivity:
problems concerning energy efficiency could be solved by
As part of the preparations for the Rio+10 Summit, to be networking and using the tools that have already been de-
held in Johannesburg in 2002, we are currently drafting a veloped.
report on sustainable development including a chapter on
sustainable energy use.
Results of the Last and Outlook at this Seminar 7
I do believe that the last seminar inspired you a lot to start popular, especially when sufficient financial resources are
new activities on the basis of the network of energy experts not available.
we created between all of us. In this context I would like to
We will also discuss combined heat and power generation
mention the very successful follow-up seminar that took
– or CHP for short. You will be given an introduction to
place in Tallin, Estonia, on the subject of energy audits etc.
small CHP units and small fuel cells. Hopefully, in the fu-
In the meantime, many things have changed concerning ture, all of us will find appropriate applications of these
the Kyoto process. The resumed Sixth Conference of the technologies. Thermal energy conservation and the refur-
Parties in Bonn and the Seventh Conference of the Parties bishment of panel buildings are special items for consider-
in Marrakech have clarified the conditions for immediate able energy savings in Germany, and we imagine you
ratification. To my mind, the majority of all nations of the might have similar problems with this kind of buildings in
world are now united in their efforts to prevent climate your countries, too.
change. Taking specific action and making specific contri-
Finally, we will hear about the latest developments as re-
butions, and doing this now, is an important task not only
gards rational energy use in industry and households.
for the developed countries, but for all countries in the
world. Last but not least, please note that at the end of the semi-
nar, on Saturday, we have scheduled one hour for evalua-
In order to continue our activities to combat Climate
tion, recommendation and conclusions.
Change, we have invited you all to this follow-up seminar,
to encourage each other and to exchange the latest and During this hour we would like to discuss with you your in-
best experiences on energy efficiency. tentions as regards future work on capacity building and
networking.
In examining the recommendations we received after the
last seminar, we tried to take on board most of your pro- We would appreciate receiving substantial proposals from
posals. In concrete terms, this means that over the next you concerning both:
three days we will hear and talk about: further items to include in the agendas of CTI-events, and
• new and general questions of energy efficiency and en- your proposals for follow-up events in your home countries.
ergy savings including items like municipal climate pro- The CTI and our Agency are very keen to know what your
tection, ideas are when we talk about your contribution to the Cli-
• possibilities for joint implementation and mate Technology Initiative.
• reflections on carbon intensity.
Please, take note of that and put all your ideas on a piece
We think these aspects could be of interest for broadening of paper, so that we can discuss them on Saturday.
our perspective on energy efficiency and its importance.
At the very end, I must not forget to invite you to the social
The use of biomass will be another focal point of our semi- events, that is the tasting of regional eco-wines in the cellar
nar. A lot of comprehensive practical examples will be pre- of the convent on Thursday evening, the sight-seeing tour
sented and we hope to have intensive discussions on all to Bautzen - a nice medieval town in Saxony - on Saturday
ecological and economic problems associated with the use afternoon and the farewell dinner we will have in Dresden
of biomass. Financial tools play an important role. There- on Saturday evening.
fore, project preparation is also a main topic of this semi-
Thank you for your attention. In order to avoid any delay, I
nar, and we hope to clarify all questions concerning the
would now like to give the floor to Mr. Millhone of the US
“bankability” of projects.
Department of Energy, who will introduce you to the US
Another point is Energy performance contracting – EPC or climate protection policy.
Third Party Financing, which is becoming more and more
8 John P. Millhone
U.S. Climate Change Policy

John P. Millhone
U.S. Department of Energy
I’ve been asked to provide an overview of U.S. Climate change effectively. The United States opposes the
Change policy. This requires that I set forth the U.S. posi- Kyoto Protocol because it exempts many countries
tion on the Kyoto Protocol. However, it also requires that I from compliance and would cause serious harm to
articulate the major actions the United States is taking to the American economy. Both sides, however, are
reduce the buildup of greenhouse gases both nationally prepared to work constructively with friends and al-
and internationally. lies to solve the problem. In this context they deem
it necessary to develop, among other means, tech-
The U.S. position on Kyoto has received ample coverage in
nologies, market-based incentives, and other inno-
the media already, so I won’t be repetitious and spend
vative approaches to meeting the challenge of
much time repeating what you already know. The United
global climate change.
States does not believe that the Kyoto Protocol is the right
answer to the challenge of climate change. We believe the www.whitehouse.gov/news/releases/2001/03/20010329-5.html
Protocol is flawed – its targets are arbitrary and in many

The last part of this Statement is the focus of this semi-
cases unrealistic. It does not include developing countries.
nar...the constructive work we can do together to solve the
And its costs would damage the U.S. economy.
problem. And that’s where I want to focus my remaining
These views were expressed in President Bush’s policy remarks.
statement on June 11, 2001, available at
The United States already has made a significant invest-
www.whitehouse.gov/news/releases/2001/06/20010611-2.html. ment in this constructive work through the U.S. Country
At the Seventh Session of the Conference of Parties (COP- Study Program (USCSP), the U.S. Initiative for Joint Im-
7) in Marrakech, Morocco, the U.S. position was expressed plementation (USIJI), and our participation in this Climate
by Paula J. Dobriansky, Under Secretary of State for Technology Initiative.
Global Affairs in her initial and closing remarks.
Beginning in 1993, the Country Study Program provided fi-
www.state.gov/g/oes/climate/index.cfm?docid=5969 and nancial support to 56 countries–many of them in Central
www.state.gov/g/oes/climate/index.cfm?docid=6050
Europe and the Former Soviet Union – to undertake cli-
To focus only on Kyoto, however, would miss the large and mate change analyses, to inventory their greenhouse gas
promising opportunities for the United States and other (GHG) emissions, to assess their vulnerability to climate
countries to cooperate in their common interest in address- change and how to adapt to the changes, and how to re-
ing the challenge of Climate Change. duce their greenhouse gas emissions. About two third of
This is reflected in the Joint Statement earlier this year by these funds went to the countries themselves to help build
President George Bush and Chancellor Gerhard Schroeder their own capacities; the other third was for technical assis-
on a Transatlantic Vision for the 21st Century. The State- tance. We view this as an enormously successful invest-
ment says: ment. The countries taking part in this program are among
the leaders in their knowledgeable participation in climate
We share a common concern about global climate
change issues.
change. We openly note that we differ on the best
way to protect the earth’s climate. The Federal Re- Beginning the same time, the USIJI program was designed
public of Germany, host of the Climate Change to show the value of flexible mechanisms in reducing GHG
Conference in Bonn in July, emphasizes that the emissions. The program established clear criteria, drawn
targets to reduce greenhouse gases agreed in from the UNFCCC policies, that would need to be met to
Kyoto are indispensable to combat global climate gain USIJI approval. We issued 13 solicitations for USIJI
U.S. Climate Change Policy 9
proposals, received some 200 proposals, processed them tive contribute in the new global Climate Change environ-
through a careful review, provided recommendations for ment. Some of the main elements of the future U.S. pro-
how they could be approved, and approved 52 proposals, gram are starting to emerge.
representing 26 countries. Over a period of some 60 years,
They include a recommendation in the National Energy
according to the estimates of the project developers, these
Policy that DOE and other agencies “continue efforts to
projects would reduce emissions by the equivalent of 350
identify environmentally and cost-effective ways to use
million metric tons of CO2. (We are developing a website to
market mechanisms and incentives, continue development
make the products of the USCSP and USIJI programs
of new technologies; and cooperate with allies, including
available electronically, but it’s not up yet. In the meantime,
through international processes, to develop technologies,
I’ve brought hard copy information on these programs.)
market-based incentives, and other innovative approaches
We are proud of our role in CTI, launched at COP-1 in Ber- to address the issue of global climate change.” They also
lin by 23 IEA/OECD countries. CTI has shown the value of include the National Climate Change Technology Initiative
a collaborative effort to promote the UNFCCC objectives (NCCTI), which is developing a series of white papers that
through accelerated development and diffusion of climate- analyze the contribution that advanced technologies can
friendly technologies. make to reducing global climate change. These papers are
scheduled to be published early next year. A fuller descrip-
The United States Climate Change programs currently are
tion is available at
in transition. We recognize the value of the USCSP, USIJI
and CTI programs. We are examining how the successes www.whitehouse.gov/news/releases/2001/06/climatechange.pdf
achieved by these programs can be recast to make a posi-

10 Hanns-Joachim Neef / Hans Nilsson / Clas-Otto Wene
Lessons Learned in Technology Deployment

Dr. Hanns-J. Neef
Hans Nilsson
Clas-Otto Wene
International Energy Agency
A project (slide 2) is under way at the International Energy • What “best practices” can be identified regarding indus-
Agency that is focusing on deployment of energy technolo- try involvement in developing and executing deployment
gies. The purpose of this IEA project is to review success- programs?
ful programs for deployment of advanced energy technolo- • How is success in technology deployment defined and
gies, and to identify factors that contributed to their suc- measured?
cess. With this project, we are following up on guidance • What “best practices” can be identified concerning how
from the IEA Energy Ministers, who told us in 1999 to and when programs are evaluated?
share information on lessons learned in energy technology
The IEA project thus focuses on how the process of devel-
research and deployment.
oping markets for new energy technologies is shaped and
It is a project of particular value and relevance because it implemented.
addresses the need to:
The Analytical Framework for the Study
• promote economic development through advanced
Here you see the analytical framework for the study.
technologies;
• give all countries access to the best technologies to fos- The ongoing analysis of deployment policies is being car-
ter sustainable development; and ried out within a combined framework based on the view
• mobilize technology solutions to reduce climate- that different models cannot be substituted for each other,
destabilizing emissions, which is a goal especially im- and that none is superior to the others. Rather, the point of
portant to the Climate Technology Initiative. departure is that models are complementary and that suc-
cessive applications give further insights. We call this the
The basic question is whether it is possible, through review
Triangulation Model (slide 3), because it incorporates three
of successful cases, to determine what precisely are the
component models.
success factors for expanding markets for technologies
that use energy more efficiently. • The Market Barrier Model is the standard deployment
model, consistent with a neo-classical economic view-
A number of questions are addressed in the deployment
point stating that it is legitimate for governments to in-
project, including:
tervene in the market to remove or reduce barriers due
• What strategic goals (such as energy security, global to market failures. Messages from this model refer to
climate change, local pollution abatement, economic price-setting mechanisms (for example, removing sub-
productivity) are used to define technology deployment sidies, but internalizing externalities, or initiating infor-
goals and programs? mation on dissemination programs to provide support
• What processes are used to define technology deploy- for technology deployment).
ment goals and develop technology deployment pro- • The RD& Deployment Model (research, development
grams? and deployment) states that it is legitimate for govern-
• How is technology deployment policy linked to R&D pol- ments to intervene in the market to avoid high future
icy? opportunity costs due to externalities and under-invest-
• Can common factors be identified among successful ments in learning, which may appear as a public good.
programs?
• Do circumstances exist where a particular type of policy
tends to work best?
And, finally, The Netherlands – Application of high-efficiency mechani-

cal ventilation with heat recovery (MVHR). This program
• The Market Transformation Model (MT). Deployment
has led to higher market penetration of MVHR.
policies should transform markets by stimulating market
actors to develop, invest in and use technologies with Sweden – A program for procurement of high-frequency
higher performance. Messages from this model focus ballasts for fluorescent lights. High-frequency ballasts use
on measures to stimulate development and market up- less energy than conventional ballasts and last longer.
take of efficient technologies by forming co-operative or
Sweden – A technology procurement project for market
competitive networks of public and private actors for
transformation for heat pumps. Sales in Sweden and ex-
technology procurement, or voluntary agreements.
ports have grown significantly.
Slide 4 shows the three key factors which contribute to
United States – A program for compact fluorescent lamps.
shaping the market:
It motivated manufacturers to develop and produce such
• political will (which should be used to establish the lamps in the expectation of a successful procurement ef-
proper framework for the many actors involved in mar- fort.
ket development);
United States – The Motor Challenge program promotes
• technical ability (which will deliver good, reliable prod-
the use of more energy-efficient motors and acted as the
ucts to the market place); and
prototype for similar programs for the so-called nine “Indus-
• customer acceptance (which is a prerequisite for market
tries for the Future”.
success).
European Union – The Energy Plus Program. This is a
That is how it works in theory!
pan-European procurement scheme for refrigerator-
The Project freezers, aimed at products consuming considerably less
energy than average cold appliances.
With this theoretical matrix in mind, we started to collect
case studies in 1999 so that lessons learned from pro- Canada – Canada’s program focuses on solar ventilation
grams in the real world could be shared. air heating systems, solar hot water systems, biomass
combustion systems and ground-source heat pumps.
Out of a group of 55 cases that were proposed by dele-
gates from Member countries working within the IEA struc- Germany – Solarbau is a German program focusing on
ture, a selection was made. 22 cases (slide 5) were finally R&D and demonstration for solar-optimized non-residential
submitted as case studies to be analyzed. They provide a buildings. It is a pre-deployment program providing valu-
good representative mix of focus on demand, on supply able information for future regulations, such as those in-
and on the different types of fuels. volving mandatory energy saving.
Case studies and related information are available on the Sweden – Baltic Sea Region – The goal of this program
CTI homepage: www.climatetech.net/conferences/ostritz2/deploy.htm targeting the Baltic Sea Region is to reduce emissions from
oil- or coal-fired energy production plants.
Of special interest to this CTI Seminar are the case studies
relating to energy efficiency. Eight case studies are de- United Kingdom – This part of the Best Practices Program
voted to the end-use of energy, another five have strong focuses on industry and buildings. For both components,
elements of energy efficiency. The next two overheads current best practices in energy efficiency have been
(slides 6 and 7) provide an overview of the case studies identified. Relevant, impartial information is disseminated,
with a focus on the end-use sector. and the development of new technologies is supported.
This is an important United Kingdom policy tool for
Austria – Thermo-profit. A total service package to reduce
delivering emissions reductions under the Kyoto Protocol.
the amount of energy consumed in buildings.
And the final cast study on this list,
Denmark – An energy labeling scheme for buildings,
through which some 50,000 houses are labeled per year. United States – The Industrial Assessment Centers, sup-
ported by the United States Department of Energy, train
engineering students in energy-efficiency practices for
small and medium-sized manufacturing plants. Assess- • they draw empirically from their own results (feedback);
ments are carried out at no cost to manufacturers. • and they are demand-driven.
Generally, the strength of case studies is that they repre- Let us look at what emerged from each of the three ses-
sent reality. They carry the weakness, however, of not sions of the workshop, which was structured according to
lending themselves easily to generalization in terms of the Triangulation Model.
conclusions. One has to take into account the specific con-
The first session dealt with:
text of tradition, culture, politics etc. that surrounds the
Overcoming Market Barriers.
case being studied. This raises severe methodological
problems. In the analytical process, case studies are taken Here are the types of barrier that can be encountered. The
apart piece by piece, according to the triangulation struc- key messages that emerged from the first session on barri-
ture already described, in order to identify the factors con- ers were as follows (slide 9):
tributing to success. • Information. Information must be available and under-
As part of the project, a workshop took place at IEA Head- stood at the time of investment for all types of goods
quarters in Paris on 28-29 November 2001. Prior to the and services. It needs to be easily accessible, reliable
workshop, three rapporteurs had reviewed the 22 case (and known to be so), and it needs to provide the basis
studies, covering the spectrum in terms of supply/demand for comparison between products. Examples are stan-
and fuel focus. This workshop brought together more than dardization, labeling, reliable independent sources, cal-
60 representatives from government policy-making bodies, culation methods.
industry and academia. • At the same time, transaction costs can constitute a
major barrier. “Time is money”: the time needed to take
But I would add that, significantly, one stakeholder group –
an informed decision to purchase and use equipment
the financing sector – was not represented. It can be seen
costs money. This applies at every level, from the pur-
that this constitutes a missing link in the chain if we con-
chase of a household washing machine to the decision
sider one of the workshop conclusions, which was that all
of a government administration over large-scale, nation-
stakeholders should be involved in successful deployment
level purchases. Here again, information is crucial.
programs.
• Financing. First cost is high and access to funds for
Analysis of the input from the case studies is still ongoing, new and risky technologies is sometimes difficult to ob-
with a view to establishing the most effective methods for tain. Demonstration programs can be a good solution,
sharing information on “best practices” and “lessons which also help address risk issues.
learned” in the deployment of advanced energy technolo- • Price distortion. Costs associated with production and
gies. The results reported here are thus tentative. use, and their effects on the environment, health, the
eco-system, are not included in assessments of cost.
During the workshop, the case studies were discussed by
Regulations to internalize “externalities” or remove sub-
the rapporteurs from the three angles of the Triangulation
sidies can address this price distortion.
Model, and some case studies were presented and exam-
• Market Organization. Here we have the problem of the
ined in greater detail.
split incentives, where the owner, the designer and the
Ways to improve things user are not the same person.
One clear finding is that while individual deployment pro- • Regulation is often based on old technologies, on out-
grams are highly contextual and not easily reproduced be- dated business traditions. Standards and codes are not
tween countries and/or sectors, it is nevertheless possible in pace with technology development. Testing and
to identify factors for success that can be repeated in a demonstration can clear the vision of the decision-
context similar to that where they have already proved ef- takers. Regulations should be based on performance.
fective (slide 8): • Capital Stock Turnover. Sunk Costs are deterrent to
change. And tax rules that require long depreciation are
• The really successful programs have been developed
also dissuasive because they lessen the level of tax re-
over a long period;
• they cover several policy issue/areas (coherency);
lief at a time when manufacturers are in need of funds ergy-efficient product categories, and eventually to the
to finance learning. disappearance of the least efficient products.
• Technology Specificity. Existing infrastructures are fa- • For the industrial stakeholder, this all means new mar-
vored, as opposed to changes that involve new hard- ket opportunities, and possibly more jobs, too.
ware and the institutional skills to handle it. To address
To sum up:
this, the focus should be on the system aspects in the
use of the technology. The value of measures should be We have looked at some of the messages (slides 12 and
seen in the light of other benefits such as productivity, 13) that emerged from the individual workshop sessions.
environmental-friendliness. Let me now identify some pointers that will be guiding our
focus as this project continues.
The second session of our workshop focused on:
The R&D and Deployment Perspective and • Success takes time. It takes time to achieve full impact
Technology Learning. on the market.
• But it is possible to take a fast track when and where
Here is one point that emerged from this session (slide 10):
the technology is well established, and it is the applica-
deployment and R&D policies are closely tied.
tions that need to be adapted.
Deployment policies should stimulate learning investments, • Program adjustments from trial/error feedback are fre-
including private R&D, setting up a virtuous circle between quently necessary. Successful programs have often
public and private R&D and deployment on the market. been adjusted during their execution on the basis of ex-
Messages from this model would thus focus on measures perience from trial and (sometimes) error.
to stimulate these investments through time-limited subsi- • It is important to distinguish between projects working
dies, mandated minimum prices and technology portfolios. on fragmented markets and those that target a “known”
A policy recommendation following from this would be that group of actors.
the design of any deployment project should take explicit • Monitoring should be carefully tailored to measure the
account of the possibility of technology learning. early indicative results and interpret them.
• Aggregation of volume of demand is often crucial and it
The theme of the third session of the workshop was:
opens the fragmented markets, but it needs some in-
The Market Transformation Perspective and the
volvement from operating agents on the market.
Involvement of Market Actors and Stakeholders.
• Combining programs and policies designed for different
Or, in other words: How to engage market actors? The purposes makes each more stable and adds arguments
messages that emerge are (slide 11): for the change the projects advocate.
• Deployment policies – which can include subsidies for Clarity of objectives is paramount. Market-based thinking is
more efficient, climate-friendly technologies – should obviously the most effective method. And communication
transform markets by stimulating all market actors to between all players – from the producer to the end-user –
develop, invest in, and use technologies with higher per- is absolutely crucial.
formance. “Partnership” is the key word here. This
Our project on market development for new, efficient – and
should ideally create a durable market which lasts after
in this regard also climate-friendly technologies – was cer-
the intervention has been withdrawn. It is all about
tainly placed in the limelight at our workshop in Paris. It
bringing a technology permanently onto the market.
was an occasion for open – and very enthusiastic – discus-
• Policies should focus on the scope to change market
sion of the case studies and for comparison to our model
preferences and orientate demand towards prod-
approaches. We will keep you informed on the progress of
ucts/services with generally better performance. The
our analysis. Meanwhile, further information is available on
aim is to introduce yet more new technologies with bet-
the IEA and CTI homepages. In this way, we are making a
ter performance by selling more of the existing high per-
modest contribution to what we have been asked to do.
formance products/services and selling fewer of the low
This is: to make information available on best practices in
performing variations. In the case of energy efficiency,
deployment of clean energy technologies.
market transformation causes a shift toward more en-
Slide 1 Slide 2
Slide 3 Slide 4
Slide 5 Slide 6
Slide 7 Slide 8
Slide 9 Slide 10
Slide 11 Slide 12
Slide 13
16 Gotelind Alber
Municipal Climate Protection

Gotelind Alber
Klima-Bündnis - Alianza del Clima e.V.
Climate Alliance of European Cities with Indigenous Rainforest Peoples
1. Introduction
Why are local authorities so important for climate pro- • Local authorities are to a high degree responsible for lo-
tection? cal infrastructure and public services
• They maintain facilities such as public buildings,
• Everybody is an energy consumer
schools, car fleet, sports centers, swimming pools.
• Everybody lives in a municipality
• Cities and towns can influence nearly every sector Lessons learned during 10 years of municipal climate
• Cities and towns can apply nearly every policy instru- protection
ment.
• Combine with administrational reform, introduce innova-
Specific areas for municipal climate protection tive procedures
• Involve citizens, in particular children
• Local authorities are the government level next to citi-
• Address all relevant sectors including waste, agriculture,
zens and thus can directly involve them
forestry ...
• Local authorities are responsible for spatial planning
• Create liveable cities
• Achieve double dividend: global and local benefits.
2. Municipal areas of activity

Energy consumption by local authorities themselves tion of weak points. Measures that involve building users
are highly successful, for example awareness-raising and
An obvious starting point for municipalities is their own en-
motivation. Moreover, municipalities have introduced inno-
ergy consumption, which represents between 3% and up-
vative schemes offering incentives by sharing the monetary
wards of 10% of total energy use. This includes heat and
savings with building users. Energy efficiency and envi-
electricity consumed in municipal office buildings or for
ronmental acceptability are also used as criteria in public
street lighting, sewage treatment, water pumping, munici-
procurement.
pal car fleets, swimming pools, etc. In many European
countries, schools are also in municipal hands. Some local Many municipalities systematically plan their investments in
authorities also own large amounts of tenanted social energy efficiency, based on regular energy book-keeping
housing. Climate protection in their direct sphere of influ- and energy consumption indicators from which priorities
ence serves several purposes: municipalities can show can be derived. Investments include retrofitting of buildings
leadership, save costs and practice more effective adminis- and heating systems, installation of efficient lighting sys-
trative action. Moreover, they can demonstrate and dis- tems, and construction of combined heat and power units
seminate new technologies and procedures. in large public buildings. Many municipalities explore new
ways to ensure funding for these investments: either they
Many municipalities have reduced their energy demand by
work with energy service companies that offer performance
up to 15%, without major investment, solely by means of
contracting, or they restructure their own budget in order to
energy management techniques such as monitoring con-
create a revolving fund (“intracting”).
sumption, improved control, early recognition and elimina-
Energy supply An energy-efficiency strategy like that used in the energy

sector, which in transportation would target the fuel con-
Municipalities may also be responsible for acting as local
sumption of individual vehicles, is not possible for local au-
utilities – distributing energy and sometimes also producing
thorities as they have barely any influence on purchase de-
it as well. This function is usually, though not always, dele-
cisions outside their own fleet and virtually no influence on
gated to a municipally-owned company and is widespread
manufacturers. The key factors in local transport policy are
in Northern and Central Europe. Many such utilities own
demand for mobility (where the strategic aim is traffic
district heating systems.
avoidance) and the means of transport (where it is a shift to
Major potential for substantial short-term greenhouse gas public transport, cycle and pedestrian traffic).
reductions lies in the extension of existing and creation of
In addition to their role in long-term urban planning (see
new district heating systems, the upgrading of old systems
above), it is local authorities that impose restrictive meas-
and their conversion into combined heat and power sta-
ures stemming car use while providing low-cost and attrac-
tions. Small municipalities in particular utilize biogas or bio-
tive alternatives. Measures to cut motor traffic rarely
mass for their district heating. A large number of munici-
achieve consensus. Implementing a “push and pull” strat-
palities provide support for the use of renewable energies.
egy in spite of this fact entails winning acceptance and pro-
Urban planning viding the necessary funding for public transport. This is
Local authorities are usually responsible for land-use plan- one of the greatest challenges of local climate protection,
ning decisions. They may have powers over the local en- not least because this area is more often seen from the
ergy distribution network through the power of concession. short-term perspective of reducing traffic jams.
The basic planning level, urban development planning, is a Private sector

key determinant of demand for mobility: whether it is a Finally, local authorities can have a considerable influence
compact city; where the various functions – residential and on energy demand in the private sector. Many municipal
commercial, services, education and recreation – are lo- energy utilities apply demand-side policies, offering advice
cated and how they interconnect; if there is public transport and incentives for efficient devices and integrated energy
available for newly developed areas, etc. Cities can make a services in the heating sector. In a liberalized market, local
substantial long-term contribution to car traffic prevention if authorities are likely to play an increasing part in this area
they consider these aspects early in the planning process. since freely competing energy producers have little interest
Local climatic concerns have also to be addressed. in limiting consumption.
The next step of urban planning, the detailed planning of A core area of municipal energy-efficiency policy in most
housing areas, also significantly affects energy consump- parts of Europe involves developing the manifold opportu-
tion. Many cities already apply comprehensive catalogues nities to save energy in public and private buildings, since
of criteria including orientation and arrangement of build- in a typical municipality these contribute over 50% of emis-
ings to ensure that solar energy can be utilized and district sions. Municipalities in some countries have explored the
heating systems can be installed cost-effectively, and envi- legal possibilities for applying stricter building codes than
ronmental and energy-efficiency standards for individual are required by national legislation. Some have introduced
buildings. innovative schemes committing investors to stricter stan-
Transport policy dards either by contractual means or by using competitive
mechanisms.
Many European municipalities control local public transport
companies that operate underground railways (in big cit- Beyond this, municipalities have to rely on awareness-
ies), trams (in big and medium-sized cities), and buses. raising, advice and consultancy, funding programs, and
Some urban railways are operated by the national railway cooperation with relevant trades people such as heating
companies; elsewhere, local public transport is provided engineers and chimney sweeps. Information, motivation
only by private companies. and cooperation are playing an increasing part in municipal
policy.
18 Gotelind Alber
Other areas agricultural areas, they can influence how these areas are
managed. Waste management, which is in most countries
Beyond the core sectors in terms of CO2 emissions, mu-
a municipal task, is increasingly viewed under climate
nicipal climate protection is presently expanding to other
change aspects as well. Moreover, municipalities can influ-
fields, too, that are sources of greenhouse gases. Since
ence private consumers and businesses in many ways.
many municipalities are owners of substantial forestry and
3. The Climate Alliance Methodology

Municipal climate protection is not only an important contri- (7) Adopting and implementing action programs
bution to protecting the Earth’s climate, but also yields local (8) Drawing up greenhouse gas emissions inventories
benefits such as promoting industry, or reducing emissions (9) Applying sustainability indicators
and noise and, not least, provides incentives for innovation (10) Publishing a climate protection report.
and new forms of cooperation. Nonetheless, climate pro-
The Climate Alliance Catalogue of Measures comprises
tection remains a challenge, for there is still a long way to
some 100 individual measures in all activity areas of a mu-
go until the necessary climate change policy targets are
nicipality of relevance to climate protection. It provides
met!
• the basis for developing local climate protection action
Therefore, the Climate Alliance has developed a methodol-
plans,
ogy as a recommendation to local authorities for the strate-
• a matrix for local authority reporting, and
gic development of programs of action that encompass all
• a tool for the qualitative assessment of municipal cli-
activity areas of relevance to climate protection. It is to
mate protection activities with regard to the range of
support local authorities from their initial decision to engage
measures planned and being implemented.
in climate protection right through to their monitoring of the
performance of measures implemented. The structure of the Catalogue proceeds from the various
roles and functions that local authorities have in the devel-
The key elements of this methodology are:
opment and implementation of climate protection meas-
• The “10 Steps” for internalizing climate protection within ures. These are consumer and model, planner and regula-
the municipality tor, supplier and provider, and advisor and promoter.
• The Climate Alliance Catalogue of Measures Within all these roles, energy, land use planning and trans-
• The Climate Alliance Monitoring System and Indicators. port, procurement, waste management, and agriculture and
forestry should be addressed. Since global equity issues
The 10 steps
are closely connected with climate change policy, the Cli-
give municipalities a structured orientation defining the mate Alliance Catalogue of Measures includes practical
cross-sectoral tasks for political and institutional internaliza- approaches to North-South cooperation, too.
tion of climate protection:
The Climate Alliance Indicators
(1) Formally resolving to define climate protection as a
serve to monitor in quantitative terms the performance of
local authority task
local authority climate protection activities. They supple-
(2) Creating a climate protection office/department with
ment the limited information provided by CO2 emissions in-
appropriate competencies and budget
ventories on the impacts of local authority climate protec-
(3) Establishing a forum with external stakeholders
tion policy. The set of 18 indicators builds on the structure
(4) Defining visions for all spheres of action
of the Catalogue of Measures.
(5) Drawing up a greenhouse gas abatement action plan
(6) Adopting binding, sector-specific targets
4. The Climate Alliance Catalogue of Measures

The local authority as consumer and model • Energy consumption: promote energy conservation and
efficiency
• Energy management in own facilities, and reporting
• Local public transport: improve public transport accel-
• Energy conservation investments, financing schemes,
eration and availability, expansion of public transport
commitment to best possible energy standards for new
network, improve fare policy and comfort and service
public buildings, and in retrofitting public buildings
• Infrastructure for pedestrians and cyclists: reduce the
• Energy supply: renewable sources of energy and co-
space devoted to cars in favor of walking, cycling and
generation in municipally owned buildings, purchase of
public transport
'green' electricity
• Cycling and walking: promote these options by better in-
• Transport - staff: support efforts to prevent or shift the
frastructure, better interlock with public transport
modal split of private motor vehicle traffic by own staff
• Waste separation and recycling: minimize environ-
on the way to work
mental impacts in the waste
• Transport - fleet: low-emission vehicles and shift to cli-
• management sector by separate collection, utilizing
mate-friendly option
landfill gas and biogas, disposal of (H)CFCs, HFCs and
• F-Gases: phase out (H)CFCs, HFCs and PFCs
PFCs.
• Procurement: environmentally sound purchasing policy
system through guidelines for climate-friendly purchas- The local authority as advisor and promoter
ing, giving preference to products with certified envi- • Energy sector: establish grant programs for efficient
ronmental labels, guidelines for award of contracts giv- heating systems, low-energy houses, conversion of
ing preference to best over cheapest offers electric space heating and domestic hot water systems
• Procurement and waste management: abstain from us- to other sources, cogeneration, renewables
ing tropical timber, give preference to domestic, and • Agriculture and forestry: promote and provide incentives
FSC certified timber for organic and extensive farming practices and bio-
• Waste: work towards rigorous waste prevention and mass facilities, support the marketing of regional pro-
reduction duce
• Agriculture and forestry: certified organic criteria, ecol- • Co-operation with industry and commerce: carry out
ogically adapted silviculture, forests certified to FSC joint climate protection projects with businesses and
standards trades, co-operate with housing associations and with
• North-South co-operation: support sustainable projects farmers
in the South, use 'fair trade' products. • Public education and awareness-raising: make profes-
The local authority as planner and regulator sional PR work, organize regular climate protection re-
lated events
• Urban development: reduce the area required for new
• Advice: offer energy, waste and mobility advice for citi-
construction, stop urban sprawl, integrate traffic preven-
zens
tion aspects in development planning
• Education and awareness-raising: demonstration pro-
• Energy: optimize the energy performance of new
jects, schools projects, energy conservation campaigns,
developments by district heat supply, renewable
campaigns aiming at changing the choice of transport
sources of energy, small-scale CHP units, efficiency
modes
and solar-oriented urban development planning
• Co-operation and participation: co-operate with citizens,
• Transport in urban planning: support transportation pat-
local groups and institutions in round tables or Local
terns more conducive to liveable cities by means of le-
Agenda 21 process, involve municipally owned utilities
gal and regulatory instruments and organizational
and other energy suppliers
measures.
• Co-operation with other municipalities in city networks
• The local authority as supplier and provider
and in the region
• Energy supply: promote climate-friendly options (co-
• One-World activities: events on North-South related is-
generation, efficient heating systems, district heat,
sues, co-operate with local North-South initiatives, cre-
renewables
ate and maintain partnerships focusing on Agenda 21
and climate issues.
20 Gotelind Alber
5. Some examples of good practice
Slide 1 Slide 2
Slide 3 Slide 4
Slide 5
6. The Climate Alliance

The Climate Alliance is an association of European cities sented by the Coordinating Body for the Indigenous Peo-
and municipalities that have entered into a partnership with ples’ Organizations of the Amazon Basin (COICA). Our
indigenous rainforest peoples. This world-wide alliance is world-wide cooperation partner is the International Alliance
united by a common concern for the world’s climate. Our of the Indigenous-Tribal Peoples of the Tropical Forests
climate protection contributions build upon commitment (I.A.I.P.). Both organizations are committed to conserving
and diversity at the local level. We view our initiative as a tropical rainforests and their biological diversity.
part of efforts towards sustainable development and North-
The Climate Alliance is the connecting link between the lo-
South equity.
cal level and the international policy processes in the cli-
Objectives mate change, biodiversity and forest policy arenas. We
represent the interests of European cities and municipali-
The aim of the Climate Alliance is to preserve the global
ties committed to climate protection, and support indige-
climate. In our view, this involves reducing greenhouse gas
nous organizations in developing positions of their own and
emissions to a sustainable level in the industrialized coun-
putting these positions forward in the international proc-
tries of the north, and conserving the rainforests in the
esses.
south of the planet.
Activities of the Climate Alliance
By joining, the member municipalities have committed
themselves to certain goals, activity areas and measures. • Networking and exchange of experience
These voluntary commitments are set out in the Climate Al- • Compilation, documentation and dissemination of good
liance Manifesto (1990) and Climate Alliance Declaration practice examples
(2000) and go far beyond national and international targets. • Evaluation of the members’ activities
This commitment is backed by a tremendous amount of lo- • Development of methodologies, recommendations,
cal action to protect the climate which is gaining recognition tools and guidelines
both nationally and internationally. • Campaigns and activities inviting broad public participa-
tion
Indigenous communities are the ones who contribute the
least to climate change, but could be affected the most Alliance
since they are living in very vulnerable areas. In our part-
• European Climate Alliance Award “Climate Star”
nership with them we support their goals to attain their ba-
• Car-free day campaign “In town - without my car” and
sic rights as peoples and to be able to live and work in their
European Mobility Week
natural environment according to their own development
• Social marketing campaign “wild climate”
concepts.
• Internet-based information and monitoring system in the
Members area of renewable energies
• „Pathfinder“ for local authorities in Southern, Central
Since its foundation in 1990, almost 1000 European cities,
and Eastern Europe
municipalities and district authorities over 47 million inhabi-
• Partnership programs between local authorities in
tants have joined the Climate Alliance. Regional govern-
Western and CEE countries.
ments and non-governmental organizations collaborate as
associated members. Our indigenous partners are repre-
22 Diana Ürge-Vorsatz / László Poizs
Energy and Carbon Intensities in Central Europe:

A Decade of Transition in Review
Diana Ürge-Vorsatz
László Poizs
Central European University Budapest, Hungary
Energy and carbon intensities in CONTENTS

Central Europe:
] Energy and carbon intensities in CEE at the fall of

communism
A decade of transition in review ] Reasons: Legacies of the centrally planned economy
] Policy agenda for a sustainable energy transition
Diana Ürge-Vorsatz ] A decade of transitions: energy in CEE in 2000
Y a chronicle of the first decade of energy transitions
László Paizs Y the energy landscape at the turn of the millenium
] The remaining transition agenda for sustainable energy
presented by Anna Soehl
Central European University, Budapest, Hungary
Diana Urge-Vorsatz
Central European University
Slide 1 Slide 2
INTRODUCTION Energy intensities in selected countries and

OECD , 1989 (TPES/G D P)
2
T oe/thousand 1990 U SD
1.8
1.6
1.4
] energy - the single largest polluter in CEE 1.2
] key to energy-related environmental problems 1
is the wasteful energy practices… 0.8 1989
0.6
] …indicated by world-record energy and carbon 0.4
intensities 0.2
] radical restructuring is a grand opportunity for 0
leap-frogging Czech Hun g ary Poland Russia O ECD EU15

Rep u blic
Diana Urge-Vorsatz Diana Urge-Vorsatz
Central European University Central European University
Slide 3 Slide 4
E n e rg y in te n s itie s in s e le c te d c o u n trie s
CO2 emissions per GDP in selected
a n d O E C D , 1 9 8 9 (T P E S /p p p G D P ) countries and OECD
0 .8 2
T o e /th o u s a n d 1 9 9 0 U S $ p p
0 .7
kg of CO2 equivalent
0 .6 1.5
1980
per 1990 USD
0 .5
0 .4
1 1989
1989
0 .3
0.5 1999
0 .2
0 .1 0
0
Czech Hungary Poland OECD Russia
C ze c h H u n g a ry P o la n d R u s s ia OECD EU 15
R e p u b lic Republic Europe
Slide 5 Slide 6
Energy and Carbon Intensities in Central Europe 23
Negative legacies of the centrally Positive legacies of the centrally

planned economy planned economy
] communist paradigm: efficiency has no role
Y subsidised energy prices
Y flat rates
Y lack of metering ] potential for leap-frogging
] marxist resource economics: unrealistic resource ] centrally planned economy favours collective
valuation ( e.g.. Bucharest formula) consumption
] planned economy: no competition, no penalty for Y high share of public transport in modal split
inefficiency Y high share of rail freight shipping
Y normative planning Y high share of district heating
] dominance of the heavy industry ] others

] lack of awareness
] others: insufficient data and information,
economies of scale, corruption
Slide 7 Slide 8
Policy agenda for reducing energy Feature of centrally planned

economy contributing to high energy
Policy response to address feature
and carbon intensities in CEE intensity

No competition, no penalty for inefficiency Transition to a market economy
Privatisation
] key goal: addressing the legacies affecting Unrealistic resource valuation Introduction of market prices
energy consumption patterns identified above Subsidised energy prices Lifting subsidies
Liberalisation of energy prices
Y positive legacies: potential for leap-frogging
Y negative legacies: policy goals to be tailored Flat rates Consumption based billing
targeting each legacy Introduction of metering
Dominance of heavy industry Transition to a market economy
Restructuring
Economies of scale Transition to a market economy, Privatisation
Lack of expertise and awareness Education, technology transfer
Insufficient data and understanding Data collection on end-use practices

related to energy use Establishment of energy related state
Diana Urge-Vorsatz
institutional background
Central European University Open access to information
Slide 9 Slide 10
Chronicle of the first decade of Pol i c y goal t o
addr ess f ac t or
St at us of t he i mpl ement at i on of pol i cy goal
energy transitions c ont r i but i ng t o hi gh

ener gy i nt ensi t i es
Pol and Hungar y Czech Rus s i a
Republ i c
Tr ans i t i on t o a Compl et ed Compl et ed Compl et ed St ar t ed; muc h

] Economic reforms in advanced stage in Central mar ket ec onomy f ur t her pr og r es s
need ed
European countries (Hungary, Czech Republic, Pr i vat i sat i on of t he L ar g el y L ar g el y L ar g el y P ar t i al l y
economy c omp l et ed c omp l et ed c omp l et ed c omp l et ed
Poland)... Pr i vat i sat i on of t he St ar t ed L ar g el y P ar t i al l y P ar t i al l y
] ... but require further progress in Russia and ener gy i ndust r y

( el ect r i ci t y her e)
c omp l et ed c omp l et ed c omp l et ed
much of CIS Li ber al i sat i on of

t he ener gy i ndust r y
St ar t ed St ar t
p l anne d f or
St ar t
p l anne d
Not s t ar t ed
2 003 f or 2002
] energy sector reforms at different stages: Li f t i ng ener gy pr i ce Compl et ed Compl et ed Compl et ed Not c omp l et ed
Y lifting subsidies s ubsi di es
Y corporatisation, unbundling Consumpt i on based Mos t l y Mos t l y Mos t l y P ar t i al l y
Y privatisation bi l l i ng c omp l et ed c omp l et ed c omp l et ed c omp l et ed
Y liberalisation I nt r oduct i on of
met er i ng
I n pr oc e s s I n pr oc e s s I n pr oc e s s I n pr oc e s s
Diana Urge-Vorsatz
Slide 11 Slide 12
Results: Energy landscape at the GDP of selected countries using exchange
turn of the millenium rates (1990 billion US$)

120.00
per cent of 1989 values
110.00
] GDP developments have followed 2 pathways:
100.00
Y fast transitioning economies (CE) rebounded
Y slow transitioning countries (Russia) slowly 90.00 Czech Republic
rebounding Hungary
80.00
Poland
70.00 Russia
60.00
50.00
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
year

Slide 13 Slide 14
24 Diana Ürge-Vorsatz / László Poizs
Results: Energy landscape at the TPES of selected countries,

turn of the millenium (cont. 1) 1985-1998 (1989 = 100% )
110.00
105.00
] GDP developments have followed 2 pathways: 100.00
Y fast transitioning economies (CE) rebounded 95.00
Y slow transitioning countries (Russia) slowly Czech Republic
per cent
90.00
rebounding 85.00 Hungary
] TPES follows similar pattern, but 80.00 Poland
Y shrank more than GDP in CE 75.00 Russia
70.00
Y shrank less than GDP in slow transitioning countries
65.00
60.00
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
year

Slide 15 Slide 16
Results: Energy landscape at the Energy intensities in selected countries
turn of the millenium (cont 2.) (1989 = 100% )
120.00
] GDP developments have followed 2 pathways: 110.00

Czech
Y fast transitioning economies (CE) rebounded Republic
Y slow transitioning countries (Russia) slowly 100.00
per cent
rebounding Hungary
90.00
] TPES follows similar pattern Poland
80.00
] Energy intensities develop two different
Russia
pathways: fast and slow transitioning economies 70.00
] Energy intensities have not fallen as expected 60.00

based on radical transition even in CE 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
year
Slide 17 Slide 18
The remaining policy agenda for Policy goal to Status of the implementation of policy goal
sustainable energy transitions address high
energy intensities
Poland Hungary Czech Russia
Republic
Increasing energy Limited Limited progress Limited progress Limited/no
efficiency progress progress
awareness
] Economic restructuring and energy sector Energy efficiency Limited/no Limited/no Limited/no Limited/no
education of experts progress progress progress progress
reforms alone will not close the efficiency gap Data collection on Worsened Worsened Worsened Worsened
] Further reforms needed: specific policies end-use practices during the
90s
during the 90s during the 90s during the 90s
targeting energy efficiency Establishment of Further Much progress Further progress Situation
energy efficiency progress made in 2000; needed worsened
related state needed further progress during Putin
institutional needed administration
background
Open access to Improveme Improvement Improvement Improvement
information nt needed needed needed needed
Diana Urge-Vorsatz
Slide 19 Slide 20
The remaining policy agenda for
sustainable energy transitions (cont) Conclusion
] the reduction of energy intensities is the key towards carbon

] Economic restructuring and energy sector emission control in CEE
reforms alone will not close the efficiency gap ] economic reforms and energy sector restructuring will address many
legacies from central planning causing high energy intensities
] Further reforms needed: specific policies
] ...but they are not sufficient for closing the energy efficiency gap
targeting energy efficiency ] for bridging the energy and carbon intensity gap with EU levels,
] Even with the most radical policies, the closing strong legal, financial and institutional commitment is needed from
governments
of the gap will be slow due to behavioural,
] leap-frogging requires inventive and dedicated policy-making to
cultural and organisational momentum. design new pathways of development.

Slide 21 Slide 22
The German Energy Agency as a Partner

for Energy Savings in CEE and FSU
Kristina Steenbock
German Energy Agency
1. Who is dena?
• New and first national energy agency
• Founded in 2000 by the German government and the KfW
• Background-idea that led to founding dena and major tasks of the agency
• Dena’s structure and partners
• Dena’s board and funding
2. Dena’s domestic action program

Examples of projects:
• Efficiency in compressed air systems
• Public information campaign to reduce standby losses
• Coordination of the offshore wind park planning
• Climate campaign
3. Dena’s international cooperation

• Cooperation, consultation and projects to energy efficiency and the deployment of new technology within the EU
• Export-orientation and -strategy of renewable energy technology
• Energy-efficiency in CEE and Russia
4. Examples
• Cooperation with Russia
• Bankable energy efficiency projects in 5 CEE countries
Slide 1 Slide 2
26 Kristina Steenbock
Slide 3 Slide 4
Slide 5 Slide 6
Slide 7 Slide 8
Slide 9 Slide 10
Slide 11 Slide 12
Slide 13 Slide 14
Slide 15 Slide 16
Slide 17 Slide 18
28 Piotr Kowalik
Overview of Biomass Use for Energy in Poland

Prof. Piotr Kowalik
Politechnical University of Gdańsk
Faculty of Environmental Engineering, Department of Sanitary Engineering
1. Concept of biomass
Biomass is the organic substance originated from vegeta- business (mainly in food processing industry). In the past
tion or animals. It may be produced by the so called socie- biomass was commonly used for energy in the form of fuel
tal metabolism as well. The most common form of the bio- wood and organic residues. About 2 tons of dry wood or
mass is wood, straw, sewage sludge similar to a peat, or straw are equivalent of the energetic value of 1 ton of black
the solid communal waste with high content of the waste coal. For example fossil fuel like Polish black coal has the
paper. Biomass is cumulated mainly in the place of produc- parameters 25/22/0.8 (25 MJ/kg, 22% ash, 0.8% sulfur),
tion or processing of the plant material (surplus of straw but biomass from plant material (wood or straw) 13/3/0.03.
during the production of grain, waste wood in the timber Dry sewage sludge has the parameters 14/45/0.8, which is
wood processing and pulp and paper industry), or it may be similar to the contents of the coal waste mud produced dur-
the plant material produced only in purpose of energy, for ing the process of washing of the black coal or to the con-
example on the fast growing short-rotation tree plantations tents of the low quality lignite (brown coal) or dry peat. But
of selected poplar or willow clones. in the energy production such a material may be utilized, it
means that coal waste mud, low quality lignite, peat, or dry
Organic waste material originated from animal metabolism
sewage sludge are considered as an energy resource in
may include biogas from the anaerobic digestion of the
the very local solutions.
animal manure or dung, biogas from the anaerobic fermen-
tation of sewage sludge in the waste water treatment In the terminology proposed in European Union (THER-
plants, or biogas from the anaerobic digestion of the MIE, 1995) biomass contains all kind of organic material
wastes on the sanitary landfills. Organic material may be originated from plants or animals, as well as all materials
transformed into pyrolitic gas (mainly during the process of originated from the transformation of the plant and animal
gasification of wood) and this pyrolitic gas may drive gas origin. The resources of biomass are: wood from the fast
engines for electricity production or may be used in the gas growing tree plantations, wood residues in forestry and in
boilers for heat production. timber production, manure and dung in the animal produc-
tion, straw produced together with grain, organic waste in
Very common is biomass as a liquid transport bio-fuels in
agro-business during food processing. Biomass contains
the form of oil or ethanol. Two technologies are existing on
organic material in the sewage sludge produced in the mu-
the Polish market. The first one is the production of esters
nicipal waste water treatment plants. It means that the pro-
from the rape seed oil giving so called bio-diesel. The sec-
ducers of biomass for energy are: agriculture (straw, bio-
ond one is the production of alcohol in the form of dewa-
gas from animal manure), forestry and wood processing
tered bio-ethanol mixed with the ordinary petrol (5% of bio-
industry (solid fuel wood), municipalities (waste paper, bio-
ethanol, 95% of petrol) and distributed in the petrol stations
gas from the sanitary landfills or biogas from the waste wa-
under the name bio-petrol E94E (Kowalik, 1997a).
ter treatment plants), or from the industry (residues from
Biomass according to the terminology introduced in the the paper and pulp industry, textile industry, food process-
European Union (Grassi et al., 1992) contains all organic ing industry, etc.).
material of biological origin (mainly from vegetation), which
In the Polish literature was proposed the definition by
may be produces on the special energy plantations, or may
Solinski (1994) as follows: „renewable energy resource
be originated from the residues in forestry, in timber pro-
means the source or energy carrier, which is able to re-
duction, in municipalities, in agriculture, and in agro-
generation under the influence of the energy coming from sanitary landfills), bio-ethanol (mainly from alcoholic fer-
Sun or Earth”. In agreement with this definition one can mentation of potatoes), or pyrolitic gas (produced from
propose that biomass is renewable energy resource (in the wood or sewage sludge).
form of solid, liquid or gas energy carriers), which are able
According to these definitions the biomass is treated in two
to regenerate under the influence of the energy, coming
separated groups of resources:
from the Sun and under the influence of the societal me-
tabolism. In this context biomass is the material originated • primary energy resources, including wood, straw and
from vegetation (wood, straw, lignin liquid waste as black sewage sludge (analog of peat) and
liquor, waste paper), from animals (municipal sewage • processed energy resources, upgraded into the form of
sludge, manure, dung), or substances after the processing biogas, bio-ethanol and pyrolitic gas (from pyrolysis and
of biomass producing biogas (from anaerobic digestion of gasification of biomass).
manure, sewage sludge, or from organic solid waste on the
2. Fuel wood
In Poland mean annual production of forestry is estimated wood boilers for production of heat, or big hardboard facto-
to be 19 mln cubic meters of wood (it was for example dur- ries producing elements of furniture. Until now the hard-
ing 1993). Recently Polish forestry is offering additional board factories are dominating client.
forest residues in amount of about 3.5 mln cubic meters
Big amount of waste wood is existing in the wood industry.
per year (during 1997) in the form of the fuel wood for di-
It is important to note that every 100 cubic meters of wood
rect combustion in small wood boilers. This wood has a
taken from the forest in the form of trunks contains at least
form of logs or fine wood (branches), about 2 mln cubic
10 cubic meters of bark, fine wood is giving 15 cubic me-
meters of logs and 1.5 mln cubic meters of fine wood (M.
ters, low quality big wood in the form of logs is 20 cubic
Jaworski, 1998, direct information). Bigger wood has a
meters, sawdust and wooden chips 19 cubic meters, sown
form of trunks cut to the pieces 1 m long and divided into
timber (lumber) contains 36 cubic meters, and the final
logs in the case when the diameter of the trunk is bigger
products from trunk wood is giving only 20–25 cubic meters
than 25 cm. Fine wood is obtained mainly from branches
(Guzenda and Swigon, 1997). According to the recent eva-
and small trees with a diameter lower than 8 cm and cut
luations it is not possible to increase the total wood produc-
into pieces 1 m long. Fuel wood is stored into cords of cut
tion of the Polish forestry in the coming years, even after
wood inside of the forest for drying and selling. Most of
intensification of the plantations of the fast growing poplars
such fuel wood is offered for clients in the Forest Regions
(30000 ha) and willows (7000 ha). Taking for the simple
of Wroclaw, Szczecin, Bialystok and Olsztyn, but the
balance annual production of 20 mln cubic meters of trunk
smallest amount is available in the Forest Regions of War-
wood and considering that 4/5 of this wood became wood
szawa, Radom, Krakow and Pila. Beside of the 3.5 mln cu-
waste, it gives about 16 mln cubic meters of wood in the
bic meters of fuel wood in the forestry is produced addi-
scale of whole country. Wood density is about 450 kg in
tional 2 to 2.5 mln cubic meters of clearing residues and
cubic meter (Gawronska, 1997) and the 16 mln cubic me-
fine branches (with diameter below 6 cm), but this particu-
ters means 7.2 mln t of wood per year, equivalent of about
lar material is not present on the market, because accord-
4 mln tons of black coal per year (Kowalik, 1994).
ing to the opinion of ecological foresters smallest residues
should be included into forest litter for organic fertilization Combustion of wood in Poland is realized in the boilers,
and reproduction of the soil humus content. Fuel wood is produced by several local factories. Most common pro-
offered for sell „loco forest” it means inside of the forestry, ducer is Factory KUBACKI from Hajnowka, producing boil-
with additional cost of the long transportation. Actual price ers under the name MODERATOR. Another producer is
of the fuel wood in Poland is about 50 PLN/cubic meter for Factory WUSP–MET in Pleszew or Factory FUWI in El-
logs and about 30 PLN/cubic meter for fine wood in the blag. Recent balance of the wood boilers was made by Da-
form of cords of cut wood (1 USD = 4 PLN now). The con- kowski (1998) who estimates that about 18000 wood boil-
current customers buying this wood are: owners of small ers are in use in Poland, with heat capacity between 14 kW
30 Piotr Kowalik
up to 820 kW, with the total heat capacity 600 MW and 0.3 mln tons of equivalent of black coal in actual use. It
consumption of fuel wood equivalent to 300 thousands tons means that the utilization of fuel wood may increase in Po-
of black coal per year. Substitution of coal by wood is land in the future even 10 times more than now. During last
eliminating of the emission of at least 6 thousands tons of year (2000) the export of wood waste from Poland to Den-
sulfur per year, but the existing potential is much bigger, up mark was about 0.4 mln t with a tendency to increase.
to equivalent of 4 mln tons of black coal with comparison to
3. Straw for energy

Poland is producing about 25 mln tons of straw (equivalent straw boilers were produced by the factory GRASO from
to 12.5 mln tons of black coal). In Denmark utilization of Starogard Gdanski. It was constructed in Baczek near
straw for energy is equal to 16% of annual straw produc- Starogard Gdanski (0.6 MW), in Kamiennik near Elblag (0.3
tion, but in some years even more (up to 50%). Taking 16% MW), in Trutnowy near Tczew (0.3 MW). In the middle of
of annual Polish production of straw the energy resources 1998 more than 10 straw boilers of the capacity 0.3 MW
would be equivalent to 2 mln tons of black coal per year. each were installed by the Factory GRASO. Straw boilers
This potential is stimulating the quick development of the from Baczek, Kamiennik and Trutnowy are using the straw
straw fired boilers on the Polish market (Kowalik and bales of cylindrical shape, diameter 1.5 m and height 1.2
Wichowski, 1998). m. Combustion is performed without continuous supply of
straw, because the straw bales are located into boiler every
First bigger straw boiler for district heating system was
4–9 hours, dependent upon the actual air temperature. It is
opened 26 October 1996 in the settlement Zielonki in the
so called „cigar burning” inside the boiler. In Kamiennik the
village of Szropy, commune Stary Targ near Malbork. It is
production of heat is used for district heating system for 82
an example of the transfer of Danish technology to the Pol-
flats, in Baczek for heating the big animal farm with 6000
ish market. Two Danish straw combustion boilers type
pigs. Most of the straw boilers produced by factory GRASO
DANSTOKER were installed with capacity 500 kW each.
has a capacity of 350 kW.
Heat supply is enough for 450 flats in few blocks. Straw is
pressed in ballots with dimension 2 x 1.2 x 0.85 m. Supply Poland is producing smaller units as well. Straw boiler with
of straw into boilers is continuous and automatic. Ash and heat capacity of 50–60 kW for individual farms is produced
slang is about 3.5% of the straw. Quality of flue gases is by Factory ENERGOMONTAZ in Gdansk (0.45 kW), or by
monitored for environmental impact assessment. Employ- METALERG from Olawa near Wroclaw (60 kW). It is esti-
ment is equal 2 workers on one shift. During the heating mated that recently more than 100 straw boilers were in-
season 1996/97 the price to buy the straw was 57000 PLN, stalled in Poland with the total heat capacity up to 100 MW
but the avoided cost to buy a coal was 169000 PLN. It (P. Gradziuk, 1998, personal communication), but these
means that the production of heat energy is cheaper from numbers seems to be too optimistic till now.
straw than from coal about three times. Change from coal
Most important factor in the development of the straw boil-
boilers to straw boilers was an investment with a pay-back
ers is related to the activity of the Voivodship Funds for En-
period equal 4 years (Denisiuk, 1998, personal communi-
vironmental Protection and Water Management
cation).
(WFOSiGW). Development of utilization of straw for energy
Similar straw boilers like in Zielonki were installed at the is observed only in the Vojevodships where these Funds
beginning of 1997 in Grabowiec near Zamosc (1 MW) and are supporting the investment for elimination of emission of
in the middle of the year 1997 in Czernin near Malbork (3 dust and sulphur from small district heating boilers. Substi-
MW). Original Polish solution was implemented in the vil- tution of black coal by straw was supported until now only
lage Wieniec on Sobieszewo Island near Gdansk (0.6 in the regions of Elblag, Gdansk and Zamosc. Expected
MW), where the existing coal boilers were expanded by the support from the Polish Ministry of Agriculture would have
straw pre-firing boilers and flue gases from straw are used the decisive importance.
to heat the old coal boilers and heat exchangers. Several
4. Sewage sludge (analogue of peat)

Utilization of sewage sludge for energy was initiated, be- completing many WWTP under construction now. Sewage
cause the parameters of sewage sludge are similar to the sludge after dewatering is similar to humified low peat. The
low peat or to lacustrine deposits reach with detritus. An- first incineration plant for sewage sludge was constructed
nual production of sewage sludge and similar organic in WWTP in Gdynia Debogorze with fluidized bed (opened
waste is estimated to be 2.5 mln tons d.m. in Poland in 1998). The capacity of this boiler is 10 t d.m. of sewage
(Kowalik, 1997b). sludge per day and production of heat equal to 2 MW.
Most of the organic residues are utilized in the Polish pulp Gasification and combustion of sewage sludge for central
and paper industry. Annual production of the organic waste heating plant is realized in the small boilers, produced by
from this industry is about 1 mln tons d.m., mostly in the the Factory FUWI from Elblag. The capacity of this boilers
form of lignin liquid waste (black liquor). Combustion of this is 0.2 MW. The supply of the boiler contains about 200 kg
material is producing heat for steam turbines, most of them d.m. of sewage sludge per day with the water content of
with capacity 15 MW(e). Heat is produces from combustion 65% of sludge, which is mixed with the 200 kg per day of
of waste wood, bark, waste paper and black liquor. It is lo- wooden chips. Example of such solution may be visited in
cated in the pulp and paper factories in Swiecie, Kwidzyn the WWTP in Swarzewo near Puck, in Radziejow near Ko-
and Ostroleka. Utilization of biomass is equivalent to the nin, in Brzozow near Krosno or in Makow near Ciechanow.
0.1 mln tons of black coal, substituted by the renewable re- Sewage sludge may be mixed with wooden chips, but may
source in Polish pulp and paper industry (Tarnawski, be mixed with coal dust as well (25% dry coal dust, 75% of
1994). In the year 1998 new fluidized bed boiler was in- wet sewage sludge). It is growing interest for utilization of
stalled in Ostroleka Electrical Company for combustion of sludge for energy, because substitution of black coal by
waste bark only. Utilization of bark for energy allowed to sewage sludge is allowing to obtain the pay-back period of
substitute 23000 tons of black coal per year here, eliminat- installed boilers in the range of two years. Emission of pol-
ing the emission of sulfur (460 tons S per year) and cutting lutants in the flue gases are very low because of the proc-
the emission of carbon dioxide. ess of pyrolysis and combustion only of gases, instead of
conventional grid combustion. Emissions from boilers for
Sewage sludge produced by the Polish waste water treat-
gasification of sewage sludge are lower than from the con-
ment plants is equal to 0.25 mln tons d.m., but in the near
ventional gas boilers.
future it will increase up to 0.5 mln tons d.m. per year, after
5. Biogas
Biogas from waste water treatment plants years it was possible to save about 100000 PLN because
of the avoided cost of the electricity from outside. Produc-
The most frequent solution used in the small electricity
tion of heat allowed to save 160 tonnes of black coal during
production is biogas to drive the engines and electricity
two years. Pay-back period of the investment in the engine
generator. Example of this solution may be seen in Bielsko-
and generator was two years. Similar solution was made in
Biala, implemented by dr M. Rutkowski from IBMER of
Olsztyn where electricity production from biogas on WWTP
Krakow (Rutkowski and Rutkowski, 1997). Generator of
is on the level of 50 MWh and is covering the demand for
electricity has a capacity 100 kW(e) and the biogas is origi-
electricity of WWTP on the level of 26%. Several others so-
nated from the anaerobic digestion chambers of sewage
lutions are working on the Polish market, for example in
sludge of the municipal WWTP. Electricity is used on site
Czestochowa, Zamosc and Sosnowiec. It is a growing in-
for driving pumps, and the consumption of the electricity
terest for such solutions.
from the state grid is reduced 25–30%, giving the savings
of money to be spend to purchase electricity if the biogas is Biogas from sanitary landfills
not utilized. Additional production of heat from cooling the
Tyminski (1997) indicates that it is not easy to evaluate the
engines is allowing to have additional heat supply for fer-
existing potential of the sanitary landfill gas in Poland. In
mentation chambers and for heating the offices. During two
32 Piotr Kowalik
1993 about 786 sanitary landfills were in use in Poland with produced 38 mln cubic meters of manure and 85 mln of
the total surface of 2845 ha. One cubic meter of biogas is cubic meters of dung per year. From 1 cubic meter of ma-
equivalent to 1 kg of black coal. In the mean conditions nure may be obtained about 20 cubic meters of biogas
from the sanitary landfill with surface 15 ha and annual (equivalent to 20 kg of black coal) and from 1 cubic meter
deposition of 180000 tons it is possible to obtain about 20– of dung – about 30 cubic meters of biogas (equivalent to 30
60 GWh heat energy per year (Nowakowski, 1997). Exploi- kg of black coal). Tyminski (1997) is giving the results of
tation of biogas from sanitary landfill may last 10–20 years. the calculations that if only half of the manure and dung
At the end of 1996 it was working in Poland 9 installations would be transferred into biogas, the production of energy
to obtain biogas from sanitary landfills and most was using would be equal 0.38 mln tons of black coal, about 9 PJ. In-
biogas to generate electricity. For example in Bydgoszcz is stitute of Buildings, Machinery and Electricity in Agriculture
working installation of capacity 300 kW(e), in Poznan 400 (IBMER) of Warsaw created several pilot plants in Polish
kW(e), in Grudziadz 100 kW(e), in Koszalin 100 kW(e). farms. One anaerobic digestor was installed in the farm us-
Design for such utilization of biogas is performed for Kra- ing 25 ha of land, with volume of 25 cubic meters. It was in
kow, Katowice, Lublin, Warszawa, Krasnik. Recently such use during 15 years producing biogas for gas combustion
equipment was completed for sanitary landfill in Gdansk for kitchen of the farm. Several biogas reactors was installed
200 kW(e) and few years ago in Braniewo for district heat in Poland, but the results are not very positive. It was
production in gas boiler of capacity of 0.1 MW(t). The summarized by Tyminski (1997) who wrote: „Considering
installation for biogas uptake from sanitary landfill and pro- the technology of the anaerobic digestion of manure and
duction of electricity with capacity 400 kW(e) has a cost dung in Polish conditions for production of biogas till today
about 2 mln PLN in Polish conditions (Nowakowski, 1997). it is difficult to find positive results. This technology of pro-
duction of biogas in agriculture is on the stage of research
Biogas from animal manure and dung
only. It was not implemented in the larger scale because of
Biogas may be produced in agricultural conditions in ani- the high cost of the reactors and it has very marginal im-
mal farms. According to Romaniuk (1995) in Polish farms is portance now” (p. 115).
6. Bio-ethanol
Consumption of the spirit in Polish conditions is about 130 This technology is implemented in USA and Brazil, but on
mln liters per year, but application of spirit as a liquid bio- the European market only in Poland.
fuel in the transport sector is about 100 mln liters per year.
Support for development of this technology should come
It was found that the addition of 5% of alcohol to the ordi-
from farmers, alcohol distilleries, oil refineries and petrol
nary petrol is allowing to decrease the content of lead of
stations. Many positive arguments exist from economical,
50%, which has beneficial influence on the health condi-
energetic and ecological points of view to support this solu-
tions of the users of the roads. Petrol with 5% content of
tion, but the progress is dependent upon the decisions of
dewatered ethanol is distributed on the Polish market under
Polish Ministry of Finance (taxes) and Polish Ministry of Ag-
the name „petrol E94E”. Production of bio-ethanol in Po-
riculture (policy). It is a great potential to produce bio-
land is supplied from the 50000 ha of potato fields now, but
ethanol as liquid bio-fuel for transport in Poland, but not
it would be easy to increase this area up to 150000 ha of
fully realized yet.
potatoes. Existing 900 small alcohol distilleries are
processing potatoes into alcohol (ethanol). This raw Bio-diesel from the rape seed oil is not produced in Poland
ethanol is processed in the few spirit distilleries to obtain yet. Import of bio-diesel from Czech Republic to Poland is
pure dewatered ethanol which is sent to the oil refineries estimated to be 10000 tons per month (year 2001), but the
(Trzebinia, Plock) to be mixed with ordinary petrol and to market is stil very limited.
produce bio-petrol with 5% of ethanol for petrol stations as
petrol E94E. This technology is implemented in USA and
7. Pyrolytic gas from wood or sewage sludge

Technology of gasification of organic matter is giving the producing heat from the coal fired boiler with capacity 320
gas product (mainly wood gas or coal gas) which can be kW. Coal boiler was too old for exploitation. Electricity sup-
used to run the gas engine and generator of electricity. ply was from the state grid, but it was a need for additional
Row material for gasification may be wooden chips, pellets electricity generator with capacity 50 kW(e), as well too old
from straw or dry organic wastes. In most of the technolo- for farther use.
gies it is needed to use the organic material with relatively
New system was designed and constructed for boiler using
small content of mineral fraction and low ash content. Ty-
wooden chips. Elements of the system are: gasifier for gas
minski (1997) indicates that the pyrolysis and wood gasifi-
generation, gas engine, electricity generator, heat pump,
cation is used in Poland during last years. For example the
heat exchangers. According to the description of Deptula et
Factory WUSP–MET in Pleszew and factory HAMECH in
al. (1997) wooden gas is produced in the generator type
Hajnowka are producing the special pre-boilers type UZE
IMBERT. Gas engine is a conventional Diesel unit, running
with the capacity from 25 till 197 kW. They are installed at
electricity generator. Most important was comparison of the
the front of the conventional coal-boilers, to substitute fossil
ecological consequences of the solution. After substitution
fuel by wood. In this equipment the fuel may be sawdust,
of black coal by wood the emission of carbon mono-oxide
shavings, wooden chips, fine fractions of bark and all wood
was greatly reduced, from 1000 to 40 mg/MJ, and similarly
wastes. After gasification the product is a mixture of com-
the emission of sulfur dioxide was reduced from 420 till 10
bustible gases, containing carbon mono-oxide, hydrogen
mg/MJ. Economical evaluation is giving some new informa-
and methane. Original solution was invented by factory
tions. Taking the investment cost, the system of heat and
FUWI of Elblag. They are producing boilers for gasification
power production from wood is costly, 760 PLN/kW with
of very moist wood in the form of logs or fine wood. The
comparison of the investment cost of the oil boiler, 329
mixture of wooden chips with sewage sludge may be gas-
PLN/kW, but the exploitation cost is very different, giving
ified and produced gas may be combusted in the central
45 PLN/kW for wood firing system with comparison to 157
heating installations, with capacity 0.1–0.2 MW.
PLN/kW for oil firing boiler. The cost of investment is not
New equipment for production of electricity and heat from surprising, because it is a prototype in the Polish condi-
wood was designed and implemented Dr B. Deptula from tions. Replications should be much cheaper in the future.
Politechnical University of Poznan, Department of Heat
It is important to stress hat it is a first in Poland the system
Technology. The starting point was that in the natural re-
to produce heat and power from wood, using technology of
serve near Poznan in the village Jeziory was necessary to
gasification of wooden chips. Capacity of the system is 50
solve the problem of the supply of heat and electricity of
kW(e), 300 kW of heat energy, but the emissions of the air
the local hospital for children. The project of the gasification
pollutants was reduced 20 times if one compares the emis-
of wooden chips and production of heat and power was
sions from coal boiler and new wood gasifing plant.
implemented during winter 1997/98. Previous system was
8. Barriers for implementation of biomass for energy

Several reasons are existing which are the barriers for the to environment and to the human health of coal, oil and
implementation of biomass to energy in Poland. They are natural gas;
(1) lack of the knowledge that the production of heat en- (3) too low progress with the technological development of
ergy and electricity from the cheap residual biomass is very the most efficient production of heat and power from bio-
economical and competing easily with the conventional fos- mass;
sil fuels;
(4) difficulties with the selling outside the produced heat
(2) too low prices of the conventional fossil fuels, without energy and electricity to the state electrical grid or to the
counting of the external negative influences of the damage district heating distribution pipes. It is lack of the detailed
regulations on the tariffs of heat and power from renewable
34 Piotr Kowalik
energy sources. The most logical seems the price for pro- it is a limited number of the success stories and positive
ducer of renewable energy is equal to 85% of the detailed solutions, but in the future should be more and more dem-
price paid by the end-user, but it is not solved yet; onstration installations and commercial replications.
(5) lack of the experience how to implement renewable en- Production of heat and power from biomass is very promis-
ergy in the obligatory local energy plans for communes in ing, if we take into account the existing positive demonstra-
Poland; tion plants. The supporting argument are very good techni-
cal parameters of the boilers, very good economical results
(6) the national strategy of the development of the renew-
with relatively short pay-back period of investments if the
able energy of the country was accepted by Polish Gov-
residual biomass is used, and the very positive ecological
ernment in 2000 and by Polish Parliament in 2001, but no
results with low level of the emission of flue gases and low
visible results so far.
emission of the pollutants to the atmosphere. Biomass is
The most important point is the dissemination of knowledge much more environment friendly than any fossil fuel.
on the existing pilot and demonstration solutions. Until now
9. Literature
• Dakowski M. (1998). Ciepło z energii odnawialnych – tanie ogrzewanie: kotły centralnego ogrzewania. Forum Ekologiczne,
Franciszkański Ruch Ekologiczny (Gdańsk), 1(107):2–3.
• Deptuła B., Grobelna M., Przybylski M. (1997). Racjonalizacja systemu energetycznego Jeziory na terenie Wielkopolskiego
Parku Narodowego. Piąta konferencja Racjonalizacja Użytkowania Energii i Środowiska, 15–17 X 1997, Gdańsk. Wyd. NOT
Warszawa, tom II, ss. 141–145.
• Gawrońska G. (1997). Ocena zasobów energetycznych biomasy drewna odpadowego w województwach nowosądeckim, tar-
nowskim i krośnieńskim. Seminarium z cyklu „Energia odnawialna, krok w kierunku ekologii”, na temat „Efekty ekologiczne,
energetyczne i ekonomiczne wykorzystania energii odnawialnej”. Wydawnictwo CPPGSMiE PAN, Sympozja i Konferencje Nr
26, Kraków, ss. 91–98.
• Grassi G., Trebbi G., Pike D.C. (Eds.) (1992). Electricity from biomass. CPL Press, Newbury Berkshire, pp. 72.
• Guzenda R., Świgoń J. (1997). Techniczne i ekologiczne aspekty energetycznego wykorzystania drewna i odpadów
drzewnych. Gospodarka Paliwami i Energią, 1(512):10–12.
• Kowalik, P. (1994). Potencjalne możliwości energetycznego wykorzystania biomasy w Polsce. Gospodarka Paliwami i Ener-
gią, R. 42, 3:9–12.
• Kowalik P. (1997a). Światowe tendencje w wykorzystaniu biomasy do produkcji ciepła, elektryczności i paliw samo-
chodowych. Gospodarka Paliwami i Energią, R. 45, 1:2-5.
• Kowalik P. (1997b). Polskie doświadczenia dotyczące termicznej utylizacji i energetycznego wykorzystania osadów ścieko-
wych. V Konferencja Nauk.-Techn. nt. Gospodarka Odpadami Komunalnymi. Koszalin–Kołobrzeg, 1997, ss. 325–338.
• Kowalik P. (1997c). Elektryczność z biomasy. Piąta Konferencja „Racjonalizacja użytkowania energii i środowiska”, Gdańsk,
15–17 października 1997, t. I, ss. 81–83.
• Kowalik P. (1998). Aktualny stan i perspektywy wykorzystania energii biomasy w Polsce. Międzynarodowe Seminarium Od-
nawialne Źródła Energii w Strategii Rozwoju Zrównoważonego, 17–19 XI 1997, Warszawa. Wyd. IBMER, Warszawa, ss. 94–
97.
• Kowalik P., Wichowski R. (1998). Polskie przykłady wykorzystania słomy i drewna do celów grzewczych w skali osiedla wie-
jskiego. Informacja INSTAL, 2:23–32.
• Nowakowski S. (1997). Prognozowanie zasobności gazowej wysypiska na podstawie próbnego pompowania gazu. Seminari-
um z cyklu „Energia odnawialna, krok w kierunku ekologii”, na temat „Efekty ekologiczne, energetyczne i ekonomiczne wykor-
zystania energii odnawialnej”. Wydawnictwo CPPGSMiE PAN, Sympozja i Konferencje Nr 26, Kraków, ss. 67–74.
• Romaniuk W. (1995). Gospodarka gnojowicą i obornikiem. NFOŚiGW, Warszawa.
• Rudkowski M., Rudkowki J. (1997). Możliwość wykorzystania biogazu i innych paliw gazowych do napędu pojazdów i agre-
gatów. Seminarium z cyklu „Energia odnawialna, krok w kierunku ekologii”, na temat „Efekty ekologiczne, energetyczne i e-
konomiczne wykorzystania energii odnawialnej”. Wydawnictwo CPPGSMiE PAN, Sympozja i Konferencje Nr 26, Kraków, ss.
75–79.
• Tarnawski W. (1994). Racjonalizacja użytkowania energii w przemyśle celulozowo-papierniczym. Druga Konferencja Racjo-
nalizacja Użytkowania Energii i Środowiska, 17–19 X 1994, Szczyrk. Wyd. NOT Warszawa, t. I, ss. 147–168.
• THERMIE (1995). Energy from biomass, principles and applications. A THERMIE Programme Action, RES, European Com-
mission, Directorate General for Energy (DGXVII). IDAE, Madrid, pp. 25.
• Tymiński J. (1997). Wykorzystanie odnawialnych źródeł energii w Polsce do 2030 roku, aspekt energetyczny i ekologiczny.
IBMER Warszawa, ss. 178.
• Soliński I. (Red.) (1994). Prognozy kosztów oraz konkurencyjność odnawialnych i nieodnawialnych nośników energii w
Polsce. Wydawnictwo CPPGSMiE PAN, Studia i Rozprawy Nr 34, Kraków, ss. 88.
36 Peter Schrumm
Biomass Use in Germany

Peter Schrum
farmatic biotech energy ag, Germany
Slide 1 Slide 2
Slide 3 Slide 4
Slide 5 Slide 6
Biomass Use in Germany 37
Slide 7 Slide 8
Slide 9 Slide 10
Slide 11 Slide 12
Slide 13 Slide 14
38 Franko Nemac / Aleš Bratkovič
Economical Growth Potential of Energy Biomass Use in Slovenia

Franko Nemac
Aleš Bratkovič
ApE – Energy Restructuring Agency, Republic of Slovenia
1. Wood biomass – energy source for the next century

In the past years Renewable Energy Sources (RES), or
sustainable energy sources - among which biomass occu-
pies an important place - experienced an increasing atten-
tion. The 1994 Madrid declaration foresaw that up to 2010
there would be 15% of conventional needs of the EU re-
placed by RES. A more recent document, the EU White
Paper (Communication from the Commission - ENERGY
FOR THE FUTURE: RENEWABLE SOURCES OF EN-
ERGY - White Paper For a Community Strategy and Action
Plan) states that by 2010 the use of biomass in the area of
the EU would have saved 255 million tons/year of CO2
emissions. This is more than 60% of the decrease in CO2 1.1 Modern fuel preparation and
combustion technology
emissions that could be contributed by all the RES.
Modern use of wood biomass is far different from the tradi-
Figure 1: Chipping on the road side and transported using tional concept of wood biomass burning. Available tech-
tractors and trailers nologies enable a very efficient, automatic and comfortable
way of wood biomass preparation and burning. One of the
available technologies is presented below. “Harvesting” is
carried out by manual felling in forest, chipping on the road
side and transportation to the plant. The typical harvesting
chain is presented in figure 1.
The boiler plant consists of the fuel storage with an auto-

matic fuel feeding system to the boiler. The plant usually
has a stoker-burner and a mechanical moving grate with an
automatic combustion control system. The plant is usually
operating automatically and heating entrepreneurs only
visit the plant, feeding the fuel storage or abolishing unex-
pected operational disturbances in the plant.
Figure 2: Typical wood chips heating system
Through the computerized district heating network “green” no fire in the house, no chimney and no operation obliga-
heat is supplied to the final consumers. The consumers en- tion.
joy full comfort of heat supply, have no fuel storage costs,
Figure 3: Fully computerized district heating system on wood biomass

1.2 Comparative advantages & disadvantages of • New income for farmers and foresters
wood biomass use • Regional and country development, employment and
new branch industry development
Compared to fossil fuels the wood biomass use has several
• Sustainable region development, attractiveness and
advantages that relate to national economy, employment,
tourism development.
safety, security of supply and environment. Among others
nowadays wood biomass systems present: Despite obvious advantages for the economy as a whole its
large disadvantages are high investment costs. The market
• Comfortable, safe and efficient heat supply
penetration of modern, highly efficient and environmentally
• High security of fuel supply with very stable prices
friendly technologies is difficult. This corresponds to
• Low operating costs
technological reasons1, small production, high development
• Clean burning with zero CO2 emissions
costs and market distortion. Especially fossil fuel prices at
• Initiate forests cleaning, lower wood waste disposal,
present do not incorporate all external costs of their use2.
prevented overgrowing
• Possible fossil fuels savings, lower country import and
foreign currency saving
2. Wood biomass use in Slovenia

interest rate subsidies and grants. The available state sup-
2.1 Current situation
port has enabled a number of municipalities to prepare lo-
In general RES are considered as an important future pri- cal energy plans and feasibility studies for biomass district
mary energy source in Slovenia. Considering the fact that heating projects. In the majority of cases, district heatings
about 70% of Slovenia’s total primary energy need is im- are based on existing industrial boilers. According to the
ported, the renewable energies - beside their obvious envi- most recent data there are 78 wood waste boilers in opera-
ronmental and social benefits - are considered as an tion in the Slovenian wood reprocessing industry, with a
important national strategic reserve. The Resolution on the nominal power of over 1 MW. The overall installed capacity
Strategy of Energy Use and Supply of Slovenia (ReSROE) is 340 MW. Most of the existing old boilers do not meet the
has set a target to substantially increase the share of renew emission requirements, and therefore need to be re-
newable energy sources within the primary energy balance placed with new, modern boilers equipped with automatic
by the year 2010. The Slovenian National Energy Plan en- fuel feeding.
visages to increase the share of wood biomass within the
2.2 Barriers in wood biomass utilization
primary energy balance by 50%. The current share of bio-
mass in primary energy supply reaches 4.4% (11.2 PJ). An analysis conducted in recent years identified the follow-
Given the fact that over 56% of the Slovenian territory is ing key barriers and obstacles in development of wood
covered by forests and that there is a significant wood biomass projects in Slovenia:
processing industry in the country, the increasing use of Institutional barriers
biomass for energy supply should have a specific empha-
• Lack of a cross-sectoral strategy and policy framework
sis.
to promote biomass energy projects
The Government of Slovenia has systematically supported • Lack of a strong national focal point to support and
renewable energy programs and investment projects since promote biomass energy activities
1991 through its public competition program. The support • Strong competition with big, well organized oil and gas
was spent through a number of instruments, as soft loans, companies.
Awareness, information and capacity barriers questionable technology (due to the inefficient and pol-
luting old wood boilers).
• Lack of information and awareness of the local commu-
nities on the social and environmental benefits of in- Financial barriers
creasing the use of biomass as an energy source
• Weak financial status of the communities and wood
• Lack of awareness of the end users regarding the costs,
processing companies to acquire commercial credits, al-
benefits and possible constraints of changing the indi-
though the projects themselves would be financially
vidual heating systems to district heating
strong
• Lack of information to determine accurately the specific
• Interest rates of the banks which are still above the av-
investment and operational costs of biomass based dis-
erage European level
trict heating and co-generation plants
• Lack of information about the possible sources of
• Lack of capacity and guidelines for preparation of feasi-
financing
bility studies and “bankable” project proposals
• Uncertainties on the long term market price of biomass
• Lack of capacity and information for the assessment of
fuel
the sustainability of the wood fuel and for the mobiliza-
• Absence of a stable, long-term financing mechanism to
tion/organization the local wood fuel market
support renewable energy projects (the present gov-
• Lack of information about the possible substitutions of
ernment support from the annual budget does not allow
old boilers with high-efficient ones
long term planning)
• Lack of capacity and experience of local communities to
• Short requested pay-back time of the commercial loans
prepare all required documentation for project financing
• High project preparation costs without assurance to ob-
• Perception of biomass boilers as being environmentally
tain financing for implementation.
3. Program for wood biomass use in Slovenia

To increase the wood biomass utilization in modern, effi- • Develop a model for long term biomass supply agree-
cient, emission friendly systems significantly the Ministry for ments for creation of stable environment for investment
Economy started a 10-years developing program. Since decisions
modern wood biomass fired boilers are far too expensive to • Based on the evaluation of the results of the feasibility
compete with fossil fuels boilers, the Government intends studies and experiences gained in other countries, de-
to support the program with a sufficient level of subsidies. velop a financial support scheme for biomass energy
For the implementation of the program an establishment of activities, encouraging cost-effective use of resources
a long-term financing mechanism has to be found. As the and long term cost reduction objectives of biomass en-
main source a CO2 tax was proposed. ergy technologies
• Preparation of guidelines and organization of training for
3.1 Project activities and expected results
the local communities, industry and consultants to pre-
• To reach the envisioned objectives the following activi- pare “bankable” biomass projects and finalization of
ties are foreseen: documentation required for projects financing
• Raising the awareness and advising the local communi- • Develop the criteria for selection of the demonstration
ties, land owners associations and industry on the latest projects and selection of 3-5 demonstration projects for
available technical options for using biomass as an en- execution
ergy source, and their economic, environmental and so- • Training of the local professional groups to install, ser-
cial benefits and constraints vice and operate the biomass installations
• Organize public hearings, publish and distribute public • Monitoring, evaluating and reporting the experiences
awareness documentation and implement other meas- and lessons learned during the implementation of the
ures to facilitate participation of local communities and demonstration projects
their residents into the evaluation and development of • Preparation and dissemination of public awareness
the planned biomass energy projects documentation, organization of seminars and study
tours to share the results of the demonstration projects, are relatively old and in some cases the boilers were de-
analysis of the lessons learned and promotion of bio- spite available wood waste replaced by fossil fuels burning
mass energy boilers. The installation of minimum 100 industrial boilers,
• Establishment of a permanent financing mechanism to powering from 50-500 kW, is foreseen in the next 10 years.
support biomass energy activities in Slovenia based on The subsidy support will range up to 25% of the invest-
their local and global environmental and other benefits. ment.
The projects for Government’s and GEF’s support will be Installation of 5,000 biomass boilers for individual
selected on a competitive basis based on their economic households
feasibility, their “learning value” in terms of different tech-
Based on a number of existing old fashioned wood fired
nologies, financial approaches and sources of biomass and
boilers and the existing interest of owners, at least 5,000
their possibilities to become a “success story” to be used
small scale biomass boilers for individual households can
as a model for other projects. The criteria for the support
be installed in Slovenia in the next 10 years. Since these
will be developed during the further preparation and imple-
boilers are very expensive compared to fossil fired boilers,
mentation of the project. However, specific emphasis in
the Government should offer a subsidy up to 50% of the in-
that regard will be placed on evaluating several possible fi-
vestment. In Austria nowadays 20,000 of such boilers are
nancing possibilities in order to select a modality that would
in operation, gaining investment support form the Govern-
support the efficient use of resources and long term costs
ment. Three types of such boilers can be installed:
reduction of biomass technologies. In that regard, the
experiences in other countries (especially in Austria) will be (a) Wood chip fired boilers up to 50 kW with automatic
deeply reviewed, and the lessons learned will be used in feeding system for individual households
designing the support mechanisms. (b) Modern log wood fired boilers for central or floor heat-
ing, with large water tank, powering from 15-50 kW
In general, the support for biomass projects would be 25-
(c) Wood pellets fired boilers powering from 15-30 kW with
40% of the total investment costs and should gradually de-
automatic feeding system.
cline to 0%, or to the level reflecting the additional, justified
domestic benefits. Should the biomass energy require con- Beneficiaries
tinued public support (e.g. to cover the still unaccounted At the local level, the main target beneficiaries of the pro-
external costs of fossil fuels), a proposal has been put for- ject are:
ward to use the funds from the currently collected CO2 tax
• Slovenian communities and their residents through the
for that purpose. The use of other grant financing sources
improved local environmental conditions, provision of
or soft loans could also be justified.
modern heat and hot water supply and creation of new
3.2 Program components jobs (including the tourist centers that can utilize the im-
The program consists of three main areas: age of “green communities” in marketing)
• Local wood processing companies through opening a
Execution of 50 biomass district heating projects
market for industrial wood waste
Installation of 50 biomass district heating projects (BDHP) • Local farmers and forest owners through increasing the
with average boiler's size 3 MW is according to wood po- market for wood fuel collected from the target oriented
tential in Slovenia. The fact that today there are 300 BDHP forest tending and intensified exploitation of the biomass
working in Austria is a realistic and achievable goal. The potentials of the brushwood on the abandoned agricul-
program should be developed until the year 2010. Each tural land
project will gain in total subsidy support in range of 30-45% • Local consultant companies and NGOs providing exper-
of the investment. tise and services to promote and implement biomass
energy activities
Installation of 100 modern industrial
• Local firms producing wood biomass boilers and related
small scale biomass boilers
equipment (secondary beneficiary).
In Slovenia there are numerous industrial wood biomass
boilers installed in wood processing industry. The boilers
4. Sources of program financing

4.1 Government budget 4.3 CO2 tax
The Government of Slovenia is promoting wood biomass In the program proposal the long term financing source is
use with subsidies for project preparation as for project im- the CO2 tax. The wood biomass use namely contributes to
plementation. Especially recognizing the strong domestic CO2 reduction. The fossil fuels are taxed in Slovenia from
benefits of biomass district heating projects, the Ministry for the beginning of 1997 while energy use of wood biomass is
Economy offers to cover up to 25% of their investment not taxed since biomass is CO2 neutral. The primary goal
costs. Despite of this support only one project was exe- of CO2 instrument (beside fiscal) should be the reduction of
cuted with an additional grant component from EU-PHARE. CO2 emissions. The source of financing for such projects
This financing is predicted to slowly decrease and will be should consequently be the CO2 tax budget. Wood bio-
substituted with the income of CO2 tax on fossil fuels. mass projects usually replace the existing use of fossil fu-
els and have so called “negative” emissions. One possible
4.2 GEF / UNDP funding
criteria how to support the projects by CO2 tax fund might
In the year 2001 the final contract with GEF (Global Envi- be the actual project CO2 savings. The amount to which in-
ronmental Facility), UNDP (United Nations Development dividual wood biomass project reduce CO2 emissions,
Program) and Government of Slovenia was signed. Slove- evaluated by current CO2 tax, could be the base for its
nia will gain a subsidy of 4,3 million US $ to develop 3-5 governmental support.
biomass district heating projects and to promote the in-
crease use of biomass. This source of financing will be
used in the first years of the project development.
Table 1: Example of subsidy support calculation for BDHP
Energy Use Useful energy (MWh / year) Yearly CO2 emissions

Extra light fuel oil 6.723 1.792.000 kg
Present situation Coal 251 86.000 kg
Wood 606 0 kg
Total CO2 emissions – A 7.580 1.878.000 kg
Situation after execution of Wood biomass 8.918 0 kg
Biomass District Heating Project Extra light fuel oil 482 128.000 kg
Total CO2 emissions – B 9.400 128.000 kg
CO2 reduction: A minus B 1.750.000 kg
With tax evaluated reduced CO2 * 1.750.000 kg CO2 * 0,01429 €/kg CO2 25.000 €
Project's economic life 20 years
Financial support value 25.000 €/year * 20 years 500.000 €
* At the moment full CO2 tax amounts to 0,01429 €/kg of CO2 emissions.
An example of subsidy calculation for BDHP is given in 0. Considering 20 years of project’s economic life period the
The project has a 2 MW wood biomass boiler, 6,4 km of financial support should amount to 500,000 €.
district heating network, total useful heat consumption of
To execute the 10 years biomass program the Government
7,58 GWh/year; total primary energy to cover the district
should support it in average with the amount of 6,2 million
heating demand of 9,40 GWh/year (district heating losses
€/year, what corresponds to 17% CO2 tax collected in the
included). With the project execution the CO2 reduction
year 2000. Such financing approach would prove the valid-
would be 1,750 tons CO2/year and its value 25,000 €/year.
ity of introducing the CO2 instrument in Slovenia.
5. Macroeconomic and environmental impact of the program execution

5.1 Environmental benefits tons/year, while SO2 emissions will decrease by 3,380
tons/year. The program in total contributes 26% to Kyoto
A very important effect of the program execution repre-
requirements for Slovenia. The contribution to emission re-
sents the reduction of CO2 and SO2 emissions. In the year
duction is presented in table 2.
2010 CO2 emissions will be reduced by 0,33 million
Table 2: Kyoto requirements and expected program CO2 and SO2 reduction
Targeted national CO2 reduction according to Kyoto protocol

Years 2008-2012 Required CO2 reduction in year 2012
Targeted total CO2 emissions 14.40 million tons 1.25 million tons of CO2
CO2 and SO2 reduction related to execution of national program
Year 2010 Whole emission reductions until the year 2010
CO2 emission reductions 0.33 million tons 1.73 million tons
SO2 emission reductions 3.380 tons 17.800 tons
5.2 Economic and social impact Net regional income
In the project we used an analysis macroeconomic tool – Net regional income is calculated by net income distributed
ELVIRE, developed by the ALTENER program, with the during the investment phase, discounted income from the
aim to perform the proper calculation of socio-economic project operation and maintenance phase plus net con-
impacts. The method is halfway between traditional “ex sumers income balance (users' profitability).
ante” evaluation of projects and the analytical methods for
Regional benefit
large projects. In summary, the model analysis the project
related to the following impacts: the economic development Regional benefits in whole project's life represent the net
of the region, employment, return on public finances, sus- regional income, value added of non-imported fossil fuel
tainable development and the environment. The analysis energy and net public finances receipts.
concerns effects on the following macroeconomic catego- Public finances receipts
ries:
Total public finances receipts evaluate all tax income,
Regional activity which occurs due to project execution but also due to the
An item Regional activity accounts for regional activity cre- losses in public receipts. Net income of public receipts is
ated during the investment phase, discounted value of usually negative due to the high tax rate for fossil fuels. Ba-
maintenance and value added for project operation and all sic technical parameters and economic impact of the pro-
additionally created activities. In calculation lost activities gram are presented in the table below.
are considered also.
Table 3: Macroeconomic influence of the program execution in Slovenia
NECESSARY CONDITIONS FOR THE PROGRAM EXECUTION

Investment value for the program execution 162,9 million €
Governmental support 62,4 million €
Long term sources of financing CO2 tax
Dead line for the execution of the program Year 2010
TECHNICAL parameters
Total number of biomass based projects 5.150 projects
Total installed power in the year 2010 330 MWt
Cumulative heat production until the year 2010 6.310 GWh
Heat production from wood biomass in the year 1998 3.100 GWh
Heat production of the program in the year 2010 1.200 GWh
Increase in biomass share in energy balance of Slovenia 38,7 % increase
ECOLOGY
CO2 emissions for the year 1986 15,66 million ton CO2
8 % emission reduction according to Kyoto protocol 1,25 million ton CO2 /year
Emissions savings at program execution 0,33 million ton CO2 /year
SO2 emissions in the year 1995 119.300 ton /year
SO2 emissions savings in the year 2010 3.390 ton SO2 /year
ECONOMIC & SOCIAL influence until the year 2010
Cumulative savings of fossil fuels: alternative natural gas 668 million Sm3
Fossil fuels savings in year 2010: alternative natural gas 128 million Sm3
ECONOMIC & SOCIAL long term influence
Net regional incomes 103,3 million €
Regional activity 178,6 million €
Regional benefit 463,3 million €
Public finances receipts -35,7 million €
The results of the program execution can be summarized as • 1 € of subsidy creates 1,7 Euro of regional added
follows: value and 7,4 € of regional benefits. The impact in
terms of economic development is very important, es-
• Total investment value 162,9 million €, needed subsidies
pecially since new activities and new employment
62,4 million €.
have been created.
• 5,150 projects, 330 MWt power, heat prod. 1,200
• The program creates 380 new jobs and fossil fuels
GWh/year, 39% wood biomass growth.
saving amounting 21,9 million €/year. The consumers
• Yearly fossil fuels savings: 128 million Sm3 natural gas
themselves will participate in gain sharing: having a
equivalent.
higher quality product at lower price.
• Emission reduction: 0,320 million tons CO2/year, 3,390
• The project contributes to the spatial planning of the
ton SO2/year.
area thanks to the beneficial activity of the
• Regional activity growth: 178,6 million €, regional benefit:
hedge/coppice trimming and the clearing of the for-
463,3 million €.
ests. The project also serves to combat social exclu-
In figure 4 the main economic categories are presented with sion while creating income flows in the region.
their mutual influence and contribution to the regional devel-
opment. We can summarize the results in the following cate-
gories:
46 Franko Nemac, Aleš Bratkovič
Figure 4: Main economic categories with their contribution to the regional development
The macroeconomic results show very high social profitability On the long run, since the era of fossil fuels is slowly
of the program in terms of GDP growth, improved balance of dawning and the prices are raising, solutions for the bio-
trade and increased employment. Overall country benefits far mass are expected to become predominant on the heat
exceed with the Program execution associated costs and market. At that time subsidy support for the biomass sys-
prove the decision for the program. tems is not needed any more.
6. Literature
• Aktionsprogramm Abbau von Hemmnissen bei der Realisierung von Anlagen Erneuerbarer Energien, Forum fur Zukunfts-
energien, gefördert durch das Bundesministerium fur Wirtschaft, Bonn, April 1997
• GEF / UNDP project: Analysis of Wood Biomass Potential in Slovenia; Ljubljana, 1998
• E. Ortmeier, D. Hein: Strategies for the Energetic Use of Biomass in Bavaria – Illustrated by Projects in Operation, under
Construction and Development, 10th European Conference and Technology Exhibition – Biomass for Energy and Industry,
Proceedings, C.A.R.M.E.N., Würzburg, June 1998
• Energy Policies of Slovenia, 1996 Survey, IEA/OECD, 1996
• Final report of the PDF B phase of the UNDP/GEF project: Removing Barriers to Biomass District Heating Project in Slovenia,
Ljubljana 1998
• Growing Power, Bioenergy technology from Finland, TEKES – Technology Development Centre Finland, 1997
• M. Medved, L. Žgajnar, N. Pogačnik, R. Robek: Analysis of wood biomass potential in Slovenia - Project UNDP GEF, Forestry
Institute of Slovenia, Ljubljana, October 1998
• Mikael Skou Andersen: Governance by green taxes: Making pollution prevention pay, Manchester University Press, 1994
• Rakos, Christian: Lessons Learned from the Introduction of Biomass District Heating in Austria, Vienna 1998
• Resolution on the Strategy of Energy Use and Supply of Slovenia, Official Gazette of Slovenia No.9, Ljubljana, February,
1996.
Slide 1 Slide 2
Slide 3 Slide 4
Slide 5 Slide 6
Slide 7 Slide 8
48 Franko Nemac, Aleš Bratkovič
Slide 9 Slide 10
Slide 11 Slide 12
Slide 13
Biomass Success Stories in Ukraine

Dr. Georgiy G. Geletukha
Scientific Engineering Centre "Biomass", Kiev, Ukraine
1. Energy production from biomass in EU countries

Energy production from biomass is developing dynamically pean index significantly: In the USA biomass share is
in most European countries. The share of renewable en- 3.2%, in Denmark - 6%, in Austria - 12%, in Sweden - 18%,
ergy was 74.3 mln tons of oil equivalent in EU countries in in Finland - 23%. According to the program of renewable
1995 that came to about 6% of the total primary energy energy development biomass will cover about 74% of the
consumption. Among these biomass share was more than total renewable energy contribution in 2010 in EU countries
60% that came to about 3% of the total primary energy that will amount to about 9% of the total primary energy
consumption. In some countries biomass share in the total consumption. It is obvious that biomass is the most power-
primary energy consumption exceeds the average Euro- ful sector of renewable energy in EU.
2. Biomass potential in Ukraine

An estimation of the biomass potential available for energy Table 1: Energy potential of biomass in 1999-2000
production in Ukraine was carried out on the basis of statis-
Energy potential
tic data. The main source of biomass in Ukraine is agricul- Type of biomass
mill toe
tural residues and first of all cereals straw. Residues coeffi- Cereal crops/ straw (without maize) 2.54
cients and the share of biomass that is not used by other Maize for grain/ stems, ears 0.83
sectors of economy and is available for energy production Sunflower/ stems, husk 1.62
were defined on the basis of method literature and expert Manure/ biogas
evaluation. For instance, consumption of straw for own - Cattle 0.92
demands by agricultural sector (fodder and bedding) is ac- - Pigs 0.08
cepted as 80% of the total amount of straw in Ukraine. - Poultry 0.11
Total on manure 1.1
Thus only 20% of straw are available for energy purposes.
This figure is notably lower than that for example in Den- Wood wastes
mark, where 60% of the total yield of straw are considered Wood remained at felling areas (felling residues),
W 50-60% (mass moisture content) 0.314
available for energy production. In the future the share of
Residues at timber enterprises generated
straw available for energy purposes may increase consid- during sawing of round timber, W 40-45% 0.114
erably in Ukraine. Residues at woodworking enterprises generated
during production of finished products, W 25-30% 0.180
Another big source of biomass in Ukraine is cattle manure. Firewood taken out of felling areas, W 40-45% 0.969
Calculation was done starting from livestock of animals. Total on wood wastes 1.1
For that statistical data on livestock were used for cattle Landfill gas 0.21
and pigs. The quantity of poultry was defined on the basis TOTAL 7.42
of existing data on eggs production starting from estimation The next big source of biomass in Ukraine is wood resi-
that one hen lays 250 eggs per year. According to data of dues. According to statistical data of 1999 the energy po-
1999 the total amount of biogas that can be obtained from tential of wood wastes of different types came to 1.11 mill
manure of cattle, pigs and poultry came to 2,207.2 mln m3 toe/year. Landfill gas (LFG) generated from municipal solid
that was equivalent to 1.11 mln toe. wastes (MSW) during their degradation under anaerobic
conditions at open dumps and landfills should be consid-
50 Georgiy G. Geletukha
ered as separate type of biomass. Annually about 15 mln t on what was mentioned above, the potential of LFG avail-
of MSW are generated in Ukraine. The main part of MSW able for energy production at the 90 most large-scale land-
is disposed of at open dumps (more than 90%). Of the total fills comes to about 400 mln m3/year, which is equivalent to
quantity of dumps (655) only 140 is landfills which can be 0.21 mln toe/year.
considered suitable for LFG extraction and utilization. Of
Summary data on energy potential of biomass are pre-
140 landfills 90 are of large scale and contain up to 30% of
sented in table 1. Thus, according to 1999-2000 data, bio-
all MSW of Ukraine. These landfills are the most economi-
mass potential in Ukraine amounted to about 7.4 mln
cally rational for LFG extraction and utilization, and there-
toe/year. It comes to about 5.3% of the total primary energy
fore just these were taken into account when elaborating a
consumption in Ukraine not taking into account the share of
conception for bio-energy development in Ukraine. Based
biomass that is used now by other sectors of economy.
3. Status of bio-energy development in Ukraine

At present the use of renewable energy in Ukraine (exclud- large-scale bio-energy equipment operating in Ukraine.
ing large hydropower) is less than 0.5% of the total primary Firstly there is the Dutch-Ukrainian technical assistance
energy consumption. Now there are only some modern project. In the frame of this project two steam wood-fired
wood-fired boilers in operation in Ukraine. In addition a boilers were implemented: a 5 MW boiler at veneer plant
number of boilers originally designed for coal and oil com- “Odek-Ukraine” in the town of Orzhiv (Rivne oblast) and a
bustion and later converted for wood combustion by own 1.5 MW boiler at Malin state timber enterprise (Zhitomir
strength are now in operation at timber and woodworking oblast). The boilers are equipped with step moving grates
enterprises. As a rule such boilers have fixed grates, batch and intended for combustion of wood chips, bark and saw-
fuel loading, low efficiency and high emission. Several boil- dust with a moisture content up to 60%.
ers converted to combustion of husk are in operation at oil-
Besides, the Danish-Ukrainian technical assistance project
extraction works now. Husk combustion is a cost-effective
has been fulfilled successfully. Within the frame of this pro-
technology, which continues development in Ukraine. At
ject a 980 kW straw-fired boiler for big bales was installed
present only one straw-fired boiler of 980 kW capacity is in
at the village of Drozdy, Kyiv oblast.
operation in Ukraine. But there are not combined heat and
power (CHP) plants based on biomass, large anaerobic di- In the field of biogas the Dutch-Ukrainian technical assis-
gesters for processing of manure and food industry waste- tance project is being realized now. The CHP biogas plant
water, and gasifiers for conversion of biomass in Ukraine. of 160 kWе+300 kWth capacity and 2000 m3 reactors vol-
ume for treatment of 80 t/day of manure is now under con-
Several demonstration projects in the field of bio-energy
struction at the pig-breeding farm with 15,000 heads in the
have been fulfilled in Ukraine recently. Plants implemented
village of Olenivka, Dnipropetrivsk oblast.
within the frames of these projects are the first modern
4. Technical and economic assessment of bio-energy technologies in Ukraine

Below there are presented the results of a feasibility study calculations: annual period of boiler operation, fuel cost,
of bio-energy technologies in Ukraine, which were obtained fuel moisture and others. Operation time of 8,000 h/year
first of all on the basis of the above mentioned demonstra- corresponds to boiler producing process steam, and 4,400
tional projects. table 2 contains the results of calculations h/year corresponds to boiler operation during the heating
for wood-fired steam boilers of the Dutch manufacturer season. The results of the feasibility study for straw-fired
KARA. Capital outlays include cost of boiler, auxiliary boilers are also presented in table 2. The 800 kWth auto-
equipment, automatic and control system, multi-cyclone, matic straw-fired boiler of the Danish manufacturer Lin-ka
chimney, expenditures on mounting and putting into opera- is intended for chaffed straw. Capital outlays include costs
tion. The costs of boiler house and heating network is not of boiler, chimney, buildings, expenditures for freight and
included. The following parameters were varied during the
installation of equipment. The following parameters were Fuel consumption was calculated taking into account an
accepted for the calculations: average capacity of a plant during heating period that is
0.89 of nominal capacity. Prime cost of heat was calculated
• Period of amortization – 15 years;
as operating costs divided by annual heat production. Pay-
• labor cost of 0.65 thous. $/year corresponds to 3 men (1
back period was calculated as capital costs divided by dif-
man per shift) and operation period of 6 months; 1.30
ference between cost of saved natural gas and operating
thous. $/year is the same for operation period of 12
costs. At that operating costs did not include amortization
months;
and profit.
• natural gas price – 80 $/1000 nm3.
Table 2: Results of feasibility study on introduction of wood-fired and straw-fired boilers of foreign manufacture in Ukraine
5 MW KARA wood-fired boiler 2 MW KARA under 800 kW Lin-ka

Parameters
with step moving grate screw wood-fired boiler straw-fired boiler
Capital outlays, thous. $ 750 750 750 250 250 250 133
Fuel moisture, % 60 60 60 40 40 40 15
Operation time, h/year 4400 8000 8000 4400 8000 8000 4400
Operating costs, thous. $/year
- Amortization 50.25 50.25 50.25 16.75 16.75 16.75 8.91
- Profit (annual interest is 10%) 75 75 75 25 25 25 13.3
- Labor 0.65 1.30 1.30 0.65 1.30 1.30 0.65
- Fuel 66.1 0 135 24.2 0 49.4 3.2
- Maintenance 5 5 5 5 5 5 0.9
TOTAL 197 132 267 72 48 97 27
Fuel consumption, t/year 14685 30000 30000 3357 6857 6857 895
Heating value, MJ/kg 6 6 6 10.5 10.5 10.5 14
Fuel cost, $/t 4.5 0 4.5 7.2 0 7.2 3.6
Heat production, TJ/year 70.49 144 144 28.2 57.6 57.6 11.28
Prime cost of heat, $/GJ 2.79 0.91 1.85 2.54 0.83 1.69 2.39
Saved natural gas, mill m3/year 2.01 4.11 4.11 0.81 1.65 1.65 0.32
Saved natural gas, thous. $/year 161.12 329.14 343.95 64.45 131.7 131.7 25.78
Payback period, year 8.4 2.3 4 7.2 2 3.3 6.3
Heat production based on wood residues and straw is prof- ture. Financial benefit caused by implementation of the
itable for Ukraine now even when using foreign boilers. The biogas plant includes saved electricity, heat and mineral
most profitable is production of processing steam at a long fertilizers.
operation time of a boiler.
Bio-energy equipment of foreign manufacture is rather ex-
Table 3: Data on feasibility study for biogas plant pensive, and most of Ukrainian enterprises cannot afford it.
2000 m3 anaerobic This fact forms one of the most serious barriers for the de-
Parameters
digestion plant velopment of bio-energy technologies. The most reason-
Capital outlays, thous. $ 413 able is to begin production of such equipment in Ukraine,
Operating costs, thous. $/year 21
the share of foreign components will come to 25-40%. At
Savings, thous. $/year
- Electricity 41.4 that cost of bio-energy equipment of Ukrainian manufacture
- Heat 5.6 comes down considerably. For example, a 5 MW boiler
- Minerals (N, P, K) 25.0 with step moving grate of the Dutch firm KARA costs 750
Total 72 thous. $. The similar Ukrainian boiler with 30% of foreign
Payback period, years 8.1 components is expected to cost about 1,330 thous. UAH
The results of the feasibility study for a CHP biogas plant of (about 240 thous. $) that is more than twice cheaper. The
160 kWе+300 kWth capacity and 2000 m3 digester volume same can be said about an under screw wood-fired boiler
are presented in table 3.Capital outlays include cost of and straw-fired boilers. Boilers of Ukrainian manufacture
equipment and expenditures on modification of infrastruc- will have a rather short payback period of 1-2.5 years.
Table 4: Feasibility study for 2 MW landfill gas power (MAN). The following parameters were accepted in the cal-
project at Lugansk landfill, Ukraine culations: average density of MSW - 800 kg/m3, annual
output of LFG – 5 m3/t of wastes, total period of plant op-
eration – 20 years. Prime cost of electricity generated from
Engine of public corpo-
dieselmash (Ukraine)
LFG is 0.007 and 0.016 $/kWh when using Ukrainian and
ration Pervomaisk-
Parameters German engines correspondingly. In both cases the prime
Engine MAN
cost is lower than the market price of electricity in Ukraine
(German)
– 0.021 $/kWh.
The above given economical calculations do not take into

Volume of landfill, mill m3 2 2
consideration the potential opportunity to sell reduction of
Landfill gas make mill m3/year 8 8 emissions of CO2 and other greenhouse gases achieved
Heating value of LFG, MJ/m3 18 18 when implementing bio-energy projects. However now a
Installed capacity of power plant, kW 2×1000 2×1000 real opportunity exists to sell the mentioned reduction of
Electricity production GWh/year 14.4 14.4 greenhouse gases emissions, for instance, within the frame
Capital outlays, thous. US$ 571 1346 of the program Eru-PT supported by the Dutch Ministry of
Operating costs, thous. US$/year Economy. Reduction of emission of CO2 and other green-
- Amortization 38.1 89.7
house gases will be bought at the price of 4.54-9.08 EUR/t
- Profit 57.1 134.6
on condition that within 2008-2012 this reduction will be not
- Labour 3.6 3.6
less than 500 thous. t of CO2 or CO2-equivalent. Taking
- Maintenance 5 5
- TOTAL 103.8 232.9 into account the opportunity of such sale, economical pa-
Prime cost of electricity US$/kWh 0.007 0.016 rameters of bio-energy projects rise significantly. For ex-
IRR,% 39 17 ample, the reduction of methane emission achieved in the
Payback period, year 2.0 4.6 course of implementation of the project on LFG utilization
at Lugansk landfill described above, amounts to about 70
As an example of technical and economical assessment of thous. t/yr of CO2-equivalent or 280 thous. t of CO2-
LFG extraction and utilization technologies table 4 presents equivalent for four years (2008-2012). When selling it at the
the calculation results for Lugansk landfill containing 1.6 price of 9 EUR/t one can obtain about 2,520 thous. EUR.
mln t of MSW. There were considered two variants of The sum is several times as much than capital outlays re-
equipment for a small-scale power plant operating on LFG: quired for construction of a 2 MW power plant equipped
engine of Ukrainian manufacture (public corporation “Per- with Ukrainian gas engines.
vomayskdiselmash”) and engine of German manufacture
5. Analysis of barriers for bio-energy development in Ukraine

There are a number of technological barriers on the way of Today the most widespread straw handling system in
bio-energy development in Ukraine. At present there is no Ukraine is harvesting chaffed straw and its storage in fields
serial production of wood-fired boilers, straw-fired boilers in the form of stacks. Baling technology is not widespread
as well as biogas plants. Foreign equipment is also practi- yet. Due to this fact long distance transportation of straw is
cally absent in the market of Ukraine. One can mark the not profitable, and this puts obstacles on the way of con-
presence of 15-50 kW domestic wood-fired boilers mainly struction of large-scale straw-fired plants and spreading of
of foreign manufacture in the market, and also up to 200 boilers for baled straw. At that it should be marked that
kW wood-fired boilers mainly equipped with gasification more and more farms turn to the use of balers for harvest-
furnace extension. Maximal capacity of steam boilers pro- ing straw regardless of plans concerning installation of
duced in Ukraine is 10 tons of steam per hour (6.5 MW), straw-fired boilers. In themselves purchasing bales and
and the pressure is up to 13 bars. It forms a technological harvesting straw in the form of bales are profitable actions.
barrier for starting production of equipment for power plants They are repaid at the expense of reduced grain loss dur-
and CHP plants operating on wood or straw. ing harvesting and also at the expense of reduced expendi-
tures on storage and transportation of straw. According to fect from the construction of a biogas plant is considered
experts’ estimation, up to 50% of Ukrainian farms will have an ecological one. In Ukraine biogas technologies have to
balers by 2010. compete with other technologies only at the expense of
energy effect and effect from production of high-grade fer-
A great amount of large-scale pig-breeding farms in
tilizers.
Ukraine are equipped with water wash systems for manure.
In this case the moisture of manure (about 99%) is much In addition an almost complete informational vacuum on
higher than the moisture suitable for anaerobic digestion bio-energy technologies is typical for Ukraine. This forms
(88-90%) with obtaining a positive energy effect. To imple- an informational barrier on the way of bio-energy develop-
ment biogas plants on such farms, it is necessary to recon- ment. In Ukrainian libraries there are not profile periodicals
struct the existing water wash systems. of developed countries on these technologies, Ukrainian
specialists practically do not have opportunities to partici-
An economic barrier for bio-energy development in Ukraine
pate in specialized foreign conferences. As a positive
lies in the absence of any economic stimuli in the form of
change of last years one can mark increased interest of
subsidizing, setting free of taxes etc for development and
Ukrainian mass media to renewable energy including bio-
implementation of biomass-to-energy technologies. Even
energy. A number of journals place publications on these
the most profitable technologies (such as industrial wood-
technologies practically in each issue. Among them “Instal-
fired boilers or LFG extraction and utilization plants) need
lation market”, “Green energy”, “Eco-technologies and En-
financial stimuli for producers as well as for consumers of
ergy Saving” should be marked. Holding the First Ukrainian
the equipment, at least at the beginning period of develop-
Conference on Biomass for Energy will contribute to over-
ing and launching production.
coming the informational barrier. The conference will be
A legislative barrier is connected with the absence of state held by the Institute of Engineering Thermo-physics in
policy in the field of biomass combustion, biogas produc- 2002 (details can be found on the web site www.i.com-
tion and other technologies. A positive example of chang- .ua/~biomass). Positive events of last years also include
ing point of view of the state in this field is adopting the law the establishment and running of Bio-energy Association of
“On alternative types of liquid and gaseous fuel” (N 1391- Ukraine, whose task is promotion of bio-energy technolo-
XIV of 14/01/2000). According to the law, the projects on gies in Ukraine (e-mail: uba@ukr.net).
utilization of landfill gas, biogas and liquid fuel produced
An organizational barrier is formed by the absence of a co-
from biomass must receive certain financial support. Unfor-
ordinated policy in the area of bio-energy development in
tunately there are no laws encouraging the use of wood
Ukraine and by the absence of state structures responsible
and straw as a fuel.
for the policy. With regard to administrative barriers, it
An ecological barrier is connected with the existing rather should be mentioned that independent producers of power
soft ecological legislation that does not let to include eco- from biomass are confronted with serious difficulties when
logical constituent in economic effect from the use of bio- selling electricity to the grid. The last concerns first of all
energy technologies. In developed countries the main ef- LFG utilization systems.
6. The conception of bio-energy development in Ukraine.

The Danish conception of bio-energy development was ac- • 0.1-5 MW industrial wood-fired boilers for installation at
cepted as a basis for the elaboration of the conception for timber enterprises and wood processing enterprises;
Ukraine. Both countries have a relatively small territory • 1-10 MW wood-fired district heating (DH) plants;
covered by forest (about 14%) and a highly developed ag- • 0.1-1 MW farm and neighbor heating straw-fired boilers;
ricultural sector that leads to a similar structure of biomass • 1-10 MW straw-fired district heating plants;
potential in these countries. • biogas plants for large-scale cattle farms, pig-breeding
farms, poultry farms and food industry enterprises;
The following technologies can be considered as the most
• systems for LFG extraction and utilization in small-scale
promising for commercial use in Ukraine:
power plants of 0.5-5 MW capacity.
Technologies of direct combustion of wood, first of all for opportunities for commercialization. As for 1-10 MWe bio-
heat and process steam production, require priority devel- mass-based CHP plants, we restrict their position in the
opment in Ukraine. It is connected with a rather low elec- conception of bio-energy development in Ukraine only by
tricity price existing in Ukraine (0.03 $/kWh) and at the two demonstrational plants (one wood-based and one
same time with a quite high heat and fuel price. Implemen- straw-based) until electricity price rises greatly.
tation of small-scale power plants and CHP plants operat-
Large-scale biogas plants also play an important role in the
ing on solid biomass (wood, straw, husk) will be profitable if
conception. Their widespread implementation is possible
the electricity price rises significantly or in the case of sub-
on pig-breeding farms (with a livestock more than 5 thou-
sidies. Heat production from biomass is profitable now
sand heads), cattle farms (with livestock more than 600
even under the use of foreign equipment. Besides, Ukraine
heads), poultry farms and food industry enterprises. Ac-
has the opportunity to launch its own production of wood
cording to our estimations, it is possible to construct 2,903
and straw-fired boilers.
biogas plants in Ukraine with average digester volume of
Technologies of straw combustion are very promising for 1000 m3 including 295 plants on pig-breeding farms, 130
Ukraine too. To implement them widely it is necessary to plants at poultry factories and 2,478 plants on cattle farms
solve a number of questions connected with arrangements and food industry enterprises.
on collection, baling, transportation and storage of straw.
The use of LFG is the most profitable at industrial enter-
First of all 0.1-1 MW farm and neighbor heating boilers for
prises located near landfills. If it is impossible to utilize LFG
implementation at agricultural enterprises have the best
in nearby industry it can be used at small-scale power
prospects. After demonstration of advantages of these
plants or CHP plants equipped with gas internal-
boilers large-scale district heating plants also have good
combustion engines.
Table 5: Bio-energy equipment that can be installed in Ukraine under realization of proposed conception
Approximate Installed Operation Replacement Reduction of Total capital
capacity of capacity time of fossil fuels СО2 emission investments
Type of equipment
Ukrainian market
units MWth MWe h/year mtoe/year mill t/year mill US $
Wood-fired DH plants
250 500 --- 4400 0.21 0.49 38
1-10 MWth
Industrial wood-fired boilers
250 250 --- 8000 0.19 0.45 25
0.1-5 MWth
Wood-fired CHP plants
1 10 5 8000 0.014 0.05 5
1-10 MWe
Domestic wood-fired boilers
53000 1590 --- 4400 0.67 1.57 80
10-50 kWth
Farm straw-fired boilers
15900 3180 --- 4400 1.34 3.14 254
0.1-1 MWth
Straw-fired DH plants
1400 2800 --- 4400 1.18 2.76 280
1-10 MWth
Straw-fired CHP plants
1 10 5 8000 0.014 0.05 8
1-10 MWе
Large-scale biogas plants 2903*) 711 325 8000 0.93 22.36 290
Small-scale LFG power
90 20 80 8000 0.17 3.26 48
plants
TOTAL 73795 9071 415 4.7 34.13 1027
*) including 2478 plants on cattle farms, 295 plants on pig-breeding farms, 130 plants at poultry factories.
Liquid fuels are unlikely to be produced from biomass in • wood-fired CHP plants – 1000 $/kWе (5 MWe+10 MWth);
Ukraine in the near future because their prime cost is much • small domestic wood-fired boilers – 50 $/kWth (30 kW);
higher than cost of traditional liquid fuels. The main efforts • farm and neighbor heating straw-fired boilers – 80
in this area should be focused on research and demonstra- $/kWth (0.2 MW);
tional projects. The same can be said with regard to bio- • straw-fired district heating plants – 100 $/kWth (2 MW);
mass fast pyrolysis and gasification technologies. • straw-fired CHP plants – 1500 $/kWе (5 MWe+10 MWth);
• biogas plants – 100 $/m3 of digester volume, (volume of
Table 5 contains data on equipment that can be installed in
digester – 1000 m3, 75 kWe+150 kWth);
Ukraine under realization of developed conception. Reduc-
• small-scale power plants operating on LFG – 600
tion of CO2 emission was calculated for a case of replace-
$/kWе.
ment of natural gas. Specific capital costs based on cost of
equipment of Ukrainian manufacture have been accepted If the proposed conception is realized, the total installed
as follows (average capacities of equipment used in the capacity will come to 9,071 MWth and 415 MWe. It will re-
calculations are given in brackets): sult in replacement of 4.7 mln toe/year and reduction of
CO2 emission at the rate of 34 mln t/year.
• wood-fired district heating plants – 75 $/kWth (2 MW);
• industrial wood-fired boilers - 100 $/kWth (1 MW);
7. Conclusions
Ukraine has rather big potential of biomass available for • biogas plants for large-scale cattle farms, pig-breeding
energy production. Biomass (excluding the share that is farms, poultry factories and food industry enterprises;
used by other sectors of economy) can cover about 5.3% • plants for LFG extraction and utilization at large-scale
of the total primary energy demand. Technologies of the landfills (0.5-5 MW power plants).
utilization of biomass are just at the beginning of their de- Production of corresponding licence European equipment
velopment in Ukraine, but they have good prospects for at industrial enterprises of Ukraine seems to be the most
commercialization in the near future. promising strategy for the development of bio-energy tech-
nologies in Ukraine, at least at the first phase.
The results of the feasibility study indicate that heat
production from biomass is competitive even when using If the proposed conception is realized, the total installed
foreign equipment. With regard to electricity production capacity will come to 9,071 MWth and 415 MWe. It will re-
from biomass, the most profit-making plants now are small- sult in replacement of 4.7 mln toe/year and reduction of
scale power plants operating on LFG. Production of CO2 emission at the rate of 34 mln t/year. The develop-
electricity from wood and straw is not profitable under the ment of bio-energy technologies will decrease Ukraine’s
existing tariffs on power. The following technologies are the dependence on imported fuels, enhance its energy security
most promising for Ukraine: at the expense of organizing energy supply based on local
renewable sources, create a lot of new jobs (mostly in rural
• 1-10 MW wood-fired district heating plants and 0.1-5
area), and contribute significantly to improvement of the
MW industrial wood-fired boilers for installation at timber
ecological situation.
enterprises and wood processing enterprises;
• 0.1-1 MW farm and neighbor heating straw-fired boilers;
1-10 MW straw-fired district heating plants;
8. Literature
• Energy for the Future: Renewable Sources of Energy. White Paper for a Community Strategy and Action Plan. Bruxelles,
1997, 53 p.
• Statistical yearbook of Ukraine, 1999 - Kyiv: Technika, 2000.
56 Volkmar Schaefer
Biomass CHP Unit in Pfaffenhofen / Germany

- power, heat and chill based on wood chips
Volkmar Schaefer
eta-energy consulting, Germany
In Pfaffenhofen/Germany a biomass co-generation plant Wood chips are burned in a special biomass boiler on a
(heat, power, cooling) has started operation (27 MWth and water-cooled vibration grate. The maximum heating power
7.5 MVAel) in July 2001. Existing municipal facilities are is 26.7 MW. Its capacity was calculated by means of com-
connected to the district heat supply system. Steam, heat prehensive demand-related designing. In addition, there
and cooling is delivered to a hospital, a food producing are two steam boilers with 10 respectively 20 MW heating
company and further companies as well. power for supporting biomass-furnace during high loads
and to ensure safe heat delivery. The main fuel is gas. In
total up to 120 MWh heat are sold every year. With a ca-
pacity of about 7.5 MW electrical power, the steam turbine
is supposed to supply an amount of more than 40 GWh
electricity per year into the grid.
The calculated fuel demand will total 80,000 tons per year:
30% natural wood and bark; 70% wood waste of sawmills.
The continuous demand of 250 t per day requires efficient
logistics for harvesting, processing and transport of wood.
Forest owners can supply wood ranging from intact stems
to wood chips. All species of trees are suitable for wood
In Pfaffenhofen - Bavaria, a biomass cogeneration plant for chips production; chippers are operated. Container trucks
producing electricity, steam, district heating and cooling will transport the fuel to the co-generation plant. This guar-
has been erected. The location of the biomass cogenera- anties a flexible and efficient supply by minimal traffic.
tion plant allows to deliver energy to the connected cus-
tomers very easily: The plant supplies steam to a producer The Federal Government has committed itself to reduce
of baby-food at a temperature of 180°C / 356°F by a spe- carbon dioxide emissions by 25% by 2005 in relation to
cial conducting pipe. A district heating system for more 1990 figures. With putting the plant in operation, we have
than 100 customers on two levels of temperature (130°C / reached this target for Pfaffenhofen already in 2001. The
266°F and 80°C / 176°F) and a low-temperature grid for co-generation in Pfaffenhofen offers both energy efficiency
neighboring customers (up to 40°C / 104°F) has been in- and labor policy advantages: We have particularly em-
stalled. Moreover absorption chillers run by district heating ployment effects for 200 persons during the construction-
provide cooling for air conditioning and for low-temperature phase and we have created permanent jobs for 25 persons
applications. Due to the fact that the demand of heat is in the plant and wood procurement.
rather constant over the year, the degree of effectiveness
of a co-generation plant is very high.
Biomass CHP Unit in Pfaffenhofen / Germany 57
Slide 1 Slide 2
Slide 3 Slide 4
Slide 5 Slide 6
Slide 7 Slide 8
58 Volkmar Schaefer
Slide 9 Slide 10
Slide 11 Slide 12
Slide 13 Slide 14
Slide 15 Slide 16
Biomass Success Stories in Romania

Cristian Tantareanu
Joan Braga
Roxana Funduca
Center for Promotion of Clean and Efficient Energy in Romania-ENERO
In Romania, today some 740 thousand cubic meters of The main barrier is the quite high capital cost of the pro-
wood waste are in no way valorized and are simply thrown jects. This barrier, at least for the first demonstrations, was
away, polluting the environment. In the last years, several overcome by attracting external funds, mainly from Euro-
pilot applications were promoted in order to demonstrate pean programs.
how to use the wood waste for heating purposes in domes-
Three such demonstrative applications are presented:
tic DH systems or for industrial purposes. The advantages
of such technologies are evident: • the retrofitting of the old thermal station in Câmpeni
town;
• Energy conservation;
• the station supply with heat and hot water for a group of
• Reduction of environment pollution due to the dumping
blocks of flats.
of this residue to the rivers;
• new thermal station for DH in the Tasca commune.
• Reduction of costs for heat generation in public build-
ings and dwellings.
60 Cristian Tantareanu / Joan Braga / Roxana Funduca
Slide 1 Slide 2
Slide 3 Slide 4
Slide 5 Slide 6
Slide 7 Slide 8
Slide 9 Slide 10
Slide 11 Slide 12
Slide 13 Slide 14
Slide 15
62 Violetta Groseva
Best Practice: The Case of Biomass Utilization

Combustion of sunflower husks in industrial steam generators
Violetta Groseva
Introduction leading to the cyclone chamber. The husk quantities are

controlled via multi-camera counter whose revolutions are
The Bulgarian energy balance shows that more than 70%
regulated by the frequency. The transportation of the husks
of the energy consumption is based on imported fuels. The
to the burner is done via air ventilator. The length of the
rest is from local energy resources, which are low grade
cylinder part of the cyclone chamber is 1,500 mm, the inner
coal and RES (limited hydropower, solar energy, and bio-
diameter – 900 mm. The furnace is insulated with fireproof
mass). Biomass overall theoretical potential varies between
bricks and is cooled via separate water flow. The cooling of
3.5 and 5 million toe/year. The economical potential is as-
the connection between the cyclone chamber and the fur-
sessed to about 0.7-0.8 million toe/year.
nace of the steam generator is integrated within the water
The use of agricultural wastes for energy production is an shell of the boiler. The air coming into the furnace is pri-
important RES. Traditionally most of these wastes have mary (through the husks burner); secondary - above the
been either left to decompose naturally or removed and burner and tertiary - through the heavy fuel oil burner. At
spread directly on land where they have some benefits as the exit of the steam generator, a flue gas ventilator is
a fertilizer. For some wastes an increasingly important al- mounted to transmit the gases to a cyclone dust cleaner.
ternative is to recover the energy present in these wastes
Operation results
by using them as RES. This is the case of sunflower husks.
The average heat value of liquid fuel is 9 445 kcal/kg and
During the sunflower oil production, and depending on the
that of the sunflower husks vary between 3 485 kcal/kg and
technology used, sufficient quantities of sunflower husks
3 750 kcal/kg, so it has been proved 68,78 % of oil savings
are one of the by-products, which can be an important en-
at an average steam generation of 4,6 t/hour. It must be
ergy resource for the enterprise. The technologies for the
noted that during the efficiency testing the air temperature
husks utilization as a fuel are mainly combustion in grate
varied between -1 °С to +3 °С.
boiler or refurbished one with pseudo-fluidized bed com-
bustion. The installation burns simultaneously liquid fuel and sun-
flower husks. The liquid fuel consumption in nominal re-
The technical solution designed by Energoconsult com-
gime of operation is 70 – 110 kg/hour and sunflower husks
pany consists of incorporating a special cyclone chamber
- 900 - 1 200 kg/hour. Unburned liquid fuel (rated towards
with highly efficient operation and small size and provides a
the husks) is not over 4 – 6 %, and dust emission levels
feasible solution for refurbishment of existing in these en-
vary between 145 – 160 mg/m3.
terprises steam generators producing steam over 5 t/h and
using liquid fuel and/or gas. Heat surfaces are clean and no dust is observed on the
flue gases track.
Installation
The counter and the sunflower husks feeding system oper-
The project has been implemented in 1999 via retrofitting
ate stable, but they are sensitive regarding the purity of the
of existing boilers (two steam generators PKM - 6.5, burn-
husks. Additives like paper, chips longer than 4 cm and the
ing oil from Shabla deposits) in the steam station of Papas
others result in engorgement of the burner. The solution is
Oil enterprise – Balchik branch.
a preliminary processing and sifting out the sunflower seed
Pneumatically, the sunflower husks are fed into the bun- before feeding into the husk room and also designing
kers for fuel storage (each with volume 34 м3) of the corre- proper outlets to clean up the track from the feeding fan to
sponding boiler. This volume provides for 6 hours of opera- the burner.
tion. Below the bunkers the feeding system is situated
Best Practice: The Case of Biomass Utilization in Bulgaria 63
Investment • The renewable energy (biomass) in some cases is still

more expensive than the consumer price of heat and
Total investment for both boilers´ refurbishment and reno-
electricity;
vation, installation, start-up period, a twelve months main-
• there are no state funds in Bulgaria for the development
tenance guarantee, as well as staff training, etc. amounted
of RES (incl. biomass) utilization;
to 157,000 USD. It has been calculated that the payback
• the Energy and Energy Efficiency Law (1999) treats
period should be 1 1/2 year at the fixed price of the liquid
only generally RES. Renewables are still not considered
fuel of 100 €/ton (1999). However, even with the increase
a priority in legislation and there are no incentives for
of the price of the liquid fuel to 150 - 180 €/ton and depend-
their utilization;
ing on the load of the installation, it is considered that the
• decentralization of the state regulation and larger
payback period should be nearly 2 campaigns.
autonomy of the local and regional authorities leads to
Conclusions the development of their natural resources as they see
The operation during the first year of this system has triple dividends: environmental improvements, economic
proven the capacity and the investment benefits for the development, and increased employment;
proprietor - Papas Oil Ltd. The experience provides the op- • the biomass utilization as an energy source is a new
portunity to improve system components, in respect of philosophy in our country and requires a new way of
changes in the specific reaction surface of the husks and thinking and new approach for development. Joint ef-
also related with the partial automation of the process forts are necessary, both on the part of state with its
management. regulatory functions, and on the part of the entrepre-
neurs and financing institutions. Regional and national
From the implementation of the project several conclusions
information campaigns are needed, showing the advan-
can be drawn. They are valid not only for biomass but for
tages of biomass utilization for the energy savings and
all RES. The following conclusions should be underlined:
for the environment.
Slide 1 Slide 2
Slide 3 Slide 4
64 Villu Vares
Discussant Notes
Session: Use of Biomass
Dr. Villu Vares

Estonian Energy Research Institute / OPET Estonia
Four of five presentations at the session treated prospects • insufficient technical know-how and experience;
and achievements in the use of biomass in East-European • lagged behind technology development;
countries. In the fifth report the practical experience of real- • unavailability or insufficiency of a renewable energy
izing a biomass fired CHP plant in Bavaria was analyzed. promotion system;
• insufficient consideration of environmental impact from
In the reports the following bio-fuels were considered:
burning fossil fuels, including the CO2 emissions;
• wood fuels, inclusive wood chips from forests, wood • legal and economic difficulties by trading renewable
waste, etc; based electricity to the grid, etc.
• straw;
In spite of the modest competitiveness level of renewables,
• organic waste, biogas and landfill gas;
the reports and discussion of the biomass session show
• bio-diesel and bio-ethanol.
that the use of biomass is considered to be one of the most
The upgraded wood fuels (wood and other biomass pellets perspective applications for renewable energy production.
and briquettes) and black liquor as a residual product of The pilot projects and demo projects do not prove only
pulp industry essential for energy purposes were not con- technological potentials for the use of biomass, but also its
sidered. Problems related to growing energy forests and economic and environmental expediency.
energy crops were not treated also. Evidently it refers to
High cost of equipment and extensive need for investments
the fact that in the considered countries (Poland, Romania,
was noted as a difficulty in the implementation of bio-fuel
Ukraine and Slovenia) the resources of energy biomass
projects. For reducing the cost, less expensive technologi-
have not been exhausted by far and the use of renewables
cal solutions are looked for. Based on the Estonian experi-
is not expanding with such a speed that finding of new re-
ence, the discussant can see the following risks.
sources becomes essential.
After Estonia regained independence, wide-scale conver-
Among all the resources wood fuels are unanimously con-
sion of DH boilers from fossil fuels (mainly from heavy fuel
sidered of highest priority while the developments and fu-
oil) to wood chips burning started. Major part of projects
ture expectations in the use of these fuels are the most
where efforts have been made to introduce simple and in-
noteworthy. At the same time some countries evaluate the
expensive technical solutions have proved to be success-
aggregate potential for straw and biogas production ap-
ful. A conclusion has been drawn from this that primitive
proximately equal to wood fuels (Ukraine, Poland).
technical solutions do not provide sufficient reliability of the
One can get an impression from the reports that there is no equipment and as a rule, later reconstruction or readjust-
considerable demand for liquid bio-fuels yet, and creating ment is expensive. Energy generated in boilers switched to
prerequisites for starting the production of these fuels will wood fuel proves to be more competitive only if the equip-
still take some time. ment can be peak loaded throughout the year. The higher
The most essential obstacles to the energy use of biomass the boilers output rate is, the smaller the share of invest-
would be the following: ments in the output heat will be.
• relatively low price of fossil fuels; The Estonian experience has shown also that exact copy-
• substantial need for investments; ing of technical solutions that have been expedient in other
Discussant Notes. Session: Biomass Use 65
countries is expensive on one hand and could prove to be In the session presentations the state aid to bio-fuel pro-
unsuitable under different conditions on the other hand. In jects was not considered directly, however, it appeared
Estonia lowering of the price on bio-fuels could be from the discussion that in most of East-European coun-
achieved by combining international and domestic tech- tries supporting mechanisms on the governmental level for
nologies while most of the equipment was manufactured in expanding the use of bio-fuels , in particular in CHP pro-
the country. In several cases further close co-operation be- duction, would be substantial. In the following workshops
tween Estonian and foreign companies (Sweden, Finland) and conferences on the use of bio-fuels and renewables it
developed from these projects. Within the further co- would evidently be expedient to develop a discussion about
operation several wood chip based boiler houses operate supporting the use of renewables.
in third countries (Latvia, Lithuania, Russia).
66 Eric Herman
EBRD and Energy Efficiency

Eric Herman
European Bank for Reconstruction and Development, London
What is the EBRD? Overview
α β
An Investment Bank with Public Shareholders:
– International financial institution established 1991
– owned by 62 national and supranational shareholders
(EU; EIB)
Mandate:
– Promote transition to market-based economies in 27
0 χ
countries in central & eastern Europe and the former
Soviet Union
EBRD and Energy Efficiency Portfolio: over €13 billion to date
Eric Herman Capital base of €20 billion
α β α β
Slide 1 Slide 2
What is the EBRD? Objectives What is the EBRD? Guiding Principles
To promote:
Transition to free, market-based economies by sound additionality
supporting private and entrepreneurial initiative banking
A better investment climate
Good corporate governance at project, corporate transition
and country levels impact
Environmentally sound and sustainable
development
α β α β
Slide 3 Slide 4
What is the EBRD? EBRD’s Energy Efficiency Team

Financing of ESCO
A Project-based Bank
District heating renovation
Public or Private Sector
Public Sector Energy Management Programmes,
through ESCOs or not
Strong Local presence and unique country
knowledge Industrial Energy Outsourcing
lead-role in Climate Change initiatives
Product flexibility
Potentially: Clean energy projects, in co-operation
and…yes, speed with Power Team
α β α β
Slide 5 Slide 6
Key Issues and Challenges ESCOs: Achievements to date (1)

Progress towards energy efficiency has been too
The EBRD is currently financing 11 private ESCOs
slow: energy intensities still way above EU (all funded under Multi-Project Facilities involving
average large sponsors) and one state-owned ESCO…
Key reasons:
+ 1 ESCO indirectly through its Energy Efficiency
restructuring of (still largely state-owned) energy-intensive &Emissions Reduction Fund: EETEK in Hungary
industries is still ongoing
subsidisation of energy prices in various guises is still ... in 7 countries: Hungary, Poland, Czech
endemic Republic, Slovakia, Lithuania, Romania, Ukraine
barriers to bankability/investments still high
This presentation focuses on ESCOs and

district heating α β α β
Slide 7 Slide 8
ESCOs: Achievements to date (2) ESCOs: Key Issues

However… • Scepticism - many potential clients don't believe that
there can be a win-win scenario;
Market penetration still too modest
• Control - especially in the public sector, clients are
New project opportunities are fewer unwilling to involve the private sector;
Most of EBRD-funded ESCOs have under- • Profit - municipal governments frequently object to
performed their business plans allowing the private sector to make a reasonable profit;
Few international private players have entered • Energy costs - regulation and subsidies sometimes
the market result in energy costs that are too low or that do not allow
the ESCO to retain the benefits (e.g DH in Poland); and
Impediments and barriers are described in
following slide • Products - standard ESCO offerings may not fit the exact
α β needs of the prospective clients.

α β
Slide 9 Slide 10
EBRD’s dedicated ESCO product (1) EBRD’s dedicated ESCO product (2)
Dedicated ESCO for public sector entities The ESCO operator would set up a Special
Purpose Company (SPC) or use an existing
Premise: Public entities are large consumers of ESCO, and raise the financing on its balance
energy and not incentivised to reduce energy sheet
consumption
Benefits to public entity:
Concept: select through tender a qualified private
ESCO operator to implement a series of investments Reduced energy consumption and hence
and management improvement aimed at reducing budgetary expenditure
energy consumption in facilities and buildings
Off-budget financing
Economics: Savings should exceed the cost of capital
and ESCO overheads over the life of the EPC and Demonstration effect in the long run of
private sector operator involvement.
α β α β
surplus savings will accrue to the public entity.
Slide 11 Slide 12
68 Eric Herman
EBRD’s dedicated ESCO product (3) EBRD’s dedicated ESCO product (4)
Pre-requisites: Role of EBRD is three-fold:

Large public entity with significant energy budget and
Help prepare and mobilise grant funding for preliminary
large potential for cost-effective savings
assessment
Energy is economically priced
Help prepare and mobilise grant funding for assistance to
Public entity pays its bills on time, in full and in cash public entity in conducting the tender for the selection of a
qualified ESCO operator
Acceptance of private sector involvement
Finance the project company (either SPC or existing
No legal obstacles to Energy Saving Performance ESCO) through a direct limited recourse loan or a
Contracting guarantee of payment by public entity
α β α β
Slide 13 Slide 14
EBRD’s dedicated ESCO product (5) District Heating: Sector Overview (1)
Market penetration for DH is high in the region: 40% in CEE
Examples: and up to 60% in the CIS. Negligible in most Western countries
except Scandinavia (up to 50%) and Germany (10%)
City of Lodz (Poland) Public ownership and management remain prevalent

(fewer instances of PSP than in water sector)
Economic rationale for DH still robust in densely populated

Ministry of Interior (Czech Republic) urban areas: existing heat networks normally offer least cost
investment solutions over alternatives
DH has peaked, but vast investment needs mostly for

rehabilitation and “commercialisation” investments
α β α β
Slide 15 Slide 16
District Heating: Sector Overview (2) District Heating: Key Financing Issues
Scope for energy savings and hence air pollution and GHG Overriding issue is bankability or the lack of it!
emissions reduction is large
Tariffs below cost-recovery in many countries (all CIS)
Lack of investment capital due to cash-strapped public budgets
and below-cost recovery tariffs Subsidies not fully/timely paid by central/local
Regulatory framework is evolving and often contains barriers to government budgets
investment: Poor revenue and cash collection
cost-plus tariff-setting methodology
Affordability of tariffs is key constraint!
ad hoc tariff approval mechanisms
unclear ownership title on assets (e.g. substations) Upshot is that projects need significant grant or soft co-
legal framework for PPP still in infancy financing to be bankable or of a meaningful size ...but
ISPA funds not available for District Heating!
α β α β
Slide 17 Slide 18
District Heating: EBRD’s approach District Heating: EBRD’s approach

Focus on investments that significantly reduce energy Optimise private sector participation: pragmatic
consumption and tailor-made approach
CHP - HOB
modern compact customer sub-stations EBRD can provide financing to public or private
pre-insulated pipe entities alike: municipality; DH utility; special
automated controls and (block) metering
purpose company; concessionaire, etc…
Emphasis on reforms EBRD seeks increasingly to finance on a non
tariff-setting & subsidies sovereign basis while sovereign guarantees
commercialisation remain necessary in some countries...
EBRD supports changes to regulatory framework
α β α β
Slide 19 Slide 20
District Heating: EBRD’s Financing Panoply District Heating: EBRD’s Financing Panoply
EBRD can finance up to 35% of a company’s long
term capitalisation Local currency funding already possible in Poland
and Czech Republic
no formal ceiling for sovereign operations
ceiling can be exceeded if project is not Loan margin based on country & project risk
“greenfield” (maximum 1% if sovereign guaranteed)
EBRD can provide senior, junior or convertible
debt, or risk, portage or quasi-equity, or EBRD can mobilise technical assistance grants for
guarantees project preparation/institutional support
Loan tenor of up to 15 years and 4 year grace
α β α β
Slide 21 Slide 22
District Heating Pipeline Why work with EBRD?

Romania: concessions in 5 cities
Country knowledge
Lithuania: Siauliai, Klaippeda, Vilnius?
Estonia: Tallinn? Unique expertise in energy efficiency/district
Bosnia: Sarajevo heating
Russia: Surgut; St Petersburg, Kaliningrad, etc. Product flexibility

FRY: Belgrade (signed 27 July)
Uzbekistan: Tashkent, Andijan (signed 12 Nov.) Risk division
Poland: Szczecin DH privatisation
α β α β
Slide 23 Slide 24
70 Georg Kraft
Financial Tools for CEE/FSU Countries

Georg Kraft
Established by law in 1948 KfW-investment finance:

KfW Seat: Frankfurt a. M. SME program for investments in trade
Liable Equity 5,9 billion and industry outside Germany
Balance-Sheet total 223 billion (year 2000)
Employees 2,032 (year 2000) Long term financing of investments
Aim
outside Germany
KfW-financial tools for CEE/FSU countries German SME incl. their joint ventures
Target group
and affiliates outside Germany
• Investment Finance
o Environmental protection Program - outside Germany KfW-investment finance:
o SME program for investments in trade and industry Cooperation with development banks in
outside Germany CEE/FSU countries
• Cooperation with development banks in CEE + FSU
• Joint development of credit programs
• Export and project finance
• Refinancing of credits to local SME
• Financial cooperation with developing countries and
• Advice and refinancing of investment programs (e.g. in-
countries with economies in transition
frastructure, environment etc.)
KfW-investment finance:
KfW-export and project finance
Environmental protection program
General export and project finance:
To reduce and avoid emissions,
Aim save energy in production processes, • Industry
promote renewable energies
Energy and environmental technology
Target group Manufacturing industry • Telecommunications
Eligible Corporate investments that help improve • Raw materials extraction
Investments the environmental situation
Focus Integrated environmental protection Export and project finance transport sector:
• Shipping
KfW-investment finance: • Aviation
Environmental protection program • Land-based transport
outside Germany • Air and seaports
Investments are eligible for funding KfW-financial cooperation with developing

• in regions near the German border if such projects con- countries and countries with economies in
tribute to improving the environment in Germany transition
• in other countries if the investment is undertaken by a • concessional loans
German enterprise • credit at market conditions
• grants for special purposes (i.e. environmental)
Guiding principle: Cooperation with governments

• Developing country status
• TRANSFORM Program
Financial Tools for CEE/FSU Countries 71
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72 Georg Kraft
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Co-Generation and Energy Supply – The Success Story of the Netherlands 73
Co-Generation and Energy Supply - The Success Story of the Netherlands

Gert-Jan Bakker
COGEN, The Netherlands
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74 Gert-Jan Bakker
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Co-Generation and Energy Supply – The Success Story of the Netherlands 75
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76 Hans-Joachim Ziesing
CHP Policy in Germany

Dr. Hans-Joachim Ziesing
Deutsches Institut für Wirtschaftsforschung, Berlin
In all relevant cases CHP plants are a very appropriate decreased significantly. Together with rising prices for input
technique to improve energy efficiency as well as to reduce fuels this affected the competitiveness of the CHP plants.
greenhouse gas emissions. Insofar CHP has to be a sub- Due to economical reasons some plants already had been
stantial element of each climate protection policy. shut down. To stop a further decline a law was passed on
18 May 2000 concerning the protection of electricity gen-
In the past CHP in Germany was supported mainly by sub-
eration from existing CHP plants (the so-called “KWK-
sidies for the expansion of district heating projects. So we
Gesetz” or “CHP law”). This law comprises mainly regula-
had two investment programs in the 70th and 80th in West
tions concerning the remuneration of electricity to the grid.
Germany and the Federal/Länder district heating moderni-
zation program for the new Federal in the 90th. At present This law will be replaced by a regulation to protect the
the electricity production from CHP is about 50 TWh or existing plants as well as the modernization of older CHP
roughly 10% of the total electricity production in Germany. plants. Primarily it was decided by the German Govern-
Public utilities as well as industrial auto-producers contrib- ment to realize a quota system with tradeable certificates
ute approximately one half each. The total connecting load for cogeneration and a target of doubling the CHP electric-
of the district heating supply is 57 GW, and 79% of the heat ity production by 2010. Due to a very effective opposition
comes from CHP production. And total district heating ac- mainly of the big electricity companies this plan failed. In-
counts for nearly 7% of the final energy consumption in the stead of such a quota system now a combination of a vol-
residential and service sectors. untary agreement and a regulation by law will be imple-
mented with the target to reduce CO2 emissions by 23 mil-
With the liberalization of the electricity market in Germany,
lion tons in 2010 with the help of CHP.
legally starting in the spring of 1998, there had been a
fundamental change in the general conditions for CHP The steps of the CHP policy in Germany will be discussed
also. In consequence of the liberalization the electricity in general and the final decisions will be illustrated in detail
prices have decreased significantly. Together with rising
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82 Ture Hammar
Design of CHP Incentives - Based on Achievements in Denmark

Ture Hammar
Danish Energy Agency
With the aim of identifying useful incentives to promote CHP, this paper presents the development of CHP in Denmark, also
mentioning the recent Danish electricity reform, and seeks to give perspectives in a European context.
1. Introduction
Denmark is the best performing European country in CHP Nevertheless, elements may be generalized and combined
development. According to statistics from the Danish En- with experience from other successful countries. To this
ergy Agency, cogeneration has a share of 50% of the elec- end, Denmark has been very keen both nationally and on
tricity production. A rough estimate indicates national CO2 an EU level in promoting and maintaining CHP in its role as
emission reductions of 7-10 Mt per year, when compared an important 'no-regret' option in climate policies, and in
to separate production of heat and power. This is more making room for CHP in electricity and gas market regula-
than one tenth of total CO2 emissions in the country (being tion.
approx. 60 Mt per year during the 1990s).
In 1997, EU envisaged that it was possible to double CHP
The huge CHP coverage is the result of two to three dec- share of electricity market from 9% to 18% before 2010.
ades of persistent governmental and local policies, includ- This will lead to remarkable reductions in CO2, CHP being
ing use of taxation, economic, and regulatory incentives. perhaps the most important single contribution to GHG re-
ductions. Corresponding options are at hand in Central and
Today, most of the Danish CHP potential seems utilized.
Eastern Europe and CIS, and probably in most UN/FCCC
Limited further potentials may be found in the industrial
Annex I countries.
sector and by substituting outdated CHP stations with new
high-efficient ones. But it is still a question to which extent the countries will
take the necessary measures to utilize these options.
The conditions of this development have been very particu-
lar, especially when the energy markets are transformed.
2. The success story

So, how did this success story happen? Four important fac- small scale CHP.
tors have helped: • From 1990, climate policies became the key driver, and
extensive CHP schemes are now finalized. CHP is on
• Existence of district heating network. This is something
the threshold of finding a major role in energy market
in common with other countries in the North of Europe
and global climate policies.
and Central and Eastern Europe.
• Oil crisis at the beginning of the 70s. In 1973 Denmark The method used by the Danish government to promote
was highly dependent on oil from abroad (93% of the CHP has been a combination of strategic work, regulation,
entire fuel supply in the country). The willingness of the taxation and economic incentives, voluntary agreements
government to support CHP started with the purpose of with the energy sector and other actors, and local energy
ensuring security of supply. Nowadays, Denmark is self planning. This combination has been evolving over the
sufficient in oil and gas. years. Three types of CHP exist in Denmark and their de-
• Later on, during the 80s, environmental concerns velopment has been chronological: First the large scale
played a major role in the continuing process, thus in- CHP in cities, next small and medium scale in district heat-
troducing natural gas, biomass, and waste as fuels in ing communities, and lately industrial CHP.
Design of CHP Incentives – Based on Achievements in Denmark 83
Recently the regulatory framework has been re-designed in • transitional protection of large scale CHP investments,
the Danish electricity reform: This re-design implies rear- • load priority and price guarantees for medium and small
rangements over the next 4-5 years including scale CHP, and
• establishing a market for green certificates for renew-
• CO2 reduction quota for the large plants,
able energy.
3. Large scale CHP with district heating

The use of CHP in the city-wide district heating schemes the advantages of the saved fuel costs. Taxation and sub-
started to be developed in Denmark at the beginning of the sidy schemes have also supported the development of
century, but on a major scale during the 80s after the oil these systems.
crisis. Condensing heat from existing and new central CHP
The upcoming opening of electricity trade will affect the
stations was utilized in city-wide schemes and even con-
large CHP by fluctuating electricity prices, which subse-
necting several cities and communities by heat transmis-
quently may impact district heat economies. The transfor-
sion pipelines.
mation of pricing, burden-sharing and taxation structures
The main boost was the introduction of the heat planning are being considered at the moment.
system. Through this system, cities were divided into areas
Furthermore, the large CHP stations will be subject to strict
suited for district heating and areas more suited for individ-
quota for CO2 emissions from electricity production accord-
ual supply of natural gas. District heating was made a local
ing to the recent electricity market reform. The emissions
natural monopoly exempted from competition (natural gas
quota are reduced by approx. 5% each year. Unexplored
or electric heating). Local municipalities, district heating
emission quota may be transferred from one year to the
utilities and power companies were heavily engaged in this,
next. Excess of the quota is punished by 0,0055 € per
and economic (as subsidies, taxation, investment grants,
kWh. The CHP stations' quota may benefit from relief from
etc.) and regulatory incentives (as governmental and mu-
emission reduction due to heat fuel savings.
nicipal powers to regulate power stations and zoning of dis-
trict heating) supported the implementation. Large-scale CHP stations are expected to remain competi-
tive in a European electricity market. To secure them fur-
Denmark's ten major cities have city-wide district heating
ther they are protected by a load dispatch priority until
schemes where most of the heat (95%-98%) is produced in
2006. At the same time, new CHP capacity may rely on
large coal- or gas-fired CHP plants and waste incineration
natural gas and renewable fuels, and even integrated solu-
CHP plants. All extra costs, investment and operating
tions with geothermal plants may be on their way. This will
costs, as well as lost electricity production, have been paid
match the need for further reductions of CO2 emissions.
by the heat consumers, who in turn have gained most of
4. Small-scale CHP with district heating

In Denmark, small-scale CHP are the schemes which are electricity companies, major parts of the program were de-
outside the centrally supplied areas. The largest has a ca- layed, and municipalities and local utilities wanted to take
pacity of 99 MWe (supplying the town Viborg), but many of part in the program.
them range from 0.5-10 MWe and supply small communi-
This delay paved the way for subsequent development in a
ties and institution-buildings. Most of them are natural gas-
new Parliament decision in March 1990 to expand the ca-
fired with a rather high power-to-heat ratio.
pacity to 1,400 MWe (including industrial CHP). The devel-
The first boost came in 1986, when the Parliament adopted opment of the natural gas network was closely linked to the
a decision for the electricity sector to implement 450 MWe program. The decision was based on both socio-economic
of small scale CHP based on indigenous fuels (natural gas, considerations and climate policies. CHP as the primary
waste or biomass), first part of the program being demon- CO2 emission reduction means was integrated in the en-
stration projects. Due to disputes and reluctance from the ergy strategy 'Energy 2000'.
84 Ture Hammar
The new program opened for municipalities, industry and been of the magnitude of approx. 1,5 billion €. The emis-
local consumers to participate along with the electricity sec- sion reductions may be roughly assessed to amount to 4
tor. This 'deregulation' showed up to be very helpful. The Mt CO2 per year.
program was supported by heat supply planning, by close
Small and medium scale CHP is exempted from the CO2
regulation of size, location and choice of CHP fuel and
quota regulation (size under 100,000 tons CO2 per year).
technology, and by economic incentives in taxation, subsi-
Further, they are given priority in load dispatch in a PSO
dies, and in gas prices and electricity tariffs.
arrangement, and they receive subsidies from energy and
The 1,400 MWe program has now been implemented al- 'green' taxation.
most to its full extent. The investments in the program have
5. Industrial CHP & green tax scheme

Denmark has little energy intensive industry, and industrial stimulate employment by shifting a part of the tax on labor
CHP developed later than district heating CHP. The techni- to a tax on energy. To overcome the competitive problem
cal potential was assessed to approx. 1,700 MWe in 1991. the tax revenue is recycled, and the tax is graduated. En-
ergy intensive industries can get a reduced tax if they enter
In mid 1990s, new investment and price subsidies and
into a binding agreement on energy savings, including
electricity tariffs paved the way for new gas-fired industrial
CHP, and for a period subsidies are given to adjust the
plants. This program had a very convincing start. But gov-
technology and production to the new tax structure. An
ernment realized that subsidy and tariff incentives were
evaluation has now concluded, that the tax package results
more than favorable, and it down-sized incentives. This
in a very considerable environmental impact in an eco-
meant an almost full stop to further CHP construction in in-
nomically efficient manner. The energy tax system is ex-
dustry, also in the light of upcoming competition in electric-
pected to lead to a 3.8% reduction in the total national CO2
ity prices, etc. Later on, the program has restarted as an
emissions from 1988 levels by 2005. Due to the recycling
outcome of new upsizing of investment subsidies. Today a
of increased taxes, the macroeconomic effect of the energy
total capacity of more than 450 MWe has been established,
tax system has been very moderate. The experience
and more capacity is under construction.
shows it is possible to establish an energy tax system that
This development of CHP may be seen in connection with lead to a reduction in CO2 emissions, without causing a de-
the green tax scheme (cfr. reference 5). In 1995 Denmark crease in the competitiveness of industry and the commer-
decided on this scheme for commercial sectors and indus- cial sector.
try. The main purpose was to reduce CO2 emissions and to
6. Markets for 'green' electricity

As part of the recent electricity reform a market for green floor of 0,012 € per kWh, and a price ceiling of 0,035 € per
certificates is being planned to go into full operation by kWh. The market will be coordinated with possible markets
2003. This market has been designed to rely on a price in neighboring countries.
7. CHP development in Europe

EU policies in CHP have existed since 1979. This first rec- and several member countries have since set up certain
ommendation - on promoting CHP by starting national co- privileges for this group.
operative work with energy sector and municipalities - was
CHP gained new momentum after 1990 when a number of
adopted in the council of ministers. In 1988, a recommen-
countries carried out national programs utilizing modern
dation on the protection and encouragement of small
gas CHP. Especially UK, Netherlands and Denmark had
power producers (less than 25 MWe) was also adopted,
adopted this policy, taking CO2 reductions into considera-
tion. But also other countries as Spain, Italy, Portugal and • CHP policies should be tailored to the fact that it is an
France have opened the door for gas-fired CHP, while integrated technology dependent on fuels, electricity
countries as Sweden and Finland looked into biomass and heat supply;
CHP. • district heating, local heat consumers and industry are
three distinct applications of CHP, each with its own
This momentum was created in the early phases of energy
preconditions to policies and measures.
market transformation. In the later phases of the liberaliza-
tion negotiations, it became uncertain how for CHP to pro- Consequently, CHP policies must start on a comprehen-
ceed. It is probably not incorrect to claim that the role of sive strategic level, governments defining targets and
CHP, as well as renewable energy, is far from being per- space for the CHP, its fuels and sales of heat and electric-
fectly defined until now, in spite of market directives for ity. This strategy should also take the necessary action to
both electricity and gas, and in spite of many dedicated stop misleading development as e.g. erosion of district heat
discussions and decisions in the council of ministers. markets and construction of surplus condensing power ca-
pacity.
But CHP was also taken up from the environmental side,
and in the preparations for the Kyoto meeting, CHP was The integrated requirements of CHP have also led to an
out-mapped as a major element in the EU 'no regret' pack- unpleasant and repeating work of identifying all the possi-
age. It was considered that CHP could cover 30-40% of fu- ble barriers to this technology, as lack of awareness and
ture electricity demand, and that this would lead to reduc- tradition, obstructive monopolistic behavior, and time-
tions of approx. 10% of CO2 emissions in EU. consuming bureaucracy.
The EU work also considered which policies and measures National work on CHP should be supported by EU regula-
to implement. First of all, it was observed that tion, e.g. a CHP directive similar to that being considered
for renewables.
8. Perspectives
• The design of CHP policies and measures could consist ronmental reasons. Instead CHP should be established
of a 'recipe' for each application of CHP: and located as the best technology. Taxation and pric-
• Both EU and national targets are necessary. Only few ing could be progressive, giving premiums to low-
countries have defined such targets, though they have a emission energy.
quantified GHG reduction obligation. • The construction of CHP stations must be well organ-
• The real CHP potential must be analyzed in depth for in- ized if ever to happen. Local actors as industry, munici-
tegrating the '3 Ms', i.e. all three market categories: fuel, palities, suppliers of fuels, heat and electricity, and other
electricity, heat. This work should not be underestimated parties, must be involved. Organization may be stimu-
(EU has now spent 10 years analyzing it with sparse related by local planning processes and consumer in-
sults), and many lessons could be learned from e.g. volvement, task forces and joint ventures, etc.
Denmark and the Netherlands. • Several promotional models may be created to attract
• The market frameworks for all of the '3 Ms' must be and sustain CHP. Guaranteed subsidies and minimum
supportive. Gas prices must be competitive at all times, tariffs e.g. by load priority and PSO arrangements or by
electricity market must allow for CHP electricity at fair state subsidies, investments grants, markets for 'green'
long-term conditions, heat market should be guaranteed certificates, CO2 quota or trading, or central programs
and protected as a natural monopoly, etc. with fixed amount of subsidies and tendering proce-
• Governments must know their duties in setting regula- dures (e.g. the UK NFFO).
tion, prices, taxation, investment grants, etc. E.g., ac- • In the operational phase, CHP must be given the right
cording to proposals in the EU large combustion plant stimuli to maximize production and interact with other
directive (LCPD), no new condensing power capacity sources of 'cleaner' energy.
can be approved by government for efficiency and envi-
86 Ture Hammar
9. References:
• European Cogeneration Review 1999, CogenEurope 1999.
• CHP Programs - part of the future EU Climate Strategy. Ture Hammar, Danish Energy Agency, May 1997.
• The electricity reform. Danish Energy Agency, 3 March 1999.
• Incentive policy on industrial CHP in Denmark. Jesper Koch, Danish Energy Agency, Proceedings, ECEEE June 1997.
• Experiences with the Danish CO2 tax scheme for industry and the commercial sector and its evaluation. Ms. Lisbeth Nielsen,
Danish Energy Agency. UNFCCC Workshop on Best Practices in Policies and Measures 11 -13 April 2000.
Cogeneration in Europe: % of national

electricity production 1999/1997/1995
CHP in Denmark D e n m a rk
N e t h e rla n d s
CTI Ostritz F in la n d
December 2001
A u s t ria
It a l y
S p a in 1999
Ture Hammar
P o rtu g a l
1997
G e rm a n y
S w eden 1995
Danish Energy Agency UK
B e lg iu m
Ministry of Economy &Trade F ra n c e
G re e c e
Ir e l a n d
0 10 20 30 40 50 60
Slide 1 Slide 2
Exploitation of CHP potentials in 1980-90s Large DH cities

O 1976: Copenhagen, Aarhus, Odense, Aalborg, TVIS,
O UK & NL: gas turbines in industrial plants Esbjerg, etc. zoned centrally
O FIN: biomass, peat, coal, etc. in urban CHP O Strong utilities and municipalities secure investments
and in industries O Power plants converted to extraction and coal (‘ waste
heat’)
O DK: all fuels, all applications
O DH consumer connection secured >90% by subsidies,
O DK: utilise best available technology and low heat prices & taxes, campaigns, marketing
available clean fuel for each application O New large CHP installed
O BEST PRACTICE? O Reform: load priority, CO 2 quota - 5% each year
O Unbundling = monopoly risk to DH
Slide 3 Slide 4
Medium & small CHP Industrial CHP

• 1981: surplus capacity, moratorium to CHP • Most low energy intensity, tax exempted
• 1984: all medium size towns listed, coal banned • 1990: favourable tax/prices reelase some potential
• 1984: local energy planning full speed ahead • 1995: CO2 tax/subsidy reform
• municpalities, consumers and local utilities very active • Industry audit arrangements
• 1986: test & demonstrationsprogramme forCHP with • Voluntary agreements recover tax
biomass, waste, biogas and natural gas • Subsidies etc. move potential slowly
• 1990: total programme for all towns and communities
• Full potential of 1400 MWe achieved by 1996
• Support by energy & CO2 taxation/subsidies, zoning,
local engagement
• Reform: load priority, price floor, subsidies
Slide 5 Slide 6
Results of R&D&D Phases of Danish CHP

1976-91 Large plants Urban DH expanded and
O 10 biomass CHP and 2 biogas CHP operating Central policies converted to coal interconnected
since 5-12 years CHP
O Best performance 32% electricity, average 25- 1984-1997 Town and Municipal and local DH
Municipal community settled
30% policies programme gas
& biomass CHP
O Total efficiency average 90%
1995- Industrial & local Industries, greenhouses
O Operation in 2000 average 5000-6000 hours, Industry and gas CHP etc. involved in energy
local schemes efficiency schem es
best 8500 hours
1981- biogas, New DH, micro CHP, heat
O New local NGCHP & new DH special case R&D&D & gasification, fuel pumps, geotherm al, tech
individual cells, biomass, integration etc.
schemes multi CHP
Slide 7 Slide 8
% share of CHP & wind power Eletricity systems with high

versus condensing CHP & wind power shares
70
60 O Excess capacity happens

50 cold/windy/winter/nights
40 C on d en s
CHP
O can be exchanged with hydropower
30
20
R en
O technical fixes are also possible
10
O illustrates the need for a regional energy
0
1990 2005 2030 market
O Baltrel/Baltic Gas report foresees 47%
new CHP
Slide 9 Slide 10
Examples of countries with
DH&CHP opportunities CHP in EU
O Germany: DH potential O 1988 40 GWe(EU 12) = 6%

O Poland: Huge energy saving potential O 1994 67 GWe(EU 15) = 9%
O Lithuania: CHP least cost substitute to O 1999 Eurostat = 11%
INNP O 2010 EU target = 18%
O Central & Eastern Europe: opportunities O Potential 180 GWe + = 40%
in DH O Similar or higher potentials in CEE &
NDs
Slide 11 Slide 12
CHP CO 2Cost Guidance CHP CO 2 Reduction
’No regret’ in many cases: Depends on reference:

O Industrial CHP O Coal Condensing + Oil Heating
O CHP in city wide DH O New Gas CC + Modern Gas Heat
O CHP at large costumers/tertiary Estimates:
Sometimes cost effective when ranked: O 0,15 - 1,00 t CO 2 per MWh
O CHP in new DH when infrastructure O Choice 0,60 t CO 2 per MWh
easy to establish O Additional EU CHP potential 421 Mt/y
CO 2
Slide 13 Slide 14
88 Ture Hammar
Common Tasks to Implement

Implementation of CHP CHP
Electricity Demand Heat Demand Industrial Processes O European & national targets for CHP & DH
O Funds must be allocated
O Internalisation of external costs
• MW targets • Munic. cooperation • Task forces O CHP prirority in new capacity
• Electricity Market • Urban zoning • Pay back shortening
• Green Electricity • Heat monopoly • Joint ventures O CHP priority in operation
• NFFO Bidding • Marketing of DH • 3rd Party Financing O Develop and use DH towards efficiency
• PSO load priority • Financing • Tradeable permits
• Funding • Taxation & subsidies • Taxation & subsidies O Electricity, heat and industrial market framework
• Taxation & subsidies supportive, not destructive
O Modern dispatch & regional energy system
Slide 15 Slide 16
Conclusion
O CHP policies now widely discussed

globally
O But many obstacles (vested interests,
oligopolies, national complications,
wrong market design etc.)
Slide 17 Slide 18
Overview of Slovak Energy Systems Regarding

Cogeneration Technologies
Ludovít Mikula
Slovak Energy Agency
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Slide 5 Slide 6
90 Ludovít Mikula
Slide 7 Slide 8
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Slide 17
92 Vladimir Hecl
The Austrian-Slovak Competence Centre for CHP Diffusion

Vladimir Hecl
Energy Centre Bratislava / OPET Slovakia
Background
] Combined production of heat and power (CHP)

is the most efficient way of primary fuel
The Austrian-Slovak Competence utilisation and hence one of the main
Centre for CHP Diffusion commercially viable means to achieve the Kyoto
CO2 reduction targets
Vladimir Hecl In the Slovak Republic:

Energy Centre Bratislava ] Technical potential for CHP 1.480 MWe
OPET Slovakia
] Economic potential for CHP 656 MWe
] Market potential for CHP 430 MWe
Slide 1 Slide 2
Barriers for CHP 1997 SEA -C ogeneration C entre
] Distorted energy prices

] Lack of information on technology ] Project in frame of Austrian Slovak Energy
Partnership
] CHP had no position in the Slovak Energy Policy
] Goal - Establishment of a coordination,
] General preference of low cost investments
information and consultancy centre for
] Attitude of power distribution utilities towards investors, technology providers, FIs, authorities
independent power producers and contracting companies
] Frame conditions at Slovak capital market ] Mission: Assistance to implementation of
cogeneration technologies in Slovakia
Slide 3 Slide 4
Main Activities of SEA-Cogeneration

Centre Support to project ideas
] Spreading of information on technologies, legal, ] Elaboration of feasibility studies

economic and financing framework
] Preparation of public tender records
] Intermediation and co-ordination of contacts
] Organisation and evaluation of public tenders
among project participants
] Facilitating access to financing sources
] Competent, unbureaucratic and rapid support to
project ideas in all phases of planing and ] Participation on international projects aimed
implementation upon elimination of barriers to CHP
] Improvement of general framework
Slide 5 Slide 6
Best Practice: The Case of Combined Heat and Power

- Implementation of Small CHP Units in Bulgaria
Violetta Groseva
Basic information There is continuous though varying heat demand through-

out the year.
The Republic Bulgaria imports more than 70 % of the en-
ergy used. For this reason one of the main policy in the en- The project
ergy field is the energy efficiency.
A modern CHP gas-fired unit was installed in the DH Com-
Co-generation is one of the most effective technologies for pany with 774 kW thermal and 526 kW electrical capacity.
the rational use of energy. The advantage of cogeneration It is foreseen the unit to be in operation all year round,
is measured with the energy savings achieved when com- while during the peak season (winter) it will supplement the
pared with the separate generation of electricity and heat. It existing heat boilers, and during the summer it will operate
is estimated that through the use of cogeneration systems alone to supply hot water to the DHC customers. About 15
the possible reduction of primary energy consumption is up % of the produced electricity is to be self consumed and
to 35 %. the rest is to be sold to the utility.
Large scale CHPs are implemented in Bulgaria for a long The investment
time. The overall objective is to demonstrate the economic
The overall initial investment costs of the project are about
and environmental benefits by using also small-scale CHP
300,000 €. It has been realized under a JI scheme for co-
applications in the industry and in the building sector.
operation between Bulgaria and Netherlands. The funds for
Sofia Energy Centre (SEC) in its effort to promote small project investments were provided as a grant by the Dutch
CHP, selected four sites and for each of them a detailed Program SENTER, and there were about 10,000 € addi-
pre-feasibility study has been performed. The results of this tionally provided by Pravets DH Company related to the
analysis are shown below: necessary infrastructure and local connections provision.
CO2 NOx The equipment

Investment Payback emissions emissions
Site The CHP unit is manufactured by the com-
(k€) (years) reduction reduction
(t/y) (kg/y) pany Dynaf Spruyt Group and is equipped
Vitavel SC 926 7,4 7464 17774 with:
Regional Hospital Lukovit 254 8,7 1620 3851
• a complete heat recovery system;
Regional Hospital Mezdra 302 7,9 2166 5284
• a telemetric communication system;
Regional Hospital Novi Pazar 376 7,9 2778 7191
• a sound reducing canopy.
Sofia Energy Centre as a Co-generation Centre in Bulgaria It has been integrated in the existing infrastructure of the
took part in implementation of a CHP unit in the district DH company.
heating company of Pravets, Bulgaria.
Expected benefits
The site
It is forecasted that at about 8,200 operational hours/year
The DH Pravets is located in the small town of Pravets, the annual primary fossil energy savings are about 2,280
Bulgaria, and it supplies thermal energy for space heating MWh which makes annual net cost savings of about
and hot water production to about 1,300 households and to 50,000 €. At present conditions the expected pay-back pe-
industries and public organizations another 1,300 house- riod is about 6-7 years. The parameters derived from
holds. The company operates about 18 km network and above concerning CO2 emissions savings are some 800
100 sub-stations. Near by there is a main gas pipeline. tons a year.
94 Violetta Groseva
Main reasons for the project Project sustainability and potential for domestic repli-
cation
The economic and environmental benefits of CHP for small
and medium industries in Bulgaria were to be demon- A market analysis was made within the project realization
strated. The overall project target is to realize significant and it revealed that the replication potential of this type of
reduction of energy consumption and therefore also of projects is significant in Bulgaria. Similar projects can be
greenhouse gases at the DHC Pravets. In the long run tar- realized in:
gets are also: development of knowledge, management • Hospitals and other medical facilities;
capabilities and information in the field of energy efficiency • hotels and large buildings;
and creation of sustainable cooperation between Bulgarian • greenhouses;
and Netherlands companies and organizations. • small industries;
• heating companies, etc.
CTI Capacity Building Seminar, 5-9 Dec. 2001, Ostritz, Germany CTI Capacity Building Seminar, 5-9 Dec. 2001, Ostritz, Germany
Implementation of CHP in Bulgaria Current Situation

1. The first CHP “Sofia” was constructed in 1949
Violetta Groseva 2. The installed capacities in CHP of the country are:
Sofia Energy Centre
Nuclear Power Plant 3760 MW
51, James Boucher Blvd. Hydro Power Plants 2407 MW
1407 Sofia, Bulgaria Thermal Power Plants 6550 MW
Tel: +359 2 68 35 42 incl. Co-generation 2035 MW
Total 12717 MW
Fax: +359 2 68 14 61
E-mail: vgroseva@enpro.bg; ecencentre@enpro.bg
3. CHP accounts for 16 % of the total installed capacities;
Web-site: www.sec.bg
4. CHP accounts for 31 % of TPP capacities.
SS E
E C
C Sofia Energy Centre SS E
E C
C Sofia Energy Centre
1 2
Slide 1 Slide 2
CTI Capacity Building Seminar, 5-9 Dec. 2001, Ostritz, Germany CTI Capacity Building Seminar, 5-9 Dec. 2001, Ostritz, Germany
Implementation of Small CHP in Bulgaria CHP Installation for DHC Pravets

Results of pre-feasibility studies (executed by SEC) • CHP gas-fired unit with 774 kWt and 526 kWe;
Site Electric Thermal Invest Payback CO 2 NO x
power power ment (years) emissions emissions • Investment costs – 300 000 Euro;
(kW) (kWt) (kEuro) reduction reduction
(t/y) (kg/y) • JI scheme between Bulgaria and Netherlands;
Vitavel Lukovit 1175 2275 926 7,4 7464 17774
• Expected benefits:
Regional Hospital 465 793 254 8,7 1620 3851
Lukovit - Energy savings – about 2280 MWh/year;
Regional hospital 575 960 302 7,9 2166 5284
Mezdra - Pay-back period - 6-7 years;
Regional Hospital 799 1148 376 7,9 2778 7191
Novi Pazar
- CO2 emissions reduction – 800 t/year.
SS E
E C
C
Sofia Energy Centre 3 SS E
E C
C
Sofia Energy Centre 4
Slide 3 Slide 4
Slide 5
96 Felix Christian Matthes
Thermal Energy Conservation in the Building Sector

Dr. Felix Christian Matthes
Öko-Institut, Berlin
Energy Services Demand in Germany

100%
Thermal Energy Conservation

in the 75%
Building Sector
CTI Capacity Building Seminar 50%
for CEE/FSU Countries

www.oeko.de
www.oeko.de
Information/Communication
Ostritz, December 7, 2001 25% Lighting
Mechanical Energy
Process Heat
Felix Chr. Matthes Space Heating
0%
Industry Transport Residential Commercial Total
Slide 1 Slide 2
German Building Codes Energy Efficiency Potentials

kWh/sqm
350
Aircraft
Recent Technologies Transpor-
Ships
300 DIN 4108 Future Technologies tation
Railway Transport
Road Transport
Thermal Processes
250 Industry
Mechanical Processes
1. WSchVO Audio
200 Video
Mechanical Appliances
Dishwasher
Residential
2. WSchVO &
150 Dryers
Commercial
www.oeko.de
www.oeko.de
? Washing Machines
Microwaves
100 Cooking
3. WSchVO Refrigeration
Standby
50 EnSpVO
Information & Communication Cross
Electric Motors Sector
0 Lighting
1970 1975 1980 1985 1990 1995 2000 2005 2010 Existing Buildings
0 20 40 60 80 100
Slide 3 Slide 4
Scenario Assessment Challenges & Opportunities

mln t CO2
50
Scenario Policy Scenario Potential Energy Efficiency in Buildings
0
f Germany: high share of labor costs
-50
should be
-100
-150
More Cheap in EITs
www.oeko.de
www.oeko.de
-200
and could build opportunities for

-250
Cogeneration Other Energy Transformation
-300
Electricity Savings
Transport
Renewables
Space Heating (Existing Buildings) Combining Energy Efficiency
-350
Other Energy Efficiency
with Increase of Employment
2005 2010 2015 2020 2005 2010 2015 2020
Slide 5 Slide 6
Implementation of Thermo-modernization Law in Poland

Andrzej Szajner
The new Thermo-modernization Law (“Law on Assistance • pay-back time of the loan ≤ 10 years
in Thermo-modernization Projects”) introduced in Decem- • monthly payments (loan repayments with interest) ≤
ber 1998 and modified in 2001 has replaced state subsi- monthly savings calculated in the energy audit;
dies by financial support of feasible thermo-modernization • thermo-renovation project has been performed in ac-
projects. cordance to the technical design and in time.
The objective of the Law is to support of modernization pro- Financing is arranged by Bank Gospodarstwa Krajowego
jects aiming at: BGK (Bank of National Economy) through selected com-
mercial banks.
• reduction of energy consumption in buildings, residential
and public/ communal, From the principles of the Law it could be seen, that regula-
• reduction of energy losses in local heating networks and tions are favorable to renewable energy sources together
local HOBs <11,6 MW, with thermo-modernization of buildings providing that the
• conversion of conventional heat sources to non- economy of the investment is good. The key factor of the
conventional sources, incl. renewables. Law are savings allowing for repayment the loan with inter-
est within 10 years. Potential of savings means the differ-
Definition of the thermo-modernization project according to
ence between costs of energy in existing heating system
the Law:
and costs after thermo-modernization.
a) modernization resulting in reduction of annual con-
The staff of BAPE has already performed audits of a few
sumption of energy in buildings
hundred buildings. The big majority of buildings was built in
• when modernizing heating system only - min 10%
prefabricated systems in the 70’s and 80’s, with big slabs
• building thermo-modernization - min 15% or 25%
of reinforced concrete. The audits confirm high annual en-
b) modernization of local HOB and local network, reduc- ergy consumption - 180-270 kWh/m2 - in prefabricated
tion of energy losses - min 25% multistory apartment buildings. Typical scope of
c) closing of local HOB and connection to DH system, re- modernization includes insulation of walls and roof,
duction of heating costs - min 20% modernization of heating installation and replacement of
windows. Reducing energy demand of about 30% requires
d) conversion of conventional energy sources to non-
high investment expenditures, with SPBT often exceeding
conventional.
10 years. Even then in many cases the indicator of
The necessary condition is to elaborate an ENERGY AU- seasonal energy demand is still higher than the today
DIT – a pre-feasibility study, including costs and energy required 150 kWh/m2. Further reduction of energy
savings, assumption for technical design of modernization consumption usually means replacing windows, which
(verified), which shall include: information about buildings, causes an increase of investment costs and makes it
local HOBs, network and owners, evaluation of technical unprofitable.
The important role of building administration is to install
conditions buildings, local HOBs and network, description
heat meters or heat costs allocators as well as to encour-
of possible options of thermo-renovation and selection of
age tenants to save energy and change bad habits. Till re-
the optimum option of thermo-renovation.
cently the Thermo-modernization Fund has been used at a
The special part of the law is a thermo-renovation bonus, much lower rate than anticipated. The system has been
25% of the loan, which is granted if: modified this year to stimulate substantial increase of ther-
mo-modernization investments.
• loan ≤ 80% of investment
98 Andrzej Szajner
Slide 1 Slide 2
Slide 3 Slide 4
Slide 5 Slide 6
Slide 7 Slide 8
Slide 9 Slide 10
Slide 11 Slide 12
Slide 13 Slide 14
100 Georg Kraft
KfW-Housing Modernization Program

- Experience with Refurbishment of Panel Buildings in Eastern Germany
Georg Kraft
Data on flats in Eastern Germany • Mainly change of heating systems/fuel change from
high-emission coal to gas and oil
Number in Total %
• Annual reduction of 6 mln t CO2 (to reach the objective
Flats total 7,363 100
of which are in of the German government of a 25% CO2 reduction in
Old Houses households in Germany, a reduction of 32 mln t CO2
3,393 46
(constructed up until 1948) would be necessary).
Panel Buildings 2,127 29
Credit requests for panel buildings
• building modernization work to improve the functional • Rehabilitation77 %
value of individual flats (e.g. sound insulation, flat layout, • Energy Saving10 %
sanitary installations)
Rehabilitation needed primarily because of bad construc-
• construction measures to improve the general housing
tion performance.
conditions (e.g. communal facilities, construction or ex-
pansion of balconies (loggias) Rehabilitation of panel buildings
• installation and upgrading of lifts
• 1/3 of East German households live in Panel Buildings
• measures for energy conservation or reduction of SO2
• Rehabilitated Panel Buildings are more modern than
and CO2 emissions (e.g. replacement of windows, mod-
flats in old houses
ernization of heating including changeover to fuels that
• Rent in Panel Buildings are lower than in new houses
emit less CO2, installation of central heating, hot water
• There are less empty Panel Buildings than other hous-
supply and heat insulation)
ing
• rehabilitation (repair and replacement of defective build-
ing components, e.g. roof, façade, windows, floors, Program conditions
stairs). Payment: 100 %
Energy saving in the Interest Rate 3,44 %
(per Nov. 9, 2001) (fixed for the first 10 years)
Housing Modernization Programme:
Repayment Period 30 years
(Total including panel buildings)
Please find the actual interest rates on the KfW internet
• 50% of all credits
page http://www.kfw.de
• 20% of volume
KfW-Housing Modernization Program 101
KfW-Housing Modernisation Programme
Data on Flats in Eastern Germany

Number in 1000 %
Flats Total 7,363 100
Of which are in:
- Old Houses 3,393 46

(constructed up until 1948)
- Panel Buildings 2,127 29
Slide 1 Slide 2
KfW-Housing Modernisation Programme
Modernisation of Panel Buildings KfW-Housing Modernisation Programme
building modernisation work to improve the functional value of individual flats

286 101 (e.g. sound insulation, flat layout, sanitary installations)
Mecklenburg-Vorpommern
construction measures to improve the general housing conditions
(e.g.communal facilities, construction or expansion of balconies (loggias)
339 110
Brandenburg
Flats in Panel Buildings promoted
installation and upgrading of lifts
293 253
under the KfW Housing
Berlin (Ost) Modernisation Programme (in
thousand)
measures for energy conservation or reduction of SO 2 and CO 2 emissions (e.g.
356 replacement of windows, modernisation of heating including changeover to
97
Flats in Total: fuels that emit less CO 2, installation of central heating, hot w ater supply and
Sachsen-
2.127 Tsd heat insulation)
Anhalt
554 Flats promoted by KfW :
191 818 Tsd
299
Sachsen rehabilitation (repair and replacement of defective building components, e.g.
66
roof, facade, w indow s, floors, stairs)
Thüringen
Slide 3 Slide 4
KfW-Housing Modernisation Programme KfW-Housing Modernisation Programme
Energy Saving in the Housing Modernisation Credit Requests for Panel Buildings
Programme:
(Total including Panel Buildings)
50 % of all Credits
Rehabilitation 77 %
20 % of Volume
Mainly Change of Heating Systems/Fuel change from high-emission

Energy Saving 10 %
coal to gas and oil
Annual Reduction of 6 Miot CO 2 (to reach the objective of the German

government of a 25 % CO 2 reduction in households in Germany, a Rehabilitation needed primarily because of bad
reduction of 32 Miot CO 2 would be necessary)
construction performance.
Slide 5 Slide 6
KfW-Housing Modernisation Programme KfW-Housing Modernisation Programme
Rehabilitation of Panel Buildings Programme Conditions
1/3 of East German households live in Panel Buildings

Payment: 100 %
Rehabilitated Panel Buildings are more modern than flats in old
houses Interest Rate (per Nov. 9, 2001): 3,44 % (fixed for the first 10 years)
Rent in Panel Buildings are lower than in new houses Repayment Period: 30 years
Please find the actual interest rates on the KfW-Internet-Page

There are less empty Panel Buildings than other housing http://www.kfw.de
Slide 7 Slide 8
102 Tamuna Abazadze
Best Practice: Thermal Energy Conservation in the Building Sector

Tamuna Abazadze
Project Title: Renovation of Heating and Ventilation under stage and orchestra ditch, to blow hot air to foyers, to
System in TBILISI Opera and Ballet House make windows double-glazing in ballet rehearsal halls, as
well as some other improvements for increasing the boil-
In 1999-2000 in the framework of the TACIS program the
ers´ efficiency.
pilot project at TBILISI Paliashvili’s State Academic Opera
and Ballet House was successfully completed. The aim of For implementation of the 2nd phase - installation works –
the pilot project was to renovate the old heating and with an advertisement published in 3 local newspapers, 12
ventilation systems. companies expressed a wish to participate in the project.
The local Georgian company MRETSVENTILATCIA Ltd.
Nowadays energy crisis showed the inefficiency of the pre-
has been sub-contracted.
sent heating and ventilation system in TBILISI Opera
House. The old system was designed during Soviet Union The installation started in June 2000 in 2 phases: by local
on a permanent consumption of diesel fuel. And the TBI- works and installation of supplied equipment from Western
LISI Opera House as an architecturally unique building Europe. There were installed huge energy efficient air
faced a huge heating problem. heaters and fans, gas burners for the boilers, double-
glazing on windows, by-pass pipes, insulation etc. The
Heating became a key problem for artists and musicians
heating system has been connected to the natural gas
during the last 10 years. It was terribly cold inside of the
supply system. The Municipality of TBILISI provided the
building. According to the old design, during winter the heat
gas piping system and the US company CHEVRON paid
flow was coming from the ceiling resulting in +13°C low
for an amount of 180.000m³ gas for the whole heating sea-
temperature in auditorium, in orchestra ditch and stage.
son. Installation works were finished in October 2000.
Artists and musicians suffering from the low temperature
during performances, started leaving the Opera House - it Presently a new heating system provides heating to the
was impossible physically to work during the winter season. auditorium where the average temperature is +25°C, stage
The situation was so difficult that Mr. Lomidze, Director of and orchestra ditch are heated up to +20°C, enough to
Tbilisi Opera House, asked for help by TACIS. give a comfortable feeling to opera singers, ballerinas and
musicians. Also nice warmth meets people in foyers and
The pilot project started in December 1999 by carrying out
wardrobes. The climate in ballet rehearsal rooms is im-
a comprehensive energy audit. Based on the results of the
proved and temperature increased up to +23°C. Thanks to
energy audit, it took a number of months work of TACIS
energy efficiency measures implemented and energy sav-
expert Mr. Mircea Abrahamsson, Project Manager Ms.
ings achieved, the whole system keeps warm inside this
Tamara Abazadze and energetic input of Director of TACIS
huge building by making nesting with all improved facilities.
EEC Mr. Bernard Froelicher to find a correct technical solu-
Energy efficiency of heat supply in the boiler has been sig-
tion: the solution mainly consisted in modification of airflow
nificantly increased. The ventilation system is quite effec-
in auditorium and the other 14 modifications for increasing
tive in the summer.
of temperature on the stage, in orchestra ditch, in foyers, in
ballet rehearsal rooms and other places devoted to public The final phase of the project – testing and monitoring -
and actors. was completed in November 2000. At 9th of December
2001 it was organized a press conference and at the end
For the huge public auditorium (for 1,100 persons, area
an official inauguration of the new heating system took
550 m², volume 9,900 m³, height 18 m) was proposed a
place with a special opera performance and gala concert.
specific technical solution by reversing the airflow. For
Besides, a videotape has been made during works per-
stage and orchestra ditch it was decided heating a volume
formed.
Best Practice: Thermal Energy Conservation in the Building Sector 103
The project has been successfully implemented through reason that the old system was designed for a permanent
the grant assistance from European Union’s TACIS Pro- use of fuel according to Soviet standards which nowadays
gram for an amount of 34,142 $, project duration 1 year is pretty expensive compared to fuel prices of Soviet times.
and payback time 3.25 months. Before renovation it was necessary to start heating in the
building 3-4 days permanently (!) before each performance
Calculation of economic effect of and a significant heat effect could not be achieved at all –
new heating and ventilation system of the the building was cold!
TBILISI State Academic Opera and Ballet House Past energy billing:
Current energy billing: • Electricity consumed for heating system: 3,500
• Electricity consumed for lighting, all fans & equipment: GEL/month (1,750 $/month)
1,500GEL/month (750 $/month) • Fuel (diesel) consumed for building heating: 1.2
• For fuel (natural gas) consumed for permanent heating: tons/day (2 boilers working full capacity, fuel consump-
10,000GEL/month (5,000 $/month) tion 50L/hr/boiler. Average monthly fuel billing: 35,000
• Total monthly NEW Energy Billing: 11.500GEL/month GEL/month.
(5,750 $/month). • Total monthly OLD Energy Billing: 38,500 GEL/month
(19,250 $/month).
The main achievement of energy efficiency in this project is
that for heating of the huge building (total area 3,900 m²,
maximum height of building 30.6 m, volume 97,500 m³) it is Energy savings achieved 13,500 $/month
necessary to switch on the new heating system 3 hours be- Investment provided for
34,142 $
heating system
fore performance to an average temperature in auditorium
Investment provided for gas piping 10,000 $
of +25°C, on the stage +20°C, orchestra ditch +22°C, bal-
Total Investment 44,000 $
let rehearsal rooms +23°C, in foyers +25°C.
44,000/13,500
Payback period
The old heating & ventilation system did not give an oppor- =3.25 month
tunity to save energy and consequently also money for the
104 Paata Janelidze / Tamuna Abazadze
Best Practice: Renovation of Heating and Ventilation System

in Tbilisi Opera House
Paata Janelidze
National Agency on Climate Change at the Ministry of Environment of Georgia
Tamuna Abazadze
Climate Technology and Energy Efficiency – GHG reduction is caused by:

Disseminating “Best Practice” Experience
Ostritz, 5-9 December 2001 • Thermal energy saving - 38% - due to the new
heating and ventilation system;
BEST PRACTICE: RENOVATION OF • Electricity saving – due to the decrease of
HEATING AND VENTILATION SYSTEM IN duration of ventilation;
TBILISI OPERA HOUSE
• Fuel switch – Natural gas instead of Diesel
ESTIMATION OF GHG REDUCTION fuel.
Paata JANELIDZE, Tamuna ABAZADZE
National Agency on Climate Change
at the Ministry of Environment of Georgia
2
Slide 1 Slide 2
120 650000 S p e cific e le ctricity a n d fu e l co n su m p tio n , kW h /p e rfo rm a n ce
600000
9500 25000
100 550000
500000
8500 20000
80 450000
400000 Num ber of

perform anc es 7500 15000
60 350000
Other arrangem ents Elec tric ity
Fuel
300000
P erform anc es + other

6500 10000
40 250000 arrangem ents
Fuel (Diesel fuel)

200000
c ons um ption, l
E lectricity 5500 5000

20 150000
c ons um ption, k W h
100000
0 50000 4500 0
1996 1997 1998 1999 2000 2001 1996 1997 1998 1999 2000 2001
3 4
Slide 3 Slide 4
Best Practice: Renovation of Heating and Ventilation System in Tbilisi Opera House 105
D aily C on su mption o f N atural G as an d E le ctricity in N o n-pe rfo rmane days
1000
Da ily Cons um ption of Na tur a l Ga s a nd Ele c tr ic ity in Nove m be r 2 0 0 1
Performances
2500 Duration of heating, h 15

Duration of v entilation, h
900
14
Day off 851
Gas , m3 13
2000
Elec tric ity , k W h 12
Air Temperature, 0C
11 800
10
9 720
1500 695
8
700
7
639
6
1000
5
4
600
3
500 2
1 500
0
0 -1
ov
ov
ov
ov
ov
ov
ov
ov
ov
ov
ov
ov
ov
ov
ov
ov
ov
ov
ov
ov
ov
ov
ov
ov
ov
ov
ov
ov
ov
10-N
11-N
12-N
13-N
14-N
15-N
16-N
17-N
18-N
19-N
20-N
21-N
22-N
23-N
24-N
25-N
26-N
27-N
28-N
29-N
1- N
2- N
3- N
4- N
5- N
6- N
7- N
8- N
9- N
400
r
be
be
be
be
be
be
be
be
be
be
be
be
be
be
be
be
be
be
em
em
em
em
em
em
em
em
em
em
em
em
em
em
em
em
em
em
ov
ov
ov
ov
ov
ov
ov
ov
ov
ov
ov
ov
ov
ov
ov
ov
ov
ov
N
N
1
10
13
14
15
16
17
20
21
22
26
27
5 6
Slide 5 Slide 6
Assumptions
Baseline Project An n u a l E n erg y C o n s u m p tio n , G W h
• Energy demand will be met • Energy demand is met;

3.500
in 2007; • Number of performances
• Number of performances will be increased up to 120 3.000
will be increased up to 120 by 2007; 2.500

by 2007; • Natural gas daily
P roject: Heat
consumption in non-heating 2.000
B aseline: Heat
season 80m3 1.500

P roject: E lectric ity
B aseline: E lec tricity
P roject: Total
Emission Factor in Electricity Generation, kg C2/kWh B aseline: Total
1.000
Winter Summer Annual
2001 0.347 0.154 0.257 0.500
2002 0.369 0.166 0.275 0.000
2003 0.371 0.157 0.268

01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
19
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
2004 0.368 0.150 0.262
2005 0.365 0.147 0.258 7 8
Slide 7 Slide 8
Annual C O 2 Emissions, t
1000
900
800
P rojec t: Heat
700
P rojec t: E lec tric ity
600 P rojec t: Total
B as eline: Heat
500
B as eline: E lec tric ity
400
B as eline: Total
300 E m is s ion Reduc tion
200
100
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
19
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Total investment: 35,142 USD

Total emission reduction for 2001-2020: 8,123 t CO2
Emission reduction cost: 5.43 USD/t
Slide 9
106 Zdravko Genchev
Good Energy Efficiency Practices in Bulgaria

Dr. Zdravko Genchev
Slide 1 Slide 2
Slide 3 Slide 4
Slide 5 Slide 6
Slide 7 Slide 8
Slide 9 Slide 10
Slide 11 Slide 12
Slide 13 Slide 14
108 Zdravko Genchev
Slide 15 Slide 16
Slide 17 Slide 18
Slide 19 Slide 20
Slide 21 Slide 22
Slide 23 Slide 24
Slide 25 Slide 26
Slide 27 Slide 28
110 Eduardas Kazakevičius
The Energy Efficiency Housing Pilot Project in Lithuania

Housing and Urban Development Foundation Vilnius / Lithuania
1. Introduction
After the break-up of the Soviet Union, Lithuania inherited duction of the concept of long-term lending for housing im-
housing with space heating intensity significantly higher provement to the commercial banking sector; (c) develop-
than that of the Western European countries. In an attempt ment of energy consulting services and (d) support for mu-
to boost energy efficiency of residential and public build- nicipalities in the energy efficiency rehabilitation of schools.
ings the Lithuanian government signed a loan agreement
Out of the US$ 10 million World Bank loan, US$ 5.3 million
with the World Bank and started the Energy Efficiency
was allocated for implementation of energy efficiency
Housing Pilot Project (EEHPP) in 1996. The project objec-
measures in residential buildings and US$ 4.7 million was
tives were to: (a) support private initiatives to improve resi-
allocated for municipalities to invest in public schools. The
dential energy efficiency; (b) support public initiatives in
Lithuanian government agreed to provide 30 percent
improving energy efficiency in schools; (c) support the pri-
matching funds for the project.
vatization of housing, enabling increased private initiatives
in housing maintenance. The Danish Ministry of Housing and Urban Affairs and the
Dutch Ministry of Economics provided the core technical
The project objectives should have been achieved through:
assistance funds. The Housing and Urban Development
(a) provision of loans for technically and economically at-
Foundation was selected as the project management unit.
tractive packages of energy efficiency measures; (b) intro-
2. The project challenges

The project implementation started in the beginning of separate apartments in multifamily buildings. In order to
1997. Funds for school renovation were channeled to par- strengthen financial accountability the homeowners asso-
ticipating municipalities via the Ministry of Finance of ciation law was amended. Failure by an association mem-
Lithuania. 12 municipalities benefited from the project and ber to repay a state guaranteed loan could result in fore-
implemented energy efficiency measures in 54 public closure of a debtor’s property (i.e. apartment).
schools and kindergartens. Technical monitoring of two ret-
In the mid 1990s Lithuanian commercial banks lacked suf-
rofitted secondary schools demonstrated a decrease in av-
ficient knowledge about this market segment. Lack of ex-
erage calculated heat consumption by more than 40 per-
perience dealing with the commercial banks formed a sig-
cent. Successful implementation of public school renova-
nificant barrier also for households to use bank loans for
tion projects generated significant demand from the mu-
higher volume investments. There was a distinct need to
nicipalities for further loans.
increase awareness by the customer and the supply chain
Much more challenging was the disbursement of loans for (including banks) to the attractiveness of this financing.
renovation of residential single and multifamily buildings.
In the absence of mortgage, technical and financial risks
One of the project objectives was to advance the Lithua-
associated with multifamily building renovations should
nian commercial banking system therefore residential loans
have been partly mitigated by professional energy audits
to the final beneficiaries were extended via local commer-
and thoroughly prepared investment projects. However,
cial banks. Loans to homeowners’ associations were fur-
prior to the project commencement there was very limited
nished with a state guarantee due to numerous legal diffi-
understanding of the feasibility and savings potential of
culties and high transaction costs related to mortgaging of
various energy efficiency measures in Lithuanian residen-
tial buildings. At the project commencement the capacity of and skills needed for more substantial communal undertak-
local energy consultants was rather limited and in some ings. The rest of the associations were formed by apart-
smaller cities professional services were difficult to find. In ment owners who lived in the state or municipal owned
addition numerous households did not realize the impor- buildings hence their experience with property manage-
tance of professional energy consulting services and there- ment issues was quite limited. As a result, associations
fore demand for such services was low. Substantial efforts were very diverse in their sizes, performance and capacity
were needed to boost the capacity of the Lithuanian energy to carry out building renovation tasks and implement en-
consultants and generate sustainable demand for their ser- ergy efficiency measures. Significant support was needed
vices. to enhance household confidence in energy efficiency
measures and support them in all stages of the project im-
Around 50 percent of homeowners’ associations were re-
plementation.
registered former cooperatives, which had some traditions
3. The project development

Since the beginning of 1997, homeowners’ associations In the second half of 1998 the project management unit
and individual homeowners were able to apply for loans in proposed the introduction of a 30 percent grant for home-
local currency with 11% annual interest rate and maturity of owners’ associations participating in the project. The ra-
up to 10 years. During 1997 and 1998 the Housing and Ur- tionale was to improve affordability of loans for renovation
ban Development Foundation with Danish assistance es- of multifamily buildings and encourage formation of home-
tablished five regional advisory centers that quickly be- owners’ associations in the country. This initiative was ap-
came “melting pots” for housing renovation and energy ef- proved by the government and the grant scheme was
ficiency activities. In these centers households could get available since the beginning of 1999.
free advice on technical, financial, organizational and legal
During the first months of 1999 a more targeted information
issues. Advisory center staff also carried out public infor-
campaign was conducted. Almost every member of a
mation activities and assisted homeowners’ associations in
homeowners’ association in the country (around 200,000
various phases of the EEHPP project.
households) was supplied with a newsletter that explained
Dutch support facilitated the development of energy con- the new grant scheme, energy efficiency opportunities and
sulting services in the country. From the project com- provided success stories. Improved financial conditions to-
mencement till the second half of 1999 costs associated gether with an already developed support network resulted
with preparation of energy audits and investment projects in a significant increase of loan applications since the be-
for homeowners’ associations were paid from Dutch tech- ginning of 1999. An average loan size for homeowners as-
nical support funds. In addition Dutch and Danish experts sociations increased from US$ 22,000 in 1997 to almost
conducted numerous training courses for local consultants, $50,000 in 2000. The range of energy efficiency measures
assisted in development of professional tools and helped implemented by homeowners’ associations also consid-
with technical and social monitoring of performed projects. erably expanded.
All these efforts substantially advanced awareness of
As of 30th of June, 2001, 211 associations and 26 individ-
Lithuanian homeowners about the project and its
ual homeowners signed 260 loan agreements for the whole
opportunities and initiated the first wave of the project
allocated amount. So far all participating homeowners’ as-
participants in 1997 – 1998.
sociations were very disciplined in loan repayments and
However a significant fraction of performed energy audits numerous households repaid loans in advance. As of Sep-
and prepared investment proposals did not result in signed tember 1, 2001 around US$ 2.4 million of the extended
loan agreements and implemented projects and loan dis- loans were already repaid instead of the scheduled $ 1.5
bursements fell behind the schedule in 1998. Numerous million.
homeowners still perceived the loan as “too expensive” and
In accordance with the signed agreement the loan repay-
associated with substantial transaction costs and therefore
ment to the World Bank should last till the year 2016.
did not proceed beyond free energy audits.
Therefore available funds repaid by participating home- new homeowners’ associations to improve energy effi-
owners’ associations create a revolving fund thus enabling ciency of their buildings.
4. The project results

The project exposed a number of legal, economic and insti- dividual cases heat savings varied from 5 to almost 50 per-
tutional barriers inhibiting wide scale implementation of en- cent.
ergy efficiency measures in residential buildings. Removal
Cost-effectiveness of the monitored projects was evaluated
of these barriers could increase the share of household in-
on the basis of the achieved energy savings. Only invest-
vestments spent for energy efficiency measures. Neverthe-
ments directly related to improvement of energy efficiency
less the project demonstrated that active involvement of
were used for calculations of simple pay-back periods. In-
the banking sector and availability of long term financing
vestments for building repair or maintenance were ex-
opportunities are essential for the sustainable improvement
cluded. The simple pay-back period of the monitored build-
of energy efficiency of Lithuanian housing.
ings varied from less than 4 to more than 16 years with an
Initial project evaluation was performed via the technical average value close to 8 years. It is important to mention
and social monitoring of 18 projects implemented in 1997 that the second group of projects (with bigger investments)
and 1998. Most of the monitored buildings belonged to the had payback periods close to the average due to higher
initial group of projects with rather limited scope of imple- savings.
mented energy efficiency measures therefore results of the
The project significantly advanced the perceptions of the
performed monitoring cannot be mechanically applied for
Lithuanian society regarding energy efficiency as well as
the whole project. Nevertheless they can illustrate some of
borrowing, though to a limited extent, and demonstrated
the project accomplishments.
that joint efforts of capable private businesses, municipali-
The monitored projects could be divided into two groups. ties and homeowners can lead to successful renovation of
The first group (14 buildings) usually included replacement residential and public buildings. The limited social survey
of the heat substation and some other minor repairs, results confirmed the importance of comprehensive assis-
whereas the second group (4 buildings) also included roof tance for homeowners’ associations undertaking energy ef-
and wall insulation, window repair or replacement, thermo- ficiency improvements. The social monitoring results indi-
static valves and individual heat cost allocators. Average cated that around 90 percent of the surveyed households
calculated heat consumption (assuming unchanged indoor did not have significant problems with loan repayment and
temperatures of 18 degrees centigrade) in the monitored would recommend other associations to participate in the
buildings decreased by approximately 20 percent but in in- project.
5. Conclusions
Successful implementation of public school renovation pro- • affordable financing of energy efficiency improvements
jects generated significant demand from the municipalities' that consisted of the long term loan and the state grant;
side for further loans. Municipal investments are mainly lim- • comprehensive institutional support for homeowners via
ited by scarce budgetary means. Implementation of the regional advisory centers;
residential part of the Energy Efficiency Housing Pilot Pro- • expanded and improved services of local energy con-
ject required integration of: sultants which ensured positive results of implemented
renovations;
• a well tailored legal framework allowing homeowners’
• enhanced public awareness on energy efficiency
associations to obtain bank loans without mortgaging
opportunities in residential buildings and benefits offered
individual apartments thus reducing transaction costs
by the project.
and household reluctance;
Only synergy of all those stakeholders ensured success of could be done, for example, in reducing transaction costs,
the project. Designers of similar undertakings in other streamlining processing procedures and finding credit en-
Eastern and Central European countries should explore all hancements designed to attract local commercial lending to
potential bottlenecks in their countries, be it low awareness, this market segment. Energy efficiency improvement in
legislative hurdles, high transaction costs or insufficient ca- Lithuanian residential and public buildings gained a certain
pacity, and then plan a set of measures that could address pace during the implementation of the EEHPP project. In
all those problems. Any barriers, if not addressed properly, the near future it is important to achieve sustainable pro-
could obstruct development of the whole process. More gress with minimum and well-targeted state intervention.
Lessons of the Energy Efficiency Housing Pilot Project in Lithuania
ENERGY EFFICIENCY HOUSING PILOT

LITHUANIAN HOUSING PROJECT, OBJECTIVES
More than 900,000

apartments in 30,000 Support private initiatives to improve residential energy
multifamily buildings; efficiency;
Approximately 4500 Support public initiatives in improving energy efficiency in
homeowners’ associations; schools;
Most of residential buildings Support the privatization of housing, enabling increased
were constructed according to private initiatives in housing maintenance.
the soviet norms and were
poorly maintained;
Average space heating
intensity in 96 monitored
buildings was 152
kJ/m2/degree-day.
2 3
Slide 1 Slide 2
FUNDING CONSTITUENTS
The World Bank US$ 10 million loan; Provision of loans for technically and economically attractive
Matching funds provided by the Lithuanian government; packages of energy efficiency measures;
Technical support funds provided by Danish and Dutch Introduction of the concept of long-term lending for housing
governments. improvement to the commercial banking sector;
Development of energy consulting services;
Support for municipalities in the energy efficiency
rehabilitation of schools.
4 5
Slide 3 Slide 4
RENOVATION OF RESIDENTIAL BUILDINGS:

PUBLIC SCHOOL RENOVATION CHALLENGES
1997 - 2000: 12 municipalities implemented energy

efficiency measures in 53 public schools and kindergartens Limited public awareness of energy efficiency opportunities;
with 27 thousand pupils; Limited financial and organizational capacity of Lithuanian
Monitoring of 18 renovated schools demonstrated average homeowners to implement substantial communal
heat savings of 24 percent and significant increase of undertakings;
indoor comfort: Undeveloped energy consulting services;
Before After Lack of relevant legislation;
“Vyturio” secondary 15° C 18° C Immature banking sector.
school, Kaunas 193 kWh/m2 117 kWh/m2
Vilijampolė secondary 14°C 16° C
school, Kaunas 237 kWh/m2 128 kWh/m2
6 7
Slide 5 Slide 6
APPROACH MEASURES
IMPLEMENTATION OF ENERGY EFFICIENCY PROJECTS
Targeted information campaigns on energy efficiency
Homeowners opportunities in multifamily buildings (more than 200,000
Targeted
subsidies and Apartment Home Owners of Owners of
Management copies of a project newsletter distributed via direct mail);
supervision
other financial
assistance
owners Owners’
Associations
single family
house
public
building
technical
assistance
Five regional advisory centers consulting homeowners on
technical, legal, financial and organizational issues and
Institutional Infrastrukture assisting them in all stages of the project;
Comprehensive capacity building program for energy
Contractors and
Maintenance
Commercial
Consultants
consultants;
Companies
Advisory
suppliers
Housing
Centers
Energy
Banks
Amended Homeowners’ Association Law, strengthening
Legal and Regulatory Framework accountability of homeowners;
Building
code
Building
maintenance
Civil
Code
HOAs
law
Mortgage
law 30 percent State grant for participating homeowners’
law
associations and support scheme for low income families.
8 9
Slide 7 Slide 8
DEVELOPMENT, 1997 - 2001 LOANS, 1997 - 2000

As of June 2001:
45
H o m e o w n e r s ' a s s o c ia t io n s p a r t ic ip a t in g in t h e E E H P P
More than 700 Loans, US$
Number of loan agreements

40
800 participants; 35
<25,000
700 R e g is t re d
More than 300 30
600
investment 25
projects;
500
20 25,000 -
In ve s t m e n t
400
p ro p o s a ls
More than US$ 15 50,000
300 p re p a re d
10
200
8 million invested; > 50,000
5
260 loan
L o a n A g re e m e n ts
100 s ig n e d 0
0 agreements with 1997 1998 1999 2000
associations and
00
01
7
8
98
99
98
99
00
01
.9
.9
.9
.0
b.
b.
n.
n.
n.
n.
Average
b.
b.
ct
ct
ct
ct
Fe
Fe
Ju
Ju
Ju
Ju
Fe
Fe
O
O
individual loan: $19,000 $21,000 $45,000 Lt $42,000 Lt
homeowners
10 11
Slide 9 Slide 10
MONITORING RESULTS OF 96
IMPLEMENTED MEASURES, 1997 - 2001* RENOVATED BUILDINGS
113 modern heat
80
Modernized heat
Savings versus investments Average comfort
substation substations installed;
70
per apartment adjusted savings of 24
Windows in 144
Number of measures
60
W indow buildings replaced or 80%
%;
50 replacem ent or
repair repaired; Annual savings in all
Savings, %
60%
40
Roof insulation Roofs of 41
Savings renovated multifamily
30
multifamily buildings
40% Linear buildings around 23 GWh
20
insulated; 20% worth US$ 0.7 - 0.8
10 W all insulation
million;
Walls of 25 0%
0
multifamily buildings
0 2000 4000 6000 8000 100001200014000 Annual reduction of
1997 1998 1999 2000 2001
-20%
insulated. CO2 emissions of 8,500
-40% tons.
* - as of June 2001 Investments, Lt per apartment (1Lt = US$ 0.25)
12 13
Slide 11 Slide 12
FINANCIAL AND SOCIAL ASSESSMENT LESSONS

Average simple payback period for 96 monitored buildings The EEHPP project success required integration of:
amounted to 10.5 years ;
tailored legal framework allowing homeowners
More than 60 percent out of 250 surveyed families associations to obtain loans without mortgage;
indicated that loan repayment represents an
affordable financing consisting of the long term loan
insignificant or negligible burden on their family
and the state grant;
budgets;
comprehensive support via regional advisory centers;
No defaults, as of September 2001;
enhanced public awareness of energy efficiency
US$ 2.5 million repaid instead of $1.5 million due, as
opportunities;
of September 2001;
improved services of local energy consultants;
56% of the surveyed families indicated reduced
expenditures for heat, 48% improved indoor comfort, heat tariffs reflecting real costs and effective
30% improved building appearance. collection of heating fees.
14 15
Slide 13 Slide 14
Regional Networking to Promote

EU Accession Process –
RENEUER
Dr. Zdravko Genchev
Slide 1
Slide 2 Slide 3
Slide 4 Slide 5
Slide 6 Slide 7
116 Zdravko Genchev
Slide 8 Slide 9
Slide 10 Slide 11
Slide 12 Slide 13
Slide 14 Slide 15
Slide 16 Slide 17
Slide 18 Slide 19
Slide 20 Slide 21
Slide 22 Slide 23
118 Igor Bashmakov
Discussant Notes
Session: Thermal Energy Conservation in the Building Sector
Dr. Igor Bashmakov

Center for Energy Efficiency, CENEf
Key issues Absorptive capacity. Scale of implementation:

how many replications are following “best practices”?
• How is energy delivered to the building and at what
costs? Absorptive capacity is the function of
• What are possible savings in buildings? • Market transformation and creation of interested groups
• Bad habits or bad incentives? Are we wise or other- • Appropriate incentives
wise? • Affordable costs.
• Absorptive capacity. Scale of implementation: how
It takes time and money to build! In Lithuania in 1997-1998
many replications are following the “best practices”?
only 18 projects were started. But in 1999-2001 after Ab-
• Economics of improvements
sorptive capacity was developed this number grew up ten
• Who and how benefits: whether capable have wishes
fold.
and wishing have capabilities?
There are no bad habits, but there are bad incentives and
• Where financings are coming from and at what costs?
bad market structures!
• The quantity of energy efficiency product
• What should be made for building sector swallow up Economics of improvements
“best practices”? Cost per household
How is energy delivered to the building, with what reli- • 5,000 US$Latvia, households are ready to cover
ability and at what costs? only 50% of costs through rent
• 1,000 US$WB Russia
Central heating from CHP – overall losses 40-65%
• 70 US$CENEf Russia.
HOB – overall losses 40-50%
Individual heating – overall losses 1-10% Cost per building
• 20,000-50,000 US$ - Lithuania.
Low quality of heat supply
Paybacks:
Many Buildings and flats are under-heated. In Vladimir
• Poland 10 years
• 80% of residents are using electric heaters, 30%
• Latvia 10 years
enlarge the radiator surface
• Lithuania 4-18 years with 8 years average.
• 50% use gas ranges for heating purposes, at the same
time High unit costs with long paybacks!
• 40% of residents at spring and 10% at fall are complain- Russia – weatherization – 1 year payback with electricity
ing about overheating. savings
Heat costs vary from 4 to 70 $/Gcal in Russia Who and how benefits: whether capable have wishes and
wishing have capabilities?
Residents are paying 60-100% of costs
Lithuania
Costs are questionable
• Homeowners associations
What are possible savings in buildings? • Regional advisory centers
• Experts capable to conduct energy audits and develop
• Present level of consumption
investment projects
• Level of savings
• Informational campaigns.
Discussant Notes: Thermal Energy Conservation in the Building Sector 119
Russia Need for clear savings accumulation procedures for revolv-

• Municipalities and heat supply companies have capabili- ing funds.
ties, but no wish to remove subsidies
What should be made for building sector
• Residents with existing billing system have wish, but
swallow up “best practices”?
cannot benefit.
• Tailored legal framework
Where are financings coming from and at what costs?
• Affordable financing for EEMs
The quantity of energy efficiency product • Matching financing – soft loans and grants
• Comprehensive institutional support
• Energy Audits
• Homeowners associations
• Energy Attestats
• Energy efficiency centers
• Energy Passports
• Project implementation and monitoring units
• Affecting factors:
• Qualified local experts capable to develop and imple-
• Whether conditions
ment EEMs
• Indoor comfort
• Growing public awareness
• Supply breaks
• Educating local and foreign bankers on EE projects and
• Occupancy
country specific conditions
• Other.
• Networking (MUNEE).
120 Ralf Goldmann
Prospects of Performance Contracting in CEE Countries

– Achieved Results and Future Strategies
Ralf Goldmann
Berliner Energieagentur GmbH
Introduction
The energy intensity in the candidate countries is four the unfavorable ratio between the project development
times higher than in the European Union. The CO2 emis- costs and the possible benefit from the project for the pri-
sions per unit GDP are five times higher than in the Euro- vate investor. These transactions costs are considered too
pean Union. Major financial efforts in energy sectors will be high for equity investors as well as for international finance
needed over many years. organizations, which have set a minimum threshold for
funding possibilities under their schemes.
Without sizeable private investment it will hardly be possi-
ble to produce the necessary funding to speed up the eco- Restrictions in know-how, money and juridical obstacles in
nomic and environmental modernization process. (2000 – the accession countries oppose in general the financing of
Annual Energy Review, European Commission DG TREN; energy efficiency measures and of small-decentralized en-
January 2001). ergy production.
In the accession countries there exists a high demand for The TPF-approach is well developed in Germany and Aus-
investment in energy efficiency measures. In order to ex- tria, especially in the field of performance contracting,
plore the full energy and cost saving potential, the involve- whereas energy saving investments in public buildings are
ment of private capital is needed. Third Party Financing refinanced through the energy savings achieved.
(TPF) is a frequent concept that ensures the involvement of
Performance Contracting aims at overcoming the barriers
private capital. This concept is usually implemented by En-
of financing energy efficiency investments and is one
ergy Service Companies (ESCO’s), and has been already
proven mechanism to involve private capital in these in-
implemented on a broad scale throughout the EU. In Cen-
vestments. With public buildings like schools, hospitals and
tral and Eastern Europe - despite some positive projects,
other administrative buildings showing a significant need in
which have been implemented in the past - there are still
the improvement of energy efficiency, one of the main ar-
certain barriers to overcome especially with regard to
eas where Performance Contracting can help to overcome
smaller projects in general and the application of Energy
budgetary barriers is the public sector.
Performance Contracting EPC. One of the main barriers is
Examples for successful implementation of Performance Contracting

As one example for the broad successful implementation of Within the TRANSFORM program, which is supported by
performance contracting in the public sector the Energie- KfW (bank under public law) and in order to help overcome
sparpartnerschaft (Energy Saving Partnership) in Berlin the mentioned problems, the Berlin Energy Agency has
has shown that the creation of building pools for perform- been coordinating a consulting project for the development
ance contracting can lower the transaction cost and lead to of the contracting market in Slovenia since the autumn of
interesting market possibilities for investors. Up to now 300 1999.
buildings in nine pools are covered by the model, with a to-
Slovenia is one of the countries in Central and Eastern
tal investment of 16 mln € by private investors in these
Europe that strives to join the European Union as one of
buildings.
the first candidate countries. Slovenia counts 1,98 mln in-
habitants on a surface of 20,253 km². The gross domestic
Prospects of Performance Contracting in CEE Countries - Achieved Results and Future Strategies 121
product per capita amounts to US $ 10,900 (as of 1999). gymnasiums (as of 1999). The expected energy saving po-
Only 44.6% of the country’s energy consumption is cov- tential amounts to 20% of energy costs.
ered by domestic energy sources. The energy intensity is a
The contract for the building pool has been signed with a
factor of 1.4 higher than in the European Union. Compared
Slovenian contractor at the end of November 2001.
to western European levels, Slovenia’s energy prices are
15% lower whereas energy costs in the industrial sector The project aims at the sustainable development of the
exceed western European prices by 5%. performance contracting market. To this end, part of the
project includes the qualification of the state-owned energy
Within the project, a model contract for performance con-
efficiency agency AURE as well as the Jozef Stefan Insti-
tracting under Slovenian framework conditions was devel-
tute as local competence centers for performance contract-
oped and municipalities for possible pilot projects were
ing.
identified. As a result of the analysis, pilot performance
contracting projects were developed in two municipalities. The main barriers for the successful implementation have
The tendering procedures for future energy saving partner- been the development of an adapted model contract and
ships were then handled according to comparable projects the public procurement rules that have to be followed by
in Berlin. In Slovenia, the tendering procedure must con- the municipalities in awarding the contract to a private in-
form to EU law. This allows a comprehensible public ten- vestor. Still possible foreign investors had to cope with ad-
dering procedure for western European investors. Re- ministrative burdens in participating in the tender fulfilling
search has shown that due to relatively high energy prices, the necessary requirements of the procurement law. After
pre-conditions for the development of the contracting mar- the successful conclusion of the first pilot project, in which
ket in Slovenia are good. no subsidies for the investment are given and all financing
is based on commercial banks, the principal procedure has
A best practice project for performance contracting was
been elaborated and further projects are expected to be
realized with a building pool in the municipality of Kranj.
implemented. As one conclusion from the project local ca-
The municipality of Kranj, an industrial center about 30 km
pacity building in order to moderate the implementation is
north of the capital Ljubljana, annually consumes about 0.5
crucial, and a local contact should be available to assist the
mln € worth of energy costs in a building pool of 14
municipalities in the implementation of the projects.
buildings comprising administration buildings, schools and
Future outlook
On the initiative of the Berlin Energy Agency and the Ener- The overall objective of the project is to overcome the exist-
gieverwertungsagentur, Austria, with partners from eight ing barriers to finance energy efficiency measures in the
CEE countries, a project for co-funding under the SAVE- candidate countries of Central and Eastern Europe. One of
Program has been submitted and positively evaluated. Fol- the main tools to achieve this goal is Third Party Financing
lowing the experience made it aims at the project develop- with two approaches, both Energy Performance Contract-
ment for Performance Contracting for all participating ing and Delivery Contracting. As this tool is already imple-
CEEC. The main task will be the establishment of a clear- mented in the European Union, especially in Germany and
inghouse in Berlin and the development of competence Austria, the aim of the project is to transfer this model to
centers in the respective CEE Country. Thus, common the CEEC. The main target areas are energy efficiency
problems can be solved in an effective way, and access for measures in the public sector and financing Small-Scale
private investors to the market in the CEEC will be facili- CHP, whereas the relative transaction costs compared to
tated through the clearinghouse with lower transaction the overall project volume hinder the allocation of private
costs for the investor. Given the differences in CEEC the capital into these sectors. Thus the project will support the
clearinghouse might also help to create project bundles Community Policies in Energy Efficiency and the efforts in
which subsume small projects and thus create funding op- the enlargement process towards an increase in energy ef-
portunities for international funding organizations. ficiency by facilitating the allocation of private capital in this
sector.
122 Ralf Goldmann
The following activities will be performed in the project:
• Creation of a Clearing House for TPF-Projects in Berlin

• Establishment of a project evaluation steering commit-
tee
• Creation of national country contact points in CEEC.
The project will be divided in six international work pack-

ages and in eight national work packages in each of the
CEE Countries, where based on a common approach,
adapted national programs will be worked out.
In each of the participating CEEC a basic investigation on Slide 1

the bordering conditions will be performed and a country
report on these conditions will be prepared.
Based on the results of the country reports, a common

strategy will be developed for the introduction of TPF-
schemes and Performance Contracting projects.
The common methodology will be based on the already ex-

isting experience from the introduction of PC in Slovenia.
Special emphasis will be put on public procurement
schemes allowing TPF projects for public bodies.
As a common working platform an Internet based meeting

point will be created, where potential projects, model con- Slide 2
tracts, and legal obligations and other information of rele-
vance for the potential contractors will be placed. On this
platform virtual consultancy services will be performed,
where experienced experts from Berlin and Vienna will be
available for municipalities or project development compa-
nies to assist in the application of PC in their respective
country.
The expected result of the action is the widespread uptake

of the TPF approach and the development of concrete in-
vestment projects financed through this scheme.
Slide 3
Slide 4
Slide 5 Slide 6
Slide 7 Slide 8
Slide 9 Slide 10
Slide 11 Slide 12
124 Ralf Goldmann
Slide 13 Slide 14
Slide 15 Slide 16
Slide 17 Slide 18
Slide 19 Slide 20
Slide 21 Slide 22
Slide 23 Slide 24
Slide 25 Slide 26
Slide 27 Slide 28
126 Tamuna Abazadze
Best Practice: Energy Service Company (ESCO) in Tbilisi (Georgia)

Tamuna Abazadze
Basic information on the selected project sary to put the gas fired boiler outside of the building. This
led to sophisticated problems with owners of the garage in
Heating being destroyed in the city, the objective was to
the yard, with the town architect, cadastre, firemen, minis-
replace (or rebuilt) the central heating system by building a
try of environment for the smoke, etc… All these questions
new one in total, or by building only a part of it when the
have been solved finally, but motivated a lot of meetings,
construction itself would be too large. In a first approach, it
public explanations, sometimes hard discussion between
appeared that a number of 40 flats at a site should be ade-
neighbors, disputes.
quate. The heating chosen was a gas heating. The heating
consisted in the installation of a new high quality boiler, Finally, a western boiler of 175 kW has been installed in
new pipes and radiators, because it appeared that the use the yard, in a private garage that has been given to the As-
of the old installed system could provide more problems sociation by his owner (free of charge). This boiler is gas
than advantages. fired but with a dual burner in case of gas shortage. The
capacity of the fuel tank is 5,000 liters, enough for 1 month.
With the help of a TACIS project that financed equipment
Electricity is also a problem because the grid is not reliable.
and manpower, an installation of (only) heating of 24 flats
If this question becomes important, adding a little generator
has been performed. The total cost of the project amounted
powered by gas will solve it.
to 35,000 $, the duration of installation took 1 year. The in-
stallation period was longer than scheduled due to some Main success indicators applied
difficulties with the sub-contractor.
As this Georgian experience is brand new and the first one
This first experiment gave the opportunity to check all the in the country, the principal success factor is that the cus-
difficulties of this business. As the population was not tomers agreed to create an association, to vote for a presi-
enough rich to be able to buy a personal equipment, the dent and to pay the fees. This is the first time in Georgia
project proposed to finance the full installation and reim- that people agreed to co-operate on a voluntary basis. All
burse afterwards, on a monthly basis during 7 to 12 years. other classical indicators will be computed after one year of
But in Tbilisi did not exist such companies as ESCOs are in experience.
western countries. Consequently, the 24 end-users were
Results / impacts / side effects
asked to create a new association, to elect a president, and
to manage this heating on a democratic basis. The main side effect is a decrease in electricity load be-
cause users were using electricity for heating.
The technical problems can be divided in two parts: a pure
technical one, not very difficult linked with the computation Realization problems and difficulties
of the power of the boiler, distribution of pipes, … and a The main difficulty was to pursue users to create an asso-
more difficult one motivated by the slight modification of the ciation and to believe in their neighbors and give them con-
building to install pipes and radiators (for instance some fidence. Other problems were linked with corruption and
persons refusing heating also refused to cross their flats unpredictable anarchical behavior of inhabitants and rele-
with pipes). This led to an enormous delay in implementa- vant public services.
tion, and a first consequence was that it was not possible
Duration follow-up / sustainability of the project
to heat during the winter 2000/2001.
This is very encouraging because all neighbors want to
Organization questions were more difficult and important.
have the same heating, and a new pilot project 10 times
For instance, according to local regulations it was neces-
more important is already scheduled as a first follow-up, as
Energy Service Company in Tbilisi (Georgia) 127
well as the creation of an ESCO, which will take in charge downed. Heating being mandatory in winter, this decease
all the exploitation questions for the future big project. is increasing strongly the difficulties of the electricity sector
(and forestry as well) leading to a dead end if the heating
Case of domestic / international replication
questions are not quickly solved. End-users simply com-
As for domestic replication, the success is already 100%. puted that the proposed system is more reliable and
As for international replication, conditions in Georgia are so cheaper than electricity.
specific that it is a little bit difficult to extend this kind of pro-
Pre-requisites / recommendations for successful
ject to other countries without sound study for each
replication in other countries
application.
Comparing to other projects needing huge investments at
Main reason for project success
country level it seems that a more simple attack of the
Georgia is presently suffering from a severe energy crisis. market at the level of 30 to 50 users could be more suc-
Following the difficulties connected with the fuel supply a cessful.
few years ago, practically all the heating organization
128 Sergiy Bevz
Main Principles of Activity of Ukrainian Energy Service Company

(Ukresko)
Sergiy Bevz
The State Committee of Ukraine for Energy Conservation
The authorized capital of the UkrEsco makes more than 43 given all participants of competition. It considerably en-
million grivnas. The state share in shares of the UkrEsco ables to lower cost of contracts owing to a fair competition
makes 99,7%. Financing of projects, which are introduced both between manufacturers of the equipment, and be-
by the UkrEsco, is carried out due to the credit of EBRD for tween the companies giving services.
the sum of 30 million US dollars. Becoming and develop-
Realization of projects by means of attraction of the Uk-
ment of activity of the UkrEsco is carried out by means of
rEsco enables clients to not withdraw from a revolution own
the European Commission within the framework of TACIS
means for purchase of the expensive equipment. The side
program. The UkrEsco is the first in the FSU countries
benefit of cooperation with the UkrEsco is that return of the
company, which unites financing and introduction of pro-
basic sum and interests begins only after input of the en-
jects "on a turn-key basis". This superiority also explains so
ergy saving equipment in operation that is then, when the
steadfast international attention to the UkrEsco.
client receives real reduction of expenses by energy re-
Сredit resources of EBRD are given for purchase of the sources.
energy saving equipment and granting of adjacent services
The legislative and normative documents regulating
in its delivery, installation and operation.
activity of the company
For today, cost of credit resources for clients of the Uk-
• Resolution of the Cabinet of Ministers of Ukraine of
rEsco makes 12-13% annual, the period of return makes
20.12.97, No. 1422
from 3 till 5 years. Periodicity of return of the credit and in-
• Order of the President of Ukraine of 09.05.98, No.
terests get out the client and may be monthly, quarter or
136/98-рп
semi-annual. There is an opportunity of granting of a delay
• Project Agreement between EBRD and UkrEsco
of the first return about 6 months from the moment of the
(Ukraine ESCO Financing) of 09.05.1998, No. 616
first payment. For maintenance of a guarantee of return of
• Contract between UkrEsco and Econoler Development
the credit with the client the contract about a pledge which
s.a. – Bechtel Limited Consortium of 21.10.98
value should be not less than 140% of cost of the project
• Sub-Loan Agreement between Ministry of Finance of
subscribes, or the client gives a bank guarantee.
Ukraine and UkrEsko of 28.10.1998, No. 22-04/22
Purchase of the energy saving equipment and accompany- • Law of Ukraine “About ratification of the Loan Agree-
ing services is carried out on a competitive basis, accord- ment between Ukraine and European Bank for Recon-
ing to rules of purchases of the goods, services and works struction and Development (Financing of Ukrainian En-
of EBRD. Residents and not residents of Ukraine have the ergy Service Company UkrEsko)” of 13.05.1999, No.
right to participate in tenders, thus equal conditions are 0074.
Energy Audits: Lessons Learned in the Czech Republic

Jiří Zeman
SEVEn
History of energy auditing in the Czech Republic
• Energy auditing in the pre-1989 period Examples of energy audits followed by project implementa-
• 1990s: Voluntary energy auditing program with financial tion
support from the Czech Energy Agency
The role of energy audits in decision-making
• 2000: New energy legislation and compulsory energy
audits. • compulsory energy audits followed by compulsory en-
ergy efficiency project implementation require no man-
How effective are compulsory and voluntary energy audits?
agement decisions
Compulsory energy audits:
• energy audits are not sufficient background information
☺ fast and wide dissemination of standardized energy material for investment decision making – no analysis of
audits assumptions used, of associated risks and other project
impacts
☺ faster and wider implementation of the recommended
• an energy audit is only one part of a (pre-)feasibility
energy efficiency measures?
study, i.e. an information source on opportunities for
energy auditor as a policeman, not a client’s advisor first-step decision-making; a feasibility study is needed
energy audit as a must rather than an option before the final decision on project implementation.
motivation of clients to avoid/minimize spendings on

energy audits
focus on the required structure of the audit rather than

real client’s needs
a risk of reducing energy audits to formal reporting

rather than providing the necessary background infor-
mation for a real management decision.
130 Jiří Zeman
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Slide 15 Slide 16
132 Igor A. Bashmakov
Rational Energy Use in the

Russian Industry
Dr. Igor A. Bashmakov
Center for Energy Efficiency CENEf, Russia
Slide 1
Slide 2 Slide 3
Slide 4 Slide 5
Slide 6 Slide 7
Rational Energy Use in the Russian Industry 133
Slide 8 Slide 9
Slide 10 Slide 11
Slide 12 Slide 13
Slide 14 Slide 15
134 Villu Vares
Energy Auditing in Estonia

Dr. Villu Vares Dr. Tiit Kallaste
Estonian Energy Research Institute SEI-Tallinn, Estonia
As a result of successful implementation of market princi- The implementation plan of Estonian Energy Conservation
ples and new price policy in Estonia, considerable progress Target Programme anticipates activities for energy saving
in reducing energy demand of buildings has been made. in buildings in the framework of two subprojects, which in-
However, going on with the process and optimization of volve development of certification methods, establishing an
specific energy consumption requires a systematic ap- organizational system and launching the certification proc-
proach, which anticipates energy certification of various ess.
buildings. Energy certification means defining the mode of
Energy auditing was included in the Energy Conservation
energy supply and establishing energy consumption indi-
Programme of 1992 already, but due to constant restructur-
ces with entering the data in the technical passport of the
ing in the production sphere, changed ownership and lack
building or the certificate. The data entered in the named
of simple uniform methods, no regular auditing is carried
document give information about the consumption level
out any more and thus the data on the energy intensity of
both for residents and owners of the building and allow de-
production is mostly not available. In order to plan energy
signing optimal energy saving measures for the reduction
conservation measures both for certain industrial enter-
of energy costs. The certificate can also be a basis for the
prises and industry as a whole, regular auditing based on
valuation of building as an item of real estate. The devel-
standardized uniform forms and requirements is extremely
oped auditing system and data bases would enable to de-
essential since it is accompanied with the collection of data
velop typical solutions for energy saving and follow the ac-
in the data base, analysis of the data and drawing of gen-
tual impact of implemented measures on energy demand in
eral conclusions for improving the situation both in enter-
various groups of buildings (different apartment buildings,
prises, branches of industry and at the national level. Or-
private houses, public buildings, offices, etc.). International
ganizing energy audits in industry anticipates devising
experience has shown that auditing is an excellent and in-
methods for energy auditing in industrial enterprises and
expensive tool for rapid fostering of the initiatives of all par-
development of the organizational system.
ties (owners of flats, owners of buildings, municipalities,
etc.). The Estonian Association of Housing Societies Working groups for developing the system of energy audit-
started with practical activities in this sphere already in ing, which include both Estonian and Danish specialists,
1999 since the need for establishing and comparing energy are being established in Estonia and this work is supported
cost of buildings is growing quickly along with the increase by the Danish Energy Agency.
of energy cost.
Slide 1 Slide 2
Energy Auditing in Estonia 135
Slide 3 Slide 4
Slide 5 Slide 6
Slide 7 Slide 8
Slide 9 Slide 10
136 Villu Vares
Slide 11 Slide 12
Slide 13 Slide 14
Slide 15
Efficient Lighting Initiative:

Grassroots Approach in Residential Sector in Latvia
Dr. Dagnija Blumberga Andra Blumberga Ivars Veidenbergs
Riga Technical University Ekodoma Riga Technical University
Background • Creation of lighting ESCOs in Latvia.
The IFC/GEF Efficient Lighting Initiative (ELI) is a three- This presentation will be more oriented on activities in resi-
year program designed by the International Finance Corpo- dential sector.
ration (IFC) and funded by the Global Environment Facility
The ELI program started with investigation of efficient light-
(GEF) to accelerate the penetration of energy-efficient
ing market. The market study illustrated that CFLs are not
lighting technologies into emerging markets in seven coun-
well known: only 22% of inhabitants in Latvia are informed
tries (Latvia is one of them). ELI has started in Latvia in
about energy saving bulbs. The ELI team has realized a pi-
March 2000.
lot project of CFL Campaign in 8 small municipalities (1000
Main goal of ELI Program is reduction of emissions of … 20,000 inhabitants) by use of “grassroots” market ap-
greenhouse gases by efficient use of energy in lighting. proach. The results of the pilot project have showed suc-
The ELI program elements were designed to generate cess obtained and therefore such type of action will be con-
market transformation effects and accelerate the growth of tinued. Different activities are planned in bigger cities (70
markets for efficient lighting technologies. ELI program in 000 … 100 000 inhabitants).
Latvia has included following activities:
This paper will analyze of pilot phase of the ELI program in
• Organization of CFL campaigns in residential sector. residential sector in Latvia. The pilot project of CFL cam-
• Facilitation of development of efficient lighting standards paign was realized in 3 municipalities: Broceni (3000 in-
and norms. habitants), Dobele (10000 inhabitants), Ludza (10000 in-
• Conducting of public education. habitants) during October – December 2000, and follow up
• Development of efficient street lighting projects in mu- activity in 5 additional municipalities during March-April
nicipalities. 2001.
1. Analysis of Strategy of Pilot Project

Methodology
The analysis of the strategy of pilot projects is implemented • Top-down approach - Related mainly to the activity of
by use of top-down ↔ bottom-up & supply side ↔ de- governments and/or institutions when introducing new
mand side methodology. regulations, standards and policies.
• Bottom-up approach - Organizing the needs of a mu-
The pilot lighting project in residential sector will be ana-
nicipality and inhabitants preparing the documents and
lyzed as a combination of four approaches and it can be
participating in activities which comply with these needs.
expressed in a Cartesian diagram where:
• Demand-side approach - Concerning the end-uses of
• X axis: supply side ↔ demand side; citizens and their needs: economic opportunities, quality
• Y axis: top-down ↔ bottom-up. of life, housing etc.
The graphic view is given in figure 1. These four ap- • Supply-side approach - Refers to the capability of the
proaches can be described as follows: market to organize the production of goods and tech-
nologies, which respond to consumers’ needs.
138 Dagnija Blumberga / Andra Blumberga / Ivars Veidenbergs
Figure 1: Combination of four approaches for the pilot project
Top Down
Supply Demand
Side Side
Bottom Up
These four approaches can be equally significant and ef- Application of methodology
fective to seek objectives for energy efficient activities in-
The lighting pilot project in residential sector was promoted
cluding energy use for lighting.
by three local governments: municipalities of Broceni, Do-
Top-down approach bele and Ludza. The proposal came from ELI Latvia team,
which worked out the action plan of CFL campaigns in
• Develop national energy strategy.
above mentioned cities. Main actors and innovative cham-
• Support energy efficient lighting projects.
pions of CFL campaign were selected after investigation of
• Consider external environmental impacts and costs of
several alternatives: electrical utility, banks, national tele-
the acquisition of new technologies.
communication company, natural gas supplier and DH
Bottom-up approach companies as well as municipalities.
• Prepare local policies and plans to support environmen- Top-down / Supply side
tally adapted energy efficiency activities in municipality.
New ideas for promoting new energy technologies and
• Establish team for implementation of energy efficiency
managing the introduction with new lighting technologies
activities.
led this campaign. During pre-campaign period ELI team
• Encourage the efficient use of resources by energy
established good co-operation with the CFL manufacturers
consumers.
(Philips, Osram and GE). All three companies has repre-
Demand-side approach sentatives in Latvia. Philips, Osram and GE participated in
• Promote residential development that is economically certification process in ELI Program and different types of
feasible, environmentally friendly and acceptable (with CFLs (from their production) have received ELI certificates.
higher comfort level) for residents. The pilot project always has demonstrated means and
Supply-side approach ways focused on the implementation of innovative energy
technologies. The approach is top-down because “know
• Provide a range of high quality energy efficient lighting
how” lighting technologies are worked out by top level of
technology.
wellknown manufacturers. Top-down / Supply side attitude
is illustrated as efficient lighting technology in figure 2.
Figure 2: Role of manufacturers of efficient lighting technologies Latvian government worked out several documents in con-
Top Down nection with promotion of energy efficiency measures. The
last one is the National Energy Efficiency Strategy (2000).
Energy
Technologies
The pilot project fulfills tasks of governmental energy effi-
ciency strategy and has demonstrated means and ways fo-
cused on the implementation of efficient use of energy for
lighting on end user side. Top -down/ demand side ap-
Supply Demand
Side Side proach is shown as governmental documents in figure 3.
Bottom-up / Supply side

Bottom Up
The ELI team made the decision (September,2000) to test
the CFL campaign in a small city and to involve Broceni
Figure 3: Role of governmental energy efficiency startegy municipality in the pilot project. ELI Latvia team invited
Top Down
them and Broceni City Council decided to participate in
CFL campaign (October, 2000). Dobele and Ludza munici-
Energy
Efficiency Strategies
palities joined to this activity in November, 2000. The mu-
nicipalities worked together closely. The ELI team assisted
in the preparation of documents for the bulk purchase of
CFLs, for the contract between municipality and CFL
Supply Demand
Side Side
manufacturer (winner of competition) as well as the loan
agreement between municipality and inhabitants. The pilot
project allows to test the scheme of creditation of inhabi-
Bottom Up tants by municipalities.
The campaign ended with a CFL sales procedure (three

Figure 4: Bottom- up approaches used for the pilot project days before Christmas). The Broceni case was most suc-
Top Down cessful: each second household purchased one CFL.
Municipalities played the significant role of innovation

champion in the best lighting practice – the pilot project.
Supply Demand
Side Side Bottom - up/ Supply side approach is shown as best prac-
tice in figure 4.
Best practice
Bottom up / Demand side
Behaviour
wood waste use
The pre-campaign period (October – December, 2000) was
used for dissemination of information: leaflets, posters,
Bottom Up
survey of inhabitants, physics lessons in schools, competi-
tion of paintings and essays of school pupils, organization
Top-down / Demand side of specific information days, “Lighting Day” events etc.
The investigation of potential supporters of the efficient Success of CFL campaign was ensured by specific behav-
lighting initiative allows to define tasks and organizations ior of people living in pilot project areas. Representatives of
which are taking care of energy efficiency measures. Dif- municipalities and inhabitants showed high interest and re-
ferent programs are estimating energy saving possibilities sponsiveness in efficient lighting activities in their cities.
in the framework of activities of USAID, PHARE, EC OPET, Bottom – up / Demand side approach is presented as be-
GEF etc. Banks and foundations are providing loans. The havior in figure 4.
140 Dagnija Blumberga / Andra Blumberga / Ivars Veidenbergs
2. Follow up activities
The pilot project of the CFL campaign was finished in habitants), Valmiera (30,000 habitants), Madona (15,000
January, 2001 by analysis of results of activities. An habitants) and Piltene (1000 habitants). They proved the
evaluation of this stage of the CFL campaign was pre- grass root approach of the CFL campaign and used sev-
sented in a book (in Latvian) for replication of similar activi- eral elements of the pilot project case. Follow up activities
ties. Target group of this material are representatives of were successful in three municipalities and showed less
municipalities: potential users bottom- up approach for success in two cases because of starting of efficient light-
similar efficient lighting campaigns. The book presents an ing activities in a period of long days (end of April and be-
analysis of data and results of the CFL campaign in Bro- ginning of May).
ceni, Dobele and Ludza as well as includes a package of
The second step of ELI Latvia activities in residential sector
documents prepared during the campaign, which could be
is a municipal CFL campaign in a large city in the light sea-
used in future activities.
son 2001/2002 followed by a CFL campaign in the capital
The pilot project results were presented to 10 selected mu- of Latvia in the light season 2002/2003. The large town
nicipalities at the end of January, 2001. 5 municipalities campaign this light season has around 80,000 habitants.
expressed interest to participate in a follow up CFL cam- The capital of Latvia, Riga, has ten times more – around
paign: Limbazi (10,000 inhabitants), Ogre (20,000 800,000. The planned activities of ELI Latvia program will
reach 30 to 40% of the inhabitants of Latvia.
3. Conclusions
(1) The market study of lighting technologies used in resi- (4) The pilot project allows to test approach, schemes and
dential sector showed low awareness of CFL advan- documents worked out for efficient lighting campaigns.
tages in the residential market of Latvia today: only The pilot case was proved by follow up activities in 5
22% of citizens are informed about CFLs. additional municipalities.
(2) The main reason of success is ensured by municipal (5) More parties could be involved in future activities. Mu-
bottom-up approach, which combines the municipal in- nicipalities are showing increasing interest in participat-
terest in assisting the citizens with the ELI goal to in- ing in the promotion of the energy efficient lighting pro-
crease CFL sales. The pilot project showed good local gram for the residential and public sector. The electric-
results. The Broceni case was most successful: each ity utility LATVENERGO is becoming more active to
second household purchased one CFL. assist in similar CFL campaigns.
(3) The major CFL manufactures are active partners in the (6) The second step of ELI Latvia activities in residential
programs (top-down approach). The CFL market is litlle sector is a municipal CFL campaign in a large city in
developed with high CFL prices. The market is domi- the light season 2001/2002 followed by a CFL cam-
nated by Philips, Osram and GE. paign in the capital of Latvia in the light season
2002/2003.
ELI programme in Latvia

Efficient Lighting elements
Initiative. Grassroots 1. Organisation of CFL campaigns in residental
Approach in Residental sector.
2. Facilitation of development of efficient lighting
Sector in Latvia standards and norms.
3. Conducting of public education.
Dr. Dagnija Blumberga, 4. Development of efficient streetlighting projects
Riga Technical University in municipalities.
5. Creation of lighting ESCOs in Latvia.
Slide 1 Slide 2
ELI programme in residental Top-down
sector in Latvia
Pilot project of CFL campaign was realised in

three municipalities : Supply Demand
• Broceni (3000 inhabitants), Side Side
• Dobele (10000 inhabitants),

• Ludza (10000 inhabitants)
during October - December 2000 and follow up Bottom-up
activity in 5 additional municipalities during

March - April 2001. Combination of four approaches for the
pilot project
Slide 3 Slide 4
Top-down Top-down
Energy Efficiency
Energy
Strategies
Technologies
Supply Demand Supply Demand
Side Side Side Side
Bottom-up Bottom-up
Role of manufacturers of efficient lighting Role of governmental energy efficiency

technologies strategy
Slide 5 Slide 6
Top-
down
Conclusions
•1. Market study of lighting technologies used in

Supply Demand residental sector showed low awareness of CFL
Side Side advantages in the residental market of Latvia today:
only 22% of citizens are informed about CFLs.
Best practice •2. The main reason of success is ensured by
Behavoiur
success stories
municipalities municipal bottom-up approach, which combines the
Bottom- municipal interest in assisting the citizens with the
up
ELI goal to increase CFL sales. The pilot project
showed good local results. Broceni case was most
successful: each second household purchased one
Municipal Bottom-up approache
CFL.
Slide 7 Slide 8
Conclusions Conclusions
•3. The major CFL manufactures are active partners •5. More parties could be involved in future
in the programmes (top-down approach). The CFL activities.Municipalities are showing increasing
market is little developed with high CFL prices.The interest in participating in the promotion of energy
market is dominated by Philips, Osram and GE. efficient lighting programme for the residental and
public sector. Utility LATVENERGO is becoming
•4. Pilot project allows to test approach, schemes and more active to assist in similar CFL campaigns.
documents worked out for efficient lighting •6. Second step of CFL Latvia activities in residental
campaigns. Pilot case were proved by follow up sector is a municipal CFL campaign in a large city in
activities in 5 additional municipalities. the light season 2001/2002 followed by a CFL
campaign in the capital of Latvia in the light season
2002/2003.
Slide 9 Slide 10
142 Morihiro Kurushima
Japanese Industry Efforts for Energy Conservation

and Technology Transfer on Climate Change
Prof. Morihiro Kurushima
Faculty of Technology
Tokyo University of Agriculture and Technology
Policy Planning Department NEDO
1. Basic survey on JI/CDM

Under the Ministry of International Trade and Industry, the April 1998, an agreement on a bank loan of approximately
New Energy and Industrial Technology Development Or- 50 million US$ was concluded between official and private
ganization has entrusted to the private sector the imple- banks of Japan and an official bank of Mexico, and Mitsu-
mentation of 5 feasibility studies in 1997, 40 in 1998 and 46 bishi Electric Corporation, which conducted the feasibility
in 1999 for promoting application of Joint Implementation study, exported 200 energy-efficient trolley buses to the
and CDM in Japan. The objective of this project is to iden- Traffic Bureau of Mexico city.
tify potential projects and offer more incentive to Japanese
Another feasibility study entitled the “CO2 Reduction by
companies which aim to realize the projects.
Easing Traffic Congestion at Intersections” was conducted
Among the feasibility studies, the “Introduction of Trolley by the Japan Automobile Manufacturers Association, and
Buses with Energy Conservation Improvement” imple- further technological cooperation is being carried out in
mented in Mexico in 1997 was realized as a project. In Thailand.
2. Top target standards for energy efficiency

Top Runner Program in Energy Conservation Law
The regulation of the Top Runner Program is to set the se- At present, target year and improvement of efficiency are
verest value in existing as the target value at levels some- regulated for 12 items based on Law Concerning Rational
what exceeding average consumption efficiencies. There- Use of Energy. In the near future, more items will be added
fore, this is the severest target value in the world. to the Top Runner Program.
Slide 1 Slide 2
Japanese Industry Efforts for Energy Conservation and Technology Transfer on Climate Change 143
Slide 3 Slide 4
Slide 5 Slide 6
Slide 7 Slide 8
Slide 9 Slide 10
144 Diana Ürge-Vorsatz / Kristina Stroukanska / Szilard Asztalos
Leaking Electricity? Standby Power Losses in Bulgarian,

Romanian and Hungarian Residences
Kristina Stroukanska
Szilard Asztalos
Central European University, Budapest
Content
Leaking electricity?
] Background: Leaking electricity?
Standby power losses in Bulgarian,
] Appliance energy efficiency in CEE
Romanian and Hungarian residences
] Aims of research
] Methods
] Results
Diana Urge-Vorsatz
Kristina Stroukanska
] Standby-related emissions and savings
Szilard Asztalos potentials
] Conclusions
Slide 1 Slide 2
Background 1. Background 2.
] Some appliances consume power while
performing no useful function (VCR, TV,
] The majority (80-90%) of these emissions can
extension cord, low-voltage lamps, transformers,
be saved at no compromise in energy services
etc.)
] Technical solutions exist in the majority of cases
] This can amount to as much as 10% of
household electricity consumption ] Policies are required for overcoming market
barriers
] Residential standby losses can account for as
much as 1.7% of total national carbon emissions ] The extent of losses is poorly understood for the
(Aus) CEE region
Slide 3 Slide 4
Appliance energy efficiency in

CEE Aims of research
] Post-socialist appliance stock legacy: few, mainly basic home
appliances (fridge, TV, washing machine), but often inefficient
] Stocks of several “luxury” appliances (microwave, VCR, IT
equipment, etc.) are starting to penetrate households, or are far ] Understand the scale of standby power
from saturation levels
losses and related emissions in CEE
] stocks of other old appliances are rapidly turning over to “new”,
Western varieties (TV, fridge, phones, etc.) countries
] dynamic market turnover and unsaturated appliance penetrations
create unique window of opportunity for leap-frogging: ] estimate electricity and carbon savings
if progressive appliance policies introduced, stocks could reach
]
efficiency levels higher than OECD averages. potentials by introducing the 1-watt policy
Slide 5 Slide 6
Leaking Electricity? Standby Power Losses in Bulgarian, Romanian and Hungarian Residences 145
Methods
RESULTS
] Standby power of appliances in 99 households in Bulgaria,
Romania and Hungary have been measured
] The field measurement of standby power was conducted with
watt meter - “Energy-Cost-Checker EKM 265” (± 1% ± 3digit)
] Each household appliance susceptible of having standby power
consumption was measured
] The standby power per household was calculated by summing the
individual usage weighted standby consumption of each appliance
(Ross&Maier 2000)
] The CO2 emissions from standby power were calculated applying
electricity emission factor(gCO 2 /kWh) (Thomas et al. 2000; IEA
2000)
] The national level estimations are based on extrapolation of the
results for the three countries on national level
Slide 7 Slide 8
Standby consumption and average number Standby power ranges (minimum, median and maximum) of
appliance types in CEE region based on the results in the
of appliances per household in CEE region
three countries
A p p lia n c e N um ber of A ve ra g e A ve ra g e
a p p lia n c e s num ber of s ta n d b y E x te n s io n c o r d
m e a s u re d a p p lia n c e s c o n s u m p tio n
per HH (W h /d ) M ic r o w a v e
V id e o C e ll p h o n e c h a r g e r
TV set 123 1 .2 4 164
P h o n e /a n s w e r in g m a c h in e
VCR 55 0 .5 6 217
A u d io P r in te r
H i- f i s t e r e o 43 0 .4 3 191
T a p e re c o rd e r 15 0 .1 6 51 PC
R a d io a la r m c lo c k 23 0 .2 3 47
IT R a d io a la r m c lo c k
PC 38 0 .3 8 147 T a p e re c o rd e r
P r in te r 9 0 .0 9 59
C o m m u n ic a tio n H i-fi s te re o
P h o n e / a n s w e r in g m a c h in e 34 0 .3 4 83
C e ll p h o n e c h a r g e r 14 0 .1 4 37 VCR
K itc h e n p r o d u c ts
T V set
M ic r o w a v e 13 0 .1 3 38
M is c e lla n e o u s
E x t e n s io n c o r d 15 0 .1 5 53 0 5 10 15 20 25 30 35
T o ta l 382 1087 W a tts
Slide 9 Slide 10
Contribution of appliance categories to the

total standby consumption in %(Wh/d) Standby power loads per household
% M is c e lla n e o u s
Country Average Average Average
100 K itc h e n p ro d u c ts number of standby power standby
90
C o m m u n ic a t io n appliances per HH* consumption
80
IT
with standby (W) per HH (Wh/d)
70
features in HH
60 A u d io
Bulgaria 5 33 789
50 V id e o
40 Romania 3 14 340
30
20
Hungary 4 30 709
10 CEE 4 26 613
0
B u lg a r ia R o m a n ia Hu ng ary ________________
*Usage weighted
Slide 11 Slide 12
Estimation of energy demand and CO 2 Household expenditure for standby

emissions from residential standby power power (per household and national)
Country Number Average Total Total Total Resid. CO 2 National CO 2 from Standby
of HH standby standby standby national Standby emission CO 2 standby as % of
2
(millions power power energy electricity as % of ratio emission power national Household Total household standby
3
of units) (W/home) demand (T Wh/yr) consumpt national (gCO2 / s 1998 (M t) CO 2 (%)
ion 19981 electricity kWh) (M t)
Price expenditure power cost
(M W) (USD/kW h) (USD/year) (millions USD/year)
(T Wh/yr) (%)
4
Bulgaria* 2.96 33 98 0.86 32.47 2.6 419 48.60 0.4 0.8
Romania* 7.4 14 104 0.91 47.43 2.0 304 94.59 0.3 0.3
Bulgaria 0.04 11.56 34.27
Hungary* 3.85 30 116 1.01 33.01 3.0 362 57.42 0.4 0.7
Germany 36.03 44 1585 13.9 527 2.6 690 884 9.6 1.1
Australia 7.09 87 617 5.4 171 3.2 942 306 5.1 1.7 Romania 0.04 4.91 36.30
Poland 11.8 20 236 2.1 124 1.7 921 350 1.9 0.5
OECD 386 38 14,634 128 8362 1.5 530 12,235 68 0.6
Hungary 0.08 21.02 80.94
Source: IEA 2001 (with amendments)
*
Results from the present study
1
Data source: IEA 2000
2
Electricity emission factor. Data source: Thomas et al. 2000
•Electricity price for household is 0.07 leva/kWh in Bulgaria (December 2001)
3
Data source: IEA 2000 • Electricity prices for households is 1200 Lei/kWh in Romania (July 2001)
4
Data source: BNSI 1992 • Electricity prices for households is 23 Forint/kWh in Hungary (December 2001)
Slide 13 Slide 14
146 Diana Ürge-Vorsatz / Kristina Stroukanska / Szilard Asztalos
Reduction of residential standby power

Reduction of residential standby power in
consumption and CO 2 emissions after
implementing the 1 Watt plan case of implementation of 1W plan
%
Country Total Average Average Total Total CO 2
100
annual standby daily standby emissions
standby power per standby power saved 90
power of HH consumpt saved (Mt) 80
HH (W) ion per (TWh/yr) 1 W s c e n a rio
70
(TWh/yr) HH (Wh/d)
60
Bulgaria 0.13 5 120 0.73 0.30 B A U s c e n a rio
50
Romania 0.16 2.3 56 0.75 0.24
40
Hungary 0.12 3.5 84 0.89 0.30
30
20 15
17
10
12 B A U s c e n a rio
0
1 W s c e n a rio
B u lg a ria
R o m a n ia
H u n g a ry
Slide 15 Slide 16
Conclusions Acknowledgements
] The scale of standby power losses in CEE countries is

significant
] There is a clear need of broader studies on CEE region ] International Energy Agency
] After implementation of 1W standby power policy,
standby power consumption and related CO2 emissions ] Peter Karbo of Danish Electric Utilities
can drop by 80 - 90%
] Savings potentials are:
· Bg: 0.3 Mt of CO2 and USD 29 million
· Ro: 0.24 Mt of CO2 and USD 30 million
· Hu: 0.3 Mt of CO2 and USD 72 million.
Slide 17 Slide 18
Standby power consumption of appliances in Bulgarian,
Romanian and Hungarian households
Definition Appliance Bulgaria Romania Hungary
Number Average Average Number Average Average Number Average Average

of number standby of number standby of number standby
applian of consum applian of consum applian of consum
ces applianc (Wh/d) ces applian (Wh/d) ces applian (Wh/d)
measur es in HH measur ces in measur ces in
ed ed HH ed HH
Video
Standby power (Watt) =(W x T)/24 TV set 39 1.30 173 46 1.53 103 38 0.97 215
VCR 23 0.77 170 12 0.40 199 20 0.51 217
Audio
Hi-fi stereo 18 0.60 204 5 0.17 175 20 0.51 194
W = the minimum power that the appliances draw when Tape recorder 11 0.37 57 4 0.10 45
Radio alarm clock 7 0.23 48 11 0.37 48 5 0.13 46
connected to the mains (Ross&Meier 2000) IT
PC 8 0.27 177 9 0.30 61 21 0.54 203
T = time during which the appliance is in standby mode Printer 3 0.10 90 3 0.10 27 3 0.13 61
(24-T active mode-T off mode) Communication

Phone/answ ering 19 0.63 77 4 0.13 71 11 0.28 102
machine
Cell phone charger 4 0.13 43 5 0.17 18 5 0.13 50
Kitchen products
M icrowave 3 0.10 21 10 0.26 55
Kitchen oven 3 0.10 37
M iscellaneous
Extension cord 7 0.23 38 8 0.21 67
Total 142 4.73 1114 98 3.27 723 145 3.77 1255
Slide 19 Slide 20
Standby power ranges (minimum and maximum) Distribution of appliance standby power in
of appliance types in the studied countries Bulgaria, Romania and Hungary
60
B u lg a r ia
M ic r o w a v e R o m a n ia 50
N u m b e r o f U n its M e a s u
C e ll p h o n e c h a r g e r H u n g a ry
40
P h o n e /a n s w e rin g m a c h in e
P rin te r
B u lg a r ia
30
PC R o m a n ia
R a d io a la r m c lo c k
H u n g ary
20
H i-fi s te r e o
VCR
10
TV set
0 5 10 15 20 25 30 35 0
0 -3
3 -6
6 -9
9 -1 2
1 2 -1 5
1 5 -1 8
1 8 -2 1
2 1 -2 4
2 4 -2 7
2 7 -3 0
3 0 -3 3
3 3 -3 6
3 6 -3 9
S ta n d b y p o w e r (W )
Slide 21 Slide 22
Leaking Electricity? Standby Power Losses in Bulgarian, Romanian and Hungarian Residences 147
Estimations by IEA (2000) for Hungary vs.

study results Appliances standby ranges, Bulgaria
E x t e n s io n c o r d
EstimationAverage Total Total Standby CO 2 National CO 2 from Standby
standby standby standby as % of emission CO 2 standby as % of C e ll p h o n e c h a r g e r
power power energy national ratio emissions power national
(W/home) demand (TWh/yr) electricity (gCO 2/ 1998 (Mt) CO 2 P h o n e / a n s w e r in g m a c h in e
(MW) (%) kWh) (Mt) (%)
Authors’ 30 116 0.99 3.0 624 57.42 0.6 1 P r in t e r
IEA 20 77 0.7 2.0 624 58 0.4 0.7
PC
R a d io a la r m c lo c k
] Average standby power per HH is 33% more than IEA estimation

T a p e re c o rd e r
] Total standby energy (TWh/yr) is 30% more than IEA estimation
H i- f i s t e r e o
] CO2 emissions from standby power are 33% more than IEA estimation
VC R
TV set
0 5 10 15 20 25 30 35
W a tts
Slide 23 Slide 24
Appliances standby ranges, Romania Appliances standby power ranges, Hungary
E x te n s io n c o rd
M ic ro w a v e
C e ll p h o n e c h a rg e r C e ll p h o n e c h a rg e r
A n s w e r in g d e v ic e A n s w e rin g m a c h in e
P h o n e /a n s w e rin g m a c h in e C o rd le s s p h o n e
P r in te r
PC
PC
R a d io a la rm c lo c k
R a d io a la rm c lo c k
T a p e re c o rd e r
H i-fi s te re o
VC R H i-fi s te re o
TV set VC R
0 5 10 15 20 25 30 35 TV set
W a tts
0 5 10 15 20 25 30 35
W a tts
Slide 25 Slide 26
148 Holger Krawinkel
Really off? Stand-by Campaign by Energy Foundation

Schleswig-Holstein, Germany
Dr. Holger Krawinkel
Energiestiftung Schleswig-Holstein, Kiel, Germany
1. The story behind the campaign

In a study, 1997 performed on behalf of the German Fed- if a successful campaign would lead to a demand modifica-
eral Environmental Agency (Umweltbundesamt, see Rath tion of the consumers.
et. al., 1997), all kinds of consumption of electric appli-
While the study developed proposals for the Federal gov-
ances and equipment in private households and the office
ernment, it’s conclusions have been also interesting for the
sector in Germany, when not in use for their primary pur-
Energy Foundation itself. Also in 1999, an institutional in-
pose, have been examined. These so-called no-load
novation for Germany, namely the establishment of a so-
losses create some 14.4 million tons of CO2 emissions per
called Energy Saving Trust following British and Danish
year. Around two thirds of this amount is due to stand-by-
examples, has been proposed (Wortmann et al. 1999). To
consumption. No-load modus is defined in this context as
support energy efficiency through marketing activities was
an operating modus of appliances and equipment when
one of the main tasks of such organization. Thus, acting
energy is wasted without any clear or considerable benefit,
like an energy efficiency trust, the Foundation could make
e.g. excessive use of energy for TV sets in stand-by posi-
a two fold “proof of the pudding”: To test the trust as well as
tion to receive remote-control signals, fax machines in
the campaign - idea, originally developed for Germany, in
ready position or transformers which cannot be discon-
the test-market Schleswig-Holstein.
nected from the power supply system due to their particular
design as is the case with numerous printers or audio sys- Therefore, it was decided to spend a remarkable amount of
tems, for example. money, about 0,75 million € for a professional energy effi-
ciency campaign as a pilot- and demonstration project.
In a next step, the Energy Foundation Schleswig-Holstein
Such had to have a clear impact on the consumer demand.
was participating in a follow up study concerning the devel-
Thus, not only „a“ campaign, but a professional marketing
opment of a political strategy how to realize the calculated
approach with a clear goal (like in profit marketing) would
potentials that is how to turn the theoretical potentials into
be the preferred way to do it. And this makes an important
climate protecting reality. This follow up study (Umwelt-
difference to many other pro-environmental campaigns,
bundesamt, Rath et. al., 1999) showed clearly that cam-
showing nothing more than that there is a nice sender of a
paigns to get consumers interested in low stand-by-
nice message, but with no measurable effect on impact on
consumption of their electrical equipment will be a neces-
consumer demand.
sary and important part of the solution. Interviews with rep-
resentatives from different stakeholders in this area (from In our contribution, we will briefly show the approach, then
Greenpeace to the representatives of the electronic indus- report results of a recently completed, very comprehensive
try in Germany) revealed a multiple win-win-situation for evaluation. We will conclude, finally, with some policy con-
consumers as well as for the industry, retailers and policy, siderations.
2. The „Off. Really off“-campaign

Initial position only some are particularly interested. But there is a label
(the European GEEA-label) which indicates efficient equip-
At first glance, the initial position to execute such a cam-
ment concerning stand-by-consumption. But this is more or
paign is unfavorable. To save electricity is a topic in which
more or less unknown among retailers and consumers. Fi- ment ("Really off!"). The comparison of the transmitted
nally, the Energy Foundation as independent authority is so information with the conditions in the household influ-
far only known among energy experts. ences the sensibility beyond the topic "stand by", e.g.
for low consumption of white goods etc.
Strategic approach of the campaign
• Another important path of influence is the advice by the
As main element the consumers are in the center of the seller at the point of sale. The decision to buy an en-
campaign. But this part of the whole system of “producing” ergy-saving equipment is finally made here. A seller in-
high or low stand-by-consumption is then used to exert informed and interested in the topic and as well suppor-
fluence also on other parts. The path of influence of differ- tive for the campaign is, therefore, a prerequisite of the
ent parts of the campaign is shown in figure 1: campaign’s success. Therefore, all retailers in the state
• The organized public awareness campaign takes place have been contacted before the official start of the pub-
in the print media, in cinemas and in the broadcast. The lic campaign. They have been invited to join a special
advertisements, the cinema spot and the radio commer- “sellers' event”, where they have been informed about
cials are coordinated with each other in temporal waves. their possibilities to profit from the campaign (free point
• The increased demand of the consumers and the adver- of sale-material, “go to your electrical shop for more in-
tising effect of the mass media shall exert influence on formation” as a central message of the campaign).
the behavior of the sellers and manufacturers. Manufac- The dialogue media, particularly the PR-work also exert an
turers whose devices have good efficiency values effect on politicians and energy professionals. This effect is
should be likely to support the campaign positively, e.g. still strengthened by the representation in the mass media.
by sponsoring. Positive assessments of the politicians and “insiders” cre-
• A positive reporting supported by PR-activities – as one ate a good base for further actions or campaigns of this
of the dialogue-media - promotes the engagement of kind.
the consumer for the campaign.
The communication approach
• By internet and brochures more detailed information is
passed on. This together with the mass media influence The slogan "Off. Really off?" points to the central sales ar-
should help to improve the everyday behavior of the gument: Decide when you want to consume electricity and
consumers. A behavior modification is often sufficient to when not! The slogan puts a previous comprehensibility
reduce the electricity consumption of different equip- ("Off") in doubts ("Really off?").
Figure 1: The strategic approach of the campaign
MANUFACTURERS SELLERS
join in join in
promote
anticipation
anticipation
intensification
CINEMA - RADIO - ADVERTISEMENT
mass media CONSUMERS
get attentive public relations internet/brochure seller/point of sale
dialogue media
POLITICIAN AND INSIDER

attitude to the campaign behavior in the purchase
and to the subject everyday life decision
promote
The consumer reacts to the topic "switch off" emotionally are used. The accompanying text and the campaign sign
and experiences an appeal to the autonomy of the individ- point to the topic and further information. The cinema and
ual. The slogan is in a direct connection to the scenes of radio commercials are built up similarly: After a surprise ef-
the commercials and pictures. Everyday events in which fect of an "everyday" event the topic is mediated by a few
something is "off”, “out” or “over" are represented here. In sentences, the campaign’s logo and the information on the
German it means a pun: The one word "aus" describes web-site www.wirklich-aus.de.
these three words in English. Further arguments like
The second group of the means of advertising contains the
money savings or climate protection are not in the center,
information passing on. A brochure which is displayed at
but are also mentioned.
the distributors is one of the media for deeper information.
The campaign backs on fun instead of morals for an enter- The sellers in addition get material with which they can re-
taining advertising. This is a contrast to the traditional pro- fer to efficient equipment at the point of sale. For telephone
environmental communication. Such way to communicate inquiries, a hotline is established. An extensive multi-media
with the consumer on the basis of his or her personal ad- internet presentation offers further information including a
vantage even for ecological goals is necessary to reach list for recommendable equipment following the GEEA-
many segments of the population and not only those who guidelines. Thus, this efficient equipment can directly be
are already convinced. This attempt is therefore a novelty requested from a data base. The distributors who partici-
and a pilot project in which a new approach how to com- pate in the campaign are mentioned in the internet presen-
municate a "dry" topic to a fun-seeking public is examined tation, too.
in a reality test.
Time schedule
The means of advertising can be divided into two groups:
The campaign was planned during summer 2000. The offi-
The ones draw the attention, the others inform. Cinema,
cial start was November, 8, 2000 with the so called retail-
radio and newspaper advertisements excite the attention
ers' “event”. The advertising in newspapers, cinemas and
with commercials and eye-catching pictures. The further in-
the radio started in January 2001, and the campaign has
formation sources are pointed out to the public simultane-
been running until June, 2001. It’s prolongation starts just
ously. In the advertisements always striking motives from
now (October 2001) as a reminder campaign in all news-
the daily life which are not in a direct context with the topic
papers in Schleswig-Holstein.
3. Evaluation results
The evaluation of the campaign is mainly based on an im- wasting energy, respectively high electricity consumption.
pact control carried out by an independent survey institute, The rate of „don’t know“-answers decreased from 22 % to
paid by the German National Environmental Foundation 16 %. A similar tendency, but weaker could be observed in
(Deutsche Bundesstiftung Umwelt) because of the high in- Lower Saxony. Generally, the campaign reached to put it
terest of this organization to learn from this regional cam- into two words „more attention as well as more doubts“ in
paign for it’s national stand-by-initiative which has been in Schleswig-Holstein compared to Lower Saxony, as the fol-
preparation at that time. For the impact control, a public lowing results demonstrate further:
opinion poll was carried out using the computer-aided-
• 54 % in Schleswig-Holstein compared to 39 % in Lower
telephone-interview (cati)-method with N = 1.000 individu-
Saxony, noticed the topic „stand-by-consumption“ dur-
als in each population sample and N = 100 retailers in
ing the last month,
Schleswig-Holstein and, as „quasi-control-group“, in Nied-
• more people in Schleswig-Holstein wish to have more
ersachsen (Lower Saxony). In general, the evaluation
information about the stand-by-consumption of elec-
which has just been finished by the Emnid institute, re-
tronic devices,
vealed very positive results for the campaign. For example,
• less people feel sufficiently informed about electricity
24 % of the population in Schleswig-Holstein (compared to
saving compared to the situation before (34 % com-
3 % before) relate now the term stand-by-consumption with
pared to 38 %),
• more people say they put off (really off) their TV- • 16 % (compared to 2 % before, in Lower Saxony 5 %)
equipment (57 % compared to 49 %), say that stand-by has something to do with wasting en-
• switchable power strips are more in use than before ergy,
(from 35 % to 42 %). • 47 % (compared to 26 % before, in Lower Saxony
30 %) became active to look for more information about
The campaign, despite informing the public, led to more
this topic,
doubts among the consumers, but that is a precondition in
• two thirds of all relevant retailers in Schleswig-Holstein
this case to be really interested in more information. Other
(400 out of 700) ordered the campaign material, and
results show that retailers have more widely than before
know the campaign; nearly 80 % used the material in
been used as information source and that the willingness to
the shops and more than 80 % say the material is good,
pay for “power savers” or for devices with low stand-by-
• additional measures based on own activities claim 23%,
consumption increased. Additionally, the communication
33 % say they are planning such activities and 13 % say
strategy was confirmed by the observation, that more than
that they even changed their range of products.
80 % in all four population samples said, that they would
feel disturbed if their appliances could not really be Many other positive results could be observed besides this
switched off from the mains. Psychologically spoken, not survey, for example a very good reaction in the newspa-
pro-ecological attitudes but the fear to loose control about pers which helped to reach the goals of the campaign, co-
things in my personal environment can be regard as main operation projects with the consumer agency in Schleswig-
motivation source. When the people were asked, why they Holstein and so forth. The survey report concluded that
feel disturbed, nearly 50 % say „just because off is not awareness and interest in the population and among the
really off!“ (they don’t need more reasons). Looking at the retailers have been reached, partially even some action,
retailers, similar positive results could be observed: which is for such a campaign in this quite short time period
a very positive result.
4. Policy lessons
The role of the consumer for energy efficiency measures • attempts to reach market shares worth mentioning.
has been underestimated in the past from our point of view,
The idea of the individual as passive victim of powerful
mainly due to the traditional roles in the energy sector,
pressure groups is as misleading as the opposite idea of
which are challenged not only for the former energy utili-
“only the free market solves any problem”. The promising
ties, but also for energy efficiency advocates. Energy sav-
path (and further development of this path in terms of it's
ing becomes a product to be sold effectively to the end
conception, including marketing and other approaches is
consumer, when one follows the described approach.
certainly needed) runs between these two extremes.
There are signs that Eco-Marketing in general has to over-
come it’s “traditional” role as niche marketing for niche However, only out of a relatively independent and trans-
products. Instead it should attempt a mass marketing ap- parent position, a persuading marketing approach will
proach as described here (see Villiger et al., 2000). Criteria work. As not only the consumer is important, but also the
to distinguish pro-environmental marketing “beyond the institutional framework for the campaign, this issue shall be
eco-niche” are, for example: considered in more detail. Based on our experiences so
• overall good quality of the product, not only environ- far, the following important framework conditions should be
mental friendliness, considered to secure real outcome:
• products as cheap as possible (not high prices as signal Relative independence of the institution
for ecological value of this product),
That means in it’s core that a good campaign is hard to be
• using all tools of professional persuasion, not only moral
carried out when many different interest groups try to se-
appeals or mere facts,
cure their influence on the activity (that is and will be the
• compete with the conventional range of products, this
normal case for most of the campaigns we know about in
leading, as a result, to
Germany).
Clear institutional goal Even the “Negawatt costs” are supportive for a campaign
as can be demonstrated by the following calculation: A
The task of the institution or at least this specific campaign
stand-by-consumption of approx. 700 million kilowatt hours
has to be defined in a clear and transparent way in order to
per annum is registered in Schleswig-Holstein. Nearly half
secure the trustworthiness of the communicator within the
of the consumption is approximately reducible. If the de-
communication process, which is the most important vari-
mand-side campaign with a volume of about 1 million €
able of a successful persuasion or communication process
(covering all costs) affects successfully about 10% of the
as is well known from social psychology. A strict energy ef-
population, then the costs amount to 3 cent (0,03 €) per
ficiency, respectively climate protection orientation of the
kilowatt hour. This value is within the range of electricity
institution and the obligation to follow this goal (and not
production costs.
many others at the same time) is therefore an important
factor. This approach to use professional solutions also in the do-
main of communication, should be improved and refined by
Budget autonomy
follow up campaigns. The Energy Foundation works into
It will be difficult to lead a campaign over more than a year this direction with their next so called „Schlaulicht“-
when it is unclear which budget can be spent for the pur- Campaign, using the same approach to market (still!) en-
pose of the campaign from year to year - this is the normal ergy saving lamps because of their high climate protection
situation for publicly funded institutions. An advantage for potential and their as well high potential in terms of per-
the energy foundation is it’s foundation status which allows sonal benefits for the consumers. Recent discussions with
for self financing of the own activities. the RWI, the institute responsible for monitoring the com-
Appropriate (sufficient) budget for the task mitment of German industry with the German government
for special efforts for climate protection showed that it will
A campaign costs money and no professional advertising
be possible to use this kind of campaigns as a climate pro-
agency will submit proposals when there is no fit between
tection instrument and to give this instrument a certain
the task and the budget to solve it.
quantitative CO2 reduction value based on good and com-
Under these preconditions it will be possible to build up prehensive evaluation data like the ones we have pre-
new alliances on the market and by this, that is the whole sented here. Thus, our recommended action is to use this
activity, not only the communication approach, a real im- successful form of public private partnership also on the
pact on the market is possible. Such an activity supports national (may be even European) level and in the context
the energy political proposal by the Foundation for Ger- of this commitment.
many, namely to follow the British or Danish example in
building up an Energy Saving Trust (see Wortmann &
Menges, 2000).
5. Literature
Rath, U., Hartmann, M., Präffke, A. & Mordziol, Chr. (1997). Klimaschutz durch Minderung von Leerlaufverlusten bei Elektrogerä-
ten - Sachstand /Projektionen/CO2-Minderungspotenzials. Berlin: Umweltbundesamt.
Rath, U., Hellmann, R., Möhring-Hüser, W., Wortmann, K., Bregas, J. & Mordziol, Chr. (1999). Klimaschutz durch Minderung von
Leerlaufverlusten bei Elektrogeräten-Instrumente. UBA-Texte 5/99. Berlin: Umweltbundesamt.
Villiger, A., Wüstenhagen, R. & Meyer, A. (2000). Jenseits der Öko-Nische. Basel: Birkhäuser Verlag.
Wortmann, K. & Menges, R. (2000). Der Energy Saving Trust als Förderinstrument für Energiewirtschaft im liberalisierten Markt.
Zeitschrift für Energiewirtschaft, 24, 51-68.
Wortmann, K., Menges, R. & Krawinkel, H. (1999). Energieeffizienz im liberalisierten Markt: Ein Energie-Effizienz-Fonds für
Deutschland. Kiel: Energiestiftung Schleswig-Holstein (Studie 7).
Really off? Stand-by campaign

0 1 The story behind the campaign
by the Energy Foundation C O 2 -e m is s io n s c a u s e d b y n o -lo a d lo s s e s
in G e r m a n y i n 1 9 9 5
Schleswig-Holstein, Germany
T e le c o m m u n ic a t io n
I n f o r m a t io n t e c h n o lo g y 4 ,8 %
( O f f ic e s )
1 4 ,6 % I n f o r m a t io n t e c h n o lo g y
2,0%
STARTING POINT
T e le c o m m u n ic a t io n
Holger Krawinkel ( O f f ic e s )
1 7 ,3 %
H o t w a te r s to ra g e
1 1 ,6 %
Energy Foundation Schleswig-Holstein, Kiel, Germany
A u d io H o u s e h o ld s a p p lia n c e s
1 1 ,3 % 4 ,7 %
CTI Capacity Building Seminar for CEE/FSU Countries
M is c e ll. e q u ip m e n t
Climate Technology and Energy Efficiency - 3 ,1 %
Disseminating “Best Practice” Experience T V a nd V C R
2 8 ,2 %
M is c e ll. a p p lia n c e s
December 5-9, 2001 in Ostritz, Germany 2 ,5 %
to ta l C O 2 - e m is s io n : 1 4 . 2 m illio n t o n s
e b ö k T ü b in g e n 1 9 9 7
Slide 1 Slide 2
2 The story behind the campaign 3 The story behind the campaign
ve r y a p p ro p ria te p ar tly a p p ro p ria te n o t a p p ro p ria te n o s ta te m e n t Energy Foundation´s interests

In fo r m a tio n a n d a d v ic e
Q u a lity m a r k s • Proposal for an Energy Saving Trust in Germany

Acceptance of
T a r g e t v a lu e s fo r m in im u m s t a n d a r d s
Marketing activities as one of the main tasks
individual instruments
C o n c e r te d p u r c h a s in g
"O ff= O ff" -le g is la tio n in itia tiv e

• Test of the trust-idea
• Test of the campaign approach
D u ty to la b e l p r o d u c ts
S e lf -o b lig a tio n s • Realisation of a pilot and demonstration project

s u b s id y p r o g r a m m e s
0 2 4 6 8 10 12 14 16 18 20
N u m b e r o f s ta te m e n ts
Slide 3 Slide 4
PRODUCERS SELLERS mutual influence

4
The “Off. Really off?“- Campaign 5
The “Off. Really off?“- Campaign
join in join in
OBJECTIVES anticipated
demand change
anticipated
demand change
• Enhanced customer awareness and activity
concerning stand-by consumption Mass media
• Stand-by consumption as example for pointless Newspapers Radio
Strategic Approach
Awareness
of the
Consumers
energy use
• Support for energy efficient devices
Cinema
Consumers
Campaign
Attitude to User Purchase
• Pilot project for modern forms of eco-marketing
• Impact Control Strategic stand-by behaviour decision
⇒ Assistance by advertising agency

Approach of
PR Internet/Brochures POS-Material
⇒ Start in January 2001, duration of six months, the Campaign
continuation in autumn 2001 and spring 2002 Dialogue media
Slide 5 Slide 6
6
The “Off. Really off?“- Campaign
COMMUNICATION APPROACH
• Elicit awareness by using „trojan horses“
1 Describing everyday life situations which are „off“ (or

„out“ or „over“)...
2 Asking if they are „really off“ (or „out“ or „over“)
3 Explaining stand-by issue in small print with hint to

the web-site and sellers of electronic devices
4 ...have a smile on your face...
Slide 7 Slide 8
Slide 9 Slide 10
Slide 11 Slide 12
Slide 13 Slide 14
Slide 15 Slide 16
16
Evaluation results 17
Evaluation results
What does stand-by-consumption mean for you?
(In Schleswig-Holstein)
• Impact control by independend survey institute
25
• paid by National Environmental Foundation b e fore
• pre- and post-telephone interviews with 20 24 d uring
22
representative samples of the population (N=1000)
15
and electronic sellers (N=100) in Schleswig-Holstein % 16
and Lower Saxonia, results in August 2001 10
• Reactions of the public and among experts 5

3
• Media reports 0
W aste of ene rgy /h ig h don´t k now
• Web-site-visitors on www.wirklich-aus.de elec tricity cons um p tion
Similar tendency, but weaker, in Lower Saxonia
Slide 17 Slide 18
18
Evaluation results
HIGHER AWARENESS, MORE DOUBTS Looking at the retailers
than before in Schleswig-Holstein
• 16 % (compared to 2 % before, in Lower Saxony 5 %) say that
• 54 % in Schleswig-Holstein compared to 39 % in Lower stand-by has something to do with wasting energy
Saxony, noticed the topic "stand-by-consumption" during
the last month • 47 % (compared to 26 % before, in Lower Saxony 30 %) became
• more people in Schleswig-Holstein wish to have more active to look for more information about this topic
information about the stand-by-consumption of electronic • two thirds of all relevant retailers in Schleswig-Holstein
devices ordered the campaign material
• less people feel sufficiently informed about electricity – and know the campaign
saving compared to the situation before – nearly 80 % used the material in the shops
(34 % compared to 38 %) – more than 80 % say the material is good
• more people say they put off (really off) their tv-equipment • additional measures based on own activities claim 23 %,
(57 % compared to 49 %) 33 % say they are planning such activities and 13 % say
• switchable power strips are more in use than before that they even changed their range of products
(from 35 % to 42 %)
Slide 19 Slide 20
20
Policy Lessons
Criteria to distinguish pro-environmental marketing

THE CAMPAIGN ”beyond the eco-niche” are, for example (See Villiger et.al., 2000)
• already successful • overall good quality of the product, not only environmental
friendliness
• appears innovative and modern • products as cheap as possible (not high prices as signal
for ecological value of this product)
• supports marketable solutions
• using all tools of professional persuasion, not only moral
• co-operates with market partners appeals or mere facts
• makes energy saving cheap • compete with the conventional range of products, this
leading, as a result, to
• to be repeated, expanded, supplemented • attempts to reach market shares worth mentioning
Slide 21 Slide 22
22
Policy Lessons
PRECONDITIONS
• “good” products exist already

• independend and trustworthy campaigner
• relative budget autonomy of the campaigner
• low negawatt-costs (below 3 Cent, if only
10% reduce 50% of their stand-by-con-
sumption as a consequence of the campaign)
⇒ act as an Energy Saving Trust!
Slide 23 Slide 24
156 Franzjosef Schafhausen
The Kyoto Mechanisms
The Situation after Marrakech – Opportunities for Infrastructure Investment in Central and East Europe –
The Integration in the European and International Climate Protection Strategy
Franzjosef Schafhausen
Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, Berlin
The issue of the greenhouse effect, its causes and the Development Mechanism and Emissions Trading - are also
possibilities of countermeasures against it have been dis- becoming more important. All three mechanisms are based
cussed in scientific circles, the business world, politics and on the intention to use the cost differences between vari-
society for 15 years now. Certainly, the intensity of the de- ous emitters of greenhouse gases to achieve global climate
bate varies greatly from one world region to another. protection in an economically efficient way. Especially
Whereas the small island nations, particularly in the Pacific suited to that is the combating of the greenhouse effect, in
(Alliance of Small Island States – AOSIS), that are the first which it is not a question of where on our planet emissions
to be affected by the climate change already underway are harmful to the climate are avoided, but that they are re-
in the front line together with the European Union, the sub- duced.
ject is virtually taboo in the USA. Nevertheless, an impor-
tant step forward was taken in Marrakech with regard to an The aim of my following remarks is to portray the current
internationally agreed climate protection policy. Marrakech situation, to elaborate on the opportunities for investors and
has created the preconditions to enable the Kyoto Protocol host countries offered by the Kyoto Mechanisms depicted
to come into force within a few months. As a result, the so- in figure 1, and to point out the prospects.
called Kyoto Mechanisms - Joint Implementation, Clean
Figure 1: The flexible mechanisms of the Framework Convention on Climate Change and the Kyoto Protocol
The flexible mechanisms
Framework Convention Kyoto Protocol

(1992/1994) (1997)
Activities
Project-related Emissions-related
implemented jointly
Joint Clean Development Emissions Trading

Implementation Mechanism
Pilot phase Art. 6 KP Art. 12 KP Art. 17 KP

from 1995 From 2008 From 2000 From 2008
No emissions
credits
between developed between developed and between developed
countries developing countries countries
The Kyoto Mechanisms – The Situation after Marrakech 157
6. Brussels trends – The EU climate strategy

The activities of the European Commission during the last greenhouse gases emitted from the territory of the Euro-
two years were characterized by the realization that in the pean Union in 2012 will be about 1 per cent higher than its
“business as usual” case the EU as a whole would fall well emissions in base year 1990 (see table below).
short of the commitments it made in Kyoto in 1997. This
The European Commission’s conclusion: since the EU
was the finding of a scientific study presented at the begin-
member countries were obviously not in a position to real-
ning of 2000. The alarming statement at that time was: in-
ize the required reduction targets (see table below) by
stead of having come very close to the target it took on in
means of national policies and measures, further steps at
Kyoto - “Reduction of greenhouse gases by 8 per cent in
Community level were essential.
the period 2008-2012 (base year 1990)” – the amount of
Table 1: Greenhouse gas reduction potential within the European Union under cost-efficiency criteria for all relevant
sectors to 2012 (including implementation of the voluntary commitment of the European motor industry)
Marginal cost 20 $/t GHG emissions 1990 or 1995 Baseline emissions 2010 Cost-efficiency potential beyond
CO2 equivalents in megaton CO2 equivalents according to “business as usual” the “business as usual“ case
Energy supply 1.422 minus 6 % minus 13 %
Industry 757 minus 9 % minus 12 %
Transport 753 plus 31 % minus 4 %
Households 447 plus/minus 0 % minus 6 %
Small-scale consumption 176 plus 14 % minus 15 %
Agriculture 417 minus 5 % minus 4 %
Waste management 166 minus 18 % minus 13 %
EU as a whole 4138 plus 1 % minus 9 %
This was the starting signal for the European Climate The result of the year-long, at times extremely contentious
Change Program (ECCP). The concept was developed ini- discussion process: 40 cost-efficient measures were identi-
tially within the framework of an extensive process in which fied. With a greenhouse gas reduction potential of 664-765
not only officials of the EU member country governments megaton CO2 equivalents, the measures cover a potential
but also representatives of industry and environmental of double the reduction target the EU took on in Kyoto. The
groups participated. Recommendations for the design of European Commission calculated that the total costs of re-
the European climate protection policy were drawn up from alizing the EU target with the most cost-efficient measures
the spring of 2000 to July 2001. The results of this process would in 2010 be 3.7 billion €s, or 0.06 per cent of the EU’s
focused on the sectors ‘Flexible Mechanisms’, ‘Demand- gross domestic product.
related measures’, ‘Energy supply’, ‘Industry’, ‘Transport’
and ‘Fluoridated Gases’.
Table 2: EU burden-sharing, emissions development 1990 to 1999, and target achievement level of the individual
EU member countries
Targets for the commitment

Emissions trends between Emissions reduction target
EU country period 2008–2012 according to
1990 and 1999 to 2008-2012
the burden-sharing of 1998
Belgium minus 7.5 % plus 2.6 % minus 10.1 %
Denmark minus 21 % plus 4 % minus 25 %
Finland plus/minus 0 % minus 1.1 % Target achieved
France plus/minus 0 % minus 0.2 % Target achieved
Germany minus 21 % minus 18,7 % minus 2.3 %
Greece plus 25 % plus 16.9 % Target achieved, but continuing upward trend
Ireland plus 13 % plus 22.1 % minus 9.1 %
Italy minus 6.5 % plus 4.4 % minus 10.9 %
Luxembourg minus 28 % minus 43.3 % Target achieved
Netherlands minus 6 % plus 6.1 % minus 12.1 %
Austria minus 13 % plus 2.6 % minus 15.6 %
Portugal plus 27 % plus 22.4 % Target achieved, but continuing upward trend
Spain plus 15 % plus 23.2 % minus 8.2 %
Sweden plus 4 % plus 1.5 % Target achieved
United Kingdom minus 12.5 % minus 14 % Target achieved
EU as a whole minus 8 % minus 4 % minus 4 %
Source: European Commission, 2001
The measures focus on the following sectors: The basic structure of the proposed directive tabled by the
European Commission on October 23, 2001; introducing
• Introduction of EU-wide emissions trading
EU-wide trading in greenhouse gases; arises from the fol-
• Greater use of renewable energy sources
lowing overview.
• Improving energy efficiency in buildings
• Tightening energy-saving standards for domestic appli- • Binding concept
ances as well as communications and entertainment • Installation-related (> 20 MW combustion installation in-
technology devices put) or registration of the most energy-intensive sectors
• Energy consumption management (Appendix I)
• More intensive use of cogeneration of power and heat • Allocation of emissions allowances on the basis of abso-
• Better control of fluoridated greenhouse gases by main- lute quantities
tenance, leak tests and monitoring • Fundamentally all ‘Kyoto gases’ – start with CO2 (Ap-
• A more climate-efficient ‘modal split’ in the transport pendix II)
sector by improving infrastructure and levying fees and • Introduction phase 2005-2007
charges • Final phase 2008-2012 – after 2012, a five-year exten-
sion in each case
Because of the currently very controversial discussion,
• Drawing up of national allocation plans for all sectors
which in part is being conducted with completely wrong ar-
• Allocation method: ‘grandfathering’
guments, and also because of the theme of my address, I
• Allocation rules (Appendix III) take account of technical
would now like to pick out from the basket of proposals the
possibilities, need/growth, newcomers and early action
introduction of an EU-wide trade in greenhouse gas emis-
• Burden-sharing of 1998 remains unaffected
sions.
• 46 per cent of the EU’s estimated CO2 emissions in The same applies to exports. In 2001, German industry
2010 is registered. achieved its second-best export result since the Federal
Republic of Germany came into being in 1949. The fore-
If one looks at the possibilities the Commission’s proposal
casters at present expect a further increase in the export
provides for in designing national allocation plans, it can be
surplus during the course of this year. In 2001, Germany
seen that all the alarmist claims which interest groups are
also for the first time posted another surplus in the chroni-
presently disseminating are completely unfounded.
cally deficit balance of payments. (See: Deutsche Export-
The fairytale of “a brake on growth” proves to be false if wirtschaft kann ihren Anteil am Weltmarkt ausbauen, in:
only because in the free-of-charge allocation of emissions Handelsblatt 11 April, 2002.) Also against this background,
allowances not only the technical potential of each installa- the argument that, of all things, trading in greenhouse gas
tion can be taken account of, but also their need and so- emissions based on a free initial allocation of emissions al-
called ‘early action’ – which against the background of the lowances would ruin German industry’s international com-
prompt reductions of greenhouse gas emissions already petitiveness appears extremely odd.
made by Germany and not least also by German industry –
Why, given this situation, the German chemicals industry is
is extremely important.
launching massive and expensive advertising campaigns
The threat of job losses is also unconvincing because the against emissions trading instead of constructively getting
“scientific studies” which are supposed to prove this as- to grips with realizing German interests within the frame-
sume a “worst case” scenario, which actually no-one in work of an EU-wide concept remains largely a mystery for
Germany is aiming at. At the same time, those who warn outside observers.
against the negative impacts of emissions trading evidently
The impression is hardening that the critics are not at all
quite deliberately overlook the fact that in all probability
concerned about the instrument as such, but rather that the
Germany and German industry will be sellers of emissions
climate protection policy goals in general are unpopular.
allowances and not fuel the demand for emissions certifi-
But it would seem that for some sections of German indus-
cates.
try it is not proper to admit that.
In addition, the argument that emissions trading would in
In the end, the objectively unfounded opposition in German
effect pay “closure bonuses” and drive German industry out
industry is strengthened by the conjecture of those who
of the country is actually so absurd that one should not
since the existence of the industry’s declaration of volun-
even take notice of it. I can only say here that no rational
tary commitment to climate protection have never tired of
economists and also no logical ecologists would dream of
claiming that its targets are at best “business as usual”, and
constructing such “closure bonuses” in the context of emis-
that a thoroughgoing input to climate protection by German
sions trading
industry is out of the question. I must remark here that
If one looks at the situation of German industry as a whole, these comments come not only from the environmental
one has to ask if the fundamental critics of emissions trad- movement, but also from senior representatives of German
ing fail to take note of the facts, or whether their assess- companies.
ment benchmark has not in the meantime become com-
What must remain is:
pletely unrealistic. For instance, Germany’s popularity with
foreign investors last year increased hugely. While Ger- • basic approval of the EU draft directive; and
many in 2001 posted growth in foreign investment, Britain • constructive participation in its development as well as
and France suffered clear losses. (See: Mehr Direktinvesti- seeking to anchor German concerns in the draft.
tionen, in: Handelsblatt 11 April, 2002.) At any rate, against
Fundamental opposition makes no sense, since both the
this background it is difficult to imagine that foreign inves-
Council of Europe and the European Parliament have given
tors would put their money into a country where it was ex-
the ECCP a green light. In addition, the decision on
pected that the introduction of an environmental policy in-
whether to introduce EU-level emissions trading will be
strument would result in what the Morgenthau Plan in-
taken by a qualified majority vote (Art. 175.1 EEC Treaty).
tended after the Second World War: ridding Germany of all
So assuming even that Germany wished to block a positive
industrial structure.
Council decision it could not do so.
From the German Federal government’s point of view, this climate protection agreement with German industry, the
means working on the draft directive that is on the table Renewable Energy Sources Act (EEG), the Act on Heat-
with the following goals: Power Cogeneration (KWK-G) and the European Com-
mission’s Directive on Integrated Pollution Prevention
• creation of a voluntary pilot phase for the period 2005-
and Control (IPPC) ;
2007, before the binding EU-wide emissions trading
• ensuring consistent monitoring and robust sanctions
system comes into force in 2008;
measures for cases where installation operators violate
• formulation of clear and transparent rules for the initial
the agreed rules;
allocation of emissions allowances if only to prevent dis-
• inclusion of the project-related mechanisms Joint Im-
tortion of competition between the EU member coun-
plementation and Clean Development Mechanism from
tries;
the start; and
• clarification of the interplay or relationship between EU-
• opening up the draft directive to other sectors and ac-
wide emissions trading and other instruments already in
tors, such as private households and transport.
place, such as Germany’s ecological tax reform, the
7. The status of international climate protection negotiations

The Seventh Conference of the Parties (COP7) to the UN tailed regulations are to hand. The national measures to
Framework Convention on Climate Change, held in Marra- implement the commitments accepted by the industrialized
kech, Morocco, from October 19 to November 10, 2001, nations in Kyoto in 1997 to reduce or limit emissions are
took an important step forward in the international negotia- now becoming more and more recognizable.
tions on climate protection after a lengthy process of con-
So despite all misunderstandings and confusion along the
ferences in:
way, 2001 was in the end a good year for international cli-
• Rio de Janeiro 1992 mate protection. For a long time before that things looked
• Berlin 1995 (COP1) very different:
• Geneva 1996 (COP2)
• the conference in The Hague produced no usable result;
• Kyoto 1997 (COP3)
• despite all prophecies of doom, the wreckage inherited
• Buenos Aires 1998 (COP4)
from The Hague was glued together. Bonn delivered the
• Bonn 1999 (COP5)
political agreement which many no longer expected;
• The Hague 2000 (COP6)
• on the other hand, everything looked like turning into
• Bonn 2001 (continuation of COP6)
waste paper again at the beginning of 2001 due to the
In the early hours of November 10, the conference adopted blow the new US Administration under George W. Bush
the Marrakech Accords (available at UN Climate Secre- delivered to climate protection policy by rejecting the
tariat in Bonn at http://www.unfccc.de/index.htm) - due not Kyoto Protocol;
least to the entirely positive engagement of the so-called • in sharp contrast to that are the ever louder warnings
‘countries in transition’. from the IPCC, which in its Third Assessment Report
(‘Climate Change 2001’, available via the homepage of
That concretized the Bonn Agreement of 2001 (available in
IPCC: http://www.ipcc.ch as well as of the Federal Envi-
German via homepage of Federal Environment Ministry:
ronment Ministry: http://www.bmu.de/fset800.php) calls
http://www.bmu.de/download/dateien/kyoto Bonn.pdf) and
for action in unprecedented clarity.
put it on an operational basis in such a way that the Kyoto
Protocol can now be implemented. This means international climate protection policy is located
in an area of tension between scientific warnings and a
It means the international community now has the princi-
growing attitude of political refusal:
ples, precise terms, processes, rules and guidelines with
which the Kyoto Protocol can be implemented and realized. • the IPCC points out expressly that the upward trend of
The industrialized nations (the so-called Annex I or Annex greenhouse gas emissions is all too clear and is caused
B countries) can now ratify the Protocol. All required de- by man;
• therefore the activities got underway by the industrial- That means there is now a reliable foundation for designing
ized nations to date are far from sufficient to reverse the the policies of both the industrialized and developing coun-
trend and decouple economic growth and an increase in tries. It is a foundation which in the final analysis industry
greenhouse gas emissions; also needs to operate the instruments the Kyoto Protocol
• in marked contrast to that is the attitude of rejection of offers and use the business opportunities, for German in-
the world’s greatest emitter of gases harmful to the cli- dustry in particular, that can be derived from an interna-
mate: the USA. tionally agreed climate protection strategy.
In this situation, the US government’s blockading stance The negotiation poker game
must be broken open and the gap between the technical
Marrakech showed even old hands at negotiations a thing
and economic opportunities closed – at international, re-
or two. Until the end, and for purely selfish motives, Japan,
gional and national level. The efforts made in developing
Canada and Russia sought to delay the international cli-
the rules of the Kyoto Protocol were also based on this aim.
mate protection convoy. That means three countries at-
The goal - which is not always recognized by all partici-
tempted to hold 187 others hostage. In the end, the nego-
pants in the negotiations - is to reconcile economic policy
tiations were wrapped up between only the EU and those
requirements with environmental policy concerns. The at-
three nations. Canada turned out to be an especially tough
tempt to achieve symbiosis between ecology and econom-
‘hardliner’. It was not until the EU made a compromise deal
ics - at a time of worsening world economic conditions -
with Japan, which meant that Russia and Canada risked
has become ever clearer the further away in time from
ending up on their own in the pillory of world public opinion,
Kyoto. All the valves offered by the Protocol have been
that Canada softened its tone. In the final analysis, this was
opened, so:
also due only to an alliance between the EU and the G77
• application of the rules on sinks; states. Russia then forced the conference, under the threat
• the so-called ‘flexible’ mechanisms: Joint Implementa- of allowing Marrakech to fail, to agree to increasing the ceil-
tion (Art. 6 KP), Clean Development Mechanism (Art. 12 ing for its forest management sinks credit from 17.63
KP) and Emissions Trading (Art. 17 KP); megatons to 33 megatons p.a. on a scale that is unjustified
• reporting and monitoring (Art. 5,7,8 KP), and in scientific terms. (According to FAO data, a maximum of
• the compliance system (Art.18 KP) 24.85 megatons would have been permissible.)
have been used as far as possible. It must now be seen Russia thereby brutally exploited its key position with re-
whether the rules also prove successful in practice, and gard to the Kyoto Protocol’s coming into force and with the
whether the willingness to compromise shown in the suc- aid of some countries of the so-called Umbrella Group (led
cessful conclusion in Marrakech has not smashed too by the USA and including Canada, Australia and Japan) left
much climate protection policy china. the rest of the international community no choice. But on
the other hand, this resulted in a strengthening of Russia’s
The procedure, however, has faced the testing of the rules
economic interest in the Kyoto Protocol.
with another obstacle. The rules recommended by COP7
will not be able to be adopted until the first meeting of the The developing countries’ role
Parties to the Protocol (the so-called MOP1). The result is
The developing countries’ positive general mood was of
that we shall not know finally what the rules for the Kyoto
decisive importance for the results of Bonn and Marrakech.
Protocol’s first commitment period (2008-2012) look like
But their affirmative basic attitude also had to be bought
until 2003.
with concessions by the industrialized nations – especially
Nevertheless, the decisions taken in Bonn and Marrakech the EU. In Marrakech, the rules for the developing coun-
have delivered clarity and legal certainty. They have also tries’ national communications were further developed. In
made clear that the great majority of the industrialized na- addition, a framework of action with further individual
tions is meeting its responsibility, although the world’s measures was laid down as part of agreement on the trans-
greatest emitter of greenhouse gases – the USA – contin- fer of environmentally-compatible technologies to the de-
ues to evade it and at best is prepared to implement veloping countries.
somewhat more than “business as usual”.
Compliance The ‘flexible mechanisms’
Logically, compliance is a main item of the international Subsequent to COP7 in Marrakech, the newly-formed Ex-
climate protection regime. A relatively robust compliance ecutive Board of the Clean Development Mechanism met
concept was adopted in Marrakech. The system provides for the first time (see above). The chief task of this body is
for binding consequences for failure to meet commitments. to register and review CDM projects. Its members include
In addition, it contains detailed rules of procedure for deci- two representatives of the EU.
sion-making. The following central points characterize the
To be eligible to use the flexible mechanisms, the parties to
concept:
the Kyoto Protocol must fulfill the following conditions:
• the ‘Enforcement Branch’ – composed of six representa-
• ratification of the Kyoto Protocol;
tives of developing countries and four from industrialized
• commitment to the compliance system adopted in Mar-
nations – decides in cases of doubt on the fulfillment or
rakech, whereby participation cannot be withdrawn ret-
non-fulfillment of commitments;
roactively by the establishment of a system with binding
The CDM Executive Board is constituted as follows:
consequences under international law;
ο one member from each of the five UN regional
• establishment of a national system to register emis-
groups;
sions;
ο two members from each of the Annex I and Non-
• punctual and correct presentation of annual greenhouse
Annex I countries;
gas balance sheets and submission of sinks inventories;
ο one member from a so-called ‘Small Island State’.
• punctual and correct reporting on the carbon stored in
Fundamentally, decisions will be taken by consensus. In
sinks from the second commitment period (2013–2017).
cases of doubt, a 75 per cent majority will suffice.
During the first commitment period (2008–2012) a quali-
• the ‘Facilitative Branch’, made up of the same represen-
tatively incorrect report will result only in the respective
tative ratio, will tackle implementation problems beyond
sinks being unable to generate emission credits.
non-fulfillment;
• if reduction or limitation commitments are not met, the In Marrakech, in addition to the three variants of emissions
difference between them and actual emissions – plus 30 allowances or credits known since Kyoto a fourth – Re-
per cent (‘compensation rate’ of 1.3 times excess emis- moval Units (RMUs) – was established:
sions) – will be deducted from the emission volumes • Assigned Amount Units (AAUs): Emissions allowances
permitted for the subsequent commitment period; to which the Annex I countries are entitled within the
• in addition, countries which fail to fulfill their commit- framework of the Kyoto Protocol for the period 2008-
ments can be excluded from using the Kyoto mecha- 2012;
nisms (suspension of eligibility). In that case, it is • Removal Units (RMUs): Emissions credits which a
planned that eligibility will be restored at the latest when country receives when its national ecosystems absorb
the commitments for the second period are fulfilled; and carbon from the atmosphere (‘sinks function’);
• as a sanction, the compliance system provides for an • Emission Reduction Units (ERUs): Emissions credits
action plan if reporting obligations are not met or com- generated as part of Joint Implementation projects be-
mitments are not fulfilled. tween industrialized nations according to Art. 6 of the
It was also agreed in Marrakech that failure to fulfill com- Kyoto Protocol;
mitments accepted with ratification of the Kyoto Protocol • Certified Emission Reductions (CERs): Emissions cred-
can also be reported by other parties to the Protocol. its generated as part of Clean Development Mechanism
projects implemented jointly by industrialized and devel-
There is also a complaint procedure which enables appeals
oping countries.
against ‘Enforcement Branch’ decisions, but which can only
be successful if the decision process was not conducted The following possible applications are provided for:
according to the rules. An ‘Enforcement Branch’ decision • All emissions allowances can be used to fulfill emis-
remains in force while a complaint procedure is under way. sions commitments.
The rules and processes adopted in Marrakech are open
to the public.
• All emissions allowances may be traded freely between (see above), it can itself implement the registration and
the Parties. This rule clearly increases the liquidity of the verification process.
emissions market. • Second track: On the other hand, if a host country
• Emissions allowances can be carried over (called ‘bank- does not meet its reporting obligations, a JI project must
ing’) to future commitment periods as follows: AAUs be registered and subjected to international review by
without limit; ERUs and CERs up to a limit of 2.5 % of a the newly-formed JI Supervisory Committee. The Com-
Party’s initial AAUs. RMUs: no banking. mittee consists of 10 members (plus 10 deputies) and is
constituted as follows: three representatives of western
These rules require a fully developed tracking system that
industrialized nations, three from Central and Eastern
can follow the path of the various emissions allowances in
Europe, and four from Non-Annex I countries including
a thoroughgoing way.
one seat reserved for a representative of the small is-
Emissions Trading land developing states. The voting procedure corre-
With regard to emissions trading, it is clarified that Parties sponds to that of the CDM Executive Board.
to the Kyoto Protocol can trade the four above-mentioned In the course of the Marrakech voting process compro-
emissions allowances with each other. To prevent the non- mises had to be made on various issues. In particular, the
covered sale of emissions allowances, every Party is original German negotiating position was cut back consid-
obliged to hold a certain amount of its allowances in a erably. Thus, the ‘carry forward’ of sinks activities to sub-
Commitment Period Reserve (CPR). If a Party falls short of sequent commitment periods (banking of RMUs) - as al-
the required amount in the CPR it cannot sell any emis- ways called for by Germany - was formally excluded. But
sions allowances until it has realized the defined minimum this still is possible via a ‘RMU bypass’ by which the corre-
amount again. Trades that take place regardless of that sponding Party carries forward other emissions allowances
rule will be considered invalid in the context of commitment instead of RMUs and uses its RMUs to cover its emissions
fulfillment according to the quantitative guidelines of Annex limitation commitment.
B of the Kyoto Protocol. They are thus worthless.
Furthermore, both Germany and the EU had demanded
Clean Development Mechanism that the complete and qualitatively sufficient fulfillment of
The CDM Executive Board mentioned above was set up reporting obligations in the sinks sector belonged to the cri-
with the fact in mind that CDM projects could be imple- teria of eligibility for using the flexible mechanisms in as
mented as early as the beginning of 2000. The Board de- early as the first commitment period and not - as adopted in
cides on the functions, guidelines and methods which the Marrakech – only from the second period. Germany in the
actors must apply. Implementation of CDM projects by de- end also had to relinquish its call for a ‘concrete ceiling’,
veloping countries without the participation of industrialized meaning a precisely quantified limit to which emissions
nations (so-called ‘unilateral projects’) are not expressly credits from the flexible mechanisms could be used to
prohibited and therefore are permissible. Sinks projects cover a Party’s own commitments.
cannot be included in the CDM until the Executive Board Reporting, monitoring and verification
has adopted guidelines for their implementation under this
In the overall Marrakech Accords, the European Union had
mechanism.
to make concessions to the Umbrella Group and G77 coun-
Joint Implementation tries, but in countermoves it was also able to push through
Climate protection projects between two industrialized na- some significant concerns of its own. The most important
tions are called Joint Implementation (JI). Emissions credits point in the negotiations was the requirements and proc-
can be generated within JI, but they must be deducted from esses in reporting and the crediting of sinks according to
the host country’s AAUs. ERUs can be used by the Parties Art. 3.3 and 3.4 of the Kyoto Protocol (reforestation, forest
to fulfill their own commitments or for sale. Basically, there management and emissions reduction in agriculture). After
are two ways in which JI projects can be recognized: the concessions made in Bonn with regard to carbon sink
crediting, above all to the Umbrella Group, Marrakech had
• First track: Provided the host country has met all the
to demand sufficiently high requirements for reporting on
eligibility requirements for using the Kyoto mechanisms
sinks and provide incentives for good-quality sinks invento-
ries. In the end, a compromise satisfactory to all sides was great majority of the ‘ratifiers’. Before Johannesburg, how-
achieved here. ever, the politically potent block of the EU member coun-
tries and the European Commission will ratify the Protocol
With regard to reviewing greenhouse gas inventories and
together. The path to that was smoothed in Brussels on
other reports, so-called Expert Review Teams (ERTs) will
March 4, 2002 by the decision of the EU Council of Envi-
be set up. In the case of poor reporting, these teams will be
ronment Ministers. According to present planning, the
able to correct inventories and present reports which will
European Union will deposit its ratification documents be-
form the basis for the compliance checks by the Compli-
fore the summer recess and thus make a contribution of
ance Committee. The issue of the selection criteria for
24.1 per cent to fulfillment of the quorum.
technical review experts was solved in the end by reaching
a compromise between technical expertise and a balanced With regard to achieving the quorum of 55 per cent, Russia
international representation. in particular (17.4 per cent) is still a ‘shaky’ candidate that
holds the key to the Kyoto Protocol’s coming into force. To
When will the Kyoto Protocol come into force?
all appearances it also does not wish to hand it over for the
The quorum requirements for the Kyoto Protocol contain time being. Various actors in Russia still seem intent on
two points, both of which must be fulfilled: landing more ‘goodies’ for their country. It must be expec-
• it must be ratified by 55 Parties to the Convention; and ted that it will be some weeks and possibly even months
• they must include developed countries representing at before the Russian government and the Duma, the Russian
least 55 per cent of the CO2 emissions of the Annex I Parliament, have got their act together. In the final analysis,
nations in 1990. however, the economic incentive of the Kyoto mechanisms
is so great for Russia that it will ratify the Protocol in order
At present, about 50 countries have ratified the Kyoto Pro-
to benefit from its blessings. This is already being empha-
tocol. But developing countries currently still account for the
sized by the relevant government departments in Moscow.
8. Conclusion and prospects

Marrakech has made the Kyoto Protocol suitable for ratifi- of low-fuel vehicles – the list of the opportunities goes on
cation. That also brings into sharper focus the opportunities and on.
offered by the project-related mechanisms Joint Implemen-
Hopes are also raised by the fact that the Confederation of
tation and Clean Development Mechanism. For the Central
German Industry and various important industrial branches
and East European countries, consistent use of joint im-
have declared that they view the project-related mecha-
plementation gives them the opportunity to attract invest-
nisms Joint Implementation and Clean Development
ment to improve their energy supply infrastructure, which
Mechanism as more important than emissions trading. But
as a rule is no longer up-to-date. For western countries,
JI and CDM will play a significant role as instruments of
joint implementation enables them to fulfill their Kyoto
climate protection and technology transfer only if it is pos-
commitments at much lower cost than they would incur by
sible to:
implementing purely national measures. Building new
power plants and rehabilitating existing ones, optimizing • put the information flow on a broader basis;
transport power line energy, measures to improve energy • eliminate misunderstandings;
users in the end-consumer sectors of industry, trade and • curb unrealistic expectations;
private households, cogeneration of power and heat, using • create the infrastructure required for implementation
renewable energy sources, vigorous rehabilitation of old both in investor and host countries;
buildings and the building of efficient new houses, using • put in place the preconditions which the Kyoto Protocol,
domestic appliances and communications and entertain- the Bonn Agreement, and the Marrakech Accords de-
ment technology with a lowest possible consumption of en- mand (above all, reporting and monitoring); and
ergy, use of state-of-the-art metrology and control engi- • offer not only technical solutions, but put together full-
neering, improving transport infrastructure and deployment solution packages (including maintenance, spare parts
supply, concepts for financing, and insurance services).
9. Literature
UNEP-Informationsstelle für Übereinkommen (IUC) (Pub.). Klimakonvention, Geneva, (no year).
Sekretariat der Klimarahmenkonvention der Vereinten Nationen (Pub.). Das Protokoll von Kyoto zum Rahmenübereinkommen
der Vereinten Nationen über Klimaänderungen, Bonn (no year)
Nationales Klimaschutzprogramm, Fünfter Bericht der Interministeriellen Arbeitsgruppe „CO2-Reduktion“, Bundestagsdrucksa-

che 14/4729 of 14.11.2000
Bundesministerium für Umwelt, Naturschutz und Reaktorsicherheit (Pub.). Damit weniger in die Luft geht. Das Neue Klima-
schutzprogramm der Bundesregierung, Berlin, December 2000
Umweltbundesamt (Pub.). Treibhausgasminderungen in Deutschland und UK. Folge „glücklicher“ Umstände oder gezielter Poli-
tikmaßnahmen? Ein Beitrag zur internationalen Klimapolitik, Berlin, July 2001
PROGNOS (Hrsg.). Klimaschutz und Arbeitsplätze. Sind klimaschützende Maßnahmen ein sinnvoller Beitrag zur Arbeitsmarkt-
politik? Frankfurt am Main, Berlin, Bern, Brussels, New York, Oxford, Vienna 2001
Stein, Gotthart and Strobel, Bernd (Pub.). Politikszenarien für den Klimaschutz. Schriften des Forschungszentrums Jülich, Reihe
Umwelt.
Band 1. Szenarien und Maßnahmen zur Minderung von CO2-Minderungen in Deutschland bis zum Jahr 2005, Jülich 1997
Band 2. Emissionsminderungsmaßnahmen für Treibhausgase, ausgenommen energiebedingtes CO2, Jülich 1997
Band 3. Methodik-Leitfaden für Wirkungsabschätzung von Maßnahmen zur Emissionsminderung, Jülich 1998
Band 5. Szenarien und Maßnahmen zur Minderung von CO2-Emissionen in Deutschland bis 2020, Jülich 1999
Wuppertal-Institut für Klima, Umwelt und Energie. Bewertungen eines Ausstiegs aus der Kernenergie aus klimapolitischer Sicht,
Wuppertal 2000
Kleemann, Manfred, Heckler, Rainer, Kolb, Gerhard and Hille, Maren. Die Entwicklung des Wärmemarktes im Gebäudesektor
bis 2050. Schriften des Forschungszentrum Jülich, Reihe Umwelt, Band 23, Jülich 2000
Ökoinstitut, Berlin; DIW, Berlin; FFU, Berlin. Indikatoren für Energieverbrauch und CO2-Emissionen von Ländern als methodi-
sche Grundlage zur Konzipierung international vergleichbarer Reduktionsziele
ecologic. Untersuchungen zur Umsetzung eines Protokolls zur Klimarahmenkonvention. Auswirkungen von Aktivitäten und Re-
gelungen der EU auf die Emission klimawirksamer Gase, Berlin 1998
Deutsches Zentrum für Luft- und Raumfahrt e.V., Stuttgart; Wuppertal-Institut für Klima, Umwelt und Energie, Wuppertal; Zent-
rum für Sonnenenergie- und Wasserstoff- Forschung, Stuttgart; Internationales Wirtschaftszentrum Regenerative Energien,
Münster und Forum für Zukunftsenergien, Bonn. Klimaschutz durch Nutzung Erneuerbarer Energien, Bonn, Münster, Stuttgart,
Wuppertal 1999
Fischedick, Manfred, Langniß, Ole, Nitsch, Joachim. Nach dem Ausstieg. Zukunftskurs Erneuerbare Energien, Stuttgart und
Leipzig 2000
Schafhausen, Franzjosef. Der Kampf um die Ratifizierung des Kyoto-Protokolls in Marrakesch, in. Energiewirtschaftliche Tages-
fragen 1/2., 2002, S. 90 – 93.
The Kyoto Mechanisms

What has the aij pilot phase achieved?
The situation after Marrakech – Opportunities for
infrastructure investment in Central and East Europe • aij projects meet with coolness in the host countries
• In the introductory phase, aij projects need massive
– For integration in the European and international assistance from the investor countries – political, technical
climate protection strategy and economic barriers have to be overcome
by • The level of information on aij projects and their
Franzjosef Schafhausen MA (Econ) MBA implementation is very low in both investor and host countries
Ministerial Counsellor in the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety
Berlin • A lack of institutional, technical and financial capacities,
above all in the host countries, impede aij projects
on the occasion of the
• Development and implementation of aij projects could be
facilitated by bilateral or multilateral framework agreements
BMU/CTI – Workshop (memoranda of understanding)
in December 2001
in Ostritz
Slide 1 Slide 2
What has the aij pilot phase achieved? What has the aij pilot phase achieved?
• Considerable consultancy for all actors (companies and • The government must ensure the ecological integrity of the
governments) is required projects (“Golden Standard” – positive list)
• Only with growing familiarity with projects will the need for
consultancy and thus transaction costs reduce • The government must ensure timely climate bookkeeping/
• Project-related funds can reduce transaction costs, above all for emissions inventories
interested small to medium-sized businesses – the Netherlands’
experience with ERUPT and CERUPT should be used • The government must ensure no deviation from the target
• General, internationally accepted rules would facilitate the corridor (monitoring, sales approval, right of first refusal)
development and implementation of aij projects
• The government must put regulatory frameworks in place (e.g.
to prevent distortions of competition)
Slide 3 Slide 4
Challenges following Marrakech

Preconditions for use of the Kyoto Mechanisms
• Ratification of the Kyoto Protocol
• Ratification of the Kyoto Protocol
• Creation of institutional and organisational capacities
(designated national authority – DNA)
• Commitment to the compliance concept adopted in Marrakech
• Rules for recognition of JI and CDM projects
• Establishment of a national system to register emissions
• Presentation of reports to the UNFCCC (Art. 5.7 and 8 KP)
and national reports (Art. 12 KP) in conformity with • Punctual and correct presentation of annual greenhouse gas balance
requirements – currently considerable shortfalls in Germany sheets and submission of sinks inventories
• Punctual and correct reporting on the carbon stored in sinks in the

• Creation of structures to use ERUs (JI) and CERs (CDM) second commitment period (2013-2017)
Slide 5 Slide 6
The flexible mechanisms Status of the preparations I
The flexible mechanisms • Ratification of the Kyoto Protocol: European Commission and EU
member countries before Rio+10 in Johannesburg, August 26-
September 4, 2002
Climate Convention (1992/1994) Kyoto Protocol (1997)
• DNA – enhancement of capacity of the Joint Implementation

Activities implemented jointly Project-related Emissions-related Coordination Office (JICO) located at the Federal Environment Ministry
Pilot phase from 1995
Joint Implementation Clean Development Emissions Trading • Development of practical support (JI and CDM guides for users)
Mechanism - Project development according to flow chart
Art. 6 KP Art. 12 KP Art. 17 KP
- Early examination of suitability and climate protection input
Useable from 2008 Useable from 2000 Useable from2008
- Reduction of transaction costs
between developed between developed between developed - Facilitation of investment decisions
countries and developing countries
countries
• Project Design Document (PDD) as basis for recognition
Slide 7 Slide 8
Status of the preparations II Status of the preparations III

• Use of ERUs and CERs:
- implications of national commitments and the objectives of industry,
• Forwarding to and clarification by the Executive Board in the energy supply, private households, small-scale consumption and
case of CDM projects transport
• Forwarding to and clarification by the Supervisory Committee in • Integration in the EU-wide trading of greenhouse gas emissions (Draft
European Commission Directive of 23 October 2002)
the case of JI projects
• Use of alternative instruments with comparable results (voluntary
• Project guide as test of suitability commitment declaration, eco-tax, Renewable Energy Sources Act
(EEG), Heat-Power Cogeneration Act (KWKG), and the EU Directive
on Integrated Pollution Prevention and Control (IPPC)
• Funds for implementation of JI and CDM projects
• Sales to third parties or their inclusion (e.g. brokers, project developers)
Slide 9 Slide 10
Project guide
Project development and implementation process
• Basic knowledge – JI and CDM categories

• Project guide as support for the entire project cycle
• Validity check
• Development phase: the project is given a brief scrutiny (self-
evaluation?) • Development of the project design document (PDD)
• Early agreement between investors and DANN in investor • Monitoring concept

countries
• Verification and validation

• Option: advance notice and rough examination at DNA
• Technical installations
• Drawing up of the project design document by the certification
office (designated operational entity)
Slide11 Slide 12
Tasks of the validity check from the companies’

Objectives of the validity check
point of view
• Alignment of project development on the JI and CDM
characteristic • Lowering the recognition threshold
• Validity check to assess at a very early point in time the project • The check offers early orientation and certainty
idea’s prospects of success
• Potential clarification of the use of ERUs and CERs in Germany
• Minimising of transaction costs
• Advance notice serves at the same time as the basis for developing the
• Abridged documentation as the basis for initial agreement with project design document (PDD)
- the designated operational entities (DNAs) of investor and host
countries
• Abstaining from a validity check and initial agreement with a designated
- the designated operational entities, and national authority increases later scrutiny costs
- possibly also the investors or sponsors
• Option: advance notice – goal: creation of investment certainty
Slide 13 Slide 14
Tasks of the validity check from the point of view of

Abridged documentation
the government
• Early ensuring of the ecological integrity of German JI and CDM • Information on all project participants
projects (“Golden Standard” – positive list)
• Technical description of the project, identifying the interfaces
• Prevention of misunderstandings – minimising of conflicts and the system’s limits
• Gaining of experience for the further development of the Kyoto • Suitability of the project as a JI or CDM project
mechanisms
• Quantification of the estimated emissions reduction / initial
• Control possibility with regard to realising national climate validity check of the baseline
protection targets
• Project planning and financing
• Early participation of the public
• Assessment of the project risks
• Acceleration of the recognition process based on the project
design document
Slide 15 Slide 16
Reporting system during the project cycle Reporting system II
Validity check PDD Monitoring Verification • Identical certification facility (DOE) can upon inquiry of the
project participants submit the project design document to the
Executive Board for verification
• After acceptance by the designated national authority, the

will be draw n up will be draw n up can be done will be draw n up Executive Board deals with the project design document
by the project by designated by project by designated
participants operational participants operational
• Public participation (at short notice)
entities entities
• The designated national authority reacts to monitoring and

verification reports within the set timeframe
DNA Executive Board Executive Board Executive Board
Slide 17 Slide 18
Conclusion I
• Structures and processes will be developed step-by-step in

2002 and 2003 and be available when the Kyoto Protocol
comes into force
• Planning for JI and CDM projects can begin immediately
• For CDM, however, Executive Board decisions are still

necessary
• JI and CDM assume the existence of a workable emissions

trade in order to be able to turn ecological inputs into economic
dimensions
• Before 2008, JI can be used in economic terms only in

combination with emissions trading
Slide 19
Conclusion II Conclusion III
• The project guide and validity check will be available from • Priority projects:
summer 2002 - rational and economical use of energy
- renewable energy sources
• The Federal Environment Ministry and its Joint Implementation
Coordination Office (JICO) should be called in early to clarify the • Restraint on sinks projects – rules are to be expected at the
process earliest for COP9 – COP/MOP1, probably in 2003
• Negotiations are already under way on bilateral arrangements – • Rules for small-scale projects are to be adopted by COP8 in
but conclusion only according to need New Delhi in 2002
Slide 20 Slide 21
Climate glossary Climate glossary II
• aij activities implemented jointly (pilot phase for JI and CDM) • MoU Memorandum of Understanding (agreement as basis for
• BMU Federal Ministry for the Environment, Nature Conservation JI and CDM projects, binding under international law)
and Nuclear Safety • PDD Project Design Document (basis for recognition by EB und
• CER Certified Emission Reduction (emissions credit from SC)
CDM projects) • PP Project participants
• EB Executive Board – body for formulating the rules for CDM • PUB Public participation
projects and recognising such projects
• RL Directive
• DNA Designated National Authority (in Germany: BMU)
• DOE Designated Operational Entity (accredited certification • SC Supervisory Committee (JI supervisory body)
office) • SV Climate protection agreement of German industry of
• ERU Emission Reduction Unit (emissions credit from JI projects November 9, 2000
• UNFCCC United Nations Framew ork Convention on Climate Change
• JIKO Joint Implementation Coordination Office in the BMU, • WSSD World Summit on Sustainable Development
Arbeitsgruppe Z II 6 (Johannesburg)
• KP Kyoto Protocol of 1997
Slide 22 Slide 23
Recommendations Derived from the Seminar Discussions 169
CTI Capacity Building Seminar in Ostritz 2001

Recommendations derived from the seminar discussions
1. Co-operation items and projects

• Co-operation projects with countries in transition should focus on the regional and municipal levels in order to se-
cure efficiency by defining appropriate projects adapted to local conditions
• Existing networks in the CEE countries (e.g. Municipal Energy Efficiency Network MEEN EcoEnergy in Bulgaria)
should be developed into a nucleus for future co-operation on climate protection; the Climate Alliance (Klimabünd-
nis e.V.) should try to improve networking with CCE cities
• Future seminars should focus on demonstrating successful projects suitable for adoption by CCE countries
• Kyoto mechanisms and their impact on the CEE countries’ policies should be discussed at the follow-up seminar
• Biomass should be a key issue to be discussed at a follow-up seminar
• Energy efficiency should be the driving force for project development
• Financial engineering for projects which takes into account the different sources of monies (national environmental
funds, donations, loans, credits, subsidies, problems of profitability/payback times of CHP after electricity market
liberalization) should be a key issue in the future
• When promoting biomass use the positive socio-economic side effects and public welfare effects should be com-
municated (benefits such as increasing (local) tax revenue, forest technology innovation, job creation, air pollution
reduction).
2. Framework conditions
• Legal and institutional framework conditions (e.g. home owner association law, ownership issues, mortgage mar-
kets) must be in place as a pre-requisite for successful financing and implementation of projects
• Demonstration projects carried out at municipal level are an essential factor for further success in climate and en-
ergy savings policies
• CTI should change its focus from technology to policy
• Market transformation programs and instruments and the “creation” and strengthening of interest groups for en-
ergy efficiency are necessary.
• A mechanism of low cost project replication should be implemented.
3. Proposals for future seminar tasks
• Answer the questions of the coherence of driving forces, especially of economic restructuring and active energy
efficiency policies, but also decarbonization etc.
• Remove numerous market barriers in transition countries by generating interest among stakeholders and networks
• Discuss legal and institutional pre-requisites for long-term strategies in the energy system
• Clarify the policy instrumentation e.g. the coherence and consistency of the policy mix, efficiency threshold and
orientation of instruments
• Demonstrate successful projects in CCE countries and communicate to others.
COUNTRY REPORTS

Svetlana Ganjumyan

Director of Belarussian Scientific and Industrial Information Centre for Energy Saving
“BelVIEC-Energy Centre”

Violetta Groseva
Dr. Zdravko Genchev

Tomaš Vorišek

Dr. Villu Vares
Dr. Tiit Kallaste
SEI Tallinn

Tamuna Abazadze
Paata Janelidze

Terez Szabo

Maija Vimba
Andra Blumberga
Ekodoma, OPET Latvia 2
Claudio Rochas
Ekodoma, OPET Latvia 2

Housing and Urban Development Foundation 2
Vygintas Jarašunas
Energy Efficiency Center 2
Lithuanian Energy Institute 2

Prof. Piotr Kowalik
Technical University of Gdańsk, Poland 2
Dr Andrzej Szajner
Baltic Energy Conservation Agency BAPE, Gdańsk, Poland 2

Cristian Tantareanu Roxana Funduca
Center for Promotion of Clean and Efficient Energy in Romania - ENERO 2

Dr. Igor Bashmakov
Center for Energy Efficiency 2

Cogeneration Centre, Slovak Energy Agency 2
Ing. Vladimir Hecl
Energy Centre Bratislava 2

Darko Hrovatin Mojca Pipan Franko Nemac Aleš Bratkovič
Energy Restructuring Agency ApE 2

Sergiy M. Bevz
State Committee of Ukraine for Energy Conservation 2
Scientific Engineering Centre „BIOMASS“ 2
Valentyn Seredyuk
Agency for Rational Energy Use and Ecology 2
Country Report: Armenia
“Climate Technology and Energy Efficiency – Disseminating ‘Best Practice’ Experience”
Svetlana Ganjumyan
1. Overview
The world experience shows that the Least Cost Develop- looks for alternative heat sources and generally uses wood
ment Plan of the Energy Sector does not fully satisfy the stoves. Armenia is a country with very limited timber re-
actual requirements for energy security and independence. sources and deforesting with the purpose of personal heat
According to the International Energy Agency (IEA) most of provision also may result in negative impacts to the envi-
the countries found their energy policy on the principles of ronment. That impact effects deforestation of the country
secure energy supply and the increasing of the role of the and soil corrosion, as well as the increasing of CO2 emis-
liberalized market. Armenia having gone through a severe sions as a result of uncontrolled combustion processes.
energy crisis 1993-1995 tested in practice the results of the The new State Energy Policy of the Republic of Armenia for
loss of energy security. The following examples show the ensuring Energy Security is based on:
importance of ensuring the balance between utilization of
• Three-level energy diversification policy based on using
energy resource, energy supply and environmental issues
all type of generation plants, utilization of different kinds
in Armenia. The hydro potential of the unique Sevan Lake
of fuel and ensuring fuel transportation.
was intensively exploited for energy purposes during the
• Rational use of energy including priority development of
period of the energy crisis which raised the risk of negative
domestic renewable energy resources, energy conser-
impact on the regional climate conditions. Outflows from
vation and climate technology.
the lake have been reduced over the last years to just
• Regional co-operation.
cover the irrigation needs of Armenia, but at the same time
this results in a proportional reduction of hydro power gen- In this report a few important projects are described which
eration to about 500-600 GWh/year. Another example is are dedicated to the problem of energy efficiency and cli-
linked with the absence of full-scale heat supplies to the mate technology in Armenia.
household sector. Under existing conditions the population
2. TACIS Project: Reconstruction of district heating

The main aim of reconstruction of district heating in Arme- • the lack of heating supply by the municipality forces the
nia is to restart the high quality and reliable heat supply to residents to identify and apply alternative sources. One
the household sector of the cities. In this area the most of the most common is the use of wood, which arises a
critical elements that should be taken into account while great concern from the environment point of view.
operating in this field are:
These conditions were taking into account for developing
• the actual economical situation in Armenia, recently im- the Pilot Business Plan for the reconditioning of the District
proved, but not completely restored after the energy cri- Heating System (DHS) of Yerevan carried out by the TA-
sis of the 1993-1995; CIS Project 98.0358 and co-realized by the parties of Ital-
• it is accepted that the supply of heat for the population ian G&FInt and ESC. In this project there has been put up
in the cold season must take into consideration the re- the hypothesis to recondition the DHS in two stages: the
lated social impact; first aimed at the recondition of the system in order to
174 Svetlana Ganjumyan
achieve an efficient and reliable heat supply for the cus- • to completely reconstruct the indoor systems of hot wa-
tomers, the second aimed at a better control of heat pro- ter supply;
duction and supply. The two stages have been identified • to perform energy saving interventions by improvement
not only from the technical and economical point of view, of thermal insulation of the apartments.
but have also taken into consideration issues related to the
The works of the second stage require longer time and are
social conditions. The project has been evaluated on the
connected to the control and accounting of the real thermal
basis of the saving arising from the reduced consumption
power consumption by the customers.
of natural gas and the expected increase of percentage of
payments from the users. The first stage refers to: The Pilot Business Plan was focused only on a first stage
and as an example was taken the district heating plant N
• Complete reconditioning of the transmission (main) and
11-Avan. The total actual losses in the selected district
distribution heating network;
heating system were estimated to be at a level of 49.6%.
• refurbishing of the equipment of the central district heat-
The main sources of losses are the bad condition of the
ing plant, installing the urgently needed instruments for
district heating plant, water leakage, and heat loss in pri-
the monitoring and control of the heat release, control of
mary circuit, heat losses in substation, water leakage and
fuel burning regimes, removal of interplant heat losses;
heat losses in secondary circuit.
• refurbishing of the equipment of the boiler houses in-
stalling the urgently needed instruments for the monitor- The overall cost for the complete reconditioning of the dis-
ing and control of the heat transfer to the buildings, re- trict heating system of DHP N11-Avan has been calculated
moval of water leakage and losses of heat from pipe- on the base of a detailed analysis and summarized as
lines and heat exchangers. shown in the following table:
It is expected that the reconditioning works of the first stage First Second
thousand US$ Total
Year Year
could be completed in a period of 2 years.
Central Boiler House 23.5 23.50
The second stage refers to the optimization of the heat Primary Circuit 585.8 452.80
supply process and control. The main interventions will Substations 41.4 41.40
concern: Secondary Circuit 567.45 567.45
• To equip the central boiler houses and boiler houses Total 517.7 567.45 1085.15
with the facilities necessary for automation and control To perform feasibility analyses of the Reconditioning Pro-
of thermal power production and distribution; ject it has been utilized the software "A computer support
• to optimize the buildings´ structure installing metering calculation method for the preparation of financial state-
and control equipment; ment for feasibility studies of investment projects". The cal-
culations have been made with the following assumptions:
Year 1st 2d 3rd 4th 11th

Losses reduction to the level:
Central Boiler House 15.0% 15.0% 3.0% 3.0% 3.0%
Transmission Network and Substations 14.0% 3.0% 3.0% 3.0% 3.0%
Distribution Network 12.0% 11.0% 11.0% 11.0% 11.0%
TOTAL 41.0% 29.0% 17.0% 17.0% 17.0%
Unit Cost of Gas, US$/1000 cub. m 65.9 65.9 65.9 65.9 65.9
Heat Tariffs, US$/G cal 17.1 17.1 18.6 18.6 24.6
Rate of Payments 35.0% 60.0% 90.0% 98.0% 98.0%
They will remain almost constant, with minor variations due to the main-
Operating Costs tenance costs, which will decrease in the first years and increase slowly
after the seventh year.
The study shows a break even point, which is reached at sible technical and economic options for urban heating
the 11th year after the start of the activities and an internal supply systems in four selected cities in Armenia, taking
rate of return equal to 8.1%. into account the basic heating needs, fuel supply and af-
fordability criteria.
During the next stage of the study the main potential
sources of risks have been identified and analyzed, based The project consists of following tasks:
on the “GUIDE TO ENERGY EFFICIENCY BANKABLE
• To estimate roughly the economic and financial costs of
PROPOSALS” jointly published by the European Commis-
the developed heat supply options, including the poten-
sion (DGXVII, THERMIE and SYNERGY Programs) and
tial for low cost weatherization measures in buildings
the EBRD. In particular, the study was focused on estima-
and expected benefits;
tion of negative impact of sponsor, pre-completion, comple-
• to develop different options for pilot projects in the four
tion, technology, input or supply, operating, regulatory and
sample cities, including a cost-estimate;
environmental
• to determine the requirements to be set for the devel-
as well as sales risks. The analysis shows that as the main opment of gas supply systems with respect to heat sup-
critical element of the project must be considered the rate ply;
of payment. Along with that the analysis shows that a small • to broadly define the institutional and legal requirements
increase of the heating period may give to the project a and approaches of the heating options, taking into ac-
margin that may put the project in a safer condition to af- count the scope for commercialization of heating ser-
ford the other risks. vices and the potential for competition to regulate price
and quality of service;
For completion of the study the environmental aspects of
• to present a first outline of an Urban Heating Strategy at
reconditioning of the district heating system have been
a workshop in order to select the main supply options
analyzed. For this purpose an Environmental Manual
for further investigation.
software developed by GTZ was used to identify the emis-
sions´ results in rehabilitation and reconstruction of the dis- At present investigations by Urban Heating Strategy selec-
trict heating system. The following table shows the results tion are carried out on the basis of the following scenarios:
of the possible scenario analysis:
• Representing areas, which presently are supplied from
CHP;
Airborne GHG
Generic • representing areas, which presently are supplied from
emissions (t) emissions (t)
Options SO2 NOx CO2 large heat boilers;
Before reconstruction 6.2 12.9 2868 • representing areas, which presently are supplied from
After the first stage 5.7 11.8 2620 small heat boilers;
Completely rehabilitated 5.3 11.0 2467 • representing areas which used to be connected to CHP
or heat boilers but today are disconnected but could be
The described Pilot Business Plan was the base for devel-
reconnected at relatively small costs (i.e. there are boil-
oping a pre-feasibility by ESC study for rehabilitation of
ers that can be put back into operation, most of the
seven DHPs with connected heat supply systems under
main DH pipes are intact and most buildings still have
contract with the District Heating Authority of the Municipal-
more or less intact internal heat pipe system and radia-
ity of Yerevan.
tors);
The main results of this study were also taken into account • representing areas with multistory buildings that cannot
by the ongoing World Bank Project “Urban Heating Strat- be connected to an existing CHP or heat to boilers at
egy”. The overall purpose of this project is to develop fea- relatively moderate costs.
3. Armenian-Netherlands Project: ArmNedWind

According to the Memorandum of Understanding the Neth- output volumes of wind turbines in the certain sites under
erlands PSO program facilitates the execution of the Ar- study and grid-connected wind-farms.
menian - Netherlands Wind Energy Program (PSO 98
In order to fulfill the feasibility study more comprehensively,
/AM/2/1, ArmNedWind Project) started in 1999.
the Armenian specialists carried out special calculations of
E-Connection Project BV Company (Holland), Riso Labora- the distribution of capacities of Armenian Power System
tory (Denmark) and Energy Strategy Center (Armenia) ac- and the static stability of the power system. During these
complished the ArmNedWind Project. The main aim of the investigations seven options of wind power installation
ArmNedWind Project was to answer the most important were calculated. In the worst option, the installation of 50
question of grid-connected wind farm development: MW wind power capacity was observed, while in the best
"Whether there is enough wind resource potential in Arme- case this index was 250 MW.
nia, which can be efficiently used to produce electricity re-
At present all the activities, calculations and investigations
liably".
of the above mentioned phases are successfully com-
Five modern wind energy-monitoring complexes were suc- pleted. At the main “success” indicators could be men-
cessfully installed in the preliminarily chosen and prepared tioned that from the realization of 175 MW total installed
different perspective sites of Armenia. For a more compre- capacity wind farm in the northwestern part of Armenia 2.9
hensive assessment of wind power resources, it was nec- billion kg of CO2 emission per year could be saved. An es-
essary to compare the short-term (12 months) and accu- sential side effect of the wind project implementation in
rate monitoring data with the meteorological long-term, but Armenia would be creating of more than 700 men/year
less accurate data. The obtained results were summarized permanent and 28,000 men/year temporary jobs.
in special reports. The results allowed fulfilling the correc-
The pilot project for a 80 kW wind-turbine is carried out to
tion of wind speed and direction according to the results of
define what scope is delivered from Netherlands and what
correlation analysis for the Pushkin and Karakhach
is to be done by Armenian counterparts. In July or August
Passes.
of next year, the 80 kW wind-turbine will be transported
The three-dimension model of wind flow in the five sites and installed. Till the end of 2001 a legal entity, operating
was created within the study. The modeling was accom- as independent power producer, will be established in Ar-
plished by the Project specialists according to the WAsP-7 menia. This entity will start the licensing and land lease
software, with the support of Dutch experts. In order to agreements as well as will support the environmental im-
carry out the modeling, the three-dimension topographic pact assessment preparation in accordance to the rules
and roughness maps of the terrain were created. The main and regulation of RA.
result of the Project was the definition of annual electricity
4. Armenian-Netherlands Project: ArmNedSun

The consortium of Ecofys, Econosto and FACET is carry- Next to the commercial business plan, a more general
ing out a two-year project “ArmNedSUN” aiming at the in- promotion awareness plan was developed and imple-
troduction of a thermal energy system in Armenia. The pro- mented. Promotional activities include seminars and sym-
ject is sponsored by the Netherlands Government (PSO) posia, special promotional gadgets, advertising, commer-
and supported by the Armenian Ministry of Energy. The cials, documentaries, etc.
project is being implemented since 1 January 2000 until 31
15 demonstration projects with a solar heater were in-
December 2001 and consists of a variety of activities, all
stalled in 2000 to show the benefit and to demonstrate the
aiming to facilitate the introduction of solar water heaters.
functioning of the systems. These demo-boilers are of
One of the first activities was the development of a busi- Dutch origin, manufactured by Econosto, but adapted to
ness plan, based upon a proper market survey, for the Armenian circumstances. Thanks to the Netherlands the
marketing and sales of solar water heaters in Armenia. firm presently sells the SWHs with a discount of 50%. The
main consumers of SWHs are the owners of private household use as well as for industrial use. SunEnergy is
houses, boarding–houses, hospitals and top-floor dwellers. the market leader in Armenia.
One standard SWH saves 1000 and more kW electricity
A subsidy fund is developed to lower the high initial in-
annually, i.e. expenses on a SWH are compensated for a
vestment barrier for the clients of solar water heaters. Lob-
few years, and its exploitation period is more than 25
bying at government institutes takes place during the whole
years. In conditions of Armenia SWH completely operates
project period to place solar energy on the political agenda.
during 9-10 months and only in winter its efficiency de-
The goal was to sell at least 50 SWHs during the project
scends till 20%.
period. The internal goal is to sell more SWHs during the
The demonstration projects are monitored in detail for a project term to bring overhead costs to a reasonable level.
year to investigate the efficiency of the adapted system. It is expected that a couple of years after the project, the
The Armenian solar irradiation is measured too. sales volume will grow to 500 – 1000 units per year. This
will lead to the creation of jobs for Armenians, both directly
The SunEnergy Joint Venture between Econosto and
and indirectly.
Technokom is established and in full operation. SunEnergy
produced and installs solar water heaters in Armenia for
5. Hydro energy projects

The development of hydro energy projects is a main priority ter pipeline with 500 kW capacity each were constructed
for Armenia, because water is the largest indigenous and commissioned. These 4 SHPPs and Avan SHPP were
source of energy. The economically feasible new hydro po- constructed at the expense of private investment of "En-
tential of Armenia has been estimated to be at a level of ergy" Ltd.
250 – 300 MW.
In 2000 the first unit of SHPP with a capacity of 1000 kW
Under the new economical conditions, the ways of private on Kotayk irrigation canal was commissioned. Hydro
capital involvement in hydro energy were being searched. pumps were used as hydro turbines. It is foreseen to
For that purpose, the system of licensing of construction enlarge the plant, increasing the installed capacity up to
and exploitation of small hydro power plants (SHPP) is 2000 kW.
regulated in a legal act in Armenia since 1992. Also new
In 2001 two SHPPs on Kamenka-Amrakits irrigation canal
provisions for all purchased electricity generated at SHPPs
with a total capacity of 1200 kW were constructed. One
and other renewable sources of energy within the next 15
HPP was constructed on the basis of a pump station. Hy-
years are ensured by the “Energy Law” of RA adopted in
dro pumps were used in both HPPs as hydro turbines.
March 2001.
Four SHPPs are in the phase of construction.
In 1997 a SHPP was constructed on the drinking water
pipeline near the Gyumri city. There are 2 two-stage pumps At present, mainly the legal basis is elaborated in Armenia
used as a turbine with a capacity of 350 kW. Two asyn- that is promoting the development of hydro energy. Limita-
chronous motors are used as a generator. The increase of tion of financial means is the main factor, determining the
a capacity up to 500 kW is foreseen. In 1997 Ger-Ger construction of SHPPs. This compels to reduce as much as
SHPP with 1.2 MW capacity was commissioned. 2 turbines possible the cost of construction, e.g. at the expense of the
with 600 kW capacity, 2 asynchronous generators, pro- use of hydro pumps with asynchronous motors instead of
duced by "Armelectromash", are installed in the SHPP. hydro turbines with asynchronous generators.
In 1997 a SHPP was commissioned on Yerevan lake with a Experience of the use of pumps instead of hydro turbines is
capacity of 750 kW; in 1998 the Avan SHPP on a drinking well known. In spite of the fact, that the efficiency of the
water pipeline with a capacity of 200 kW; in 1999 two pump in reverse regime is lower than hydroelectric aggre-
SHPPs on the Aparan-Yerevan drinking water pipeline with gate for 25%-30%. Its price is much lower which gives a
500 kW capacity each were constructed and commis- sound argument for their application. Besides, the pumps
sioned. In 2000 two more SHPPs on the same drinking wa- meet ecological and sanitary requirements.
6. OPET Project: Organizations for the Promotion of Energy Technologies

The OPET Network is an initiative of the European Com- concrete energy field actions tailored in five work pack-
mission, which aims at dissemination of information on the ages.
benefits of new innovative energy technologies and pro-
This year the dissemination of the relevant information has
motes them. These energy technologies cover the areas of
been carried out via mass media. Two TV programs have
renewable energy sources, rational use of energy in indus-
been shown on TV promoting the benefits of wide scale
try, buildings and transport, solid fuels and hydrocarbons.
utilization of renewable energy sources.
The OPET Network is supported by the Enterprise Direc-
torate-General, under the Innovation Program, in collabora- Institutional and pre-feasibility studies of SHHPs are car-
tion with the Energy Directorate-General, under the dem- ried out in the sector of SHHPs. Our representatives took
onstration component of the JOULE-THERMIE Program. part in presentations and seminars.
The Network members have access to a wealth of informa- In the framework of the OPET project the activities of
tion and experience on new, innovative energy technolo- “ArmNedWind” and “ArmNedSun” are promoted. Informa-
gies, which exists as a result of EC Programs, and interna- tion about this projects has been put on OPET Web Side
tional energy programs. and the
There were two main objectives at building an OPET Net- A Business Plan for a 20 MW wind farm was represented
work in the Caucasus Region with the Energy Centers of to the Armenian Investors Conference held in New York.
the three Caucasian Republics - Armenia, Azerbaijan and
Other current OPET activity: the illustrated Dictionary-
Georgia:
Handbook will be produced and disseminated in the South
Provide a focal point and a relevant process of dissemina- Caucasus Region, translated into Russian, with references
tion of information concerning energy in the Caucasus Re- to renewable energy terms in three national languages of
gion and links with European OPET Network. the region.
Provide opportunities of European co-operation according In the Work Package “Efficient and Clean Energy Supply
to the real needs of market actors in this region in terms of Chains for Natural Gas” a preliminary plan for a regional
clean and effective energy and corresponding technolo- gas distribution network, a regional assessment study, an
gies. analysis of the proposed gas technology pertaining to
The representative of OPET-Caucasus Armenia partner is European supply chains and a preliminary assessment of
the Energy Strategy Center. Last years project consisted of the ecological,, economic, and geopolitical impact on new
two different objectives: information about objectives and regions will be carried out.
Country Report: Belarus

Selected “Best Practice” Projects and Measures in The Republic Of Belarus

Director of Belorussian Scientific and Industrial Information Centre for Energy Saving “BelVIEC-Energy Centre”
1. Section
One of priority directions in the Republican energy saving As it was noted by the authors in the previous report, big
program for 2001-2005 is the usage of renewable non- assistance in the development of programs for using wood
conventional energy sources, including biomass. waste was received from EEC UN and UNDP office in the
Republic of Belarus during realization of the project «Ra-
In the Republic of Belarus usage of biomass is planned and
tional use of wood scraps and reduction of harmful dis-
is realized on the following directions:
charges in the environment through their utilization to pro-
• Usage of lignin; duce heat energy» (1998-1999). As a result of successful
• cultivation and usage of quickly growing timber; implementation of the project in 2001 GEF issued a grant
• implementation of the program of growing usage of tim- for the project «Removing barriers to greenhouse gas
ber and wood waste for heat supply and hot water facili- emissions reducing through the use of wood wastes for
ties. municipal heating of Belarus». During realization of the pro-
Examples of using lignin are energy technological com- ject the evaluation of the full potential of energy saving in
plexes for incineration of lignin on hydrolyzing factories. As the Republic of Belarus was performed for the usage of
a result of implementation of these projects up to 35 thou- biomass as energy source for heating and hot water facili-
sand tons of fuel equivalent imported in the republic will be ties, the technical and economic potential of using wood
substituted by lignin, which previously accumulated in pit scraps was evaluated with allowance to available expertise
bings of hydrolyzing factories. The program of peat bri- and know-how. Special attention was paid to the problems
quettes production from peat and lignin at enterprises of of gathering, transportation and preparation for incineration
Belenergo concern has also been developed aiming to of wood scraps remaining in forests after planned cutting of
achieve the volumes of production of 50 thousand tons of trees. A program of production of the necessary equipment
briquettes annually to use them as fuel for domestic con- and mechanisms on the basis of available industrial poten-
sumers. tial of the country was prepared.
An example of realization of the second direction are the One of the most successful projects for the use of biomass
first plantations of quickly growing timber (Sakhalin cane, wastes is the national children sanatorium “Solnyshko” in
etc.), which will be used as fuel oil. Slutsk district, where retrofit of the heating system was per-
formed and the boiler burns local fuels. To achieve this, two
The realization of the third direction boosted in 1998, when
boilers working on furnace oil were substituted by one
according to the governmental order the Program of timber
boiler “Vertical SN-250” produced by a joint Belorussian-
use for production of thermal energy was developed. The
French enterprise “Komkont” and burning wood scraps
program demonstrated that the summary effect for the
(splinter, sawdust). The boiler was commissioned in 1998.
country from substitution of fuel import accompanied by
The pay-back period for the project was 1.9 years, and
additional use of timber in the amount of 641 thousand tons
economic effect – 85 tons of fuel equivalent per year.
of fuel equivalent constitutes about 21 million US dollars.
180 Vladimir Belochvostov / Vladimir Kouzmitch
2. Section
Systems of centralized heat supply and production of ther- In December 1993 the government of the country signed a
mal energy at CHPs remains the guideline in heat and loan agreement with EBRD for 48.6 million US Dollars for
electrical power supply in large cities of the country. In the retrofit of Orsha CHP. An international tender was an-
Republic of Belarus more than 50% of electric energy is nounced. After technical and economic evaluation of bids
produced at CHPs and, accordingly, big attention is paid to the evaluation commission announced the winner - the
optimization of modes of joint production of heat and elec- French firm GEC Alsthon (bidder price - 37.609.893 US
tric energy and implementation of new technologies. Dollars). Implementation of construction works and pur-
chasing of a part of electro-technical machinery was exe-
One of the most interesting examples of application of new
cuted at the expense of the investment fund of Belenergo
technologies is the retrofit of Orsha CHP. Orsha CHP was
concern. The construction works were executed by Belin-
commissioned in 1961 and first worked on peat, then on
vestenergostroy concern, which has allowed to considera-
boiler oil, and since 1995 on gas.
bly reduce expenditures for retrofit. Table 1 contains main
The basic reason for retrofit of Orsha CHP was physically technical and economic indices of the CHP before and af-
and morally obsolete machinery, resulting in considerably ter the retrofit.
growing calorific and electrical loads of the city. In these
In general, after retrofit the overall technical and economic
conditions the options of retrofit of the CHP were consid-
characteristics of power plant operation will considerably
ered with regard for application of modern know-how. CHP
improve:
retrofit with usage of steam and gas boilers was found to
be the most expedient solution.
Table 1 Basic technical and economic indices of Orsha CHP.

Retrofitted part – CHP in total
Index Existing part
steam and gas unit after retrofit
CHP Capacity:
- electric, MW 6.0 69.4 74.4
- heat, GCal/h 381.2 78.3 459.5
Equipment:
Steam turbines, MW 6.0 12.0 18.0
Gas turbines, MW - 2х28.7 57.4
Steam boilers, t/h 4х70 - 280
Boiler-utilizers, t/h - 2х42.7 85.4
Hot-water boilers, GCal/h 2х100 - 200
Production volume
Annual production of electric energy, million kWh 30,3 540,6 587,3
Annual consumption of electric energy, million kWh 16,2 511,0 555,0
Annual heat consumption, thousand GCal 424,3 523,5 1052,5
Fuel
Main gas gas
Reserve fuel oil gas
Emergency - fuel oil
Fuel consumption, thousand toe/year 75,7 210,2 309,5
Electricity consumption for own needs, % 46,6 5,5 5,5
Fuel rate for electricity production gfe/kWh 188,2 - 196,4
Total number of staff 226 112 338
- incl. maintenance 153 58 211
Staff rate, men/MWfe. 25,5 0,84 2,84
Cost of retrofit, million USD 45,996 54,064
Specific investments, USD/kWfe 662 726,6
Sources of funding:
Investment fund of Belenergo concern, USD 5.33 13.398
EBRD loan (for purchasing equipment), USD 37600 37600
EBRD loan for consulting services, million DM. 3,066 3,006
• annual volume of electricity generation will increase by construction of mini-CHPs on the basis of existing boiler-
34 times; houses. The republican program of energy saving for 2001
• consumption of electric energy for own needs will con- - 2005 envisages the implementation of a number of large
siderably drop - from 46,6% to 5,5%; energy efficiency projects in this field. In particular, the pro-
• specific number of factory personnel will decline from gram of development of electricity generating capacities on
25,5 people to 2,84 people per MW of installed power. the basis of steam turbine, gas turbine and steam and gas
The specific number for steam and gas part will consti- devices has been designed with creation of small CHPs in
tute 0,84 people/MW, which is comparable to indices of 2001 - 2005. This program roughly evaluates the possibility
power stations of large single power (1 million kW and of installing electricity generating capacities at the boiler
higher). houses of the republic with a capacity up to 150MW with
annual fuel conservation up to 120 - 150 thousand tons of
Specific fuel consumption for electric energy will slightly
fuel equivalent. In 2001 it is planned to commission turbine
grow (by 4%). However, this growth is a consequence of
generators with the summary capacity 18,5MW, of which
methodical incomparability of steam and steam and gas
turbine generators with the summary capacity 13,5MW
cycles. For definition of actual efficiency of fuel use it is
have already been commissioned. In 2002 the crucial activ-
necessary to compare not specific consumption for electric
ity according to the program will be the creation of an en-
energy, but general fuel consumption in the energy system
ergy technological complex on the Belorussian cement
in conditions of identical volumes of production of electrical
works with commissioning of two gas turbine devices with a
power and heat.
capacity of 32MW, which will bring annual savings up to 40
A comparison of the specific investments in retrofit of Or- thousand tons of fuel equivalent. Feasibility studies for in-
sha CHP demonstrates that the retrofit has allowed to con- stalling steam and gas devices on a number of major boil-
siderably reduce investments as compared to global levels. ers with using heat of exhaust gas after combustion tur-
In global practice specific investments in creation of high- bine, both in the work cycle and in steam and hot water
power steam and gas devices constitute 800-850 USD/KW, boilers – utilizers are now conducted.
and for steam and gas devices similar to those at Orsha Among the operating objects mini-CHPs on the basis of
CHP investments reach up to 1100-1200 USD/KW. turbines Р-0.75MW ensuring annual fuel economy of 1120
At Orsha CHP the economy of investments is reached at tons of fuel equivalent are of interest (boiler-house of a pa-
the expense of using during construction local construction per factory "Albertin", Slonim), as well as 3 mini-CHPs on
staff and building materials, and at the expense of using a the basis of district boiler-houses "Vostochnaya" (Vitebsk),
proportion of auxiliary objects of the operating CHP (water “Severnaya” (Grodno) and № -1 (Molodechno), with turbine
treatment facilities, engineering networks, auxiliary ser- generators Р-3.5 MW each. The fuel economy at each of
vices, etc.). the above boiler-houses is 3100 tons of fuel equivalent an-
nually.
The second direction for implementation of new know-how
for combined generation of electrical power and heat is the
3. Section
One of the main directions of energy saving in the Republic measurements conclusions were made about the possibil-
of Belarus is heat rehabilitation of living and communal ity of saving up to 50% of thermal energy in an average flat
buildings. The first project in this direction was realized by in Minsk. The results of the project promoted the develop-
specialists of the French firm ВСЕОМ and the Belorussian ment of various projects for heating retrofit of buildings and
enterprise BelVIEC within the framework of EU THERMIE separate flats.
program. In four flats of one of the houses in Minsk energy
For instance, the following works for heating retrofit of
saving measures were introduced. During the heating sea-
buildings were conducted in Minsk from 1997 to 2000 in
son of 1992/1993 several parameters were measured in
the apartment houses at the expense of energy saving re-
these flats and in reference flats. On the basis of these
sources:
• Façades of apartment houses completely insulated - 16 • Installation of heat metes, meters of hot and cold water
• pieces of façades (butt ends, separate parts) insulated – and gas in buildings;
45,494 sq.m. • overall repair and insulation of buildings.
• roofs insulated - 42000
As a positive result of work it should be noted that all civil
• separate flats insulated - 1156.
and erection works on the demonstration objects have
As a result of operations for heating retrofit of apartment been executed by Belorussian firms.
houses in Minsk executed in 1999, in the heating season of
The results of comparative monitoring of energy consump-
2000 (January - April, October - December) 157 tons of
tion in the demonstration building on Matusevicha street
fuel equivalent were saved. As a result of operations for
11, where heating retrofit has been performed and in the
heating retrofit of apartment houses in Minsk executed in
reference building on Zhudro street 32, where such works
2000, in the heating season of 2001 (January - April) the
have not been performed, we can make the following con-
economy of 82,6 tons of fuel equivalent was obtained.
clusion:
One of specific and interesting projects for heating retrofit
• the reduction of heat consumption in the heating system
of buildings in the Republic of Belarus is a demonstration
of the demonstration building constitutes about 40 -
project within the framework of EU TACIS program in
43% from the level of heat consumption in the reference
1997-1999 (leader of the consortium - German company
building.
Consult Team, budget - 1.3 million US dollars).
• energy consumption for hot water supply was reduced
Full scale heating retrofit of an apartment house in from 0,34 to 0,174 GCal per capita per month or nearly
Matusevicha street 11 in Minsk was held on following direc- twofold. The consumption of hot water has declined
tions: from 5,02 to 3 cubic meters per capita per month.
• insulation of outside walls (with combined mineral wool As the result of the executed projects the World Bank has
with polystyrene, thickness - 6-8 cm); issued a loan to the Republic of Belarus in the amount of
• triple glazing of windows; 22.8 million USD for implementation of energy saving
• glazing of balconies; measures in the social field – in schools, hospitals and
• substitution of the roof and its insulation; other social objects. For the period from 2001 to 2005 it is
• installation of individual gas meters and meters of hot planned to implement these activities at 600 social objects.
and cold water; Within the framework of the loan four demonstration zones
• installation of thermostatic valves on heating batteries; in the cities of Minsk, Vitebsk, Baranovichy and Borovlyany
• installation of heat evaporators on each battery; have been set up. At the present time business plans are
• installation of automatic heat consumption control sys- being prepared for the demonstration zones with the pur-
tems at heat substations; pose to ensure the most efficient investment of funds.
4. Section
In the Republic of Belarus there are no companies such as More than 3 million USD are spent annually in Minsk for
ESCO. Since December 1, 2001 the project UNDP/EECUN funding the energy saving program. Table 2 lists the main
/GEF "Removing Barriers to Implementation of Energy Effi- sources of finance of the 2000 program in percent.
ciency Improvements in Belarus", aimed at the creation of
The main source of funding of the municipal energy saving
the first municipal ESCO company in the country is being
program in 2000 was the innovation fund of Belenergo
implemented.
concern, which covered over a half of spent funds. A con-
In the previous report we reviewed the sources of funding siderable fraction, almost one third of funding of energy
of energy saving activities and projects in the Republic of saving activities was covered from own funds of enter-
Belarus. In the present report we analyze the structure and prises. The remaining sources were relatively insignificant.
volumes of using the sources of funding for implementation For instance the share of local budgets actually amounted
of the specific regional energy saving program for Minsk. to less than 8%.
It is necessary to pay attention Table 2 Main sources of finance of the 2000 program
to the appearance of such
relative involvement in %
source of funding as energy and № Source
planned Actual
resource saving funds of enter- 1 Innovation fund of Belenergo concern 58,5 59,67
prises. The relative share of this 2 Own funds of enterprises 28,4 22,96
source was very small - only 3 National budget 2,3 3,67
0,08%. In the long term the im- 4 Local budget 10,8 7,69
portance of this source should 5 Loan - 5,93
essentially increase. 6 Enterprise funds for energy and resource saving - 0,08
Total 100 100
5. Section
Big attention in the Republic of Belarus is paid to lowering For covering own technological needs and heat supply of
of fuel and energy resources consumption at industrial en- the living area "Yug" the Vitebsk television sets factory has
terprises. All industrial enterprises annually develop pro- its own boiler-house "Yuzhnaya". The boiler-house has the
grams of energy saving which are considered and ap- following boiler units installed: 3хGM-50 (steam mode) and
proved by the Committee on energy efficiency under the KVGM-100 and 5хPTVM-100 (water-heating mode). The
Council of Ministers of the Republic of Belarus. For each main fuel is natural gas. Heat generation - 790388 GCal,
year the enterprises receive target indices on energy sav- specific fuel consumption for heat generation - 159, 61 kg
ing. The regulation of the government is currently in force, of fuel equivalent/GCal.
according to which the enterprises should have funds of
Five main activities are realized in the frames of the above
energy and resource saving. These funds should be used
mentioned large-scale energy efficiency project:
for funding of energy efficiency projects and creation of fi-
nancial incentives for implementation of energy efficiency • installation of two steam turbines with the capacity of
projects. Most of the significant and efficient energy effi- 3,5MW and drive turbine of the network pump;
ciency projects of industrial enterprises are funded from • retrofit of fuel and energy resources metering system;
sectoral, regional and national energy saving programs. • optimization of combustion regime;
• decentralization of the compressor station;
Over the last years large attention was given to implemen-
• installation of thermo-compressor.
tation of large-scale energy efficiency projects at a number
of large industrial enterprises of the country. Given high in- The realization of the above measures will allow:
vestment attractiveness of such projects the enterprises • to reduce energy consumption and accordingly to re-
expect to attract investments of international financial insti- duce harmful emissions in the atmosphere;
tutions. In this direction large assistance is provided by the • to completely cover own needs of the boiler house and
European Economic Commission of the United Nations by 75% the electricity demand of the Vitebsk television
within the framework of the international project "Energy Ef- sets factory;
ficiency Investment Project Development for Climate • to ensure high reliability of electricity supply;
Change Mitigation (Belarus, Bulgaria, Kazakhstan, Russian • to ensure automatic regulation and keeping up at a
Federation and Ukraine)". given level of pressure in the feeding mainline of net-
One of the most interesting projects is realized at Vitebsk work water;
television sets factory producing modern TVs "Vityaz" and • to efficiently use main production assets of the boiler
other electronics. The factory’s products are in great de- house - steam boiler units.
mand in countries of CIS and in Belarus. In 2000 179,000 Basic activities – saving of fuel and energy resources:
TVs and 18,000 other electronic devices have been pro-
• Installation of one 3,5 MW turbine will allow to save
duced.
3720 tons of fuel equivalent, installation of turbine drive
- 517 tons of fuel equivalent;
• metering of fuel and energy resources and installation of • installation of a thermal pump will allow to save 164 tons
a gas analyzer will allow to save 777 tons of fuel equiva- of fuel equivalent and to improve the quality of casting.
lent;
Basic expenditures under the project are 2,068,000 US dol-
• installation of modern air engines will allow to save 500
lars. As a result of project implementation the following
tons of fuel equivalent and to liquidate constant noise
ecological advantages (see Table 3) will be obtained
effects at the compressor station situated in the center
of a living area of the city;
Table 3 Reduction of harmful emissions, t/year
Saving,
Energy efficiency measure CO2 SO2 NOx СО
t.f.e.
Installation of two 3,5 MW steam turbines and network pump turbine 6817 18815 0,7 6,8 0,07
Modernization of fuel and energy resources metering system 367 1013 0,04 0,4 0,004
Optimization of combustion mode 410 1131 0,04 0,4 0,004
Decentralization of compressor station 1000 2760 0,1 1 0,01
Installation of thermo-compressor 164 452 0,02 0,16 0,002
Total reduction 8758 24172 0,9 8,76 0,09
6. Bibliography
• Republican energy saving program for 2001-2005. Minsk.2000.
• Analytical report on implementing the 2000 energy saving program for the city of Minsk. Pospelova T.G.Minsk.2000.
• Report on modernization of Orsha CHP.Minsk.1999.
Country Report: Bulgaria
Selected “Best Practice” Projects and Measures in Bulgaria
Violetta Groseva
Dr. Zdravko Genchev

1. Best Practice: the case of biomass utilization

Combustion of sunflower husks in industrial steam generators
Introduction Installation
The Bulgarian energy balance shows that more than 70 % The project has been implemented in 1999 via retrofitting
of the energy consumption is based on imported fuels. The of existing boilers (two steam generators PKM - 6.5, burn-
rest is from local energy resources, which are low grade ing oil from Shabla deposits) in the steam station of Papas
coal and RES (limited hydropower, solar energy, and bio- Oil enterprise – Balchik branch.
mass).
Pneumatically, the sunflower husks are fed into the bun-
Biomass overall theoretical potential vary between 3.5 and kers for fuel storage (each with volume 34 m3) of the corre-
5 million toe./year. The economical potential is assessed to sponding boiler. This volume provides for 6 hours of opera-
about 0.7-0.8 million toe. /year. tion. Below the bunkers the feeding system is situated
leading to the cyclone chamber. The husk quantities are
The use of agricultural wastes for energy production is an
controlled via multi-camera counter whose revolutions are
important RES. Traditionally most of these wastes have
regulated by the frequency. The transportation of the husks
been either left to decompose naturally or removed and
to the burner is done via air ventilator. The length of the
spread directly on land where they have some benefits as
cylinder part of the cyclone chamber is 1 500 mm, the inner
a fertilizer. For some wastes an increasingly important al-
diameter – 900 mm. The furnace is insulated with fireproof
ternative is to recover the energy present in these wastes
bricks and is cooled via separate water flow. The cooling of
by using them as RES. This is the case with sunflower
the connection between the cyclone chamber and the fur-
husks.
nace of the steam generator is integrated within the water
During the sunflower oil production and depending on the shell of the boiler. The air coming into the furnace is pri-
technology used, sufficient quantities of sunflower husks mary (through the husk burner); secondary - above the
are one of the by-products, which can be an important en- husk burner and tertiary - through the heavy fuel oil burner.
ergy resource for the enterprise. The technologies for the At the exit of the steam generator, a flue gas ventilator is
husks´ utilization as a fuel are mainly combustion in grate mounted to transmit the gases to a cyclone dust cleaner.
boiler or refurbished one with pseudo-fluidized bed com-
Operation results
bustion.
The average heat value of liquid fuel is 9 445 kcal/kg and
The technical solution designed by Energoconsult com-
that of the sunflower husks vary between 3 485 kcal/kg and
pany consists of incorporating a special cyclone chamber
3 750 kcal/kg, so it has been proved 68,78 % of oil savings
with highly efficient operation and small size and so pro-
at an average steam generation of 4,6 t/hour. It must be
vides a feasible solution for refurbishment of in these en-
noted that during the efficiency testing, the air temperature
terprises existing steam generators producing steam over 5
varied between -1 °С tо +3 °С.
t/h and using liquid fuel and/or gas.
186 Violetta Grosoeva / Zdravko Genchev
The installation burns simultaneously liquid fuel and sun- portunity to improve system components, in respect of
flower husks. The liquid fuel consumption in nominal re- changes in the specific reaction surface of the husks and
gime of operation is 70 – 110 kg/hour and sunflower husks also related with the partial automation of the process
900 - 1 200 kg/hour. Unburned liquid fuel (rated towards management.
the husks) is not over 4 – 6 %, and dust emission levels
From the implementation of the project several conclusions
vary between 145 – 160 mg/m3. Heat surfaces are clean
can be drawn. They are valid not only for biomass but for
and no dust is observed on the flue gases track.
all RES. The following conclusions should be underlined:
The counter and the sunflower husks feeding system oper-
• The renewable energy (biomass) in some cases is still
ate stable, but they are sensitive regarding the purity of the
more expensive than the consumer price of heat and
husks. Additives like paper, chips longer than 4 cm and
electricity;
others result in engorgement of the burner. The solution is
• there are no state funds in Bulgaria for the development
a preliminary processing and sifting out the sunflower seed
of RES (incl. biomass) utilization;
before feeding into the husk room and also designing
• the Energy and Energy Efficiency Law (1999) treats
proper outlets to clean up the track from the feeding fan to
only generally RES. Renewables are still not considered
the burner.
a priority in legislation and there are no incentives for
Investment their utilization;
• decentralization of the state regulation and larger
Total investment for both boilers´ refurbishment and reno-
autonomy of the local and regional authorities leads to
vation, installation, start-up period, a twelve months main-
the development of their natural resources as they see
tenance guarantee, as well as staff training, etc. amounted
triple dividends: environmental improvements, economic
to 157 000 €. It has been calculated that the payback pe-
development, and increased employment.
riod should be 1 1/2 year at the fixed price of the liquid fuel
of 100 €/ton (1999). However, even with the increase of the The biomass utilization as an energy source is a new phi-
price of the liquid fuel to 150 - 180 €/ton and depending on losophy in our country and requires a new way of thinking
the load of the installation, it is considered that the payback and a new approach for development. Joint efforts are
period should be nearly 2 campaigns. necessary, both on the part of state with its regulatory func-
tions, and on the part of the entrepreneurs and financing
Conclusions
institutions. Regional and national information campaigns
The operation during the first year of this system has are needed, showing the advantages of biomass utilization
proven the capacity and the investment benefits for the for the energy savings and for the environment.
proprietor - Papas Oil Ltd. The experience provides the op-
2. Best Practice: the case of combined heat and power (CHP)

Implementation of small CHP units in Bulgaria
Basic information Large scale CHPs are implemented in Bulgaria for a long
time. The overall objective is to demonstrate the economic
Bulgaria has limited energy resources. For this reason one
and environmental benefits by using also small-scale CHP
of the main policies in the field of energy is the energy effi-
applications in the industry and in the building sector.
ciency. Co-generation is one of the most effective tech-
nologies for the rational use of energy. The advantage of Sofia Energy Centre (SEC) in its effort to promote small
cogeneration is measured with the energy savings CHP, selected four sites and for each of them a detailed
achieved when compared with the separate generation of pre-feasibility study has been performed. Sofia Energy
electricity and heat. It is estimated that through the use of Centre as a Co-generation Centre in Bulgaria took part in
cogeneration systems the possible reduction of primary implementation of a CHP unit in the district heating com-
energy consumption is up to 35 %. pany of Pravets, Bulgaria.
CO2 emissions NOx emissions

Site Investment (k€) Payback (years)
reduction (t/y) reduction (kg/y)
Vitavel SC 926 7,4 7464 17774
Regional Hospital Lukovit 254 8,7 1620 3851
Regional Hospital Mezdra 302 7,9 2166 5284
Regional Hospital Novi Pazar 376 7,9 2778 7191
The site It has been integrated in the existing infrastructure of the

DH company.
DH Pravets is located in the small town of Pravets, Bul-
garia, and it supplies thermal energy for space heating and Expected benefits
hot water production to about 1300 households and to in-
It is forecasted that at about 8 200 operational hours/year
dustries and public organizations equivalent to another
the annual primary fossil energy savings are about 2 280
1300 households. The company operates about 18 km
MWh which makes annual net cost savings of about 50
network and 100 sub-stations. Nearby there is a main gas
000 €. At present conditions the expected pay-back period
pipeline. There is continuous heat demand though varying
is about 6-7 years. The derived from above parameters
throughout the year.
CO2 emissions savings are some 800 tons a year.
The project
Main reasons for the project
A modern CHP gas-fired unit was installed in the DH Com-
to demonstrate the economic and environmental benefits of
pany with 774 kW thermal and 526 kW electrical capacity.
CHP for the small and medium industries in Bulgaria. The
The unit is foreseen to be in operation all year round, so
overall project target is to realize significant reduction of
during the peak season (winter) it will supplement the exist-
energy consumption and therefore – of greenhouse gases
ing heat boilers, while during the summer it will be operated
at the DHC Pravets.
only to supply hot water to the DHC customers. About 15%
of the produced electricity is to be self consumed and the In the long run targets are also: development of knowledge,
rest is to be sold to the utility. management capabilities and information in the field of en-
ergy efficiency and creation of sustainable cooperation be-
The investment
tween Bulgarian and Netherlands companies and organiza-
The overall initial investment costs of the project are about tions.
300 000 €. It has been realized under a JI scheme for co-
Project sustainability and potential for
operation between Bulgaria and the Netherlands. The
domestic replication
funds for project investments were provided as a grant by
the Dutch Program SENTER, and there were about 10 000 A market analysis was made within the project realization
€ additionally provided by Pravets DH Company related to and it revealed that the replication potential of this type of
the necessary infrastructure and local connections provi- projects is significant in Bulgaria. Similar projects can be
sion. realized in:
The equipment • Hospitals and other medical facilities;

• hotels and large buildings;
The CHP unit is manufactured by the company Dynaf
• greenhouses;
Spruyt Group and is equipped with:
• small industries;
• a complete heat recovery system; • heating companies, etc.
• a telemetric communication system;
• a sound reducing canopy.
3. The project for investment in schools – investment in the future

The costs of schools in Bulgaria are covered entirely by the ment (storage heaters, etc.) are installed or a shift of the
local authorities. For this reason the issue of how to reduce traditional fuel base is effected (gas-fired heating). Systems
the energy costs for space heating and lighting in school for modern energy management are demonstrated and/or
buildings is an issue of major concern for municipal ad- activities aimed at involving pupils in energy conservation
ministrations. At the same time, heating and lighting in through games, contests and other appropriate forms are
many schools is below the modern norm requirements. In organized.
its capacity of the Secretariat of the Municipal Energy Effi-
Financing opportunities and schemes
ciency Network EcoEnergy, the Center for Energy Effi-
ciency EnEffect implements a number of projects in Bulgar- The local authorities' capacity to finance energy efficiency
ian schools. These projects are financed through different projects in schools are very limited. For this reason, al-
international programs, having their specific objectives and though this type of projects are paid back within acceptable
tasks, and may be grouped in three major directions: (a) time limits by the achieved savings, municipalities rely in
reduction of municipal expenditure for covering the energy the first place on external grant financing under interna-
costs of school buildings; (b) reduction of GHG emissions tional programs. In the recent time there is a growing num-
and improvement of the indoor climate in school buildings; ber of initiated projects whose financing is procured
(c) impact on public behavior. through bank loans. An option of particular interest among
municipalities is the application of financing schemes
The project "Energy Efficiency Strategy to Mitigate GHG
based on "third party financing" through energy services
Emissions. Energy Efficiency Demonstration Zone in the
companies (ESCOs), as well as the use of the Develop-
City of Gabrovo, Republic of Bulgaria", financed by
ment Credit Assistance (DCA) mechanism of the US Gov-
GEF/UNDP, is a specific laboratory for new ideas and solu-
ernment.
tions. In its framework a demonstration project for retrofit of
a school building has been implemented and later this ex- Several lessons learned from implemented projects
perience was replicated many a time in other municipali- Despite the variety of specific conditions under which en-
ties. On the grounds of the lessons learned from these ret- ergy efficiency projects in school buildings are imple-
rofits several summary conclusions may be made, the most mented, there are several common conclusions that may
significant among them being as follows: be made from them:
Main components of the projects (a) Investments for the majority of energy efficiency pro-
Projects for school buildings retrofit have been developed jects in Bulgarian schools feature a payback period of
and/or implemented in Bulgarian municipalities that differ 3 to 5 years. This makes them in general suitable for
broadly in terms of characteristics or capacity. The state of bank crediting.
the buildings and their technical equipment also vary within (b) In many schools, in which projects are implemented,
broad limits. Nevertheless, there is great similarity among the rooms were heated and lighted far below the
the measures applied in this multitude of projects and they norm requirements. For this reason, although in the
may be combined as follows: (a) measures on the building majority of cases the applied heating and lighting
envelope; (b) measures on the space heating systems; and systems and components are effective per se, the
(c) measures on the lighting systems. The most frequently relative energy costs are low. This is a low baseline
applied technical measures are repair and weather- that deteriorates the economic indicators of the pro-
stripping of windows and doors, rehabilitation of space jects and has a negative impact in case of application
heating yards and introduction of automation, fitting of de- for bank crediting.
vices for individual control of heat supply, partial insulation (c) A serious barrier to this type of projects are the en-
of different premises and installation of reflector screens forced legal restrictions to bank crediting of munici-
behind the radiators, replacement of the low-efficiency palities. Municipalities face problems mainly in two
lighting fixtures and luminaries in the study rooms by highly aspects - shortage of equity funds and inability to
efficient ones. In certain sites new types of heating equip- provide collateral on bank loans. The projects imple-
mented in Bulgaria with the use of the specific the use of the mechanisms and practices of public-
mechanism for partial guarantee on bank loans private partnerships is of particularly great interest.
(DCA), offered by the US Government, have proven (f) A significant achievement of the demonstration pro-
the benefits of such an instrument. ject in the city of Gabrovo was the involvement of
(d) Good opportunities are offered by packaging energy both teachers and pupils in the process of implemen-
efficiency projects that feature a different degree of tation and monitoring of the project. The substance
cost-effectiveness. A skillful combination of such pro- and importance of energy efficiency have been eluci-
jects may help implement a broader range of meas- dated through elaboration of adequate information,
ures, some of which could not have been imple- teaching and entertainment materials and aids, while
mented in isolation. A good example in this respect is games and other enticing occupations helped influ-
the combined project for energy efficiency retrofit of ence the awareness and behavior of the young peo-
school buildings and street lighting in the city of Paz- ple. This is undoubtedly an achievement with a for-
ardjik. ward-looking reach.
(e) Since schools belong to the public sector, and in view (g) The energy efficiency projects in Bulgarian schools
of the very limited possibilities for return on invest- offer broad opportunities for creation of new jobs for
ments for improvement of their infrastructure through employees with not very high qualification level, who
their primary activity (the teaching process), financing are often employed in small and medium-size com-
of school projects falls mainly within the scope of re- panies. The implementation of these projects pro-
sponsibility of social funds. This limits severely the vided conditions for involvement of a considerable
opportunities for initiation of new projects outside the number of private companies.
support through international programs. That is why
4. Energy efficiency retrofit of existing hospital buildings in Bulgaria

Energy consumption in hospitals as a burden on the budgets
Currently there are 284 hospitals in Bulgaria. The majority was implemented. The hospital is a typical representative
of their buildings are constructed prior to World War II un- of regional hospitals in the majority of medium-size cities in
der conventional-type projects and through application of Bulgaria. The building features inadequate thermal and
almost identical construction methods. The energy con- physical characteristics, considerable heat losses and in-
sumption of hospitals in 2000 accounted for 43.6% of the door climate that is below the norm requirements. The
total energy consumption in municipalities. This acts as an demonstration project has been implemented thanks to the
incentive to seek for opportunities to reduce their energy grant financing and support by the US Agency for Interna-
consumption and thus save costs that would allow re- tional Development (USAID) in the framework of the Mu-
direction of the limited budget funds to the provision of nicipal Energy Efficiency Initiative Project.
medical services.
Project objectives
Introduction to the project for retrofit of hospitals
The main objectives of the project were: reduction of the
In its efforts to assist hospitals and municipalities to reduce energy component in the total of hospital expenditures;
their energy costs, the Center for Energy Efficiency EnEf- demonstration of the process of implementation of an en-
fect has implemented a project on Energy Efficiency Retro- ergy efficiency project; demonstration of a financial mecha-
fit of Existing Hospital Buildings in Bulgaria. The project nism for financing and distribution of the savings; identifica-
comprises two phases: working out of a pilot project for en- tion of the real energy conservation potential; demonstra-
ergy efficient retrofit of a hospital building and replication of tion of conventional and innovative energy conservation
the experience accumulated during the pilot project in other technologies; creation of prerequisites for introduction of
hospital buildings throughout Bulgaria. During the first energy management in the hospital; dissemination of the
stage of the project an energy efficient retrofit of the “Dr. experience accumulated during the demonstration project.
Tota Venkova” Regional Hospital in the city of Gabrovo
Energy efficiency measures • considerable reduction of local environmental pollution -

30% reduction of CO2 emissions and 26% reduction of
As a result of an energy audit, energy saving measures
SO2 emissions.
were proposed, divided into three groups:
Financial indicators
Group I: Energy conservation measures on the boiler yard
Group II: Measures on the building envelope The total value of the project amounts to USD 355,927.
Group III: Measures on the in-house systems The Hospital and the Municipality of Gabrovo contributed
through their internal funds and their participation in project
One of the principal implemented measures was the instal-
implementation, as well as with some additional energy
lation of a new air conditioning system in the surgery unit.
conservation activities that were realized during that period.
Besides energy savings, it led to the improvement of the
indoor climate and attainment of the conditions prescribed The achieved savings amount to 481 tons of heavy oil and
by the standard requirements for a surgery ward. The new 186,670 kWh of electricity per annum. The energy costs of
system, Model EPCH 5 of SEMCO Inc., USA, is both an the hospital have diminished by USD 92,210 per annum,
established and at the same time innovative technology, that makes savings of the range of 37%. The simple pay-
which is the first of its kind applied in Eastern Europe. It back is 3.9 years. A physical expression of the good finan-
ensures 100% fresh air supply at exhaust heat/cooling re- cial results of the project is the fact, that thanks to the
cuperation efficiency rate of 80% via a regeneration heat achieved savings the hospital succeeded to finance with its
exchanger with specific coating of 3 Angstrom (1 Angstrom own funds the repair of the gullies and rehabilitation of the
= 1х10-10 m) molecular network, protection of air mixing surgery ward through replacement of the joinery.
and facilitated humidity control. The respective third stage
At the request of the donor, an agreement for distribution of
of high-grade filtration (HEPA filters having 99.99% effi-
the savings between the Municipality of Gabrovo and the
ciency) in the pressurizing pipeline has been duly replaced
Hospital was signed. In view of the grave financial state of
and restored. The high and stable coefficient of efficiency
Bulgarian hospitals, the larger portion of the monetary sav-
of the system reduces energy consumption at heat-
ings (70%) has been allocated to the hospital budget. 30%
ing/cooling duty and thus leads to reduction of energy
shall be retained in the budget of the municipality, whereat
costs. The advantages of the selected technical solution
the municipality commits itself to use its share for imple-
are in the reduced installed capacity of the cooling aggre-
mentation of other energy conservation projects.
gate and about 50% lower prices of the equipment of the
cooling loop. Dissemination of the results
Main benefits from the project The results from the Gabrovo project have been presented
at the regular Annual Conference of the Municipal Energy
The principal benefits for the hospital in Gabrovo as a re-
Efficiency Network (MEEN) EcoEnergy, in which the Mu-
sult of the applied measures were as follows:
nicipality of Gabrovo is a member, by the MEEN Secre-
• Reduction of the annual consumption of heavy oil by tariat CEE EnEffect. Three hospital retrofit projects were
36% and of electricity by 15%; initiated following the example of Gabrovo: the regional
• considerable reduction (by 37%) of the annual energy hospitals in Stara Zagora and Varna (project of USAID),
costs of the hospital under a situation of budgetary and the municipal hospital in St. Ivan Rilski hospital in
shortage and growing energy prices; Gorna Oryahovitsa (Ecolinks Program).
• improvement of the comfort in the hospital building;
The project has won the 1998 International Energy Project
• attainment of the standard levels for indoor climate in
of the Year Award of the Association of Energy Engineers,
certain specific hospital wards;
Atlanta, USA - one of the most prestigious awards for in-
ternational projects.
5. Municipal Energy Efficiency Network EcoEnergy

General review Key thematic studies have been conducted on the most
typical barriers to energy efficiency in Bulgarian municipali-
The Municipal Energy Efficiency Network (MEEN)
ties and recommendations on how to overcome them have
EcoEnergy is a non-formal voluntary non-profit association
been formulated. Concrete proposals on how to resolve ur-
of Bulgarian municipalities, founded in 1997 by the Mayors
gent issues of the energy reform in municipalities.
of 23 municipalities. Currently its membership comprises
35 municipalities and 4 associations of municipalities, rep- For a first time in Bulgaria realistic long-term energy pro-
resenting more than one half of the country's population. grams and annual action plans have been worked out for
The strategic objectives of the Network are as follows: (a) Network member-municipalities. To this end a genuine
to integrate energy and water efficiency in the policy for methodology and a guide to energy planning and man-
sustainable development of municipalities; (b) to contribute agement have been elaborated. Currently, training of Bul-
to reduction of the energy costs of municipalities; (c) to garian, Serbian and Moldavian municipalities is conducted
contribute to reduction of the energy costs of energy end- on this basis. The programs, worked out in the framework
users. of the Network, have already been approved by the Mu-
nicipal Councils of several municipalities now.
The founding and activity of MEEN EcoEnergy were sup-
ported by two international projects: the Municipal Energy Considerable advance has been achieved in the develop-
Efficiency Initiative Project of the US Agency for Interna- ment of an integrated municipal energy database for the
tional Development and the GEF/UNDP-funded project En- Network member-municipalities. This database provides
ergy Efficiency Strategy to Mitigate GHG Emissions. En- valuable historical and up-to-date information about the
ergy Efficiency Demonstration Zone in the City of Gabrovo, state of the energy sector in municipalities, the energy con-
Republic of Bulgaria. Several Network member- sumption of the sites whose costs are covered by municipal
municipalities (Stara Zagora, Rousse, Varna) have created budgets and the potential for implementation of programs
energy agencies, which in co-operation with the Network and projects for energy and water conservation. The data-
and other interested organizations on the area of the re- base is developed on the basis of a specifically designed
spective municipalities, implement a large variety of activi- computerized software, interest in which has already been
ties to the benefit of the respective municipality. manifested by several countries of the region of Southeast
Europe. An active website of the Network is maintained in
Some more noteworthy outputs and lessons learned
Internet.
Four and a half years after the founding of the Network, the
Through EcoEnergy and with the assistance of interna-
below listed more important outputs and lessons learned
tional experts a certified team of trainers on energy plan-
from its activities may be reported:
ning and management has been trained. These trainers, on
EcoEnergy has established itself as a respected associa- their turn, are currently realizing an ambitious long-term
tion of municipalities, acting as a partner of state institu- training program for Network member-municipalities, as
tions and public organizations in decision-making related to well as for municipalities of other countries from Southeast
municipal policies in the fields of energy and water re- Europe.
sources. It conducts its own studies and renders advisory
Several demonstration projects have been implemented in
services to municipalities.
the framework of the Energy Efficiency Demonstration
For a first time specialized Energy Efficiency Offices were Zone in the city of Gabrovo (rehabilitation of the systems of
set up within the municipal administrations as local subdivi- district heating and street lighting, retrofit of the regional
sions of the Network. Their major task is to create munici- hospital, a school building, a residential building and an in-
pal energy information systems (databases), to develop dustrial building). The outputs and lessons learned from
energy programs and plans, to identify and develop pro- these projects are being evaluated, summarized and dis-
jects for energy conservation in municipal sites. seminated among the rest of the Network members.
Energy efficiency investment projects have been worked tance (DVA) have been worked out and are being imple-
out jointly with the Network in the majority of the member- mented in the cities of Pernik, Pazardjik and Silistra. In oth-
municipalities. Part of these have already been imple- ers, third party financing is realized with the participation of
mented, others are underway and yet others are in the local and foreign ESCos.
process of search of funding. The most typical projects are
Another attractive mechanism for project financing, based
those for upgrading of municipal energy end-use sites -
on partnership between municipalities and private US com-
street lighting, hospitals, schools and kindergartens. Cer-
panies, is contained in the Ecolinks Program of the US
tain projects are being implemented in the residential sec-
Agency for International Development. On this basis a pro-
tor as well - apartment blocks, in which the dwellings are
ject for retrofit of the hospital in Gorna Oryahovitsa has
privately owned. Part of the projects have been identified
been developed.
and worked out in the framework of the training programs,
conducted by the Network. Guides on accessible financial sources and financing
mechanisms have been developed for use by Bulgarian
Also in the framework of the Network there have been im-
municipalities wishing to implement energy efficiency pro-
plemented projects, through which innovative for the Bul-
jects. The model of EcoEnergy and the accumulated ex-
garian practice mechanisms for financing and/or guaran-
perience are being used in the development of the Re-
teeing of bank loans for energy efficiency projects are be-
gional Network for Efficient Use of Energy and Water Re-
ing tested. Thus, for instance, projects with the use of the
sources (RENEUER) for Southeast Europe.
credit guarantee mechanism Development Credit Assis-
Country Report: Czech Republic
Selected Best Practice Projects and Measures
Tomaš Vorišek
1. Biomass energy portfolio

The use of biomass energy is becoming a more and more attractive option for the local authorities of Czech towns and villages
as they look for ways to bring finances and employment opportunities into the region. Although there is a National support pro-
gram providing subsidies of up to 80 % of eligible investment costs, many municipalities are unable to raise the remaining funds
due to their very limited budgets and the lack of sufficient assets usable as guarantees. This situation (the possibility of state fi-
nancing to cover a large proportion of the investment costs) is therefore an attractive option for JI activities (as the JI investor
gets emission reductions at minimal cost) which could provide the financial help required to put these projects into practice. This
potential has been recognized by the Dutch company BTG which has recently started a nation-wide project in the Czech Repub-
lic (calling it Biomass energy portfolio) which aims to assist in the implementation of 28 projects related to biomass use especially
in the municipality sphere. Such co-operative arrangements could lead to an increased number of implemented projects for the
benefit of local inhabitants and sustainable living.
The current use of biomass for energy purposes in the substituted by woodchips made from logging residues and
Czech Republic is at present estimated at 1,5-2 million tons optionally, where technology allows, also grain/rape straw.
per year (dry matter), mostly in the form of firewood (used
As far as the residential sector is concerned, although most
as a fuel in individual ovens/boilers especially in rural ar-
of the biomass burnt in local ovens or boilers is firewood, a
eas) and residues from wood processing (sawdust,
significant market share has been achieved by wood-gas
wooden chips etc.) usually partially burnt at the place of
producing/burning small boilers (heat capacity 15-50 kW)
origin (at sawmills, joiner’s workshops and other wood-
for family houses, 40,000 of which, according to estimates,
processing facilities).
have already been sold on the Czech market, and the mar-
At various wood-processing enterprises there are at pre- ket is growing every year by several thousand units (practi-
sent 100-150 medium- (hundreds of kilowatts of heat en- cally all made by local manufacturers of which the most
ergy output) and large-scale (units of MWs of thermal out- successful are ATMOS and VERNER). As these small
put) boilers in operation, burning wood waste originating boilers require a fuel (wood) with a very low moisture con-
from the processing of wood. They usually only produce tent (less than 20 %), this creates a growing demand for
heat which is used for the drying of rough timber and/or the higher quality bio-fuels such as wood/straw briquettes and
heating of companies’ premises, but there are also several pellets.
installations with steam turbines (and one pilot project with
An even more rapidly expanding market sector, however, is
a wood-gas generator) allowing for the production of elec-
that of fire-place stoves. Whereas last year only roughly
tricity as well.
15,000 wood stoves were sold on the domestic market, this
In addition, more than 10 municipal biomass-fired boiler year sales are expected to increase dramatically to 20 000
houses (with a heat output of 1 - 10 MW) have been con- units (this market is also dominated by another Czech
structed in the last ten years to produce heat delivered via manufacturer ABX Rumburk).
a central heating distribution system to local inhabitants.
As the table below shows, however, the current and future
The fuel they use is mostly sawdust, shavings and other
energy potential of biomass in the CR is much greater, es-
wood-processing residues, sometimes complemented or
pecially in agriculture, where, thanks to rising production in-
194 Tomaš Vorišek
tensity, it is expected that up to 500,000 hectares of the ex- (The energy yield from one hectare of the fastest growing
isting arable land (more than 15 %) will not be needed in energy crops can reach 300 GJ which is well enough for
the next few years for agricultural purposes, thus it will be meeting the annual heating demands of up to three family
possible to use them for growing other (energy) crops. houses.)
Table 1 The potential of bio-fuels in the Czech Republic to 2020 (million tons of dry mass)
Years
Bio-fuel Source
2000 2010 2020
Wood, bark residues from logging, wood-processing 2,6 3 4
Grain straw 25-40% of crop with 4-5 t of straw per ha 1,6 2,2 3
Rape straw 90-100% of crop with 3,5-4 t of straw per ha 1 1,2 1,5
Hay, reed from 20% of persistent plant cover with 2-3 t of hay per ha 0,8 1 1,2
Energy crops, SRF* plantations of fast-growing plants/trees 0 4 6
Wood waste, coverings waste from construction industry, municipal waste and coverings 0,6 1 2
Total 6,6 12 17,7
*) short rotation forestry
Although the subsidies provided at present by the State boiler systems. The owners of the systems are mainly mu-
Environmental Fund (SEF) to towns and villages for the in- nicipalities, two of them are private companies. In a few
stallation of biomass boilers in centralized heat delivery projects a co-generation system is to be installed for the
systems and hot water preparation can reach as much as production of heat and power. The thermal capacity of the
80% of the investment costs of selected projects (max. 50 installations ranges from 600 kWth to about 24 000 kWth.
% in the form of a grant and the rest as a zero interest The total thermal capacity of the 28 projects amounts to
loan, according to the current rules), many municipalities 130 MWth.
are still unable to invest in new bio-energy installations be-
The projects in the portfolio vary in their level of develop-
cause of their very limited annual budgets.
ment. The first are planned to be implemented in 2001 and
And, as it is impossible for most Czech municipalities to get the last in 2003.
a loan from a bank because they are often unable to pro-
The company’s role in these projects is to supplement the
vide a sufficient guarantee, and the possibility to use the
municipalities’ funds and the national support program
planned investment itself as a guarantee (collateral) is not
(managed by SEF). It is supposed to provide a maximum
accepted by Czech banks, a lot of projects never get past
of 10 % of the planned investment which is, however, often
the planning phase.
crucial for the realization of the project.
However, an illustration of how these barriers can be over-
For this, the company will be then assign claims on emis-
come has recently been provided by the Dutch company
sion reductions (counted in so-called emission reduction
BTG (Biomass Technology Group B.V.), which, within the
units – ERUs, where 1 ERU is equal to 1,000 kg of CO2
framework of Joint Implementation activities financially
equiv.), which will come from these projects in the future, if
supported by the Dutch government, has launched a JI
they are realized.
project in the Czech Republic on the promotion of the wider
use of biomass especially in the municipal sector. The preliminary estimates of the company are that the vol-
ume of ERUs „produced“ by all these projects combined
Biomass energy portfolio, as it is called, is not actually a
could, in the key years 2008 to 2012 (the time when the
single project but consists of a portfolio of (currently) 28 in-
Kyoto obligations should be fulfilled) reach a minimum of
dividual biomass energy installations to be implemented in
0.5 million, with an optional additional volume of 0.7 million
various places across the country. These projects mainly
if all the planned projects are well implemented and run-
consist of the replacement, renewal, extension or new con-
ning. The maximum emission reduction potential of the pro-
struction of municipal heating systems, where biomass
jects as a whole is thus 1.2 million tons of CO2.
(wood and straw) boilers will replace old coal or gas-based
These ERUs (in reality claims on ERUs, as only countries - ning of December, and it is offering Senter the above
Parties to the Kyoto Protocol - can own ERUs) will be then stated amount of CO2 carbon savings for the price of 9
purchased in a tendering procedure by a Dutch company EUR/ERU. Since the price per ERU Senter expects is
Senter, which is in charge of running a national program on however much lower (2-5 €), the final price will depend on
CO2 reduction called Carbon-credits on behalf of the Dutch the bids (ERU amounts and prices) offered by other com-
government. petitors (investors in JI projects).
The BTG company has recently registered this project in If the offer made by BTG is accepted, the company prom-
the JI sub-program of Carbon-credits called ERUPT, which ises that any possible profit would be then re-invested in
opened the first tender for ERUs purchasing at the begin- further bio-energy projects in the Czech Republic.
2. Fuel-switching, district heating reconstruction, and combined heat

and power generation in city of Decin, North-West Bohemia
The city of Decin was one of the pioneering projects co- mand from the district which was then on average 107 000
financed under the Joint Implementation Initiative. The pro- Gigajoules (GJ) per year.
ject with investment costs of 230 million CZK (7 million €)
Thus, emissions from the plant were extremely high. In ad-
included fuel switch from coal to natural gas (11 MW), up-
dition to SO2 (over 68 tons/year) and airborne dust (3,190
grade of distribution network, and installation of combined
tons/year), the Bynov plant was also producing around
heat and power units (5 MW el, 7 MWth). The investment
19,582 t of CO2 every year (calculated on the basis that the
costs were financed by 75% with a subsidy from the Czech
average carbon content of North Bohemian lignite is
State Environmental Fund, 9% was a donation from Danish
41.8%)
government, 6% own capital of the City of Decin, and 8%
was a zero interest loan from US utilities (owners of emis- After several unsuccessful efforts to find the necessary
sion credits under JI agreement). The project demonstrated funds, the city's representatives finally decided that the re-
contractual arrangements for JI projects, however, due to construction of the Bynov heating plant should be proposed
its high costs of the technology used it is not replicable on as a pilot project for the then nascent Joint Implementation
a commercial basis without subsidies. Initiative. In this they were successful: with the aid of the
Center for Clean Air Policy, they managed to obtain an in-
Detailed project description
terest-free loan of 0.6 million USD for the conversion of the
The city of Decin, due to its location (in a deep valley in a district heating plant from a coal (lignite) burning to a natu-
heavily industrialized part of North-West Bohemia) and its ral gas-fired facility which would provide both heat and po-
energy dependence on lignite coal (extracted on a large table hot water to local apartment blocks. In return for pro-
scale from the nearby North Bohemian Brown Coal Field), viding the funding, the three American utilities will (under JI
experienced one of the highest concentrations of sulfur di- rules) gain recognition for the carbon dioxide reductions
oxide, dust, and other pollutants in the Czech Republic. For achieved on-site by the project.
this reason, the first democratically elected leaders of the
However, due to lengthy negotiations over the means of
town after the collapse of the Communist regime immedi-
verifying reductions in real emissions and their recognition,
ately began to take action to improve the local environ-
and thanks to the provision of further financial support by
ment. One of the measures proposed at this time was the
the Danish Government and the Czech State Environment
reconstruction of one of the most inefficient heating plants
Fund, extensive modifications to the original project were
in the town supplying the city's Bynov district.
made over the course of time. The project was gradually
The underlying reason for the reconstruction of the Bynov extended to also include energy efficiency measures in the
district heating plant was that, due to its low combustion ef- distribution network, and ultimately four co-generation units
ficiency (below 63%), this 19.6 MW facility had annually to were installed as the major producers of both heat and
consume around 12 800 tons of lignite (170 000 GJ of the electricity thus changing the new gas boilers` role as only
primary energy content in the fuel) to cover a heating de- peaking sources. (The inclusion of co-generation units was
196 Tomaš Vorišek
required by the Danish government as a condition for the Project results

provision of their grant.)
The results of the project, after nearly five years in opera-
The construction phase of the project began in 11/1995 tion, brings mixed results. From the ecological point of
and in less than one year (09/1996) it was finished. The view, the project is undoubtedly a success. Thanks to co-
whole project in the end consisted of: generation, not only on-site (due to fuel-switch), but also
off-site emission reductions are reached by the project.
• the replacement of the existing coal-fired boilers with
two gas-fired boilers (produced by the Danish manufac- However, as the original projections of heating consump-
turer VOLUND) with a common heat accumulator and tion were too “optimistic”, the real emission reductions are
total thermal output of 11 MWth, lower than estimated. None the less, with a real annual
• the switch from steam to hot-water heat distribution combined production of between 80 000 and 90 000 GJ of
(with the installment of pre-insulated hot-water pipe- heat, and around 15 000 MWh/year of electricity (meaning
lines), and the construction of new heat transmission that an average energy production efficiency of approxi-
stations, mately 87% is being achieved), the carbon dioxide on-site
• the construction of a new facility to house four DEUTZ emission savings (against the reference scenario *) amount
gas engines with a combined capacity of 5.2MWe and to 6,000 tons/year, and together with off-site emission re-
7.1 MWth. ductions made due to co-generation, the total emission
savings reach nearly 18 000 tons of CO2 every year
Project financing
Total Grant Equity Debt If future heat demands (= production) do not differ greatly
Investors from current levels, then with an anticipated project lifetime
mln € mln € mln € mln €
Czech State Environmental of 25 years the total CO2 savings will probably range be-
5,2 2,6 2,6*
Fund (SFZP) tween 400 000 and 450 000 tons. That, translated into CO2
Danish Ministry of abatement costs, would mean approximately 530 CZK or
0,6 0,6
Environment and Energy
16 € per ton of CO2 reduced.
Three American Utilities
0,56 0,56** * It is assumed in the reference (baseline) scenario that the
(ComEd, NIPSCO, WEPCo)
plant will produce the same amount of heat as was pro-
City of Decin 0,45 0,45 duced by the reconstructed plant in the year 2000, with the
same heat production efficiency (i.e. 63 %) as before, and
Sum cca 7 3,2 0,45 3,16 from the same lignite coal as before (i.e. with an average
heat value of 13.28 MJ/kg, carbon content of 41.8%, and
Exchange Rate: 1 € = 33 CZK thus an emission factor of 0.115 t CO2 per GJ of energy
*) an 8-year loan with interest rate of 0% contained in the fuel).
**) a 25-year loan, also at 0% interest
Electricity Coal / Nat.Gas Energy Content of CO2 savings (due CO2 savings
The Bynov Heat demand CO2 emiss.
produced consumed Fuel (Coal/Gas)* to fuel change) ** (due to cogen.) ***
District Plant
GJ / year MWh / year t,mln.m3/year GJ / year t / year t / year t / year
BEFORE 107,000 0 12,800 170,000 19,582 - -
AFTER
96,000 24,137 6,210 207,476 12,187 5,373 19,068
(est. 2001)
AFTER
81,238 14,663 4,588 153,285 8,763 6,066 11,584
(year 2000)
*) The heat value of the lignite used in the plant was on average 13.28 MJ/kg, while natural gas has a heat value of 33.41
MJ/m3
**) CO2 savings due to fuel change were calculated using an emission factor of 0.115 t CO2/GJ of energy content of the lignite
coal (with energy production efficiency of approx. 63 %) and 0.058-9 t CO2 /GJ of natural gas
***) The emission factor for electricity from the grid is 0,79 t CO2/MWh
3. Energy performance contract project in Bulovka Hospital, Prague

The Teaching Hospital Na Bulovce represents one of the The hospital's primary steam heating distribution infrastruc-
first and also largest EPC projects implemented so far in ture was thus replaced by pre-insulated hot-water pipelines
the Czech Republic in the public sector. The project in- and connected to the urban heat distribution grid of the
vestment costs reached more than 70 million crowns (appr. Pražská teplárenská joint stock company; furthermore, new
2 million €) and were financed on a commercial basis individual exchange stations were constructed in 14 build-
through the ESCo. The project also received a minor finan- ings. The heat and hot utility water distribution networks in
cial support from the Czech Energy Agency (5 million CZK all of the buildings were also renovated, and the distribution
or 0,15 million €). The actual heating cost savings reached system was equipped with a central monitoring and regula-
nearly 40 % (24 million CZK or 0,7 million €) and heat con- tion supervisory system.
sumption decreased by 46 % (104 000 GJ/year). The pro-
As far as the LFO-fired boiler house is concerned, it was
ject has a simple pay-back period of 4,2 years and the En-
not shut down, but was converted to run on natural gas
ergy Performance Contract has been signed in 1994 for 8
fuel; it will serve in future only as a reserve source, how-
years.
ever.
Detailed project description
Beyond these measures, the project also included the in-
Located in the northern part of the Czech capital, Prague, stallation of a new medium-pressure steam gas boiler to
the state-owned Na Bulovce Teaching Hospital with its 1 meet requirements for technological steam, and measures
650-bed capacity is one of the largest healthcare facilities for the recuperation of heat within the buildings by way of
in the Czech Republic. The hospital comprises around 20 air-conditioning were also implemented.
buildings, with a total floor area of some 80 000 m2.
The total project costs were 72 million CZK, and EPS ČR
Before the project, all of the hospital buildings were con- Ltd. served both as general contractor and major investor
nected to a hot-water or steam distribution system that in the project (the other investor was the Czech Energy
supplied them with heat produced in the hospital's own Agency, which contributed a 5 million CZK subsidy). Engi-
boiler house, which ran on light fuel oil (LFO). neering works constituted the smaller part of the project
budget (8.4 million CZK), the majority (63.6 million CZK)
This situation, however, gave rise to major problems for
being spent on technological equipment.
which the hospital's representatives had to find a solution;
the heat distribution system was in a poor state (given that A contract for "Energy Services" between EPS ČR Ltd. and
much of the indoor and outdoor distribution piping dated the Hospital was signed in March 1994 (to run for 8 years)
back to the hospital's founding in the 1930's), the price of and two months later the first works began. The whole re-
LFO was high, and the hospital was required to pay air pol- construction project took twelve months to complete, and
lution fees (170 000 CZK/year). the project was officially commissioned into service in De-
cember 1995. The project thus described consisted of:
A solution was suggested by one of the first ESCO firms in
the CR, EPS ČR Ltd., the Czech subsidiary of U.S. firm • the connection of the hospital facilities to district heating
PECO Energy Co. The company proposed a plan for the and gas main pipelines,
complete reconstruction of the distribution system, to be • the construction of 14 new heat exchange stations in in-
realized as an EPC contract, thus sparing the hospital's fi- dividual buildings,
nancial budget from any capital expenses. Once the hospi- • the reconstruction of the heat and hot utility water indoor
tal's representatives had been advised as to the magnitude distribution system,
of the annual savings that could be achieved by the project, • the installation of a central system of measurement and
they readily accepted it. regulation,
• the gasification of the existing steam boiler plant,
The basic measure proposed and put into practice by EPS
• the installation of a new medium-pressure steam gas
ČR Ltd. was to make use of the district hot-water heating
boiler for covering technological steam requirements,
and natural gas mains pipelines which ran immediately ad-
• the implementation of heat recuperation measures.
jacent to the hospital.
198 Tomaš Vorišek
Project financing nearly 90,000 GJ (or 46%) less than in the baseline. Ex-
pressed in terms of CO2 emission reductions, the project
Grant Equity
Investors saves nearly 1,700 tons of CO2 every year.
mln € mln € mln €
Na Bulovce Teaching Hospital - -
As far as costs are concerned, comparison of the energy
EPS ČR, Ltd. 2,03 2,03
costs for heating before (39.32 million CZK in the reference
Czech Energy Agency 0,15 0,15
scenario) and after (23.88 million CZK in the year 2000) the
Sum cca 2,2
project reveals that the financial saving last year was more
Exchange Rate: 1 € = 33 CZK than 15 million CZK (i.e. 39%). If all of the benefits resulting
Project results from the project are considered (e.g. the elimination of air
The reference heat consumption (i.e. heat consumption be- pollution payments), then the savings in financial terms,
fore the project) was agreed in the EPC contract to be according to the MVV data, reached nearly 22 million CZK
192,500 GJ/year. The projections were that, thanks to the - well over 50% of the original costs - last year.
reconstruction annual heat consumption would
decrease by at least 35-40%, thus saving around Na Bulovce Heating Costs Heat Consumption CO2 emiss.
Teaching Hospital mln CZK / year GJ / year t / year
17 million CZK per year. This would mean a sim-
BEFORE 39.325 mln CZK 192,495 GJ 17,211
ple payback period of roughly 4.2 years.
AFTER (projected) (savings ≈ 43 %) (savings 35–40 %)
The reality has brought these results. According to
23.884 mln CZK 103,743 GJ
the data provided by MVV EPS, Ltd. (formerly AFTER (year 2000) 15,523
(savings ≈ 39 %) (savings ≈ 46 %)
EPS ČR, Ltd.) for the last year, heat consumption Source: MVV EPS, Ltd.
in the year 2000 was approximately 104 TJ, i.e.
4. Low-energy, low-cost residential buildings in the Czech Republic

The low energy efficiency of buildings actually adds to the deterioration of the environment. However, due to high costs addi-
tional thermal efficiency measures often prove to be uneconomical. For existing buildings, it is the price we have to pay for the
mistakes of the past. But why make the same mistakes today as well? For this reason, SEVEn, together with local partners of the
same persuasion and with the financial help of the UNDP and GEF, has started a project whose aim is to facilitate the application
of the principles of energy efficient architecture in residential building in the Czech Republic. To prove that such an approach to
civil engineering does not necessarily have to be more expensive, one of the major outputs of the project will also be the demon-
stration(s) of low energy residential houses constructed at no higher-than-usual investment costs. Three projects aimed at the
development of the first low-energy/investment cost apartment buildings in the country are already nearing the construction
phase.
The project: „Low-energy, low-cost residential buildings in • information and practical experience sharing among
the Czech Republic“ is a three-year program running from professionals as well as the public.
1999-2002 and financed by The Global Environment Facil-
In connection to these activities, the project outputs will
ity (GEF) through The United Nations Development Pro-
also include:
gram (UNDP). The project is managed by The Energy Effi-
ciency Center (SEVEn) under the patronage of The • An evaluation of the potential for the construction of low-
Charles University Environmental Center (CŽP). energy/cost houses in the CR,
• verification of the mechanism for financing the construc-
The project itself focuses on these three major themes:
tion of these types of residential houses,
• Improving the energy efficiency of newly-built buildings • revision and recommendation for thermal-technical
in the Czech Republic, norms, with respect to their harmonization with EU
• drawing up an implementation design for low-energy, standards,
low-cost housing constructions, • the proposal of a national program for low-energy build-
ing construction promotion.
The most “visible“ result of the project is to be, however, a building), have been addressed and invited to participate in
construction of the first real low-energy/cost residential the project.
buildings in selected towns across the country to demon-
So far, three towns have expressed their „serious“ interest
strate that such an architectural design can be not only op-
in building such a residential building and becoming part-
erational but also investment cost effective and thus very
ners in the project. For them, local architects, with the help
attractive for investors.
of experts in energy efficient architecture, designed, under
To make it happen, the Czech municipal authorities, which the condition of not higher-than-usual investment costs,
are, thanks to the current legislation, the biggest actual in- residential houses whose projected energy consumption
vestors in this building sector (the municipalities are the for heating meets the criteria for low-energy buildings (£ 55
only eligible recipients of state subsidies for residential kWh/m2/year)
Investment Costs Budget Heating and Air Conditioning

Town CZK/EUR per m2 Energy Consumption
of residential area kWh/m2/year of heating area
Humpolec 17 500 / 530 35/55*
Železný Brod < 19 000 / 575 45,6
Sušice 15 000 / 455 55
Common residential building in the CR 16-19 000 / 485 - 575 100 - 120
Exchange Rate: 33 CZK/EUR
*) with/without solar gains
Figure 1: Low cost, low energy residential building for the town of Sušice
Figure 2: Low cost, low energy residential building for the town of Humpolec
Figure 3: Low cost, low energy residential building for the town of Železný Brod
200 Tomaš Vorišek
5. Efficient Lighting Initiative - Promotion of rational energy use in

industry and household appliances
The Efficient Lighting Initiative, or ELI, is a program initi- budget for the Czech Republic is $1 250 000. The ELI Pro-
ated by the International Finance Corporation (IFC) from gram in the Czech Republic focuses on three main areas:
the World Bank Group with the aim to promote energy-
Residential CFL promotion
efficient lighting technologies on those markets, where lo-
cal conditions prevent from their wider use. Because it is The countrywide campaign (top down/bottom up) started in
also the case of the Czech Republic, a special Czech ELI October 2001, with completion planned for February 2002.
program has been designed. It is now underway and con- The campaign has following main goals:
centrates mainly on promotion of CFLs for the residential • To raise consumers knowledge and awareness about
sector, municipal street lighting systems, and training of CFLs,
professionals and businesses engaged in lighting tech- • to change consumer behavior and stimulate them to buy
nologies. CFLs,
Detailed project description • to promote the ELI logo.
Transitional and developing countries with their immature The campaign is using a variety of channels, such as two
markets often show similar market barriers to the increased national TV stations (30´, 20´ and 10´ spots), print adver-
penetration of energy-efficient technologies. High initial tisements in 4 dailies and their supplements and in many
costs, lack of consumer knowledge, and low electricity magazines. There are also billboards (300 throughout the
prices due to subsidized or distorted tariff structures are the ČR). PR activities are also important, including the publish-
most common ones. ing of a number of PR articles and stories. The selected
Ads agency engaged at present recommended presenting
In response to this problem IFC developed with funding
the media ELI campaign as a social campaign, so the
from the Global Environment Facility (GEF) a three-year
original budget of 8 million CZK (210 th. USD) was en-
program called The Efficient Lighting Initiative (ELI), to
hanced by free space in the media and other benefits to
accelerate introduction of energy-efficient lighting tech-
the value of 20 million CZK (526 th. USD).
nologies by lowering these barriers in those countries
where such market failures still exist. ELI has co-operated closely with major manufacturers
(Philips and Osram). The ELI campaign was actually sup-
Seven countries have been identified as suitable for ELI
ported by their own campaigns (PHILIPS print ads., OS-
Program, and among them the Czech Republic as one
RAM billboards), for which SEVEn coordinated the placing
such country (besides ČR also Argentina, Peru, South Af-
of ads etc. The manufacturers are using the ELI logo in
rica, the Philippines, Hungary and Latvia).
their activities (where appropriate). The main area of coop-
Even though the market barriers in all the countries are of eration is in the POS materials. ELI developed the materi-
the same kind, with respect to different local conditions als (leaflets, POS stickers etc.) and the manufacturers pro-
there has not been designed one universal program, but for duced it at their cost and delivered it to the POS site.
each country has been appointed a local manager who, to-
The ELI campaign received the "Gold Stone Award" at the
gether with an assigned advising consultant, is responsible
end of October, a prize given by the Czech Association of
for preparation of a specific national program. The basic
Advertising Agencies for the most creative spot of the year.
elements of all the national programs are however the
same. The ELI mass media campaign is supported by other activi-
ties such as an Educational Program for Primary Schools
All seven ELI country programs last two years and are be-
(currently 160 schools have participated) and a Contest for
ing implemented in two tranches over a three-year period.
Designers on the design of luminaries compatible with
The ELI program for the Czech Republic (and for the other
CFL. There is also a local web page running -
three European ELI countries) is in tranche 2 which began
www.uspornazarivka.cz
in June 2000. The Czech program manager for ELI is
SEVEn (advised by Danish Power Consult) and the ELI
Municipal Street Lighting Program Commercial and industrial lighting
Street-lighting activities focus on encouraging municipali- The activities in this field are currently in development. We
ties to retrofit their street-lighting systems and supporting have planned the training of ESCOs and activities for rais-
installation companies in offering energy services. ing user awareness. There will be also professional training
programs for installers and one plan is to have a Transac-
As one of the first steps ELI prepared a "Street lighting
tion Fund for supporting the implementation of EE lighting
manual", a book for municipal decision-makers about the
retrofit projects.
management of STL systems. In the manual we described
the process of preparing retrofit projects, the tender proce-
Figure 4: Official logo of ELI
dures, methods of financing and other things. The manual
is the first detailed material about STL under Czech condi-
tions. The manual was delivered directly to all Czech cities
above 5000 inhabitants (250) and to another 100 smaller
cities and companies.
Based on interest from the cities and our own activities ELI
is working with cities and ESCOs on the preparation of fea-
sibility studies and public tenders for STL systems retrofits.
Currently we have two of them approved by City Councils The ELI Program as a whole is expected to yield significant
and another 10 are in various stages of preparation. In ad- energy savings and environmental benefits. Participating
dition we are co-operating with banks to develop special fi- countries are expected to avoid almost 3000 Gigawatt-
nancial products for financing STL retrofit projects. hours of electricity consumption and the emission of 15 mil-
Co-operation with ESCOs/installers to ensure implementa- lion tons of CO2 over a ten-year period. As far as our re-
tion capacity is the third key activity in this area. ELI is out- public is concerned, it is still too early for a full assessment,
lining for them the key factors required to be a successful with the ELI program now running at full speed. The first
ESCo, helping them in preparing the projects and in offer- resounds are however positive. (Further information on ELI
ing their services to customers can be found at www.efficientlighting.net)
Figure 5: The leading spot of the Czech CFL campaign (“Do you know how much your bulb is eating?”)
202 Villu Vares / Tiit Kallaste
Country Report: Estonia

Dr. Villu Vares
Dr. Tiit Kallaste

SEI Tallinn
1. Best Practice: Boiler conversion from heavy fuel oil to biomass combustion
in the Kalevi DH Boiler Plant, Kuressaare Municipality, Saare County, Estonia
Basic information Before this project was started, 4 boilers with the total ca-
pacity of 31 MW had been installed in the Kalevi boiler
Kuressaare is a city with a population of about 16 000 in
plant: oil fired hot water boilers DKVR-10 and GTP-10, a
the southern part of the biggest Estonian island - Saare-
container boiler plant with a Witermo type boiler and a bio-
maa (Ösel). About half of the inhabitants of Kuressaare live
mass boiler (a Saxlund/Tamult prefurnace and 5 MW Dan-
in multi-storied residential buildings, which are connected
stoker hot water boilers). The new investment will add to
to the DH network. District heat is supplied to the Kures-
the production capacity 7 MW and after the implementation
saare City from the Kuressaare District Heating Company
of this project the total capacity will reach 38 MW.
(Kuressaare Soojus Ltd).
Table 1 Data on heat production

Production of the existing Production of the new wood
Year Total production, MWh
wood fired boiler, MWh fired boiler, MWh
1999 80 800 27 550 -
2000 74 400 35 600 -
2001 (forecast) 76 500 36 000 2 000
2002 (forecast) 77 000 36 000 18 000
The main objective of the project was to avoid rapid in- • Prefurnace and grate– designed by AS Tamult (main
crease of heat price through burning a less expensive fuel. contractor, Estonia) in co-operation with the Saxlund AB
It should also reduce the atmospheric pollution by sulfur (Sweden) and Thermal Engineering Department of Tal-
oxide emissions. linn Technical University, produced and installed by AS
Tamult. The capacity of the converted boiler with the
The planned total investment cost is 6 million kroons, in-
moving grate is 7 MW.
cluding 4.5 million kroons for the wood fired boiler, 1 million
• Conveyors – designed by Saxlund AB (Sweden), pro-
kroons for oil boiler and 0.5 million kroons for the extension
duced and installed by AS Tamult.
of the building of boiler plant. The bank loan of 4.7 million
• Fuel bunker – produced and installed by AS Tamult.
kroons from the Eesti Ühispank was used for funding the
• Fuel push-bottom feeder –produced and installed by
project. The rest was covered by the company’s equity. No
AS Tamult, patent of the Saxlund AB.
subsidies or grants from abroad were used for the imple-
• Fans – produced by ABB (Finland), installed by AS
mentation of the project.
Kuressaare Soojus.
Main project components • Hydraulics – supplied by AS Baltfleks (Estonia), in-
Acceptable fuels for the converted boiler: woodchips as a stalled by AS Tamult.
main fuel with a moisture content of 30-50%, bark, saw- • Multicyclone – produced in Latvia, type MC-36, in-
dust, plane shavings, sawdust briquettes and sod peat. stalled by AS Tamult.
• Ash disposal system – produced and installed by AS consumption of heavy fuel oil will decrease for about 2000
Tamult. tons. Since the company has used Russian heavy fuel oil
• Installation of electrical and automatic devices – AS with the sulfur content of 2.3%, the emission of sulfur ox-
Kuressaare Soojus. ides will decrease by 90 tons per year. The emission of
• Extension of the building of boiler house – designer OÜ carbon dioxide will also be reduced for about 5 000 tons
Kuressaare Kommunaalprojekt (Estonia), builder AS per year.
Lääne Ehitus (Estonia).
Time schedule of the project:
Main “success” indicators and results
• March 2001 – Call for tenders for the construction work;
The loan will be paid back from savings based on burning a • April 2001 –Evaluation of proposals, selection and con-
less expensive fuel in the converted boiler. The estimated tracting;
annual saving will be about 1.5 million kroons (in calcula- • May–November 2001– Building activities;
tions present prices on oil and wood fuel were used). As a • November-December 2001 – Adjustment of the equip-
result of boiler conversion to wood combustion, the annual ment and commissioning.
2. Best Practice: Small-scale CHP plant at Põlva

SSCS in the DH system of Põlva municipality as a DH demonstration project, Estonia
Basic information the Utility Company and they also purchase all the excess
electricity. The Manufacturers’ representative in Estonia -
The unit is installed in an existing boiler house and supplies
Filter AS is responsible for the maintenance of the unit. The
base load heat to the neighboring district heating network
staff of Põlva Jõujaam carries out minor and routine ser-
and electricity to local industrial consumers. The Dansk
vice. The maintenance cost is less than 6 € / working hour.
Energy Management AS supervised the project. The unit
comprises a gas engine with a 3-phase synchronous gen- Main success indicators
erator of 0.4 kV. The generator is connected to the grid
The rated efficiency of the unit is 92%. The energy output
through a 0.4/10 kV transformer. The return DH water is
from the plant is sufficient enough to replace electricity de-
heated to 90°C. This level can be reached with the heat
mand otherwise supplied from Estonian oil-shale fired
from the flue gas heat exchanger, combustion air inter-
power plants and that of heat, which otherwise would have
cooler, lube oil cooler, engine jacket and high-temperature
been generated in the oil fired boiler house owned and op-
flue gas heat exchangers. The unit is installed in a noise
erated by the Põlva Jõujaam.
resistant room with a ventilation to control the internal tem-
perature and gas detector for safety reasons. Energy output in the first half of 1999
Heat 5300 MWh
The performance of the unit is controlled and monitored by Electricity 3750 MWh
a computer system. It is also possible to operate the sys- Fuel consumption 1.07 Mln Nm3
tem through a telephone network. The control system is in- The actual total efficiency is around 90-92%.
terconnected with the existing boilers; when heat demand These indices are close to the design conditions.
is increasing, an additional boiler is started. In December
The Põlva Jõujaam AS supplies heat to the consumers at
1998 the test runs were completed and since then the plant
the price of 325 EEK/MWh (20.75 €/MWh). This is lower
has been in continuous operation with only minor stops for
than the average price of heat in Estonia of 360 to 400
maintenance and repairs.
EEK/MWh.
The Põlva Municipality has owned the plant since July Reduction of emissions during 09/1999 until 09/2000
1999. It has rented the boiler house and DH network to a Emission tons per year
private company Põlva Jõujaam AS. They sell electricity CO2 7 849
via the grid to 6 industrial enterprises at 3-5% lower prices SO2 111
NOx 3.2
than those charged by the Utility Company. They also sell Solid particles 60
heat to DH consumers. The transmission fees are paid to Ash 5 551
3. Best Practice: Energy Service Company

Basic information:
Name of organization: TAMULT AS
Address: KIVILA RD.12,

HAABNEEME, VIIMSI MUNICIPALITY
74001 ESTONIA
Email: astamult@hot.ee; Homepage: www.hot.ee/tamult
Tel.: 372 6090 716; Fax. 372 6090 021
Contact person and title: JÜRI TAAL, Director
AS Tamult is a privately owned company found in 1992. combustion equipment (grates, fuel conveyers, etc.) and
There are 30 employees (8 engineers of various special- technological know-how of SAXLUND AB in the projects of
ties: such as mechanics, heat and electrical engineering boiler conversion to bio-fuel combustion, both in the Baltic
and automation). They are all graduates of the Tallinn states and Russia. The main contractor of boiler conver-
Technical University and have wide experience in their sion has become AS TAMULT whose best side includes
specialty. The welders of the company have licences to highly valuable experience as a main contractor, experi-
weld boilers, pressure tanks, pipes, etc. Other specialists ence in building and operating wood fuelled boilers, long
are turners, millers, locksmiths, electrical workers and pot- term experience of the work in Russia and Baltic states and
ters. reliable relations with sub-contracting builders.
AS Tamult operates on 3 main activity areas: AS TAMULT has won most of the competitive tenders for
building wood fuelled boilers and boiler houses where they
• heat production
have participated. Presently about 25 wood fuelled boilers
• managing of water supply systems
built by AS TAMULT are operated in Estonia, in addition 5
• designing, manufacturing, mounting and repairing of
units have been completed in Russia, 5 in Latvia and 2 in
heat equipment and automatic systems.
Lithuania.
Main services
Problems and difficulties
• Manufacturing of pre-furnaces with a capacity of 0.3 –
Most of the problems for AS TAMULT emerge from the
10 MW for firing woodchips, sawdust, bark and peat;
seasonality and wide geography of their activities. The
• Manufacturing of bio-fuel conveyors and building of
company has won a number of competitive tenders where
automatic bio-fuel storages;
actual granting of credits for the construction work is exten-
• Designing, manufacturing, installation and repair of
sively delayed. Therefore several projects pile up to be
automatic control systems;
completed promptly and it becomes impossible to keep to
• Thermal insulation works;
the planned internal schedule of the company. So the
• Masonry and refractory works;
company can perform certain responsibilities with difficul-
• Selling, mounting, adjustment and maintenance of Dan-
ties and highly qualified specialists participating in the pro-
ish, Swedish and Latvian hot water- and steam boilers.
jects are now and then either overloaded with work or hav-
Main achievements ing no work at all.
Since in 1994 one 6 MW boiler was converted to burning Main contributors to the success of the company
woodchips in the boiler house of AS Tamult within the
The success of a company is directly related to its reliabil-
framework of the Swedish EAES project. AS Tamult started
ity. Implementation of SAXLUND technology in the projects
active co-operation with the Swedish company SAXLUND
in Russia and Baltic states has improved the technical level
AB who had delivered them combustion equipment. The
and reliability of built boiler houses significantly. At the
co-operation of companies includes implementation of
same time many sided knowledge of the local situation and Reliability is even higher due to the availability of excep-
good experience in project management have allowed to tionally operative and unconditional guarantee mainte-
reach to good results at the price level of 40% lower than nance that can be considered unique under conditions in
that of competitors. the Baltic States.
4. Energy audit in industry: Study of energy process in the Tarmeko furniture factory
Basic information Main project result
Tarmeko Ltd is one of the largest industrial enterprises in Three alternatives were studied for the company:
Estonia. The company is specialized in the production of
Alternative 1. Energy production will be continued with the
furniture and saw material. Some key numbers for illustrat-
technique based on steam production. The boiler systems
ing the performance of the company:
and heat distribution systems will be renewed with the
• The company employs 1500 people today. minimum investment costs (boilers will be modernized by
• The annual output is 220 mln EEK (= 27.5 mln DM). installing a grate in them). The fuel handling system will
• The amount of purchased round beams – 100 000 m3s also be modernized. For this alternative there is no need to
per year. the fuel supply from outside, because wood waste from the
• The amount of produced wood waste – 37 000m3s per sawmill and factory premises provides sufficient supply.
year.
Alternative 2. Hot water boiler technique will be introduced
• The annual electricity consumption – 9 000 MWh.
for energy production. Heat substations in all buildings will
• The annual heat consumption – 57 000 MWh.
be renewed. The fuel handling system will be modernized.
• The company owns a boiler house with two 6.4 MW
New district heating pipelines will be built, if necessary. All
steam boilers fuelled with wood waste (about 7,000
steam pipelines will be closed.
MWh of heat per year is sold to the municipal DH net-
work). The technology used in the boiler house is obso- Alternative 3. Energy production system will be converted
lete and technological improvements are necessary. to that of a CHP plant based on a new boiler system. The
fuel handling system will be modernized and additional fuel
The study was initiated and is coordinated by the OPET
supply from outside will be organized. The heat distribution
Estonia while carried out by the Jyväskyla Science Park
system will be modernized.
Ltd, ELOMATIC OY and Central Finland Forestry Centre
(Finland).
Table 2 Main indicators of the alternatives
Present situation Alternative 1 Alternative 2 Alternative 3

old boiler 13 MW hot 12 MW/
Boiler house old boiler
(renovated) water boiler 2 MWe
Heat production, MWh/y 38 370 35 632 68 777 64 860
Electricity production, MWh/y 0 0 0 9 000
Investment, mln EEK/ mln DM - 7.55 / 0.944 43 / ~5.4 83.95 / ~10.5
Savings of costs compared with present, (mln EEK/y)/(mln DM/y)
Operating costs - 2.9 / 0.36 3.53 / 0.44 0.54 / 0.07
Heat sell and electricity savings - 0/0 6/0.75 10.95 / 1.37
Total savings, - 2.9 / 0.36 9.53 / 1.19 11.49 / 1.44
Repayment period (simple), years 2.6 4.5 7.3
Project time schedule • Credit guaranties to get loan might be problematic and
Feasibility study 09/1999 - 02/2000 depends very much on furniture market conditions.
Preparation financial options for the project 2001-2002
Success factors
Implementation 2002-2003
International actions based OPET network and bilateral co-
Problems and difficulties
operation between Finland and Estonia and JI financial
• CHP solution depends very much on national energy scheme should be the main factors to get the best final re-
policy and possible changes in the legislation and elec- sult for the company.
tricity price.
5. References
• Phare Multi-country Energy Programme. Contract No ZZ 9612/02.02. Promotion of Small-Scale Cogeneration Solutions in
CEEC’s. Information Dissemination CD.
• Põlva CHP: evaluation, gathered experience and prospective for decentralised CHP in Estonia. Draft report of the Project No.
2136/97953-006. Dansk Energi Management A/S (in Estonian).
• National Energy Conservation Target Programme. Adopted in 4 Jan 2000 by Estonian Government (in Estonian).
• Action Plan for the National Energy Conservation Target Programme. Adopted in 06.03.2001 by Estonian Government (in Es-
tonian).
• Fact sheet of OPET Catalogue: MARKET ACTORS OF THE WOOD FUEL PRODUCTION- HANDLING, COMBUS-
TION/GASIFICATION ETC. OPET Estonia.
• Energy Auditing Study of Tarmeko Factory. Jyväskylä Science Park Ltd., Elomatic OÜ, Central Finland Forestry Centre, Jy-
väskylä, 2000.
Country Report: Georgia
Climate Technology And Energy Efficiency – Disseminating “Best Practice” Experience
Tamuna Abazadze
Paata Janelidze
Climate technologies i.e. energy efficient and renewable of energy efficiency and renewable energy through the
energy technologies could play a very important role in the development, procurement and commissioning stages;
development of Georgia. Although interest has been shown • lack of an adequate legal and regulatory framework to
among various actors, only a few projects have been im- support energy efficiency and renewable energy in-
plemented. Some key barriers that have been identified are vestments;
as follows: • lack of strategies and master plans at the government
level for a long term, sustainable development of energy
• Relatively small size of the projects, which makes them
supply services, by applying integrated resource plan-
less attractive to big, international financing organiza-
ning principles;
tions (high transaction costs);
• low solvency of the population, which in the absence of
• high perceived risks of developing and financing pro-
long term and low costs financing mechanisms pro-
jects in Georgia, leading to high interest rates, short
motes the solutions with low investments costs, but
pay-back periods and difficulties in getting access to fi-
higher operation and often also higher life-cycle costs.
nance in general;
• weak financial status of the local energy companies and Due to the mentioned barriers the implementation of EE
problems in meeting the strict guarantee and collateral projects is possible in most cases only in the presence of
requirements of the possible financers; grant financing (partially or totally).
• lack of experience of the local SMEs to professionally
manage and supervise investment projects in the fields
Best practices
1. Renovation of heating and ventilation system in Tbilisi Opera House

In 1999-2000 in the framework of the TACIS program the sumption of diesel fuel. (The boiler house has been built in
pilot project at Tbilisi Paliashvili State Academic Opera and 1995 and launched in early 1996. Before that Tbilisi Opera
Ballet House aiming at the renovation of the heating and House has been connected to the centralized heating sys-
ventilation system has been successfully implemented. tem, which is destroyed since 1993). Because of this, even
if the administration of the Opera House could find finance
An architecturally unique building, the Opera House faced
for purchasing of fuel and operate boilers, it was quite cold
a huge heating problem. The ongoing energy crisis in the
inside the building including auditorium, orchestra ditch and
country has clearly revealed the inefficiency of the heating
stage. The government was unable to provide any support
and ventilation system in Tbilisi Opera House existing be-
and the director of Tbilisi Opera House asked TACIS for
fore the project, which was designed on a permanent con-
assistance.
208 Tamuna Abazadze / Paata Janelidze
The pilot project started in December 1999 by carrying out nowadays is pretty expensive compared to fuel prices dur-
a comprehensive energy audit. Based on results of this au- ing Soviet time. Before renovation it was necessary to start
dit, the TACIS expert Mr. Mircea ABRAHAMSSON, Project permanent heating at least 2 days before (!) performances
Manager Miss Tamuna ABAZADZE and the Director of but heat effect could not be achieved at all – the building
TACIS EEC, Mr. Bernard FROELICHER, worked out a was cold! After retrofitting the new heating system needs
technical solution for temperature increase in the audito- only 3 hours switching on before the performance.
rium, orchestra ditch, foyers, ballet rehearsal rooms, on the
For evaluation of energy savings, the specific electricity
stage etc.
and fuel consumption has been calculated on the basis of
A specific technical solution reversing airflow was proposed 1996-2001 data. Knowing the total annual consumption,
for the huge auditorium (for 1100 persons, area 550 m², and knowing that about 90 performances are given each
volume 9900 m³, height 18 m). For stage and orchestra year, the kWh/performance is simply the division of total
ditch it was decided to heat the space under stage and or- annual consumption by the number of performances. Con-
chestra ditch, to blow hot air to foyers, to double-glaze win- sequently, the heat (radiators, heat water) consumed be-
dows in ballet rehearsal halls and to propose some im- tween performances is integrated in the kWh/performance.
provements for increasing boilers´ efficiency.
Figure 1: Specific electricity and fuel consumption,
A local company, selected on a competitive basis, has per-
kWh/performance
formed the installation works. The following works were
25000
executed: installation of energy efficient huge air heaters 9500
20000
and fans, gas burner for boiler (all the equipment has been 8500
delivered from Western Europe); double-glazing on win- 15000

7500
dows, by-pass pipes, insulation etc. The Opera House has 10000
6500
been connected to the municipal natural gas network. The
5500
Electricity 5000
municipality of Tbilisi financed and executed gas piping and Fuel
the company CHEVRON prepaid 180,000-m³ natural gas 4500 0
1996 1997 1998 1999 2000 2001
needed for a whole heating season. The installation works
have been finished in October 2000 and on the 9th of De- As it is shown in the figure, a sharp decrease of the elec-
cember the official inauguration of the new heating system tricity consumption is observed after project implementa-
with a special opera performance and a gala concert took tion. Taking into account that at present the annual amount
place. Besides, a video-film has been shot during works of performances equals to about 90, annual savings can be
performed. estimated as approximately 220,000 kWh or 22,000 GEL
The new heating system provides heating to the auditorium (11,000 $). As for the specific fuel consumption, it has in-
up to a temperature of +25°C, stage and orchestra ditch creased because in previous years, due to the permanent
+20°C, ballet rehearsal rooms +23°C; nice warmth people lack of finances the Opera House was not provided with
find in foyers and wardrobes. Thanks to the energy effi- the necessary amount of diesel fuel. Assuming that (a) the
ciency measures implemented and energy savings energy demand for heating and hot water has been met in
achieved, the whole system keeps warm inside this huge 2001 (the necessary amount of natural gas was gifted by
building. Boiler’s efficiency has been significantly in- Chevron) and (b) 30% of energy saving was reached in ac-
creased. The ventilation system is quite effective in the cordance of experts’ estimations, the annual energy saving
summer as well. would be equal to 970,000 kWh (80.6 t of diesel fuel –
31,300$).
The project has been implemented owing to grant of TACIS
Program in amount of 34,142$. In addition the municipality The annual CO2 reduction due to electricity saving equals
of Tbilisi has spent about 10,000$ for gas connection. to 80 t (national emission factor for electricity generation in
winter - 0.365 kg CO2/kWh) and due to fuel saving - 258
Economic and environmental benefits of the project tons. Additional 198 tons CO2 emission reduction is caused
The old heating and ventilation system was designed for a by the fuel switch. The total emission reduction equals to
permanent use of fuel according to Soviet standards that 536 tons CO2 annually.
For better evaluation of the results of the project, a monitor- resources makes carrying out the comprehensive monitor-
ing during the 2001-2002 heating season has been ing a little bit complicated.
planned. However the absence of corresponding financial
2. Installation of a heating system in a residential building

by an Energy Service Company
In Tbilisi, capital of Georgia, the central heating system is flats). This led to an enormous delay in implementation and
destroyed since 1993. The objective of the project was to a first consequence was that it was not possible to heat
replace (or rebuilt) this central heating, but at the residen- during the winter 2000/2001.
tial building level. For the pilot project, a 40-flat residential
Organization issues appeared more difficult and important.
building has been selected, in which the owners of 24
For instance, according to local regulations it was neces-
apartments agreed to install a new heating system.
sary to put the gas fired boiler outside the building. This led
The new system consists of a new high quality gas boiler, to sophisticated problems with owners of the garage in the
new pipes and radiators, because the use of the existing yard, with the town-architect, firemen, Ministry of Environ-
old system would create more problems than advantages. ment etc. All these questions have been also solved, but
motivated a lot of meetings, public explanations, and -
The installation of the heating system in selected flats was
sometimes - hard discussions between neighbors.
performed by the assistance of a TACIS project that fi-
nanced equipment and manpower. The total cost of project Finally, the boiler was installed in the yard, in a private ga-
amounts to 35,350$, among them a 34,000$ grant pro- rage that has been given to the Association by his owner
vided by TACIS and the rest was covered by the owners – (free of charge). This boiler is mainly gas fired but with a
for getting an ecological license, connection to the munici- dual burner in case of gas shortage; the security given by
pal gas network and internal facing of garage, where the the fuel reserve is about 1 month.
boiler has been installed etc. The duration of the installa-
As this experience is brand new and the first one in the
tion (1 year) was longer than scheduled due to some diffi-
country, the principal success factor is that the customers
culties with the contractor. The boiler installed for 24 flats
agreed to create an association, to vote for a president and
(around 80 m2) is a 185 kW De DIETRICH 307; the burner
to pay the fees. All other classical indicators will be evalu-
is an ECOFLAM Dual 3P (combined gas and fuel), 83 cast
ated after one year of experience.
iron radiators totaling 740 sections, and the relevant pipes.
A 5000 liters fuel tank gives security in case of shortage of The main difficulty was to convince people to create an as-
gas. sociation and to believe in their neighbors and give them
confidence. Other problems were linked with corruption
This first experience gave the opportunity to check all the
and unpredictable anarchical behavior of contractor, inhabi-
difficulties of this business. Initially it was planned to fi-
tants and relevant public services. Mainly, the anarchical
nance the full installation and get the financing back
behavior of the contractor leads to the suppression of the
through an ESCO on a monthly payment basis during 7-12
creation of an ESCO, which was scheduled at the begin-
years. But in Tbilisi such company did not exist by that
ning as an important part of the system. Without ESCO, it
time. Therefore the 24 end-users have been asked to cre-
is not possible to put in operation the process of investment
ate an association, elect a president and manage the op-
and reimbursement of the loan. This is not very important
eration of the heating system.
in the present pilot project, because the investment made
Technical problems can be divided in two parts: relatively by TACIS could be never be reimbursed, but it is damage-
simple ones, related to the determination of the boiler ca- able for the ESCO because the potential company lost a
pacity, distribution of pipes etc., and more difficult ones first possibility to create a revolving fund. Moreover, without
conditioned by slight modifications in the buildings to install ESCO, the Association of Users must collect money and
pipes and radiators (some apartment-owners refusing heat- pay cash each expense that occurs: paying insurance, buy-
ing also refused to install vertical bi-pass pipes in their
ing the fuel reserve, eventually pay consequences of a jects of 1000 flats each, which will be financed by private
technical incident and especially potential water damage. Western and Georgian banks.
Never mind, this pilot project is very encouraging because As for domestic replication, the success is already 100%
all neighbors want to have the same heating, so there is al- and for international replication, conditions in Georgia are
ready a new pilot project scheduled, 10 times more impor- so specific that it is a little bit difficult to extend this kind of
tant as a first follow-up, and the effective creation of an project to other countries without sound study for each ap-
ESCO, which will take in charge all the exploitation ques- plication.
tions for the future big project, as well as the creation of a
Finally, comparing to other projects this district heating pro-
revolving fund.
jects needing huge investments at country level, it seems
If this second more significant pilot project turns out to be a that a more simple attack of the market at the level of 30 to
success, it is already scheduled to continue with new pro- 50 users could be more successful.
3. Construction of small-scale biogas installations in rural areas

Securing energy supply in the rural areas of Georgia is a that the daily production of biogas even in the winter ex-
very important task. In most cases firewood serves for the ceeded 2 m3. In summer, it is 2 or 3 times more.
rural population as the only available energy resource. The
The total cost of two biogas installations (volume of each –
increased use of wood on its turn leads to uncontrolled for-
7m3) amounted to 1800$; 1500$ were provided by the WB
est felling. Therefore the development of local energy re-
program and 300$ by BIOENERGIA Ltd. In addition, farm-
sources is of great importance. Biogas production from do-
ers provided manpower free of charge during the construc-
mestic animal manure (live-stock, pigs, poultry) could play
tion.
a significant role in the solution of the mentioned problem.
The successful operation of this pilot biogas installations
BIOENERGIA Ltd. has about 10 years experience in de-
has increased the interest of other neighboring farmers in
velopment of biogas installations (methane-tanks) in Geor-
construction of similar installations. The importance of this
gian environment. Different programs of international donor
project is conditioned also by the fact that it can be easily
organizations have supported research and design activi-
replicated for neighboring areas (for other regions of Geor-
ties. First successful biogas installations have been con-
gia with different climate, additional investigations and field-
structed in the framework of the WB program in 2000-2001.
work would be necessary). But unfortunately, due to the
This program included construction of four pilot installa-
low affordability of the population in rural Georgia, espe-
tions, among them 2 by BIOENERGIA Ltd.
cially in rural areas, and because of limited access to the
The main problem for an all-the-year-round efficient opera- small-size crediting, makes the development of biogas pro-
tion of biogas installations in Georgia is that a soil tempera- duction at the necessary level problematic.
ture above +150C is observed only 6 months a year. There-
This project represents “best practice” from the point of
fore special attention had been paid to the thermal insula-
view of public awareness rising and disseminating experi-
tion.
ence gained. The brochure on recommendations for con-
After selection of individual farms in TERJOLA district struction of biogas installations has been published [1] by
(about 200km from Tbilisi to the West) specially to the local the authorship of the president of BIOENERGIA Ltd., de-
conditions adapted methane-tanks have been designed. signer of biogas installation, Mr. A.BITSADZE with financial
For one of them the installation of an additional heat source support of TACIS. Along with general information (devel-
– a solar collector - was planned. After completion of the opment history, biogas parameters, potential of biogas
engineering design in August-December 2000 biogas in- production for different animal manure etc.) design draw-
stallations have been constructed and launched (01/ 2001). ings and detailed photographic material (65 photos show-
ing all the steps of construction of pilot installations) are
Unfortunately monitoring and evaluation of the project have
presented.
not been executed at the necessary level. It was only fixed
Supposing that a biogas installation is able to give perma- Besides these questions, very important side effects are al-
nently 3 m3 of biogas each day, this leads to a yearly pro- ready known:
duction of about 1100 m3. The methane component is 550
• To improve insulation, special bricks are in process of
m3. Taking into account methane density of 0.71 kg/m3,
development. These bricks will have a coefficient of
methane production will be 390 kg. This amount of meth-
transmission 20 times better than the bricks usually
ane would be emitted in the atmosphere in absence of bio-
used for construction in Georgia. These new bricks
gas installation, i.e. 0.39 t methane or 9,555 t CO2 equiva-
could be used for insulation in the future construction;
lent emissions are avoided. The specific heat of biogas is
this will lead to a decrease of energy at the household
approximately 22.5 MJ/m3. Annual bio-energy will reach
level.
24.75 GJ. This energy, produced by biogas combustion,
• Generalization of bio-reactor using manure will de-
provides 0.757 t C (emission factor of biogas - 30.6 t C/TJ)
crease the emission of methane. This will be computed
or 2,776 t CO2. The same amount of energy produced by
when the exact production of a bioreactor is known.
kerosene provides 0.485 t C or 1.779 t CO2. Total emission
• Generalization of bio-reactor using manure will protect
reduction equals to 9.555 + 1.779 – 2.776 = 8.558 t CO2
the underground water against pollution.
equivalent
• Bio-reactor using manure produces clean fertilizer for
The cost of this gas is presently in Georgia 0.125 $/m3. The farmers. This also makes savings for them.
yearly income is 125$. For a pilot investment of 900$, the
The considerations above are not presently priced. So, it is
rough payback return is 7.2 years. This value is only an in-
difficult to know exactly the payback return for bioreactors.
dication because, on one hand the price of a bioreactor
More over, for the farmers, it is necessary to put in opera-
must strongly decrease with the number of equipment
tion a creative system of finance. This is the follow-up of
manufactured, and on the other hand the real production in
this “best practice”, which is only at its beginning.
cubic meters per year must be known precisely.
4. The use of geothermal energy potential for hot water supply

in the Saburtalo pilot district
This pilot project has been prepared (but not implemented tive wells’ debit by compulsory pumping up of water using
yet) on the basis of UNDP/GEF Government of Georgia sunk pumps and re-injection of waste geothermal water.
project “Removing Barriers to Energy Efficiency in Munici-
At present there exist six productive wells, the total capac-
pal Heat and Hot Water Supply in Georgia“ (PDF-B Grant),
ity of which equals to 167 m3/h. The main flow of this
implemented in 1999-2000.
amount is delivered to the communal sector of Vake and
The pilot project is prepared for Saburtalo district of Tbilisi Saburtalo administrative districts of Tbilisi for hot water
and in its development besides UNDP/GEF National supply. Thermal water is supplied during the whole year.
Agency on Climate Change, Geothermia Ltd., Ministry for
The prime cost of delivered geothermal water is 0.13
Fuel & Energy, Ministry of Building and Urbanization, Mu-
GEL/m3 and its selling price is 0.32 GEL/m3.
nicipality of Tbilisi were involved.
The average payment is estimated as 20%, although it
Implementation of this project will generate benefits: firstly
should be mentioned that in those areas where the water is
CO2 emission reduction, part of which can be used as cred-
supplied systematically with relevant temperature the pay-
its and secondly the use of local geothermal recourses in-
ment is about 80-100%.
stead of imported natural gas. In the project increase of
thermal water capacity (geothermal energy potential) in Lisi In the III micro-district of Nutsubidze Plateau, which is also
thermal water deposit (very close to Saburtalo district) is supplied with geothermal water, a public organization “III
planned by creation of the Geothermal Circulation System micro-district” is founded. The responsibilities of this or-
(GCS) in the Middle-Eothen thermal water horizon on the ganization includes the collection of total communal taxes,
basis of existing wells and artificial increase of the produc- among them the geothermal hot water fee. 20 buildings
(3000 residents) of this district are supplied with hot water.
In the other districts commissioners are selected (and much satisfies the project its target (GHG reduction), it is
agreed with the residents) by the hot water distributor com- necessary to estimate the mitigation of environmental im-
pany in each building. The commissioners are supplied by pact. For this purpose the baseline and project emissions
hot water free of charge. have been estimated, which are based on the assumption,
that energy demand will be met by the year of 2018 (due to
For the construction of GCS 4 existing wells, technical
low affordability of the population, it is not met at present)
condition of which are rather better than other wells and
with annual growth of consumption by approximately 5%.
correspondingly they do not need the significant rehabilita-
The fuel switch is also supposed in energy demand model,
tion works, have been selected. For re-injection wells being
in particular it is assumed that every year about 15% of
presently conserved will be used.
consumers will purchase and install natural gas stoves in-
The total capacity of GCS equals to 200m3/h of 650C ther- stead of wood-, electric- and kerosene stoves [2].
mal water; installed thermal capacity would be equal to
10.6 MW in case of re-injection into the well of 200C water. Figure 2: Baseline and project emissions for heating and
hot water supply pilot project in Saburtalo,
Total investment equals to 3,937,000$ including
thousand tons
1,052,000$ for geothermal energy generation, 1,635,000$
35
for energy distribution and 892,000$ for energy consump-
30
tion.
25
As the next step to the pilot project heat supply by autono- Project
20
Baseline
mous boilers is considered (investments needed equal to 15
4,665,000$). 10
5
Environmental assessment
0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
In case of project implementation the fuel consumption will
be reduced, that will abate greenhouse gas emissions in
the atmosphere. An estimation of the amount of GHG and Total baseline emissions for a 20-year period (project life-
other air pollutants during the consumption of different time) are estimated at 513,890 t of CO2 equivalent (includ-
kinds of fuel is possible directly by measuring their average ing heating by autonomous gas boilers); project emissions
concentrations and indirectly by calculations using ac- at 182,265 t; consequently emission reduction makes
cepted methodologies. In both cases, to determine how 331,625 t of CO2 equivalent.
5. References
• A. Bitsadze. Recommendations for construction of biogas installations at small farms. Energy Efficiency Centre of Georgia.
Tbilisi, 2001 (in Georgian)
• P.Janelidze. Energy Demand Modelling in Heat and Hot Water Supply Sector. Bulletin of the National Agency on Climate
Change. No 9 (E), Tbilisi, 2000.
Country Report: Hungary
Selected „Best Practice” Projects and Measures in Hungary
Terez Szabo

1. Best practice: The case of biomass utilization

The biomass has the greatest potential among the renew- In Hungary the use of the biomass means first of all the
able energy sources in Hungary. Despite the favorable use of the waste wood, woodchips, firewood. The vast ma-
conditions the biomass utilization for power production has jority of this is firewood, 1 980 thousand t/year mainly used
been very seldom. This short study aims to give an over- in the households. The other significant sector is the for-
view of the present situation and tries to find those obsta- estry and the wood processing industry, they use alto-
cles that should be eliminated in order to increase the pre- gether 420 thousand t/year. The agricultural and manufac-
sent share of the biomass utilization. turing industry use altogether 150 thousand tons of organic
waste per year for energy production purposes. Unfortu-
Hungary is quite rich in renewable energy sources, espe-
nately the firing equipment being in operation is rather ob-
cially in biomass. According to estimations of various ex-
solete. Biomass firing projects applying modern, highly effi-
perts altogether 477 PJ biomass is available for energy
cient, easily operable and environmentally sound technolo-
production per year. This can be divided into the following
gies are rather low in number. According to estimations
groups:
approximately 30 % of the total installed capacity over the
• Primary biomass (agricultural by-products): 251 PJ 1 MW range can only be considered as representing up-to-
• Secondary biomass (waste of animal breeding): 91 PJ date technology.
• Tertiary biomass (waste of the processing): 105 PJ.
The Figure 1 shows the utilization of the agricultural by-
The use of the biomass for energy production started in the products, and it can be seen that almost half of the total
end of the 1970s in Hungary. In those times several bio- available quantity is ploughed into the soil, and only 1-2 %
mass projects received government support. As a result of is used for energy production. Among the biomass-fired
this more biomass and biogas reference plants were built, plants over the 1 MW total capacity the wood and wood-
but there was no real interest in operating these plants, be- chip dominate in use comparing to agricultural by-products
cause the oil prices were very low that time. Because of produced also in big quantity.
these reasons the first reference plants were closed quite
The other tendency of the last years is that growing of en-
soon in most of the cases.
ergy plants is on the political agenda. The governmental
The economic transition of the 1990s and the radical in- support of the energy plantations and the use of oil seeds
crease of the energy prices did not improve the situation as bio-fuel became quite significant in the last years.
basically. Although there are some positive signs for this
Projects implemented in the past years
such as the approval of the Energy Saving Strategy and
Action Programme in 1999 what allocates financial support The projects using biomass for energy production can be
for the extended use of the biomass in the energy produc- divided into two main groups:
tion.
214 Teres Szabo / Diana Ürge-Vorsatz
Figure 1: Utilization of the agricultural by-products (according to Zsuffa, 1997)
14%
2% 2%
11%
49%
22%
ploughing into the soil waste anim alfood
industrialuse energy production notused
• The plant uses its own by-products for energy produc- conversion to natural gas could offer a better solution
tion purpose. This solution is generally applied, the ma- (later the city was connected to the natural gas net-
jority of the existing projects belongs to this group. work).
• The biomass is purchased by the plant from a contrac- • The financial situation of the municipalities is rather bad
tual supplier and it is transported to the site. This ver- and in this case it was even worse, since it was further
sion is not so popular since usually the transportation loaded with the bank loan for the investment. Unfortu-
cost makes the fuel very expensive. nately, the city did not get enough money to perform the
necessary energy saving measures connected to this
One of the successful projects was the extension of the
investment and therefore could not step out from this
District heating plant in Tata. The investment was imple-
circle. The idea to extend the range of district heat con-
mented in 1994-95. The main parameters are the follow-
sumers, and to decrease the prices by better utilization
ings:
of existing capacities was not accepted at all. Like in
– Old boilers (1986): 2 x 3.5 MW many other Hungarian cities there is a number of public
– New boilers (1995): 1 x 5 MW institutions and houses situated in a few meter distance
– Used fuel: woodchip, wood waste from the DH pipeline which implemented their own
– Annual consumption: 13 800 t boiler house or individual heating system instead of us-
– Number of heat supplied flats: 1936 ing the DH.
– Annual sold heat (1996): 123.661 GJ • Because the transportation cost of the biomass is quite
Reduction in emission of GHG and pollutants: high therefore significant savings in fuel prices cannot
be achieved when the biomass has to be transported to
– SO2: 23.8 t/year
long distances. So the present circumstances are not
– CO2: 3280 t/year
really favorable to the long-term supply contracts.
– Dust: 13.8 t/year
Finally, summing up the pros and cons, the project was
Realization problems and difficulties
considered by the supporting government organizations
• The project became a target of the political debates in and the Danish partners as a successful one.
the city and some people would have liked to prove that
2. Best practice: The case of combined heat and power (CHP)

The first gas engine CHP was installed in Hungary 11 development was even more considerable (5,3 MWe). In
years ago and since that time several investments have 2000 altogether 11 gas fired CHP were installed with more
been realized in this field mainly in district heating, hospi- than 9 MWe electric capacity. The development is continu-
tals, wastewater treatment plants and in some buildings ous regarding the number of the installed engines and total
and industrial plants. Until the end of 2000 altogether 61 electric capacity.
gas engine CHP were installed in 46 places; the total in-
Investigating the fields of application regarding the total in-
stalled electrical capacity is more than 35 MWe, the ther-
stalled capacity and the number of gas engines the vast
mal capacity is almost 47 MWth. This short study aims to
majority of the CHP is operating in the district-heating sec-
give an overview about the investments realized till this
tor. Based on the number of gas engines the hospitals are
time and tries to estimate the future trends.
in the second place (Figure 2:).
The realized investments can be divided into five main
groups: Figure 2: The use of gas fired CHP in various fields
• District heating: The produced heat is sold to the con-
sumers, the electricity is partly for own use and the ma- The use of gas fired CHPin various fields according
to the number of gas engines
jority is for the grid.
20%
• Biogas utilization: Use of the biogas produced in
wastewater treatment plants and in landfills partly for 43%
own electricity supply and partly for the grid.

• Industry: Heat and electricity production for own use 16%
and in some cases for selling it to the grid.
5%
• Buildings energy supply: Heat and electricity for own 16%
use, frequently for air conditioning in summer (tri-
District heating Biogas Industry Buildings Hospital
generation).
• Hospitals: heat and electricity for own use.
The use of gas fired CHPin various fields according
The majority of the investments (60%) was realized in the to the installed electric capacity
district heating sector in the countryside, altogether 6 gas 8%
engines were installed in the biogas utilization and 7 gas 16%
engines in hospitals. There is only one gas engine CHP in
the industrial sector in Gyöngyös (implemented in 2 phases
in 1995 and 2000) for the energy supply of the local meat 5%
factory. In Budapest the CHP is mainly used for energy 62%
9%
supply of buildings, and there are some examples in hospi-
tals (4 gas engines) and in wastewater treatment plants (4 District heating Biogas Industry Buildings Hospital
gas engines).
Trends in the gas engine installation Financing of the investments

In the period of 1989-1994 only 6 gas motors were installed Concerning the financing of the investments there are two
with 1,7 MWe total installed electric capacity. The first real different solutions, which are the followings:
development was in 1995 when 10 gas motors were in-
• The investor (local government, firm, owner of the build-
stalled with almost 3,5 MWe electric capacity. In the follow-
ing, hospital, etc.) uses his own resources or bank loans
ing two years some decrease was experienced regarding
(commercial loan or preferential loan) and in some
the total investments in this field. The next milestone was
cases they use non-reimbursable grants.
1998 when the number of installed engines reached the
• The investor (local government, firm, owner of the build-
1995 level and in terms of installed electric capacity the
ing, hospital, etc.) gives the task to a third party includ-
ing the financing. In this case the entrepreneur arranges As a general trend the present shares of the various sec-
the project financing (with his own resources or bank tors will remain the same in the close future.
loans). There are several examples that the ownership
In Budapest several large real estate investments are ex-
of the project is given to the investor after a certain pe-
pected and therefore it would be very practical to solve
riod (in general 10 years). The third party financing was
their energy supply on the basis of the tri-generation.
introduced in 1995 and till this time 30% of the projects
Based on the present legislation the district heating will re-
were financed in this construction.
main a dominant part of the CHP investments and this is
Conclusions also reflected in the present projects. In order to increase
the present share of the CHP it is necessary to improve the
Comparing the number of CHP installations in Hungary to
regulatory environment, the institutional background and fi-
those in the European Union it can be stated that we have
nalize the process of unbundling.
a lot to do in order to increase the investments in this field.
3. Best Practice: Thermal energy conservation in the building sector

Energy Saving and Energy Efficiency Action Programme
The experiences of the first year in the thermal energy conservation
The Government adopted the Energy Saving and Energy separated institutions working on similar fields of the en-
Efficiency Action Programme in the end of 1999 and the ergy efficiency. The crucial step in reforming of the institu-
implementation started in 2000. The program covers the tional framework was the establishment of the new Energy
domestic, public and business sector equally and makes Centre who became responsible for implementation and
possible to realize energy efficiency investments in every co-ordination of every energy efficiency related projects
sector of the economy. The general objectives of the pro- and programs.
gram are the following till 2010:
Heating reconstruction, additional insulation of
• Energy intensity has to be reduced with 3,5% per year; residential buildings as part of the program
• Saving of 75 PJ/year (thermal equivalent) primary en-
This non-reimbursable grant is provided for the population
ergy sources;
for energy efficiency investments such as the insulation of
• 50 kt/year SO2 reduction;
residential buildings (façades, roofs, cellars, doors and
• 5 Mt/CO2 reduction ;
windows) and modernization of internal heat supply sys-
• 50 PJ/year renewable production.
tems. Grants can be obtained for 30% of the total invest-
The financial sources available for the program in year ment cost but as a maximum HUF 200 000 per household.
2000 were ten times more than in the previous years, so The grant is provided for the following objectives:
the possibilities for the energy efficiency investments ex-
• Additional insulation or change of the doors and win-
tended dramatically. The tendency for the coming years is
dows (k=1,51-1,8 W/m2K);
that based on the results of the program the Government
• Additional insulation of the walls, roofs and cellars;
will further increase the financial sources. This means that
• Energy efficient modernization of the heating and hot
for the year 2001 the budget of the program will be five
water supply;
times bigger than in 2000 what means also the extension
• Combination of the heating reconstruction, additional in-
of the actions for other areas and applying new methods
sulation and changing of the windows and doors.
based on the requirement of the recipients.
In the framework of the energy efficiency grant for the
The Energy Saving Strategy and Action Programme itself households the Centre received more than 500 applica-
can be characterized as being an intersectoral “umbrella” tions for heating reconstruction, additional insulation and
type of program covering every relevant sector and being changing of the windows and doors. This covered almost
flexible enough to follow the real needs of the recipients. 4000 households and resulted in saving energy of 37, 5
The approval of this new program also required the estab- TJ/year PES and the saving of 2,7 kt CO2 emission. The to-
lishment of a uniform institutional background instead of tal budget available for this part of the program was HUF
100 million, but the Ministry of Economic Affairs increased systems. The governmental support generated altogether
it to HUF 150 million since the program was very popular more than HUF 500 million energy efficiency investments
among the people who wanted to modernize their heating on national level.
Table 1 The results Energy Efficiency Programme in the residential sector in 2000
the investments
cessful applica-
Number of suc-
Total volume of
Number of ap-
Received sup-
Number of the
CO2 emission
Total energy
households
supported
plications
reduction
Type of application
saving
tions
port
million million
Number Number Number TJ / year kt
HUF HUF
Changing of the windows 149 95 14,96 53,31 1348 2,184 0,154
Reconstruction of the heating

181 91 37,76 133,74 859 17,091 1,444
and hot water supply
Additional insulation 144 66 37,3 129,79 1259 9,086 0,688
Combination of the investments 59 40 59,93 205,11 386 9,140 0,458
Total 533 292 149,94 521,95 3852 37,501 2,744
Source of data: Energy Centre, 2000
As the figures indicate the most significant energy saving ferent investments, this was 40% of the total sum and re-
was achieved with the reconstruction of the heating and hot sulted in the 25% of the total savings.
water supply systems. The 25 % of the total available sup-
Conclusions
port was allocated to this and finally resulted in almost half
of the total savings. The same amount was allocated to the The results of the program were rather good and the pro-
additional insulation but this achieved only 9 TJ energy gram was very popular in the residential sector therefore
saving what is only half of the previous result. The applica- the Government decided to increase the available support
tion framework supported also the combination of the dif- in the next year. This means that in 2001 already HUF 500
million was allocated to this program.
4. Best practice: Energy service companies (ESCOs) and third party financing
Third Party Financing exists in Hungary since the mid 1996 and then after the energy audit of the plant and other
1990s and there are already some good examples of suc- preparations the implementation started in 1997.
cessful implementation. In the following a short summary of
The situation before the implementation
a third party financing project can be found.
of the TPF project
Preparations for the project
The modernized plant of the MÁV (called MÁV KŐDECO
The MÁV (Hungarian Railways) started to negotiate with ’96 Kft) was supplied with heat from the Kőbánya Power
one of the Hungarian ESCOs in June 1995, and then re- Plant. The steam was used for technology purposes, heat-
ceived a proposal for the implementation of a joint project ing and hot water supply. The used steam was measured
in the April of 1996. The contract was signed in the end of only in one point, therefore special, detailed data of the
consumption were not available. The plant paid a consid-
erable amount of fines because of the condensation • A statistical module collects the data of the given pa-
losses. For a long time it was not possible to measure the rameters.
real water consumption, therefore they paid after an aver- • Optimize the operation based on energy saving.
age consumption. The plant paid the electricity bill based
Savings
on a special haulage tariff.
There was a considerable energy saving because of ceas-
The implemented technology
ing the steam system since this way there was no more
The preliminary energy audit examined two alternative ver- pipeline loss and condensation loss. The control (what was
sions from technological point of view. The first was the to- missing before) made possible to reduce the heating in the
tal separation from the power plant and the other was the nights and in the weekends. The energy saving can be
partial separation when the steam would have been further seen in the following two figures (Figure 3, 4). A consider-
supplied by the power plant. Finally, based on the negotia- able energy cost saving was achieved, since the primary
tions the MÁV decided to separate the energy supply to- energy source (natural gas) is significantly cheaper than
tally. the steam. The costs of maintenance also decreased be-
cause of the new installations.
Because of the low haulage tariff the ESCO could not sug-
gest other solutions for the reduction of the electricity costs. Conclusions
After the modernization the heating supply from the power
This project has a reference value from the point of view of
plant was stopped and a new, separate gas based heating
the MÁV and also as a TPF project. The implemented
supply was installed. This new heating system ensures the
technology coincides with the long-term development strat-
control and the metering requirements in each of the build-
egy of the MÁV: This project made possible to indicate real
ings and technologies. The building control (monitoring)
consumption data and based on that to estimate saving po-
system provides the following services:
tential within the company. From the cost of the savings the
• Operates the equipment. Starts, stops and regulates MÁV could achieve a considerable development and install
them according to the given parameters a XXI century technology. This project has proved that it is
• Gives a signal in case of errors and when there is a de- worth implementing this construction in other places since
viation from the given parameters. The signal can be in the project can be financed from the savings and a high-
printed form, can be a voice in a modem or an alarm. level technology can be installed.
5. References
• LDK Consultants, Engineers and Planners in collaboration with Energy Centre Hungary & Luxcontrol SA (Luxembourg): Mar-
ket Prospects for Small-scale Cogeneration in Hungary (Thermie Programme Action No: SME-1689-98-GR); European
Communities, 2000
• Bercsi Gábor: The situation of the gas engine driven cogeneration in the turn of the millennium in Hungary (in: Energiagaz-
dálkodás, 2001/5.) Budapest, 2001
• Dr. István Barótfi: the use of biomass for energy production in Hungary in: Hungarian Energetics 2000 December
• László Zsuffa: Biomass as energy source in Hungary- present situation and future trends in: proceedings of the Clean Energy
Symposium, 1997
• Hungarian Increasing Academy of Sciences, Subcommittee on the Renewable Energy Technologies: the Use of Renewable
Energy Sources – strategic concept, Budapest, 2001
• Péter Keller: EPC and ESCO, the Energy Performance Contract and the Energy Service Company in: Magyar Energetika,
1996/4
• Róbert Sinha (ed.): Third Party Financing, OMIKK, Budapest, 1999 December
Figure 3: Energy saving in the MÁV TPF project
Cost of the old system

Cost of the new system
-x- Cumulated savings
Figure 4: Energy cost savings in the MÁV TPF project
1996 Heat consumption in gas equivalent

1998 Plan for the gas consumption
1998 Real gas consumption
220 D. Blumberga / M. Vimba / A. Blumberga / C. Rochas
Country Report: Latvia
Selected “Best Practice” Projects and Measures in Latvia

Maija Vimba
Andra Blumberga
Claudio Rochas
1. Best practice: The case of biomass utilization in Broceni

Basic information on the project heat exchangers. Following are listed the main technical
data of the project.
The Broceni heat supply solution has been one of the first
bio-fuel activities in Latvia. Old, heavy fuel oil (masut – Item Data
heavy black oil derived from petroleum crack processes), Gas boiler, capacity VEA UNIVVEX HVSG 5.0 H-6, 5.0 MW
has been replaced by a more environmentally friendly fuel: Gas burner Weishaupt G60/2-A, ZM
Bio boiler, capacity VEA UNIVEX HVV 4.5 H-6, 4.5 MW
wood chips, sawdust and sawmill waste. Prefurnace Inclined moving grates, TRF 4/17
Fuel storage capacity 220 m3
Main project components Main fuel storage capacity 800 m3
Fuel type wood chips, 35-55 % RH, Natural gas
During the implementation of the project the heat exchang- Bio boiler 22 500 MWh
ers have been dismounted in the old boiler house and two Boiler plant 29 000 MWh
new boilers have been erected, one with a pre-furnace for
bio-fuels firing for the base load and one natural gas fired Main successes of the project
boiler for peak load. It is now also possible to supply the The project has given good results both environmentally
consumers with hot water during the whole year. The main and economically. In Table 1 and Table 2 are shown these
contractor has been KMW from Sweden. The installations features by a comparison between the situation before and
consist of combustion equipment, automatic fuel storage, after the project implementation.
fuel handling equipment, flue gas cleaning equipment and
Table 1 Environmental comparison before and after the project implementation
Before After Reduction

HFO Wood Gas
Annual heat output GWh 32 22.5 6.5 3
CO2 t/year 10,300 - 1,700 8,600
SO2 t/year 167 7.0 - 160
NOx t/year 18.0 10 2.6 5.4
Dust t/year 12.1 5.2 - 6.9
Table 2 Economical comparison before and after the project implementation
Before After
Energy MWh/a 35000 31500
Steam price USD/MWh 22,3 -
Biofuel (wood) price USD/MWh - 10,7-14,7
Gas price USD/MWh - 23,27
Average energy price USD/MWh - 15,1
Results, impact, side effects shop following the project implementation has had many
participants. More than 10 projects (in Latvia) have fol-
The project has been a success not only from an environ-
lowed the Broceni one.
mental point of view (emission reduction), but economically
feasible as well. The new technologies applied and the Main reasons for project success
lower fuel costs have increased the level of comfort for the
The boiler house in Broceni was built in 1953 and as a
inhabitants. In addition, this design has been a solution for
boiler plant was used for a very short life period. Indeed af-
the surrounding sawmill waste disposal problem.
ter two years of operation the boilers were taken away and
Ground work, civil works, electrical installations and the as- the BH was converted into a heat exchanger station. The
sembly have been performed by local companies. station was supplied with steam through a 2 km long pipe-
line coming from the cement factory.
After the collapse of the Soviet Union, the cement factory
One problem has been the short time for decision makers,
lost almost all its customers. An additional problem was de-
indeed after the cement factory shut down it has been nec-
tected in winter time, when the cement demand sharply
essary to find a solution in brief time. The municipality has
decreases, but the boilers has to work in order to supply
had a fast understanding of the situation and about the im-
Broceni with heat and also to keep the masut heated at the
portance of an efficient solution.
combustion temperature. Furthermore, the steam pipeline
Duration and sustainability of the project had large heat losses. In conclusion, the heat price for Bro-
The project implementation, from the tender documentation ceni inhabitants was very high. The implementation of the
to the operation phase, has taken 8 months. The life time project was an urgent need that the municipality has un-
of the BH is estimated around a 15 years period. The pro- derstand in time.
ject has a high sustainability given by RES and high effi- Pre-requisites/limits/recommendations for
cient energy technology applied. successful replication in other transition countries
Cases of domestic replication If there is a plant that has been visited, that is Broceni BH,
Following several other bio-fuel projects have been taken the project shows that easy ideas are often the best prac-
off in Latvia. The response has been impressive; the work- tice.
2. Best practice: The case of small scale CHP in Adazi

Basic information on the project data. In general the municipality of Adazi is saving € 60
500 per year in heat energy costs.
Adazi is a small municipality where investments in modern
boiler house technology using natural gas fired high effi- Main project components
ciency and small co-generation systems have been made.
The system is located in a building and it comprises one
The boiler house supplies heat to the public district heating
co-generator and two boilers. By means of a heat ex-
network. The production facilities also produce electricity
changer the heat is transferred into the district-heating net-
for sales to Latvenergo. In order to give an idea of the in-
work of Adazi. The thermal power is 3.6 MW. The co-
vestment made, in 0 are proposed the main economical
generator produces electrical power with a maximum of So far, the new plant has delivered around 12 000 MWh
350 kW. This electricity is delivered to the grid of Lat- per each heating season and figures between 800 and
venergo. The thermal capacity of the co-generator is about 1000 MWh of electrical power per year.
2 GJ / h.
Table 3 Economical data for SSCHP in Adazi The main difficulty encountered has been with Latvenergo
for the connection to the grid network and the dealing op-
Project development costs € 92 700
eration for the electricity tariffs. (Latvenergo is the Latvian
Capital costs € 560 000 Loan 7%
state electricity company.)
Installation costs € 26 400
Operational and maintenance costs 0.01386 € / kWh el Duration and sustainability of the project
Other costs € 9 000 Life time has been estimated between 10 and 13 years.
Revenues (estimated) € 260 000 This has a high sustainability in relation to rational energy
Pay back period (estimated) 5 years use in cogeneration plants and the high energy production.
Cases of domestic replication

The co-generator is designed for ease access and mainte-
nance. The boilers have a capacity of 1725 kW each. In The project has had a follow up activity in Lielvarde, where
case the circulation pumps of the heating network fail due another SSCHP has been made. A big constraint to do-
to a black-out, the co-generator will supply electricity to mestic replication is the problem with the connection to the
them. The system is monitored by means of a telemetry grid network and for the sale tariffs.
system, which uses a dedicate telephone line.
Main reasons for project success
Main successes of the project
Latvia has experienced, caused by general transition proc-
The introduction of new and efficient technologies as the esses, a remarkable economic decline between 1991 and
SSCHP plant in Adazi represents a wave of innovation for 1995. The decline of industry and agriculture has led to a
Latvia and an aperture towards sustainable energy use; situation where the installed heat generation and transmis-
therefore these projects have the effect of transferring sion capacities in Adazi were much bigger than necessary
knowledge and technology in Latvia, related to introduction and therefore were operating below the designed effi-
of modern energy production systems. The main environ- ciency. Besides, the heat production installations were too
ment benefit is the reduction of the national emissions and obsolete to be eligible for future use. Therefore the Munici-
in Table 4 are proposed the main figures. Also the land- pality of Adazi has decided to outsource the heat produc-
scape has been improved due the to lower chimney stacks. tion.
In 1997 the Council of Adazi has entered into a “Heat En-

Table 4 CO2 emission reduction (in metric tons of CO2)
ergy Supply” agreement with the company Essent Baltic
Projected real, (Edon Latvia). This agreement has set terms and condi-
Baseline Project
Year measurable and long-term
scenario scenario tions under which Essent Baltic has to operate and main-
CO2 emission reductions
11/1997 1472 750 -722 tain the production of heat energy and electricity, further
1998 5145 2602 -2543 terms and conditions for heat energy supply and purchase.
1999 5369 2522 -2847 The agreement has 15 years duration time.
2000 5188 2357 -2831
Pre-requisites / limits / recommendations for
Results / impact / side effects (e.g. employment effects) successful replication in other transition countries
The introduction of the SSCHP in Adazi has benefited the The main recommendation is a good awareness about the
consumers expenses, whereas the prime cost upon both connection obligation. In free market economy there are
hot water and electricity furniture are decreased. Moreover very good possibilities, while in cartel and monopoly econ-
a regular and stable delivery of heat and hot water for omy conditions for tariffs and connection have to be care-
Adazi citizens has been guaranteed. fully analyzed.
3. Best practice: Thermal energy conservation in the building sector in Latvia.

Audits. Tools. Monitoring
Three different projects are briefly described for thermal have been balanced, circulation pumps have been in-
conservation in buildings. Each project addresses a parti- stalled, windows have been partly replaced, the ventilation
cular topic that taken together make a coherent policy, as: system has been partly repaired and thermostats have
been installed in order to regulate the temperature in the
• Energy audit
rooms. Social monitoring has been implemented following
• Tools
five steps:
• Social Monitoring
• Preliminary investigation phase, questionnaires have
Basic information on the projects / policy
been provided in two dwelling buildings before the re-
Audit in schools and a hospital in Ventspils
construction project.
The aim of the energy auditing in Ventspils municipality has • Data processing.
been to set the priorities for energy efficiency measures, • Workshops and meetings, presentation and discussion
according with the technical situation of the buildings where about the earlier results.
the schools and the hospital were. The project has shown • Second investigation phase, collection of further infor-
that it was possible to save between 24% and 42,6% of mation from municipality and by direct meetings with the
heat energy. Then the project implementation has provided inhabitants. Inspection of the buildings after the recon-
several recommendations, elaborated from measurements, struction.
technical calculations and data gathered, for to improve the • Final data processing.
energy situation of the buildings. After that the schools
As general conclusion from the social monitoring, the in-
have obtained a loan from the World Bank.
habitant involved are now more conscious about the impor-
Tools, computer aids for optimization problems tant meaning of energy efficiency and savings. A great part
After energy auditing, as down stream activity, consump- of the recipients have affirmed that they will implement fur-
tion of dwellings and optimal set of energy efficiency ther energy efficiency measures in their flats.
measures, as upstream activity, are the main concerns for Main successes of the project / policy
energy conservation in buildings. Given the vast amount of
Energy audit, tools and social monitoring have a common
data, the upstream part is made by computed aids, and a
success, they all increase the awareness of the recipients
dedicated software tool, Māja , has been employed (in
about energy efficiency and energy savings, with a positive
English, the Latvian word Māja means house. Māja has
feed back for implementing new energy efficiency meas-
been developed from Andra Blumberga and it is currently
ures.
used and owned by Ekodoma, Ltd.).
This software is a quasi-static, one zone optimization
model, which uses two optimization criteria: equivalent an- The main problem are the financial resources for this policy
nual net cost and CO2 emission reduction. Māja is a par-
Sustainability of the project / policy
ticular design for Latvian conditions (weather, buildings ma-
terials, etc.). Energy efficiency in building is directly connected to sus-
tainable buildings and therefore with a high sustainability
Tool Māja has been already used in Kuldigas, Ventspils,
Riga and Aizkraukle, by achieving outstanding results and Cases of domestic / international replication
optimal solutions. Tool Māja has been object of several local and interna-
Social monitoring in Ludza municipality tional offers.
In the framework of the PSO program of the government of Main reasons for project / policy success
the Netherlands, energy efficiency increasing measures In Latvia, many buildings have been constructed with for-
have been carried out in two dwelling houses in Ludza mu- mer USRR standards and regulations with low concern for
nicipality. Heating substations have been repaired, risers
energy efficiency and environmental issues. Therefore, cution. Thus, social monitoring supplies answers about as
Latvia is faced with a general bad situation in energy con- how to implement better certain measures and what kind of
sumption in buildings. Furthermore, energy inefficiency in a preliminary deeds are necessary. Social monitoring is
building denotes less comfort for its tenants. Social moni- meanwhile a sort of information dissemination practice that,
toring and the demand side management meet consumer in this case, divulges information about energy efficiency
needs with market conditions and project objectives. measures.
Often, project realization is endangered by insufficient in- Pre-requisites / limits / recommendations for
formation for recipients concerning the objectives, their successful replication in other transition countries
gains and reasons for implementing certain measures.
As in Latvia, this kind of projects can be implemented in all
Social monitoring is a method that allows to understand the transitional countries where buildings have similar con-
changes in people’s attitude following some process exe- ditions.
4. Best practice: Energy service companies (ESCOs)

and third party financing in Latvia
Basic information on the policy hancement to the national economy in addition to national
sources.
The transitional economic situation in Latvia supports the
initiation of new activities in the field of energy and recom- Main policy instruments
mendations on energy efficiency, as well as environmental
Energy service companies work following three financial al-
policies. A special interest is concentrated upon the finan-
ternatives, where the third one is a combination of the other
cial and economical measures, which can promote the im-
two. These alternatives are here listed:
plementation of projects like CHP, district heating and other
projects concerning energy efficiency. • Payment for energy service, for example the typical
scheme includes energy produced and supplied. (most
The overall risk factors of energy projects is minimized by
popular in Latvia)
rigorous technical and economic appraisal at the feasibility
• Payment from energy saved, for example an ESCO re-
stage or by using innovative financing strategies, such as
alizes several energy efficiency measures and the pay-
third party financing or Energy Supply Companies (ES-
ment comes from the consequent money savings (one
COs), to by-pass the risk through a more specialized op-
project has started a few weeks ago for efficient lighting
erator.
in a sport hall).
In accession countries like Latvia exists a high demand for
Main success of the policy
investment in energy efficiency measures and small-
decentralized energy plants. In order to explore the full en- A small scale CHP in Lielvarde has been a big successful
ergy and cost saving potential, the involvement of private case, following ESCO financial scheme. Now the munici-
capital is needed. Third Party Financing is a frequent con- pality is saving about € 14 000 per year in heat energy
cept that ensures the involvement of private capital. This costs. Moreover the quality of the service has extremely in-
concept is usually implemented by Energy Service Com- cremented. In this case payments are achieved by a com-
panies (ESCOs), and has been already employed on a bination of payments from both energy saving and energy
broad scale throughout the European Union. services.
Direct foreign investments play an important role for facili- Results / impact / side effects
tating the development of the national economy. Indeed, Using Energy service companies and third party financing it
besides that they provide additional external funds they will be possible to implement several energy projects,
also introduce advanced technologies and new equip- which otherwise would not take off. The example of Liel-
ments. Co-operation with international financial institutions varde epitomizes these concepts and now the municipality
and direct foreign investments brings a substantial en- benefits from the project results.
Realization problems and difficulties Cases of domestic / international replication
TFP and ESCO are commercially viable in Latvia. Never- At the moment there is only a high potential for domestic
theless very few companies have tried to act as ESCOs. replication, on the other hand TFP and ESCO have been
On the other hand, those that have attempted, have found already employed on a broad scale throughout European
big difficulties to convince clients, mainly due to their lack Union.
of information and knowledge. Further, other important
Main reasons for policy success
problems and barriers are: there are no models for per-
formance contracting (PC), there is not a clear legislative This policy allows to explore the full energy and cost saving
background, an unfavorable ratio between the project de- potential, to minimize the overall risk factors of an EE pro-
velopment costs and the possible benefit from the project ject through a more specialized operator (ESCOs), and to
for the private investor, and the transaction costs and risks find financial and economical supports.
are considered too high. Pre-requisites / limits / recommendations for
Sustainability of the policy successful replication in other transition countries
The use of TFP and ESCO is addressed to EE projects It is important to deeply explain the concept of TFP be-
and therefore towards sustainable development. cause often the mechanisms behind are not understand-
able to everybody.
5. Best practice: Rational electricity use for lighting in bakeries in Latvia.

Benchmarking.
Benchmarking, energy audit for Latvian bakeries eight bakeries was higher than in Denmark and The Neth-
erlands. Only in one bakery data were comparable. In fig-
An energy audit in bakeries was part of a program for en-
ure 1 are shown the investments held in each of the eight
ergy saving in food industry, financed by the Danish En-
bakeries for efficient lighting.
ergy Agency and The Netherlands government. Audits in
eight bakeries have been made for working out a set of Main project policy instruments
measures for energy savings and costs reduction. The en-
The benchmarking, deriving from the energy audit carried
ergy audit was on energy efficiency measures and espe-
out in the bakeries, includes several recommendations:
cially focused on the lighting.
• switching off all sources of light not necessary;
Basic information on the selected policy
• regulate lighting corresponding with needs;
Figure 1: Investments in EE lighting measures • use energy efficient lamps and ballasts;
(1 LVL= 0,568 €) • use appropriate sources of light;
• use surface tones that are favorable for lighting;
350
LVL • use daylight;
300
• clean lighting sources regularly;
250
• long-term investments in energy efficiency measures.
200
150
• select places where the largest economy can be ob-
100 tained ignoring EE measures that give small energy
50 economy;
0 • point to obvious EE measures;
1 2 3 4 5 6 7 8 • sometimes ignore EE measures if more detailed analy-
sis is needed for defining them.
The first project using benchmarking methodology and a fi-
nal workshop have allowed to compare energy consump-
tion in eight bakeries over the Latvian territory. It has been
detected that the electricity consumption for lighting of the
Figure 2: Reduction of electrical energy consumption due the possible range for energy savings, they just have to
to lighting measures. implement the measures.
2500 Realization problems and difficulties

kwh/year
2000 Often lighting, if compared with other energy efficiency
measures (like investment in new technologies), is consid-
1500
ered and only rarely there are resources for this subject
1000 available.
500 Duration/follow-ups / sustainability of the project /

policy
0
1 2 3 4 5 6 7 8 High sustainability as energy efficiency measure.
Cases of domestic / international replication

Main success
There is a high possibility for replication, in particular if the
The main success is represented for the potential savings
entire food industry is going to be involved.
deriving from efficient lighting. The histogram in figure 2
gives an outline obtained from the analysis made over the Pre-requisites / limits / recommendations for
eight bakeries. Savings between 100 and 2000 kWh per successful replication in other transition countries
year have been achieved. These data highlight as lighting Everybody interested can implement efficient lighting pro-
has to be taken into account when energy efficiency meas- jects, the results are good. ESCOs can be as well used.
ures are undertaken. Benchmarking does not have any negative feed back.
Results / impact / side effects
Management level and decision makers get aware about

energy efficiency and efficient lighting. They know about
Country Report: Lithuania

“Best Practice” Projects and Measures in Lithuania
Housing and Urban Development Foundation
Vygintas Jarašunas
1. Thermal energy conservation in the building sector

Project No. 1: Energy Efficiency Pilot Project in Lithuania: Residential part
Objectives • introduction of the concept of long-term lending for
housing improvement to the commercial banking sector;
• Support private initiatives to improve residential energy
• development of energy consulting services.
efficiency;
• support the privatization of housing, enabling increased Success indicators
private initiatives in housing maintenance.
Disbursement of the allocated funds, energy savings in
Financing renovated buildings, increased awareness on energy effi-
ciency issues, developed energy consulting services.
was allocated for implementation of energy efficiency Results
measures in residential buildings. The Lithuanian govern-
As of July 1, 2001 211 associations and 26 individual
ment agreed to provide 30 percent matching funds. The
homeowners signed 260 loan agreements for the whole al-
Danish Ministry of Housing and Urban Affairs and the
located amount. Technical monitoring of 96 implemented
Dutch Ministry of Economics provided the core technical
projects revealed comfort adjusted heat savings of 23 per-
assistance funds.
cent in average. An average simple payback period for the
Organization monitored projects amounts to 7 years. Due to high cost-
effectiveness of investments around US$ 2.4 million of the
In order to advance the Lithuanian banking system, resi-
extended loans were already repaid instead of the sched-
dential loans to the final beneficiaries (homeowners’ asso-
uled $ 1.5 million, as of September 1, 2001, with no de-
ciations and owners of individual houses) were extended
faults. Total annual savings in 211 renovated multifamily
via local commercial banks. The Housing and Urban De-
buildings would amount to 23 GWh worth some US$
velopment Foundation was selected as the project man-
750,000 at the current heat tariffs. With Dutch and Danish
agement unit. Five regional advisory centers were estab-
support 150 individual consultants were trained of which
lished in 1997 and 1998 to provide advice to homeowners
around 20 were given an opportunity to work on the pro-
on technical, financial, organizational and legal issues. The
ject. They prepared more than 300 energy audits and in-
advisory center staff also carried out public information ac-
vestment proposals. Conducted social surveys indicated
tivities and assisted homeowners’ associations in various
increased awareness on energy efficiency issues. As re-
phases of the EEHPP project.
sult, more than 700 homeowners associations were in-
Project components volved in the project activities.
• Provision of loans for technically and economically at-
tractive packages of energy efficiency measures;
228 Eduardas Kazakevičius / Vygintas Jarašunas / Romualdas Škema
Realization problems and difficulties few years the involvement of multilateral financial institu-
tions could help to bridge this gap.
• Lithuanian commercial banks lacked sufficient knowl-
edge about the residential market for home improve- Cases of domestic and international replication
ment loans;
Experience and lessons gained during the implementation
• households lacked experience dealing with the com-
of the Energy Efficiency Housing Pilot Project were used
mercial banks and using bank loans for higher volume
for similar undertakings in Latvia and Estonia.
investments;
• in the absence of mortgage, technical and financial risks Main reason for project success
associated with multifamily building renovations should A well tailored legal framework allowing homeowners’ as-
have been partly mitigated by professional energy au- sociations to obtain bank loans without mortgaging individ-
dits and thoroughly prepared investment projects, how- ual apartments thus reducing transaction costs and house-
ever, prior to the project commencement there was very hold reluctance;
limited understanding of the feasibility and savings po-
• affordable financing of energy efficiency improvements
tential of various energy efficiency measures in Lithua-
that consisted of the long term loan and the state grant;
nian residential buildings and the capacity of local en-
• comprehensive institutional support for homeowners via
ergy consultants was rather limited;
regional advisory centers;
• homeowners’ associations were very diverse in their
• expanded and improved services of local energy con-
sizes, performance and capacity to carry out building
sultants which ensured positive results of implemented
renovation tasks and implement energy efficiency
renovations;
measures, therefore significant support was needed to
• enhanced public awareness on energy efficiency oppor-
enhance household confidence in energy efficiency
tunities in residential buildings and benefits offered by
measures and support them in all stages of the project
the project. Only synergy of all those stakeholders en-
implementation.
sured success of the project.
Sustainability of the project
Recommendations for successful replication
The project created a mechanism for renovation of multi- in other transition countries
family buildings with developed institutional infrastructure
and workable legal framework. Future sustainability will Designers of similar undertakings in other Eastern and
depend on successful transition from the state supported to Central European countries should explore all potential bot-
solely private financing of energy efficiency undertakings in tlenecks in their countries, be it low awareness, legislative
the residential area. More will have to be done in reducing hurdles, high transaction costs or insufficient capacity, and
transaction costs, streamlining processing procedures and then plan a set of measures that could address all those
finding credit enhancements designed to attract local problems. Any barriers, if not addressed properly, could
commercial lending to this market segment. For the next obstruct development of the whole process.
Project No 2: : Energy Efficiency Pilot Project in Lithuania: Municipal part

Objective Organization
Support municipal initiatives to improve energy efficiency in In order to lower the borrowing costs, municipal loans were
public schools. channeled to the final beneficiaries via the Ministry of Fi-
nance. The Housing and Urban Development Foundation
Financing
was selected as the project management unit.
Project components
was allocated for implementation of energy efficiency
measures in public schools. The total investments including • Provision of loans for technically and economically at-
municipal funds amounted to approximately US$ 5.9 mil- tractive packages of energy efficiency measures;
lion. • support for municipalities in the energy efficiency reha-
bilitation of public schools.
Success indicators vestments in energy efficiency of public buildings depend

on the financial capacity of municipalities (budgetary funds
Disbursement of the allocated funds, energy savings in
and borrowing limits) as well as on availability of alternative
renovated buildings, enhanced capacity of Lithuanian mu-
financing mechanisms, such as the third party financing or
nicipalities to implement energy efficiency projects.
master lease.
Results
Cases of domestic and international replication
As of July 1, 2001 43 schools and 10 kindergartens from
Experience and lessons gained during the implementation
12 municipalities were renovated. Close to 27 thousand
of the municipal part of the Energy Efficiency Housing Pilot
pupils were impacted by the project. The Housing and Ur-
Project were used for preparation of a public school reno-
ban Development Foundation organized 4 seminars for the
vation program implemented in 2001. The Municipal Infra-
staff of participating municipalities and 1 seminar for in-
structure Development Program funds were used to im-
volved energy consultants. The HUDF staff also assisted
plement energy efficiency measures in 120 schools located
municipalities in various phases of the school renovations.
in all 60 Lithuanian municipalities.
Technical monitoring of 18 implemented projects revealed
actual average heat savings of 24 percent. Indoor tempera- Main reason for project success
tures in renovated buildings increased by 4 degrees centi-
• Affordable financing of energy efficiency improvements;
grade. An average simple payback period for the monitored
• comprehensive support for participating municipalities;
buildings amounted to 12 years.
• well coordinated efforts of the implementing agency, the
Realization problems and difficulties World Bank, the Lithuanian Ministry of Finance, the par-
ticipating municipalities and private contractors and
• Lack of experience of municipalities with the World
consultants.
Bank procurement procedures;
• lack of experience of energy consultants and contrac-
tors regarding feasibility and savings potential of various
in other transition countries
EE measures in Lithuanian public buildings.
Sufficient capacity of participating municipalities is essen-
Sustainability of the project
tial for success of similar undertakings in other Eastern and
The project enhanced the capacity of Lithuanian munici- Central European countries.
palities to implement energy efficiency projects. Future in-
2. Rational energy use in industry.

Vygintas Jarašunas
Project No. 3: Recommendations for improving energy efficiency in the Lithuanian industry
Objectives dustry and energy department of Ministry of Economy.
Each trade has been considered with regard to the finan-
To estimate the energy consumption divided into electricity
cial circumstances of the companies, commercial outlets
and heating consumption for each trade and energy tech-
and investment level necessary for becoming a competitor
nology; to give more detailed overview over energy saving
in an international market. On a weighted basis the com-
potentials in the Lithuanian industry.
panies were selected from the following industrial target
Project organization sectors: textiles and clothing; wood industry (wood proc-
The project was financed by the Danish Energy Agency essing and furniture); food; chemicals and pharma-
and carried out by Danish and Lithuanian experts. The ceuticals; electronics, instruments; construction materials.
structure, composition and energy consumption of Lithua- The selection of the companies has been made to repre-
nian industry has been stated from Lithuanian statistics, in- sent the best possible picture of the Lithuanian Industry.
Results
On the basis of the walk-through energy audits, which has Electricity Electrical saving potential
consumption (GWh) (GWh)
been carried out in 20 different enterprises the energy con-
2850 384 or 13,5%
sumption and saving potential has been estimated. The (Pay back period < 5 years)
main figures are shown in the table on the right column. Heat Heat saving potential
consumption (GWh) (GWh)
More detailed energy consumption and energy saving po-
20260 3700 or 21,3%
tential in the Lithuanian industry divided into electricity and (Pay back period < 5 years)
heating consumption for each trade and energy technology
are shown in the table below.
Energy in
Electrical consumption per technology
MWh
Electricity Compressed Proces Proces

11,628 Cooling Ventilation Pumps Light Machinery Misc.
total MWh air blowers heating
All Consumption-
2.851.825 185.789 480.682 184.121 177.623 340.694 391.180 209.739 801.137 0 80.861
manufacturing total
Part of
All
industrial 2.665.719 173.664 449.313 172.105 166.032 318.461 365.652 196.051 748.856 0 75.584
manufacturing
production
Electrical consumption per technology % of total consumption

Cooling Ventilation Pumps Light Machinery Misc.
All Consumption-
2.851.825 6,5 16,9 6,5 6,2 11,9 13,7 7,4 28,1 0,0 2,8
manufacturing total
Part of
All
industrial 2.665.719 6,5 16,9 6,5 6,2 11,9 13,7 7,4 28,1 0,0 2,8
manufacturing
production
HEAT HEAT
Consumption per energy source HEAT savings
consumption savings
11,628 Total Coal Oil Natural gas Other fuel Electricity Heat Total Total Total %
All Consumption-
20.261.127 151.211 8.142.926 2.384.542 537.783 2.851.825 6.192.840 17.409.302 3.704.917 21,3
manufacturing total
Part of
All
industrial 12.847.591 36.872 3.186.153 960.136 183.781 2.665.719 5.814.930 10.181.872 2.166.830 21,3
manufacturing
production
Electrical savings per technology

11,628 Cooling Ventilation Pumps Light Machinery Misc. TOTAL
total air blowers heating
All Consumption- 25.682 60.035 34.020 25.015 63.537 78.712 50.563 46.694 0 0 384.257,0
2.851.825
manufacturing total
Part of
All
industrial 2.665.719 24.006 56.117 31.800 23.382 59.391 73.576 47.263 43.647 0 0 359.181,0
manufacturing
production
Electrical savings per technology Estimated %

Cooling Ventilation Pumps Light Machinery Misc. TOTAL
All Consumption- 0,9 2,1 1,2 0,9 2,2 2,8 1,8 1,6 0,0 0,0 13,5
2.851.825
manufacturing total
Part of
All
industrial 2.665.719 0,9 2,1 1,2 0,9 2,2 2,8 1,8 1,6 0,0 0,0 13,5
manufacturing
production
Realization problems and difficulties production – and thus the need for heat and steam - or
conversion to natural gas, the heat losses from poorly insu-
The main impressions from the 20 simple walk through en-
lated pipe systems now account for a greater part of the to-
ergy audits in industry is that the infrastructure for most of
tal consumption. This means, that every kWh consumed at
the enterprises is very typical for enterprises that have
the enterprise becomes more and more expensive. We
been static since they were built. That is, the production
have seen examples of enterprises which may “raise” the
and distribution of all auxiliary services is done in a central-
temperature on the hot water by help of steam during the
ized manner. Typically, there is no energy management at
summer. Some enterprises have not even made any at-
the enterprises or the knowledge of how to start it. There is
tempts to change or reduce the production, e.g. to move
no mapping over energy consuming equipment and the
the necessary production equipment to one workshop and
documentation in the form of plans and data of the equip-
maybe let out the rest of the buildings. We have seen one
ment are typically missing or not updated. Many enter-
example of an enterprise, which only utilizes 1-3% of the
prises are connected to district heating systems, which
total production capacity, another only 20%.
supply steam and heat, but in consequence of decreased
Recommendations for activities improving • Awareness campaign towards the industry. Simple im-
energy efficiency in Lithuanian industry provements, which industries can initiate / carry out
themselves;.
• Development of scheme of registered energy manage-
• Development of catalogues with trade specific standard
ment consultants.
solutions, both improving and renewing technology, in-
• Organizing training courses for energy responsible per-
cluding operational efficiency and behavior.
sons from Lithuanian enterprises.
3. Biomass utilization
Lithuania has very limited primary energy resources. Al- emissions to the atmosphere: 396 000 tons of SO2, 1000
though the use of indigenous and renewable energy re- tons of NOx and 110 tons of solid particles. In addition to
sources requires significant investments, and energy pro- environmental benefit the import of heavy fuel oil would de-
duced using these resources is not cheap, this will stimu- crease by 11 million USD. Last but not least, a benefit
late a local production, reduction of hard currency spend- would be the establishment of new jobs for collection,
ing, increase of employment, and reduction of environ- transportation and preparation of wood waste.
mental pollution. Therefore, utilization of these resources is
The local participants actively engaged in the project are
preferential.
JSC “Kazlu Rudos metalas” (Kazlu Ruda town), “singaras”
In 1999 indigenous energy resources (wood, peat, hydro) (Vilnius), the design company “Ardynas” (Kaunas), the
represented about 8% in the primary energy balance. Their Lithuanian Energy Institute and others.
share during the period 1990 – 1999 increased more than
Straw
4 times. During the last 5 years the major efforts were
aimed at drafting the bio-fuel (wood, straw, biogas). The total production of straw is approx. 4.5 million tons per
year in Lithuania. The percentage available for fuel needs
Wood
is approx. 10% (0.5 million tons) which contribute to the re-
Wood constitutes a considerable share of local fuel reduction of imported fuel by 1.5%.
sources. About 30% of the country’s territory is covered by
According to the RE project the pilot straw-fuelled boilers
forests. As a fuel, not only the firewood can be used but
have been installed in the country in 1997. At present there
also, certainly, wastes from forest felling, making sparse
are 15 boilers of such a type with a unit capacity not less
growth of trees and waste from wood processing indus-
as 0.5 MW, the total capacity being 10 MW. The reduction
tries.
of emissions, as compared to heavy fuel oil, is 28 300 tons
The annual potential of wood fuel amounts to approx. 3 mil- of CO2, 30 tons of NOx, 8 tons of solid particles. Given a 10
lion of solid m3. It consist of 1.4 million solid m3 of wood MW total capacity of boilers, the equivalent demand of
waste in forest felling places, 0.6 million solid m3 of wood heavy fuel oil is 8 800 tons at the cost of 0.8 million USD.
waste from wood processing industries and 1.0 million solid Several Lithuanian companies manufacture the straw com-
m3 of firewood. If utilized for energy needs, this potential bustion equipment. Such equipment is imported from
could meet 7% of the country’s energy balance. Denmark and other countries too. Furthermore, new straw
combustion technologies are also developed in Lithuania
Practically, there was not a single wood-chip-fuelled boiler
and local manufacture of equipment is in progress.
5 years ago in Lithuania, but the support by PHARE pro-
gram and the governments of Sweden, Denmark and other Biogas
countries changed the situation rapidly. At present the total
The sources of organic materials appropriate for the recov-
capacity of wood-chip-fuelled boilers has reached 160 MW.
ery of biogas are steadily produced and renewed in the ag-
If heavy fuel oil were burnt instead of wood chips, it would
ricultural technologies and waste treatment plants. The ma-
account for 123 000 tons and would entail considerable
jor sources are the manure of animals and waste from food technology to Lithuanian enterprises for further market de-
industries. Nevertheless, a profitable treatment of organic velopment. Danish biogas technology was transferred by
waste is possible only in big production companies. The the Danish Folkecenter for Renewable Energy. The total
annual energy potential of manure waste from large pig- project budget is 4.44 million DKK, the simple payback time
farming companies is estimated to be 15 million m3 biogas is between 4 and 4.5 years. The total Danish public funding
and that of cow and cattle farms 65.2 million m3 biogas. was 3.8 million DKK.
Considering the potential of small farms of individual farm-
The primary result of the project was the projecting, instal-
ers, extra 7.2 million m3 biogas can be added. Total poten-
lation, implementation, and initial operation of a biogas
tial of all farms as mentioned above equals 87.4 million m3
plant with the aim to supply the farm with electricity and
per year or, in energy terms, 0.52TWh.
heat.
During the last 2.5 years, 3 demonstrational biogas plants
The Vycia farm has been supplied with electricity from the
have been installed and are operated in Lithuania, 2.1 MW
Ignalina nuclear power plant. All heat consumption, includ-
of total capacity:
ing heating of the stables, has been covered by electricity.
• Ethyl alcohol company “Sema” in Panevezys city, bio- The total annual electricity consumption at the farm has
gas plant capacity 1.5 MW, recovering biogas from al- been 3 700 MWh; 2 300 MWh or 62% has been used for
cohol and yeast production wastes. simple heating and only 38% for electricity. In the farm PP
• Waste water treatment company in Utena town, biogas were established 2 cogeneration units of 110 and 75 kW; in
plant capacity 0.3 MW, recovering biogas from waste total 185 kW electrical power and twice as much kW of
water sludge. thermal power.
• Pig-farming company “Vycia” in Kaunas region, biogas
The project was successful, and it is hoped that this dem-
plant capacity 0.3 MW, recovering biogas from pig ma-
onstration project will be the starting point of a large-scale
nure.
biogas development in Lithuania.
The main of these demonstration plants is the biogas plant
After implementing the renewable energy projects, Lithua-
in the pig-farming company “Vycia” The project was per-
nia reduced its heavy fuel import by 140 000 tons and
formed during four years between early 1996 and early
saves about 12.6 million USD. The release of emissions is
2000. The main purpose was to demonstrate the prospect
reduced as well (compare table below).
of modern Danish biogas technology and to transfer the
Current state of implementation of renewable energy projects and their impact on reduction of emissions.
Cost saving for Reduction of emissions from combustion of
Rated power Substitution of
Sort of purchase of heavy fuel oil if substituted by RES (tons)
of installed heavy fuel oil
RES sources heavy fuel oil Solid
equipment MW (tons) CO2 SO2 NOx
(million USD) particles
Wood chips 160.0 123000 11.00 396000 600 1000 110
Straw 10.0 8800 0.80 28300 430 30 8
Biogas 2.1 1800 0.16 5800 90 6 2
Small hydro 8.0 7000 0.60 22500 300 24 6
Total 180.1 140600 12.56 452600 6820 1060 126
4. References
• Škema., A. Burba, R. Jarmokas. 1998. Implementation of energy efficiency projects in Lithuania. World Energy Efficiency
Day. Proc. of the International Conference, 5 March 1998, Wels, Austria, p.p. 197-199.
• Škema, V. Jarašunas. Energy Efficiency and Climate Change Policy in Lithuania. Proc. of International Seminar “Climate
Technology Initiative, Capacity Building Seminar”, Ostritz, Germany, 6-10 December, 1999.
• V. Katinas, R. Škema. 2001. Renewable energy policy in Lithuania. Energy Policy, 29 (2001) 811-816.
• Mikael Grimmig, V.Jarašunas. Recommendations for improving energy efficiency in the Lithuanian industry. Danish Techno-
logical Institute. Copenhagen, 2000.
Country Report: Poland
Selected “Best Practice” Projects and Measures in Poland
Prof. Piotr Kowalik

Technical University of Gdańsk, Poland
Dr Andrzej Szajner
1. Best practice: The case of biomass utilization – straw boiler for district heating
Selected project: Straw boiler 1 MW in rural area
Basic information on the selected project ploitation. Straw was supplied in bales 2.0 x 1.2 x 0.85m
and weight 250-320kg. It was automatic straw supply here,
The first bigger straw boiler was constructed in Poland in
and the straw was cut into small units. The mineral content
Zielonki near Małbork, 26th October 1996. The capacity of
of straw is 3-4% and the ash is used as a fertilizer in the lo-
the boiler is 1 MW connected to the district heating system
cal agriculture.
of the village with 150 flats and a total heated surface area
of 7 600 m2. It was the substitution of the old coal boiler, Main “success” indicators applied
reducing emissions and decreasing the price of the heat.
The reduction of the emissions because of the substitution
The investment cost was 2 000 000 PLN. According to the
of the coal by straw was for dust emission 14 t/year, sulfur
first year of work 1996/97 the avoided cost of black coal
oxide 20 t/year, nitro-oxide 6 t/year, carbon mono-oxide 27
was 169 000 PLN, but the cost of straw was 57 000 PLN,
t/year. The costs of the district heating are about 80 000
which means three times less. The tariff for heat from straw
PLN/year, while using black coal they would be 200-220
was kept the same as before for black coal during 4 years
000 PLN. An employment effect in the boiler station was
and 1/3 of the payment was covering the expenses to buy
the reduction of employment from 4 to 2 workers, but indi-
straw, but 2/3 of income were covering the cost of credit for
rect employment for straw supply was 4-6 workers.
the investment. During 4 years the total financial balance
was completed. The pay-back period was 4 years here. Af- Realization problems and difficulties
ter 4 years it was possible to reduce greatly the tariff of the Most of the components of the boiler were imported from
heat supply. Denmark, but mounted by a Polish construction company.
Main project components The old coal boiler had a capacity of 1.2 MW and the new
straw boiler 1 MW. It would be possible to change the heat
Poland is producing about 25 mln tons of straw (equivalent
demand by proper insulation of buildings and exchange of
to 12.5 mln tons of black coal). Taking 16% of the annual
windows, and to reduce the heat demand to the level 0.64
Polish production for energy (like in Denmark) gives the
MW in the future. Now the low price of the cheap straw is
energy resources equivalent to 2 mln tons of black coal per
compensating the higher heat demand and heat losses in
year. This potential is stimulating the quick development of
the buildings and flats.
straw fired boilers on the Polish market. Poland is produc-
ing the small farm straw boilers 45-60 kW, medium size Duration / follow-ups / sustainability of
0.25 MW and big units 0.5-3.5 MW. In the case of Zielonki the project / policy
near Małbork it was possible to have full utilization of the System works endure 5 years according to the expecta-
local resources of straw, about 500 t per heating season. tions. It was found that the boiler is very sensitive towards
The price of straw in bales was stabilized up to 50-70 the quality of the straw. The water content of the straw
PLN/t. The price of heat was reduced after 4 years of ex-
234 Piotr Kowalik / Andrzej Szajner
should be always below 20%. For higher values the system while the income of the payment for heat was at 127 000
works badly. It was found that gray straw is much better PLN/year, which meant a surplus of 35 000 PLN/year. Tak-
than yellow straw. The straw of wheat and rye works well, ing the costs for black coal of 203 000 PLN/year and an in-
but the best result gives straw of rape seed, full of oil and come 127 000 PLN/year, this gives a deficit of 76 000
useless for agricultural purposes. PLN/year. During the second year 1997/98 the costs of
straw were 80 000 PLN/year, the income from inhabitants
Cases of domestic replication
141 000 PLN/year, the surplus was 61 000 PLN/year, but
After the first straw boiler the next investments were made, the costs of black coal would be 220 000 PLN/year, income
indicating high replication potential. We may indicate straw 141 000 PLN/year, and the deficit of the coal boiler would
boilers in district heating systems in Poland: Grabowiec 0.8 be 79 000 PLN/year. During the third year 1998/99 the
MW, Wieniec 0.5 MW, Czerniń 2 MW, Krąg 0.5 MW, costs of straw were 77 000 PLN/year, income 141
Pruszcz Gdański 0.5 MW, Kamiennik Wielki 0.5 MW, PLN/year, surplus 63 000 PLN, but in the case of black
Starogard Gdański 1 MW, Cieszymowo 1 M, Lubań 1 MW. coal the price of coal would be 212 000 PLN/year, income
New district heating systems were constructed recently 141 PLN/year and deficit 71 000 PLN/year. The substitu-
with new boilers in Czerniń 3.5 WM and in Lubań 2 x 3.5 tion of coal by straw had changed the deficits to economic
MW. surpluses of the district heating plant.
Main reasons for project success (“success factors”) Pre-requisites / limits / recommendations for
The main reason of project success was energy efficiency, successful replication in other transition countries
economics and ecology. Straw is available in many regions Straw boilers may be implemented in many rural areas.
of Poland and the price of heat in PLN/GJ is 3 times lower The condition is to have dry straw and to build simple straw
from straw than from coal, 5 times lower than from natural boilers, fed by hand two times per day, without full auto-
gas and 6 times lower than from oil. One ton of straw is matic equipment. The optimal size seems to be 0.25 MW
able to substitute 0.5 t of black coal. Emissions from straw per unit, located in the same building with the conventional
are much lower than from coal. During the first year coal boilers.
1996/97 the costs for the straw were at 82 000 PLN/year,
2. Best practice: The case of combined heat and power (CHP)

Title of the selected project:
Combined heat and power plant CHP using wood residues in Jeziory
Basic information on the selected project The comparison of the investment and maintenance costs
is indicating that the utilization of wood would be much
A small pilot power station was installed, with electrical
cheaper in the longer run than the utilization of oil.
power 50 kW(e) and heat power 190 kW(t). For this loca-
tion the electrical energy will be produced only from wood, Main project components
creating an ecological island inside the forestry. The first
The project is located in a nature reserve, an area of high
step would be gasification of the wood. Wood gas, gener-
ecological values, and is directed at the ecological de-
ated in IMBERT installation, is utilized to supply the gas
mands of the local children’s hospital in this forest. The
engine, which in turn drives the generator of the electric
conventional coal boiler or oil boiler will not meet the envi-
current. Produced electric energy is utilized and its sur-
ronmental emission standards of flue gases released into
pluses are transmitted to the power network. Project costs
the atmosphere.
may be evaluated by comparison of the investment and
maintenance costs of different solutions. This system of Main “success” indicators applied
wood gasification and heat and power plant would cost 760 A comparison of the possible emissions is very important
PLN/kW with comparison to the investment of oil boiler with here. Conventional coal boilers would emit 420 mg SO2/MJ
costs of 329 PLN/kW. Maintenance costs for wood gasifi- while wood boilers would emit only 10 mg SO2/MJ. The
cation would be 45 PLN/kW, and for oil boiler 157 PLN/kW. emission of NOx from coal boilers would be 60 mg/MJ, from
wood boilers 80 mg/MJ. The dust emissions from coal boil- Cases of domestic / international replication
ers would be 50 mg/MJ, from wood boilers 80 mg/MJ. The
There is a great interest in the technology of gasification of
emissions of CO from coal boilers would be 1000 mg/MJ
biomass, production of electricity and heat energy (CHP) in
and 40 mg/MG for wood boilers. The emissions from the
many countries. Several prototypes were made, but it is not
system of gasification and production of heat and power
close to the full replication of such solutions. In Polish con-
using gas engines would be 7 mg/MJ for SO2, 54 mg/MJ
ditions gasification of wood started in some factories, but
for NOx, 0 emissions from dust, and 22 mg/MJ for CO
the wood gas production, driving engines and production of
emission. It is difficult to evaluate the payback time and
electricity is still in the initial stage.
cost-benefit ratios, but it is a very ecological solution, with a
pay-back period of few years. Main reasons for project / policy success
(“success factors”)
This solution of gasification of wood and production of
The unit is very small, in the scale of a single school or a
power and heat (CHP) was implemented, giving very low
small hospital, and the full impact effect is not visible yet.
emissions of flue gases to the environment and competing
Realization problems and difficulties economically with oil or coal boilers. The location of the so-
lution in the children’s hospital in the nature reserve area of
The project was realized with the financial support of the
the deep forest was very proper. Ecological, economical
Vojevodship Fund of Environmental Protection in Poznań.
and energy efficiency arguments are supporting such a so-
It was granted as a demonstration solution, without com-
lution for the longer run. The system was before 1995 us-
mercial aspects. It has rather the character of a prototype
ing a coal boiler with high emissions of dust, sulfur and
than that of a commercial implementation, but it works full
mono-oxides. Renovation of the coal boiler was not possi-
scale under real conditions, with supervision by the Insti-
ble and a new boiler was needed.
tute of Heat Technology of the Technical University of
Poznań (dr B. Deptula). The village Jeziory is located in the Pre-requisites / limits / recommendations for
area of the Wielkopolski National Park i.e. in a forest re- successful replication in other transition countries
gion. The main goal was to work with renewable resources
This solution may be directly transferred to other locations.
(solar energy cumulated in wood) and without waste pro-
Development of gasification of organic materials is more
duction, limiting emissions of flue gases, ashes and slung.
and more popular. It is important to mention the solution of
The installation was constructed during the year 1997, and
gasification of the mixture of wooden chips with sewage
is operating in exploitation since 1998, according to the de-
sludge, and to burn the gas from this gasification for heat-
sign parameters.
ing purpose. It was implemented in several locations in Pol-
Duration / follow-ups / sustainability of the project ish wastewater treatment plants, giving very positive eco-
logical, economical and technological effects. May be the
The development of gasification technologies is especially
replication potential of gasification of wood with sewage
important for Central Europe, where no network of gasifiers
sludge will be much higher than the gasification of pure
exists to exploit the energy potentially available through the
wood or straw briquettes. Polish solutions are oriented to-
large quantities of agricultural residues produced. On the
wards the utilization of waste resources, like waste wood,
other hand, the infrastructure of the countries does not al-
waste straw and waste sewage sludge. Utilization of more
low the installation of large plants because of the difficulties
sophisticated resources like biogas from anaerobic diges-
of feedstock collection and transportation. Thus this project
tion, bio-liquids from fermentation and pyrolitic gas from
is concerned with gasification of wood for decentralized
gasification of solid biomass are still waiting for full recogni-
heat and power production. The project is unique in Polish
tion and use. The pilot plant of wood gasification in Jeziory
conditions. It works during the last years, but without a real
is just the first case of more advanced technologies, but it
demonstration program, even if it is a success story.
is not replicable yet.
3. Best practice: Thermal energy conservation in the building sector

Title of the selected program: Implementation of Thermo-Modernization Law in Poland
Basic information on the program • reduction of energy consumption in buildings, residential

and public/ communal,
The Thermo-Modernization Law (Law on Assistance in
• reduction of energy losses in local heating networks and
Thermo-Modernization Projects) introduced in December
local HOBs <11,6 MW,
1998 and modified in 2001 has replaced state subsidies
• conversion of conventional heat sources to non-conven-
with financial support of feasible thermo-modernization pro-
tional sources, incl. renewables.
jects. The objective of the Law is to support modernization
projects aiming at:
Definition of the thermo-modernization project according to the law:
a Modernization resulting in reduction of annual consumption of energy in buildings:

• when modernizing heating system only - min 10%
• building thermo-modernization - min 15% or 25%
b Modernization of local HOB and local network, reduction of energy losses - min 25%
c Closing of local HOB and connection to DH system, reduction of heating costs - min 20%
Financing is arranged by the Bank Gospodarstwa Kra- The important role of the building administration is to install
jowego BGK (Bank of National Economy) through selected heat meters or heat costs-splitters as well as to encourage
commercial banks. The Bank is responsible for verification tenants to save energy and change bad habits, like control-
of energy audits. ling temperature in flats by window opening.
Main project components / policy instruments Main “success” indicators applied
The law has been supported with the secondary legislation, The main success indicator is successful operation of a re-
updated during development of the program. Promoting of volving-type fund supporting thermo modernization. The
the program, verification of energy audits and offering second one is introduction of an energy audit as the de-
funds to cover thermo-modernization bonuses have been mand for allocating of funds.
supported by the state budget.
The implementation of the Thermo-Modernization Law re-
It could be seen from the law, that its regulations are favor- quires a big group of energy auditors. The system of train-
able for renewable energy sources together with thermo- ing energy auditors has been introduced and developed
modernization of buildings providing that the economy of with support of Danish - Polish projects. A group of a few
the investment is good. The key feature of the law is that hundred energy auditors has been trained. Over one hun-
savings must allow for repayment the loan with interest dred of them successfully passed through examination by
within maximum 10 years. The potential of savings means the National Energy Conservation Agency.
the difference between costs of energy in the existing heat-
The system of state support to energy conservation pro-
ing system and costs after thermo-modernization.
jects based on verified energy audits has set a new stan-
The big majority of buildings undergoing thermo- dard for modernization investments.
modernization were built in prefabricated systems of big
slabs of reinforced concrete from the 60’s to 80’s. Energy
audits performed till now have confirmed high annual en- The system requires operating on the market of building
ergy consumption - 180-300 kWh/m2 - in multistory apart- materials and services. This stimulates more activity on this
ment buildings. The typical scope of modernization in- market, higher production of insulation materials and higher
cludes insulation of walls and roof, modernization of heat- employment. Taxes and VAT paid to the state budget
ing installation and replacement of windows. match the money allocated by the state for thermo-
modernization bonuses.
Realization problems and difficulties Main reasons for program success

Till recently the Thermo-Modernization Fund has been
used with a much lower rate than anticipated. One of the The main success factors are as follows:
obstacles was that the thermo-modernization bonus was
• the practice of state subsidies to heating costs and
paid after repayment of 75% of the loan with interest. The
modernization has been replaced by the system of sup-
other one was the condition of positive value of NPV for the
porting feasible thermo-modernization projects based
investment.
on verified energy audits;
The system has been modified this year to stimulate sub- • demonstration of possibility of financing energy conser-
stantial increase of thermo-modernization investments. The vation from savings;
thermo-modernization bonus is offered after completion of • presentation that thermo-modernization of a building is
the investment and thus reduces the thermo-modernization most efficient when combined with replacing of coal
loan. The necessity of positive NPV was cancelled. boilers with DH network, natural gas and especially re-
newable energy (biomass);
Duration / follow-ups / sustainability of the program
• increasing awareness among building administrations,
The program is supposed to be sustainable for the whole housing cooperatives and local authorities.
period of its operation of more than 20 years. It has been
expected that investments of state, communal and private
successful replication in other transition countries
funds shall reach a few hundred million € annually. Cases
of domestic/international replication The major demand and precondition for initiating a revolv-
ing-type fund supporting thermo modernization program is
The whole concept based on the revolving fund energy
the establishment of a system of energy auditors. Based on
conservation projects financed by savings shall prove to be
that a program of financial support of thermo-modernization
successful and could be replicable in other CEE countries.
measures can be introduced.
4. Best practice: Energy service companies (ESCOs) and third party financing
Title of the selected projects: Introduction of ESCO in bigger scale in cities
Basic information on the selected projects cial support of these banks. The specific feature of both
projects is involvement of cities in establishment and de-
ESCO and third party financing (TPF) concepts have been
velopment of ESCO acting on their areas.
introduced and tested in Poland in numerous cases. Typi-
cally they comprise one or few buildings (a school, a hospi- Thanks to previous activities the Energy Service Company
tal or military barracks) and are financed by different in Kraków has been established with active participation of
ESCO- and TPF-type companies. Representative pur- the DH Company. The objective of the WB project is to en-
chaser of service is a municipality. One of biggest TPF hance the possibility of ESCO to considerable increase of
companies BIO-ENERGIA ESP specializes in conversion financing of energy efficiency measures.
of fossil fuels to renewables. However ESCOs are often
The objective of the EBRD supported project is to provide
seen only as an external provider of funds oriented at
the City of Łódź with means for making demand-side en-
achieving too high profit.
ergy efficiency investments in Municipality owned facilities
Two new big projects have been under development in Po- (i.e. schools, office buildings, sports and training centers
land, supported by big international financial institutions - and cultural buildings etc.) without the need for increasing
World Bank and EBRD - and aiming at launching of ESCO its budget expenditure. This will require the establishment
organized and financed projects in much bigger scale, of a new Municipal ESCO (MunESCO) with participation of
namely hundreds of buildings. Both projects require finan- the Municipality, EBRD and external sponsors.
Main projects components Based on readings of energy consumption seasonal sav-

ings of energy consumption have been calculated.
The Kraków Energy Efficiency Project aims at improving
the efficiency of the city's district heating (DH) systems, de- The reduction of heat consumption by consumers has been
crease heat energy consumption by improving energy effi- already achieved. Reached reductions of heat consumption
ciency at the end-user level, and develop knowledge-based are close to estimated and predicted values. Further reduc-
mechanisms to finance energy efficiency projects. The pro- tion of energy consumption is achievable as the result of
ject components will support strategic and development proper maintenance of substations, raising awareness
ecological investments through connections to DH network, among consumers and introduction of energy management
finance investments by sequentially discontinuing current in buildings.
coal-fired heat-only-boilers (HOBs). A certain amount of
HOBs will be converted to gas or oil-firing, co-financed by a
grant from the Global Environment Facility (GEF). Finally There are some obstacles preventing wider spreading of
financing of heat efficiency investments will be provided. ESCO concept in Poland. Firstly public procurement pro-
Funding for the Energy Service Company capitalization will cedures limit the period of contracts to three years and can
be provided, to balance its business development. be extended only when justified. Secondly the rules of the
Energy Law result in keeping heat prices at the lowest lev-
The Łódź MunESCO will recover its investments and a
els within approved tariffs and a recovery of invested capi-
profit margin through the savings that its investments gen-
tal by the ESCO is in many cases difficult. Finally the high
erate for the city. The expected benefits for the city include
interest rate has reduced borrowing possibilities.
a potential share of the energy cost savings during the term
of the MunESCO, an improved level of service to building Duration / follow-ups / sustainability of the projects
users, professional management of the energy efficiency Both projects are after initial stages of implementation and
investment process, optimal supply and utilization of en- are set for successful sustainable operation.
ergy, avoidance of ongoing capital improvement on
thermo-modernization and energy management, off budget
financing of municipal infrastructure investments and miti- Many of the big cities in Poland consider implementation of
gation against energy price increases effects. Under this similar schemes within their premises.
program the city will enter into an Energy Service Perform-
Main reasons for project / policy success
ance Contract (ESPC) with MunESCO for implementation
of energy investments, provision of energy service and en-
ergy management. There are a number of types of ESPCs Both projects have involved cities and big financing institu-
that could be employed, e.g. shared savings, guaranteed tions in order to solve energy efficiency projects in big
savings, value based approach with no guarantees. scale. In the general opinion dedicated, Municipal ESCO is
the most suited to run energy efficiency activities. The
Main “success” indicators applied
companies develop the best strategy of activities to be per-
In both cases certain initial steps have been undertaken. formed, within available finances and Company assign-
Energy audits have been conducted on the agreed sample ment. The success depends on cooperation with the city
of buildings and results of introduction of energy efficiency administration in areas of planning, implementation and
measures have been monitored. The main success indica- operation.
tor is the resulting decrease of energy consumption, energy
costs and environmental impact of energy system.
The concept of Municipal ESCO is recommended to be im-
The first implemented projects have been verified to complemented in other transition countries.
pare assumed and achieved benefits of the modernization.
5. Best practice: Rational energy use in industry

Title of the selected project: Energy self-audit scheme in Polish industry
Basic information on the selected project trends over time and set targets for future improvement.
However, such an approach does not have to be based on
There have been already a few projects with foreign sup-
expensive metering and computer systems, the important
port aiming at energy conservation in industry in Poland.
element is the awareness of how energy is being used and
Those worth mentioning are the Japanese Project on En-
how improvements can be made. This knowledge has
ergy Conservation in Polish Industry, with participation of
been presented during seminars and discussed during site
over 20 companies from the main branches, the Norwegian
visits to plants.
Clean Production project with many medium and big com-
panies participating. The latest program has been initiated Main “success” indicators applied
and organized by KAPE (National Energy Conservation
Energy efficiency also means reduced input costs, better
Agency) with NOVEM within the SAFE program.
quality, and improved competitiveness. The membership of
The primary objectives of the pilot scheme have been the Annual Self Audit Scheme gives a branding of being
achieved namely to develop a scheme, which would en- proactive in energy and environment, which can help in the
courage companies to publicly commit to energy efficiency, market place. Energy efficiency should not be seen in iso-
to implement an energy efficiency strategy and to insure lation, but as an important element of a well run, environ-
that energy efficiency is a priority with top management mentally sound, competitive plant.
and employees alike. It is important that the staff feel they
Conserving energy produces direct environmental benefits
are part of the process of addressing energy efficiency, and
through lower emissions of polluting gases, and many indi-
that the key to its success lies in their knowledge and ex-
rect benefits if saving energy relates to reduced materials
perience.
or water consumption, or lower levels of waste.
The Scheme offers the opportunity for companies to en-
All companies have selected specific Energy Performance
hance their energy management efforts by providing the
Indicator (EPI) and environmental figures related to produc-
incentive of the public commitment along with knowledge
tion. These factors have been already tested, with reduced
sharing and networking for the actual energy managers.
energy consumption represented by EPI already down by
Main project components / policy instruments 1-5% during the first year of the Scheme. The reduced
emission indicators are even greater thanks to the switch to
The participating 25 companies from different industries
less-polluting fuels and connection to DH networks.
across Poland committed themselves to join the scheme in
the beginning of 2001. The major steps undergone during Results / impact / side effects
the project have included training of energy managers, an
The participation by companies has involved a number of
energy audit in the company, introduction of basis of en-
simple steps, which in order are:
ergy management with systematic self-audits, preparation
of an action plan and elaboration of feasibility of energy • Commitment and Registration;
conservation investments. The energy-responsible staff • Energy Audit and Annual Self Audit;
has been equipped with supporting software, allowing for • Statement of Energy Accounts.
analysis of the dynamics of specific energy consumption. Having registered to or committed themselves to the
Proper energy efficiency is much more than technology; it scheme, companies are then obliged to meet these re-
is all the people elements of energy use - policy, aware- quirements. Realization problems and difficulties
ness, maintenance, diligence and responsibility. A formal The difficult situation of Polish finances and the slowing
way of managing energy is through monitoring and target- growth of economy have brought additional problems on
ing, which uses a system, computer or manual, to record the whole industry and participating companies. However
energy usage at many points in the plant in order to find benefits from the introduction of low-cost energy measures
areas that use most energy and also to record energy
are clearly seen and companies have already introduced Main reasons for project / policy success
steps with a pay-back time of few months. (“success factors”)
Duration / follow-ups / sustainability of the project / The participating companies have already proven achiev-
policy ing a measurable reduction of energy intensity by a few
percent. The staff responsible for energy management has
The scheme has been developed under auspices of the
been given knowledge and tools to control the energy con-
Ministry of Economy and will be advised to be transferred
sumption for technology and other demands. The man-
to other industries. The Scheme is offered as one of volun-
agement of the companies has been informed of the impor-
tarily commitments undertaken by the industry, in line with
tance of energy flow and use in companies and the possi-
environmental management systems. The National Con-
bilities of reduction of costs and environmental impact.
ference on Energy Efficiency in Industry presenting the
outcomes of the Scheme is hold in December 2001. Pre-requisites / limits / recommendations for
Industries entering the international market tend to put in
The project is presented at pages of KAPE (kape.gov.pl)
order their energy systems as natural action thanks to
and interested companies can join the Scheme. The indus- competition and marketing rules. The necessary condition
trial energy conservation schemes are known from different is to have real energy prices at the market.
countries.
Country Report: Romania
Selected “Best Practice” Projects and Measures in Romania
Cristian Tantareanu
Roxana Funduca
Center for Promotion of Clean and Efficient Energy in Romania - ENERO
Introduction: The energy background ers. In early 2001, ANRE issued a set of technical codes
for transport and distribution grids. The existing legal and
The Romanian government recently approved a medium-
regulatory framework thus ensures access to the grid for
term National Strategy for the power sector (Ordinance No
any producer or consumer on the rTPA basis (regulated
647/12 July 2001). The main objectives are to develop effi-
Third Party Access).
cient energy markets, to ensure higher quality and security
of supply and to comply with EU standards regarding the The fact remains that an agreed comprehensive and de-
rational use of energy and environment protection. Mod- tailed medium and long-term strategy on environment re-
ernization of obsolescent thermal power plants, introduc- lated energy policy has not yet become fully operational.
tion of efficient technologies for heat supply, including co- Political changes and fluctuations of managerial staff have
generation, construction of the second unit at Chernavoda also affected the consistency of forecasting and forward
nuclear power plant are listed as the main immediate con- planning exercises. A lack of adequate transparency on the
cerns. In its present format, however, the Strategy does not part of government agencies has been compounded by
spell out clearly defined targets, financial resources, re- unclear allocation of responsibilities among various de-
sponsibilities and completion deadlines in specific sub- partments, poor co-ordination of strategies at a macro level
sectors. and weak feedback from major stakeholders because of a
constant failure to secure active involvement of the civil so-
The process leading to a competitive energy market in
ciety, the business community and other stakeholders in
Romania began in July 2000 with the unbundling of
policy making.
CONEL, the former integrated power and heat monopoly.
The basic laws governing the energy sector are the Power It should be noted that Romania has been commendably
and Heat Law (Government Ordinance 63/1998) and the eager to sign the principal international agreements on en-
Energy Efficiency Law (99/Nov.2000), plus the relevant vironment protection and climate change mitigation, includ-
provision in general legislation dealing with natural re- ing the Kyoto Protocol (Law 3/2001), the first country in
sources, environment and commercial company operation. continental Europe to do so. The follow-up measures,
however, have been hesitant and slow to come.
A regulatory frame for Independent Power Producers
(IPPs) is in place. It is supplemented by secondary legal The general legal, political, technological and commercial
disposition such as the Government Decision 567/1999 environment in Romania is therefore congenial to the im-
setting the standards for licenses and authorizations in the plementation of an environment-friendly energy policy rely-
heat and power sector, and the regulatory body ANRE ing more heavily on energy efficiency and wider use of re-
guidelines 36/Aug.1999 regarding the framework contract newable sources for power and heat generation.
for the purchase of power from independent power produc-
242 Cristian Tantareanu / Roxana Funduca
1. Biomass utilization: Wood waste for district heating

Basic information: objectives, organization,
The funding by PHARE grant was essential for the imple-
cost and financing
mentation of this demo project, selected as a priority within
In Romania, today some 740 thousand cubic meters of the Strategy for renewables development in Romania,
wood waste are in no way valorized and are simply thrown drawn up by experts from Romania and EU.
away, polluting the environment.
The objectives of the project were:
• Energy conservation through utilization of wood waste

instead of fossil fuels for heat generation;
• reduction of environment pollution due to the dumping
of this residue to the rivers;
• reduction of costs for heat generation in public buildings
and dwellings.
The beneficiary of this project is the Câmpeni town with a

population of 10,000 inhabitants, placed at the feet of
Apuseni Mountains. Here, an old thermal unit producing Photo: The sawdust: why polluting the river
hot water for heating of blocks of flats by using liquid fossil instead of fueling DH thermal units ?
fuel, was modernized with new boilers using as fuel the
wood waste. Success indicators and results
Project funding: PHARE funds: 100,000 € and local funds: Situation after modernization: Old boilers were replaced by
20,000 €. The technical consultant to the project was the two boilers made in Romania by an original concept, run-
National Institute of Wood. ning on sawdust with calorific power of 2,100 Kcal/kg. The
efficiency of the boilers measured after the test period is
Components and policy instruments
83%, producing 4,087 Gcal/year, that is 88% higher than
Selection criteria for this location were: the old thermal power station operated in 1998. Moreover,
the boilers are each provided with a spare burner on liquid
• high amount of wood residues from the Aries Forest
fuel being completely automated. This thermal power sta-
Basin - about 54,000 tons/year;
tion is provided with all new systems suitable for wood
• high cost of heat generation by liquid fuel burning and
waste burring: unloading platform, silo, inclined belt con-
the increased level of State subventions;
veyors, exhaust plant, ash evacuation and automation.
• high pollution level of Aries River by dumping of wood
residues and sawdust resulted from wood processing Energy savings and reduction of fuel costs are presented
units. below:
Project features Initial situation After modernization Differences %
Calorific power of fuel Hi [Kcal/kg] Liquid fossil fuel Sawdust 2100 -78
Specific consumption -ecc/Gcal- 0.204 0.172 -15,6
Heat generation -Gcal/an- 2175 4087 +88
Cost of heat generation - €/Gcal - 26.45 15.7 -40
Subvention -€/Gcal- 18.0 3.3 -81
Reduction of environmental pollution: Other advantages:
• Utilization of about 2,345 t wood waste/year; • The increase of available heat in the thermal station
• reduction of CO2 emission released when burning fuel with about 88% represents a significant improvement of
oil by some 1,000 t/year; population living standard;
• reduction of SO2 emissions in the open by some 14.5 • a substantial reduction of subventions from the local
t/year. council for the covering of heat costs of about 81%;
• the reduction of pollution due to the previous dumping of tial of replication in a large number of urban areas with
wood residues in the rivers will increase the tourism po- woodworking industries and district heating systems: Ne-
tential and consequently will help the economic devel- hoiu, Busteni, Vatra Dornei, Câmpulung Moldovenesc,
opment of this area; Abrud, Bicaz, Tg. Neamt, Gura Humorului, Câmpina, etc.
• the use of equipment designed and produced in Roma-
Main reasons for success
nia reduces the investment costs.
Deep concern and cooperation of local authorities repre-
Difficulties sented by the Câmpeni Town Council and the Prefect’s Of-
fice of Alba County as well as by the local DH company for
Some technical difficulties were encountered regarding the
the project implementation.
quality of the used sawdust and the prevention of the wood
waste to be mixed with other different particles. West European expertise for the unit concept and design.
Cases of domestic replication Recommendations, limits for other countries
The unit is successfully operating since its commissioning This technology may be applied everywhere the wood
in December 1998. This project demonstrates its technical waste resource exists. In Romania, a specific advantage is
and economic advantages from wood waste utilization as the fact that the wood waste fuel is still available at no cost.
fuel for district heating. The project has also a large poten-
2. Combined Heat and Power: small CHP unit within a maternity hospital
Basic information gas and electricity market opening. One of the first appli-
cations was the small unit installed in the maternity hospital
Small size cogeneration technology starts to be imple-
of the Ploiesti town, some 60 km far from Bucharest. Out-
mented in Romania, taking advantage of the need of de-
put electricity and heat is used on-site, although excess
centralized heat sources, the quite extensive natural gas
electricity can be exported to the distribution grid.
distribution network, the relative low gas energy and the
Technical data are:

• Internal gas combustion engine: CAT 3516 SITA HR
• Heat output: 6 bars steam / hot water for heating purposes at 90/70 oC / domestic hot water
• Power supply at 0.4 and 20 kV voltage
• Rated capacity: 1,033 kW electricity/ 1,352 kW heat
• Rated gas consumption: 2,703 kWh/h
• Global efficiency: 88.2
• Operating hours per year 7,800
• Power output 8,057 MWh /year
• Heat output 10,545 MWh/year
• Annual O&M costs: 140,000 €
The unit was commissioned in 1998. The manufacturer was ENERTRAC SRL, a caterpillar dealer in Romania.
Components and policy instruments Difficulties
Because the investment costs were too high for the local Cogeneration in Romania is entirely associated with the
utility, the project was developed under a leasing financial district heating sector, which currently has a penetration of
scheme between the manufacturer dealer and the utility. 31% of the heat market in the country. Small CHP, as
IPPs, are still at the beginning on the market, even if the
Success indicators and results
regulatory body prepared the basic legislative framework.
The energy bill (heat and electricity) was reduced with
some 27%. The investment is to be returned within a 6
years period.
This project was confronted with the following difficulties, in Cases of domestic replication
fact general barriers for all CHP potential projects:
The success of this project encouraged the unit manufac-
• Legislation changes very frequently. This makes it un- turer to develop another similar small CHP unit in the town
stable and unpredictable; of Sibiu.
• the current legal framework is still unfinished;
• there are no policies for cogeneration nor incentives to
encourage its development; The barrier of high investment costs was overcome by the
• heat prices are still subsidized. leasing scheme.
3. Thermal energy conservation: rehabilitation of the Giurgiu district heating system

Basic information Components and policy instruments
The main goal of this project was to create the technical The pilot project for rehabilitating the DH system was initi-
possibilities for each heat consumer to decide by himself ated following a request from the city of Giurgiu to the Dan-
about the thermal comfort in his own apartment and to pay ish Government. The project consists of two main compo-
for the real heat consumption. The DH consumers had no nents: a rehabilitation part (two substations, network and
means of regulating their heat consumption and no individ- consumers installations in two building blocks) and in an
ual consumption based billing. organizational part (technical and general conditions for DH
supply, consumption based billing, statutes for housing as-
In this respect, the municipality of Giurgiu town and the lo-
sociations). The project consisted of various tasks: concep-
cal heat utility started the rehabilitation of the obsolete and
tion, design, equipment procurement, a measuring pro-
low efficient local DH system. The concept was to decen-
gram, an energy saving campaign and rising the public
tralize the former distribution system by providing a thermal
awareness.
station in every residential district and the installation of
automated thermal substation for each building (block of Success indicators and results
flats).
• The reduction of water and heat waste in the distribution
The project was realized with the financial support of the system;
Danish Environment and Protection Agency – DEPA - • the reduction of distribution costs and obtaining some
through the Ramboll company. economies;
• the training of executive and maintenance personnel;
The project was developed in an area covering 22 blocks
• the protection of the environment.
of flats, 787 apartments with 1980 inhabitants, a hospital,
and a school. 18 substations for heat and domestic hot wa- The total energy economy for the retrofitted area is esti-
ter were built in the basement of every block of flats. For mated to be about 1,454 MWh/year.
two blocks (60 flats) there were installed balancing valves
The fuel consumption reduction is estimated to be: 228
on the risers, thermostatic valves on the radiators, evapo-
t/year for coal and 13 t/year for liquid fossil fuel.
ration heat meter on the radiators and energy meters for
the building blocks. Estimated reductions of pollutants are:
The corresponding substation was equipped with variable • CO2 reduction: 9 - 12 tons/year
speed pumps. As an additional source of heat there were • SO2 0 - 0.27 tons/year
mounted thermal solar panels on the buildings. • NOx 0 - 0.008 - 0.27 tons/year
• particles: 0 - 0.14 tons/year
The total cost of the project was about 1,150,000 €:
Difficulties
• Domestic financing 30,5 %:
• Danish financing 69,5 %; An essential and difficult part of the project consisted in the
• project duration was 24 months, ending in autumn 2001. training of the involved local team in respect to their posi-
tion within the project.
Cases of domestic replication pally-owned). The large majority of the DH systems are
obsolete and have large losses.
There is a huge replication potential in the country. Heat is
the main problem for the domestic consumers in Romania. Several local heat utilities introduced rehabilitation meas-
One of the objectives of the project was exactly to dissemi- ures, similar to the Giurgiu ones: Fagaras, Timisoara, Bu-
nate information on the experience gained to municipali- charest etc.
ties, building cooperatives and DH companies in other
parts of Romania.
The project received massive and targeted support from
The number of utilities supplying district heating is ap-
Romanian stakeholders, from the DH company, supple-
proximately 200, almost totally municipally-owned. In lar-
mented by the participation of a local adviser, a representa-
ger cities district heating is supplied through district heating
tive of the consumers as well as the full back-up of the
companies, independent from other municipal utility activi-
Mayor of Giurgiu. One principal supportive factor was Ro-
ties. At present, there are two main competitors in the
manian financing of the detailed design and implementa-
space heating market: the district heating and CHP plants
tion of the equipment supplied. The lack of local capital
owned by the TERMOELECTRICA Electricity Company
funds was covered by a West European grant.
and the independent district heating plants (usually munici-
4. Energy Services Companies: Still efforts to build the capacity and the market
Basic information of successful European projects and experiences were of-
fered.
ENERO - the Center for Promotion of Clean and Efficient
Energy in Romania is, among other objectives, focusing on (b). Workshop “Promotion of Energy Efficiency Projects
the promotion of the ESCO and TPF concept in Romania. and Third Party Financing in Public Buildings”, Bucharest,
There are not yet concrete examples in Romania on the Romania, April 2001.
ESCO and TPF mechanism application. The ENERO work
The main target groups were municipalities, public building
program, oriented towards ESCO promotion in 2001, in-
administrators, energy companies, NGOs, financial organi-
cluded:
zations, universities, research bodies. The representative
(a) Info-Guide for “bankable” documentation necessary for from the Agency EVA-OPET Austria presented the report
financing of RUE projects in public buildings. “Energy Performance Contracting – Experiences in Aus-
tria”, which has shown successful examples and results in
The ENERO efforts were targeted at establishing struc-
terms of economic as well as CO2 savings. These presen-
tures for financing the RUE projects in public buildings and
tations were followed by an open debate.
the basic components of bankable proposals. The repre-
sentatives from municipalities, market operators and end A SWOT analysis on the ESCO promotion in Romania:
users requested basic information as: who is making the
Strengths
application for funding, how to identify the suitable build-
ings, the type of financing required, the amount required, • The general legislative background exists: the Energy
and a simplified cash flow analysis with energy savings es- Law, The Energy Efficiency Law and also other norms
timates. The guide presents an “Introduction to Business” as the Governmental Ordinance OG292000 on the
(the lender must understand the strengths and risks, the thermal rehabilitation of buildings and thermal energy
current situation and future plans of the client’s business) savings;
and the potential benefits - energy savings/environmental • there is a positive attitude of the regulatory bodies as:
improvements, project costs, energy consumption, basis the Romanian Agency for Energy Conservation -
for the cost estimate. Another part of the guide offers the ARCE, the Romanian Authority on Heat and Power –
key regulations required for the project from public authori- ANRE;
ties as well as environmental regulations. Also, examples • the market potential is huge, with large reserves for en-
ergy savings.
Weaknesses • several private Romanian ESCOs are ready to open the

market;
• The secondary legislation is not complete;
• the political commitment to adopt the acquis commun-
• bureaucratic difficulties to apply the existing legislation;
autaire: for example the SAVE directive.
• the energy cost is still low;
• lack of information about ESCOs and the adjacent fi- Threats
nancial mechanisms;
• The disrespect of the norms and market mechanisms,
• The thermal energy is subsidized;
up to the non-payment of energy;
• suspicious attitude of potential users;
• difficulties in monitoring and certification of the energy
• the banking system is not prepared;
savings;
• investments have a rather high period of return.
• the users do not know who to contact for an energy au-
Opportunities dit or a performance contract;
• instability of the energy prices;
• Quite numerous opportunities to attract international
• the complexity of the ESCO mechanism.
funds;
• the rising trend of the energy cost;
5. Rational energy use in households appliances:

Labeling and certification of domestic appliances
Basic information In this respect, the National Institute of R&D ICEMENERG
built the first laboratory of tests for certification. The labora-
The aim of this project is the harmonization of the Roma-
tory is composed of: a test room for cooling household ap-
nian legislation with the European one, regarding the label-
pliances; a control room for data gathering and processing;
ing and standardization of energy efficiency of domestic
a test room for washing household appliances. The labora-
appliances. In order to underline the importance of the pro-
tory’s endowing and arrangement was made using public
ject in respect with the domestic appliances market, linked
and European (PHARE-TTQM) funds. The test and meas-
with some 7 million households in Romania, some statistics
ure equipment are in concordance with SR EN 153.
are presented here.
% Energy efficiency certification means the validation,
Refrigerators and fridge/freezers through application of the mark (stamp) by the certified au-
Less than 5 years 15,1 thority, of data/elements written in the label of the
From 5 to less than 10 years 18,3 model/type of domestic appliance made ready to be offered
From 10 to less than 15 years 25,4
for sale/rent.
More than 15 years 41,3
Freezers The results obtained after the validation tests, made in
Less than 5 years 33,7 standard conditions, are compared with those noted by the
producer/supplier in the label after the house tests made in
More than 15 years 10,5 the same conditions. In the case of the validation of the
Washing machines comparative results, the authority applies the mark. The
Less than 5 years 23,4 potential clients of the laboratory can be local and foreign
From 5 to less than 10 years 17,3 producers of cooling household appliances, as well as the
importing firms of such household appliances.
More than 15 years 35,4
As may be seen, many appliances are old machines with The participants of the project were: the National Institute
low efficiency. They have to be replaced soon by a new of R&D ICEMENERG, the Romanian Agency of Energy
generation. It is important to control and promote on the Conservation ARCE and the Institute of Quality Certifica-
market only efficient machines. This is why it was neces- tion - IMQ-Italy. The total costs of the project are: 174,000
sary to develop norms and the technical tools for the label- €. Project duration was from January 1997 to December
ing and certification of domestic appliances 2000.
¾ Acquisition of equipment: 107,000 € public R&D funds and 26,000 € PHARE funds
¾ laboratory arrangement 36,000 € PHARE funds
other activities 2,500 € other funds
¾ RENAR certification 2,200 € PHARE funds + other funds.
Components and policy instruments The usual yearly domestic consumption is estimated to be
almost 8 TWh, including:
In a first stage of the project, ICEMENERG has achieved
the norms for cooling household appliances-CHA (refrig- • CHA 2,345 GWh;
erators, fridge/freezers and freezers), in concordance with • washing machines 782 GWh;
the valid European legislation. The decision HG 573/14 • domestic lighting 3,126 GWh.
June 2001, published in Official Journal, took over the de-
The energy labelling of the domestic appliances will lead to
cisions of the Directives referring to the CHA and stipulated
a reduction of the consumed power with at least 5%, which
that on the market there are accepted only the CHA with
means 0.4 GWh/yearly.
smaller or equal energy consumption to the maximal ac-
cepted consumption, adequate for the class of efficiency Other positive impacts:
from the respective category, and are accompanied by: • Stimulation of the ortopraxy – the best utilization of the
• a label with the inscription ENERGY where it is written domestic appliances from the ecological point of view;
the class of efficiency, the energy consumption, the • rising the quality services of the appliances, with lower
level of noise; energy costs;
• a file with information about the domestic appliance; • improving the competitiveness of the indigenous manu-
• an EC mark. factures, in view of European integration.
Also within this project, ICEMENERG elaborated the norms Difficulties

for washing household appliances (washing machines), The recent elaborate Energy Efficiency Law has no secon-
which became the Governmental Decision HG 598/21 June dary legislation, thus the specific regulations to impose the
2001, concerning the labeling for washing household appli- labeling are not operational.
ances.
In this context, the Ministry of Industry and Resources and
The position document, issued in May 2001 by the Roma-
the Romanian Agency for Energy Conservation decided to
nian government, states clearly that “Romania accepts the
build the first laboratory of tests for certification of domestic
acquis communautaire on Chapter 14 Energy. Romania
appliances efficiency.
will apply the acquis communautaire on energy upon the
Success indicators and results date of accession.” This commitment led also to the inter-
The laboratory was completed and is now ready to perform est in the adoption of the labeling and certification of do-
the required tests. mestic appliances according to the European norms.
248 Igor Bashmakov
Country Report: Russia
Climate Technology and Energy Efficiency - Disseminating Best Practice Experience
Dr. Igor Bashmakov

Center for Energy Efficiency
The positive history of energy efficiency improvements and to Russian Federation: energy efficiency improvement in
GHG emissions mitigation can be reflected both by a set of industrial sector; energy efficiency improvements in build-
specific indicators and by so called “success stories” or ings; combined heat and power; ESCOs experience, and
“best practices”. While indicators are providing just the re- biomass use. “Best practices” described below are dis-
sult of activities, those stories or practices provide in addi- seminated by a number of informational instruments: “En-
tion details on how positive results were achieved. Below ergy efficiency” and “Energy manager” bulletin published
five examples of “best practices” are presented. They are by CENEf, MUNEE newsletter, CENEf’s internet site, pub-
reflecting five directions of energy efficiency improvements lications in Russian energy efficiency literature.
and GHG emissions mitigation ranked by their importance
1. Energy efficiency improvement in industrial sector.

Magnitogorsk metallurgical combine
At Magnitogorsk metallurgical combine specialists of the By 1996 the energy-generating equipment at the Combine
Chief Energy Manager Board (CEB) have developed the exhausted its service life. Annual repairing expenses
“Concept of OAO “MMC” Energy Efficiency Development in amounted to 35% of new equipment costs, while repair du-
1997-2005” based on a comprehensive, systematical ap- ration exceeded the standard one by a factor of 2-3. In
proach to the enterprise’s energy efficiency improvement. 1997–1998 three counter-pressure turbines of 14 MW total
(for more details see: G. Nikiforov. Experience in complex capacity (two 4 MW and one 6 MW) were put into opera-
approaches to introducing energy efficient equipment at an tion. In 1999-2001 three condensing turbines (12, 25 and
industrial enterprise. “Energy Efficiency”. №32). In line with 30 MW), and one for 40 MW fueled by blast-furnace and
the approach mentioned the following main objectives were coke gases were commissioned with average specific capi-
formulated in the OAO “MMC” concept: tal costs of $38.4 thous./MW.
• Retrofitting of the existing energy facilities aimed at 121 MW in power addition did not require any additional
maximum use of the enterprise’s own energy resources consumption of natural gas, while utilization of blast-
• Maximum utilization of secondary energy resources furnace and coke gases was brought up to 99.9%.
(SER) primarily aimed at power generation
The project paid back in 1–1.5 years. In 1996 electricity
• Implementation of measures assuring reduction of en-
costs contributed to 6.3% of metal production costs but in
ergy costs.
2001 - just 0.6%. A ratio between power cost from own en-
To run the program at the Combine a special structure was ergy generating sources and from regional power system,
created – the Center for Energy Saving Technologies, equal to 1:3, was attained.
which employs over 170 people and is responsible for
All the above-mentioned suggests an unambiguous con-
planning, management and control over energy balance
clusion: power generation at a metallurgical enterprise is
and its use for optimization and improving the efficiency of
both advantageous and advisable from the energy security
the enterprise. For implementation of energy-efficient pro-
standpoint. This conclusion in many cases can be extrapo-
jects OAO “MMC” uses various financing schemes. Six fre-
lated to other profile enterprises.
quency shifters were acquired through a leasing scheme.
An energy audit conducted by specialists of the Center for • introduction of automated system of excitation current
Energy Saving Technologies (CEST) revealed rather high reduction in the main drives, when the mill is halted for
potentialities for power saving in this mill. For two years more than 30 s;
regular efforts were made for: • review of all 10/0/4 kV indoor networks, bearing in mind
optimization of the transformers load, without impairing
• Installation of step control of speed for fans operating in
the system reliability as a whole.
the winter-summer modes and in inter-seasonal periods
with loads differing in the range up to 50%; These measures permitted to reduce the electricity con-
• installation of pliant startup of drives for cooling water sumption by 12% or about 75 MW by the “2000” mill. Simi-
supply to the mill; lar efforts are undertaken in other flatting mills.
• estimation of operation modes of the main drive fans
The complex energy saving policy resulted in reduction of
with their potential switching to one or two, depending
specific energy consumption by 23% (from 8.23 to 6.3
on the main drive loading and temperature schedule;
Gcal/t of crude steel), while the production costs fell down
(or net profits went up) by 13.6%. The program for 2002-03
is aimed at additional power consumption reduction by 7%.
2. Energy efficiency improvements in buildings. City of Cherepovets

Housing reforms in the city of Cherepovets started at 1995. • restructuring public subsidies which has provided a so-
(see T. Tasenko. Municipal heat and water supply: experi- cial support to the least-paid population;
ence in transformations in the city of Cherepovets in Vo- • growth of the number of municipal facilities equipped
logda region. “Energy Efficiency”, № 32.) Housing divesti- with heat- and water meters;
ture was initiated, and 4.5 million sq. meters of living • gradual improvement of market environment in the mu-
space, obsolete heat networks were also divested. Only nicipal housing and public utility services sector through
10.5 percent of facilities to be transferred to municipalities tenders for renovation of engineering systems in public
were equipped with water meters. Housing and communal buildings and for technical maintenance of residential
costs in the municipal budget increased from 12.3% to buildings;
31.1% because of housing divestiture while residents’ • foundation of six acting ESCOs, who are eventually ex-
payments covered only 5-7% of housing costs and pay- panding their activities;
ments’ collection did not exceed 60%. The municipal • receiving a World Bank loan under the Housing Divesti-
budget failed to bear such a burden, and its debts skyrock- ture Project and successful implementation of this pro-
eted. The city administration launched the Program of ject being at this point the leader in terms of spent funds
Housing and Communal Services Reform. The program of and debt service discipline;
energy efficiency improvement in housing sector was a • development of a monitoring system for this project.
main component of that Program.
Heat and water payments by residents of buildings owned
The success of the Residential Heat- And Water Effi- by the municipality are currently made through a billing &
ciency Program implemented in Cherepovets is primarily information center. The payment discipline of the popula-
determined by: tion has significantly improved (63 % in 1995 versus 97.5
% in 2001). Since July 1, 2001, residential heat and water
• a sound tariff policy, which not only saves municipal
tariffs are equal to those for the industrial sector and resi-
utilities from financial loss, but also provides funding for
dents are covering 100 percent of their utility costs. There
equipment renovation and upgrade (wear of water pipes
are still barriers on energy efficiency improvements which
has decreased from 75 to 25 percent);
are not Cherepovets specific, but rather typical for all Rus-
• introduction of a dual tariff (network charge plus actual
sian cities. The major problems are non-involvement of
consumption payments) that improved and stabilized
residents in the program and lack of competition. The fol-
the financial situation of municipal utilities;
lowing table provides a brief description of the municipal
energy efficiency program implemented in Cherepovets.
250 Igor Bashmakov
Country: Russia Region: Vologda Oblast City: Cherepovets

Program targets:
Energy efficiency project ; Public subsidies restructuring ; Other
District heating reform Setting up energy efficiency fund
Water utilities reform Housing reform ;
EFFECT: payments discipline improvement; subsidies restructuring; energy service companies activity expan-
sion; intense replacement of water pipelines resulting in abrupt decrease of their deterioration level; tariff de-
sign based on heat and water metering; financial improvements in heat- and water utilities due to the introduc-
tion of a dual tariff.
PROGRAM SUCCESS CRITERIA:
Before the After the
Indicators
program program
Level of energy passport compilation:
boiler-houses 47% 100%
heat mains and heat distribution networks 13% 100%
storm drain network 0% 100%
residential buildings (dwelling passports) 12% 100%
residential buildings (energy passports) 3% 37%
public buildings 4% 45%
Share of municipal facilities equipped with fuel, energy, heat, and water metering devices
Boiler-houses:
natural gas meters 80% 100%
heat meters 56% 100%
Residential buildings (inlets):
water meters 12% 100%
heat meters 0,1% 6%
natural gas meters 3% 7%
separate heat metering (space heating and hot water supply 0% 2%
metered separately)
Public buildings:
water meters 15% 100%
heat meters 7% 34%
natural gas meters 0,5% 100%
separate heat metering (space heating, ventilation and hot 0% 5%
water supply metered separately)
Contracting public buildings renovation Contractor is appointed by Contractor is identified
financed from the city budget the city administration based on the tender results
Number of energy service companies 0 6
Financial savings resulting from projects imple-

- 1.2
mented by ESCOs in schools, (mln. rubles / year)
Water supply network depreciation 75% 25%
Residents’ payment discipline

63% 97.5%
(the ratio of payments collected to energy bills)
Setting up housing associations
0% 3%
(% of total living space)
3. Combined heat and power

Russia is well known for a very high share of cogeneration There are some discussions on how to improve tariff poli-
both in electricity generation and in heat production. This cies, but not much progress in real changes was made.
brings in many cases not only benefits but also creates a
Technological progress in improving efficiency of cogene-
lot of problems, and it does not just improve energy effi-
ration plants can be illustrated based on several examples.
ciency but also often leads to substantial heat losses.
Among multiple reasons is this one which determines the Combined cycle cogeneration plant North-West CHP.
efficiency of cogeneration. Its efficiency in Russia always The first phase started when this facility was commissioned
was estimated based on efficiency at power and heat pro- in late December 2000 in Sankt Petersburg. Owners of this
duction points, while it should be relative to final consump- power plant include RAO “EES Rossii”, “Gasprom”, “Le-
tion efficiency. nenergo”, “Lentraansgas”, Sankt Petersburg city admini-
stration. Installed capacity of the first phase is 450 MW. To-
For some large systems with very high cogeneration ratio
tal installed capacity will be 1800 MW. The specific fuel
energy efficiency deteriorates. For example in “Mosenergo”
consumption of North-West CHP is down by 25%. After
– the largest Russian power utility – generating 69 billion
fully commissioned and replacing loads of municipal boilers
kWh and 69 million Gcal annually since 1998 the specific
reduction of NOx and CO2 emissions would reach 25%.
fuel consumption per 1 kWh grew up by 6.4 gce/kWh in
1998, by additional 5.2 gce/kWh in 1999 and by 4.3 Gas turbines CHPs. Today the major tendency in Russia
gce/kWh in 2000. Reduction of electricity generation in co- is not to build large-scale very capital-intensive cogenera-
generation mode was partly responsible for such a growth. tion plants, but rather upgrading or replacing industrial and
This reduction in turn is result of a pricing policy forcing municipal boilers and transforming them into small CHPs.
many industrial enterprises to switch from central heating Several gas turbines CHP (GTU-CHP) with the gas tur-
to own boiler houses and all consumers to use less heat. bines GTU-4P already were commissioned: in the settle-
That is why “Mosenergo” launched an energy efficiency ment of Bolsheust’ikinskoe in the Republic of Bashkor-
improvement program (For more details see “Energy Effi- tostan, in industrial OAO “Surgutneftegaz”, in OAO “Perm
ciency”. №31, 2001). Motor Plant” and in other places.
Another example is the unrealized efficiency potential from In the Perm Regional Energy Program up to 2010 installa-
cogeneration from the city of Omsk. If three large cogene- tion of such CHPs is planned for 63 boiler houses with a
ration plants would work in parallel with industrial boilers, heat capacity over 10 Gcal/h each including 33 municipal
then it would be possible to switch 50% of industrial boil- boiler houses, and 30 industrial and agricultural ones. Av-
ers´ load to cogeneration units with growing of overall fuel erage fuel efficiency for each unit is expected to be over
use efficiency from 61.5 to 67.5 percent, and fuel savings 65%.
would approach 630,000 tce per year.
After the program is completed the installed electric capac-
Therefore, today in Russia not technical progress, but ity will reach 328 MW, fuel savings are expected to be 0.7
rather corrections of pricing policies and creation of effec- million tce per year.
tive power and heat market structures are necessary to re-
alize full benefits from cogeneration.
4. ESCOs experience
There are only small scale ECSOs established in many There are six private ESCOs operating in the city. They are
Russian regions. This business is only at initial stage. Main basically involved in installation and maintenance of heat
regulatory issues are to be resolved until it will grow up sig- and power meters and energy efficiency improvements.
nificantly. Below the recorded experience of ESCOs in Five ESCOs work only with commercial firms, the sixth
Cherepovets is discussed. company, “Yana”, also works with public buildings (primar-
ily with schools and kindergartens).
252 Igor Bashmakov
The energy efficiency measures include installation of heat • The ESCO, which wins the tender, signs a contract with
meters, renovation of the heating system, installation of the city education department and becomes the general
automation systems to bring down heating at nighttime; contractor.
improving thermal performance of buildings, introduction of • signs a contract with the municipality for the mainte-
façade heating regulation, etc. nance of installed equipment.
• Energy savings are evaluated.
Since 1995, 15 projects of installation of heat meters in
• Financial savings are accumulated in the municipal
schools have been implemented in the city. The project-
budget.
monitoring group estimates an average annual effect at
• The ESCO gets the profit from the budget allocated for
400 thousand rubles per project (13 thousand USD). The
the buildings maintenance.
mechanism of financial savings accumulation developed by
CENEf is used in Cherepovets to reveal, estimate and ac- Type 2.
cumulate municipal budget savings (see Energy Efficiency
• A tender is announced for the implementation of energy
Bulletin No.24 July-September, 1999, p. 8-10).
efficiency measures in a school to achieve estimated
Two types of cooperation between ESCOs and municipality (planned) energy resource savings.
(namely education department) are in use: • The ESCO which wins the tender receives municipal
funds, according to the proposed budget, in the form of
Type 1.
an interest-free loan.
• The city budget includes funds for renovation of a num- • After the project is implemented and commissioned,
ber of schools. This budget specifies, which schools will both municipality and ESCO monitor its effect and iden-
be renovated, and allocates funds for upgrading engi- tify financial savings generated by the project.
neering systems, including installation of heat meters • If the actual financial savings are larger than previously
and renovation of their heating systems. estimated, the equivalent of identified excess is paid to
• The municipal tender commission announces a tender. the ESCO as a bonus.
• An ESCO submits a proposal to the tender commission.
The second algorithm motivates the ESCO to get larger
savings.
5. Biomass use. Licino forest college boiler house

Licino settlement is located 60 km from Sankt Petersburg bark. That boiler covers 80% of the heat demand in the set-
(for more details see “Novosti Teplosnabgenia”. №4, 2000 tlement with the rest provided by masut boilers left to cover
and №3. 2001). The forest college boiler house possesses the peak demand. All processes in the boiler house are
90 thousand hectares of forests with the potential to collect automated.
30 thousand m3 of wood, sufficient to generate 45 thou-
The boiler is in operation for over 4 years. Energy effi-
sand Gcal of heat annually, but was fueled by heavy oil –
ciency of the new wood fueled boiler is 80 to 85%. Wooden
masut. The annual heat demand for teaching and living fa-
chips are just 3 $ per m3. Some pulp and paper enterprises
cilities as well as for residential houses, public buildings,
sell chips for 5-10 US$/m3. With such prices the fuel cost
and small houses is equal to 10 thousand Gcal with 14
component of generated heat is 1.5-3.5 US$/Gcal compar-
percent of that number coming for hot water.
ing with the masut case – 13 US$/Gcal, and with the natu-
In the framework of the Swedish assistance program ral gas case – slightly lower 3 US$/Gcal. Keeping in mind
NUTEC (presently STEM), a project to switch this boiler the dynamic growth of domestic prices for natural gas in
house to fuel wood was implemented. The old boiler house Russia, wooden fueled boilers can become even more
(total capacity 3,2 MV) was equipped with three masut fired economically viable than natural gas powered boilers. The
boilers and one fueled by fuel wood with manual load. reduction of fuel cost is the main component of fuel switch-
Boiler modernizations included the replacement of the old ing economic effect.
wood fueled boiler by a new one using wood chips and
The payback is estimated equal to 5-6 years. Facility maintenance, partly due to the lack of companies specializ-
owner’s net profits after debt service for 15 years are 0,5 ing on servicing such type of equipment. Once the fre-
million US$. There is a substantial reduction in emissions. quency regulator for the boiler’s secondary blowing fan with
adjustable speed drive failed. It was delivered to Moscow
Reduction of emissions associated with fuel switch at “Siemens” office and answer was given that such devices
Licino boiler house (t per year) are not under production any more.
Fuel Emission There already are a number of replications. Another
Emissions of
Masut Wood chips reductions
wooden fueled boiler house was constructed in the settle-
SO2 60,6 1,0 59,6 ment of Krasnii Bor not far from Lysino with a credit pro-
NOx 6,6 4,0 2,6 vided by the Swedish government. It is in operation for al-
Particles 7,7 3,1 4,6 ready 2 years. There were already a number of masut and
CO2 3960 0 3960 natural gas boilers switched to wooden fuels base on Rus-
sian made equipment (Biisk Boiler Manufacturing Plant)
Ash generated by boiler is in high demand for fertilizations with an efficiency about 80%. “Lesenergo” alone installed
of vegetable gardens of local residence. over 20 of them with the one at Ulianovsk Forestry Indus-
trial Combine. Many Russian regions are presently consid-
Generally newly installed equipment proved to be reliable ering switching masut powered boilers to wooden fuels and
and simple to manage. But there were some technical to peat.
problems with serving this boiler and with getting spare
parts and failed sensors in the process of repairing and
254 Ludovít Mikula / Vladimir Hecl
Country Report: Slovakia
Cliomate Technology Initiative – Disseminating “Best Practice” Experience

Cogeneration Centre, Slovak Energy Agency
Ing. Vladimir Hecl

Energy Centre Bratislava
1. Biomass utilization in Slovakia

Biomass is currently one of the most important RES in Slo- pends on the development of each region and implementa-
vakia. Forests cover forty-two percents of Slovakia’s sur- tion of regional energy plans in the future. Total energy ca-
face and another 35% are used for farming. The main utili- pacity of biomass in Slovakia is shown in table 1.
zation of biomass is expected on a regional level and de-
Table 1 Total exploitable capacity of biomass in Slovakia
Type of biomass Exploitable capacity (t/y) Energy equivalent (TJ/y)

Forest biomass
Thin branches up to 7 cm 250 740 2 383,05
Thick branch waste 76 200 724,00
Waste produced by handling/processing wood 110 590 1 050,69
Fuel wood 323 900 3 079,81
Bio-mass from thinning of forests 14 300 138,58
Stumps and roots 23 500 223,25
Waste produced by mechanical processing of wood 103 800 1 170,00
Total 903 030 8 769,38
Agriculture biomass
Grain straw 272 700 3 861,00
Rape and sunflower straw 161 300 2 223,30
Waste from orchards and vineyards 50 400 528,60
Biogas 43 530 972,50
Biofuel 5 500 214,50
Total 489 900 7 799,90
Waste from wood processing industry
Piece waste 483 000 5 680,10
Fine grained waste 322 000 3 741,70
Liquid waste 460 000 6 440,00
Total 1 265 000 15 861,80
Dregs from the sewage tanks 31 022 1) 682,50
Communal waste
Communal waste 177 000 1 062,00
Wood communal waste 133 200 1 466,00
Total communal waste 310 200 2 528,00
TOTAL 2 968 130 35 641,58
1) 103 m3, tables do not include energy crops
Forest biomass Table 4 Yearly wood fuel production
Statistics on wood bio fuel production are shown in table 2. Yearly wood fuel production (t/year)
The annual thick branch amounts gives table 3. Annual From conifers 89 300
wood fuel production is given in table 4. Technically ex- From deciduous 234 900
ploitable energy value potential of wood biomass is shown Total 324 200
in figure 1.
By-products from wood processing industry
Table 2 Annual thin branch amounts
There are 150 small and 21 medium and large enterprises
Annual amounts
in the wood processing industry of the Slovak Republic.
After limiting factors
With an annual production capacity of 2,9.106 m3 of wood,
taken into account
After fell- 1,265.106 tons of by-products biomass is produced. Out of
Thin branches ing Biological
Biological and techno- this amount, almost two thirds are by-products resulting
logical from mechanical wood processing and one third is so-
(t/year) (t/year) (t/year) called black lye. The amounts of wood waste from the
From conifers 223 400 158 100 79 300 wood processing industry is shown in table 5.
From deciduous 429 200 340 600 171 440
Total 652 600 498 700 250 740 Table 5 Amounts of wood by-products from
the wood processing industry
Table 3 Annual thick branch amounts
Yearly amount Energy value
Type
Annual amounts (t/year) (TJ/year)
After biological and techno- Piece waste wet 321 000 3 040
Thick branches After fell-
logical limitations dry 162 000 2 640
ing
taken into account Fine waste wet 221 000 2 090
(t/year) (t/year) dry 111 000 1 650
From conifers 66 100 30 680 Total 805 000 9 420
From deciduous 88 550 45 520 wet waste: more than 30% moisture content;
Total 154 650 76 200 dry waste: 8-12% moisture content
Figure 3: Technically exploitable energy value potential of wood biomass
W a s te p ro d e c e d b y
m e c h a n ic a l
S tu m p s a n d ro o ts p ro c e s s in g o f w o o d
1170 TJ T h in b ra n c h e s
2 2 3 ,2 5 T J 2 3 8 3 ,0 5 T J
2 ,5 5 % 1 3 ,3 4 %
27%
B io m a s s fro m th in n in g
o f fo re s ts
1 3 8 ,5 8 T J
1 ,5 8 % T h ic k b ra n c h w a s te
724 TJ
8 ,2 6 %
Fuel wood W a s te p ro d u c e d b y
3 0 7 9 ,8 1 T J h a n d lin g o f w o o d
3 5 ,1 2 % 1 0 5 0 ,6 9 T J
1 1 ,9 8 %
The energy exploitation of black liquor is both location-wise Communal wood residuals
and time-wise dependent on wood processing enterprises
In figure 2 is shown the exploitable potential of the commu-
in Ružomberok, Vranov nad Topľou and Štúrovo.
nal wood residuals by region in Slovakia.
Figure 4: Energy potential of communal wood remaining by region in Slovakia
Bratislava region
Košice region 2172,52 TJ
6,10% Trnava region
3152,25 TJ
3696,8 TJ
8,84%
10,37%
Prešov region
5514,02
15,47% Trenčín region
2794,3 TJ
7,84%
Banská Bystrica
region Nitra region
5102,2 TJ Žilina region
6476,32 TJ
14,32% 6733,32 TJ
19,17%
19,89%
2. Energy-environmental relations in Slovakia (cases of particular project solutions)

Relations among energy sources, their exploitation and im- Total installed electricity capacity of all sources is around
pacts to environment have specific features. 8,500 MW, the largest item is represented by nuclear
power stations - 2,640 MW. In the last years higher atten-
Slovakia has not own significant fuel-energy sources.
tion is paid to cogeneration technologies. The total installed
Sources of low caloric coal are small with negative impact
capacity of CHP technologies (all categories) is 1,905 MW,
to environment and that is a reason the mining is in ceas-
classified to:
ing regime.
• 825 MW in conventional (steam) H&P plants;
Almost 90% of fuel-energy sources are imported, particu-
• 260 MW in gas turbine combined cycle;
larly natural gas, crude oil, black coal and nuclear fuel ele-
• 10 MW in small scale cogeneration units.
ments. On the other hand must be stated that the renew-
able energy sources are exploited in smaller scale than it With the aim to reduce a negative impact of the energy
could be appropriate and desirable. The reason of this production on the environment the trend of CHP implemen-
status is an unprepared base for collection, treatment and tation is visible especially in gas turbine cycle category.
technological processing of biomass, and also unsuitable
In the next part the particular solutions as “best practice”
conditions for solar and wind energy utilization. Currently
projects are introduced. From this point of view one can
the share of renewables utilization is 3.5% only. From this
see a better attitude to more effective conversion of fuel to
a major share is represented by small hydro power sta-
energy and more rational energy management. The sub-
tions, the biomass is accounting one-third, geothermal en-
jects of that are as follows:
ergy is only a small fraction and the rest of renewables
forms are negligible or even zero. • Best practice: Gas turbine combined cycle Bratislava
• Best practice: Utilization of unconventional waste gases
Total primary energy sources are represented in value of
via cogeneration units in Komarno town
754 PJ/a and electricity consumption is close to 30 TWh/a.
• Best practice: Hydraulic balancing and thermostatic The parameters of working medium are as follows
control adjustment of heating systems at company C inlet temperature of medium at gas turbine 1,060°
OSBD Martin inlet pressure of medium at gasturbine 1.05 Mpa
• Best practice: Replacement of old, unsuitable boilers outlet temperature 550°C
with biomass boilers in Bučina company, Zvolen outlet pressure 0.103 Mpa
• Best practice: Modernization of energy system in Žilina inlet temperature at steam turbine 520°C
hospital inlet pressure at steam turbine 7.9 Mpa
• Best practice: Solar collectors – possible supplementary outlet temperature of steam in range 85 - 120°C
renewable energy source for preparation Domestic Hot
The heat (enthalpy) of steam at turbine outlet is utilized in
Water (DHW).
heating systems (commercial purposes) or in case of non
Gas turbine combined cycle Bratislava off-take must be degraded by condensation. There is an
air-cooled condenser installed. The power and heat pro-
The high power energy source “Gas turbine combined cy-
duction is controlled in such a way, that a maximum of heat
cle Bratislava” was designed and implemented as the first
supply could be compensated by a small decrease of
project of the new energy conception of Slovakia. Within
power production.
the scope of this it was considered to use more effective
sources fueled by natural gas. GTCC is over-connected to the public grid and to the dis-
trict heating system “Bratislava - East”. Power production is
The implementation of this project started in 1995 and it
managed via instructions of the Central Dispatching Board
was put in operation in 1998. Shareholders companies
in accordance to the course of electricity peaks. Thermal
were established, created from Slovakian power plant and
loading and heat supply depend on climate conditions.
gas companies as members. In competition of several
submitted offers the proposal of the German company It was proved as great advantage, that this GTCC unit is
SIEMENS was chosen. There was chosen a “turn key” flexible and dynamic, despite of combination of two cycles.
mode for providing the project implementation. The total in- That is a reason for classification as a “dispatching source
vestment costs amounted to 155 Mio. DM. reserve”. The gas turbine has an attribute of high accelera-
Basic parameters of the project: tion: from zero loading it is able to run to full output (157
power capacity 218 MWe MWe) during 10 minutes.
heat supply capacity 186 MWt The indicators of operation quality after overcoming the ini-
there of capacity: in hot water 157 MWt tial problems are stabilized and could be assessed as posi-
in steam 29 MWt tive.
efficiency of electricity production
46.2%
(at terminal of generator): At parameters of electricity production efficiency 47% and
electricity self-consumption total energy conversion efficiency 86% a specific consump-
4.2 MWe
at nominal output, maximum: tion of fuel energy with the value of 7.79 GJ/MWh was
NOx volume in flue gas, achieved. For comparison must be noted that the average
51.7 mg/Nm3
at output ranges 50 - 100%
value of that indicator at other thermal power stations
Short characteristic represents 10.75 GJ/MWh.
The gas turbine combined cycle (GTCC) consists of two Concerning to NOx emissions at permanent, stabilized op-
autonomous thermodynamic cycles: eration the value 52 mg/Nm3 was achieved. By governmen-
tal decree is determined a value of 300 mg/Nm3.
• gas cycle: compressor, combustion chamber gas turbine
• steam cycle: feed pump, boiler, steam boiler, con- Certain problems, which are occurring, are market-
denser. commercial ones. The district heating system in Bratislava
has a surplus of heat sources and total heat supply to sys-
By way of connection/combination of both cycles a higher
tem due to rational activities has a decreasing tendency.
efficiency of fuel energy conversion into electricity and heat
From this reason the advantage of GTCC cannot be util-
is achieved. It is effected due to higher parameters of work-
ized in full range.
ing medium and better utilization of energy value.
Besides of the above mentioned good results in efficiency Because of the specific characteristic of the problem, the
GTCC has a significant employing as peak source and this project was declared as research task, particularly from the
fact is projected to economy, has a positive influence to point of operation security.
pay-back money. The financing model is considering in the
A similar project of cogeneration unit employing was im-
first decade of operation the income of peak electricity sale
plemented at a municipal wastewater treatment plant. In
prevailingly. Later it is expected that the income of heat
this case biogas is utilized arising at organic matter de-
supply will be more important.
composition. In 1999 two CHP units of the type TEDOM
Entirely, the GTCC project is appreciated as example one. 22A PLUS were installed. The composition of biogas is as
Experience from construction and operation could be em- follows:
ployed at implementation of the next GTCC units.
• CH4 67%
Utilization of unconventional waste gases • CO2 32.5%
via cogeneration units in Komarno town • O2 0.5%.
The municipality enterprise of tourism in Komarno has in its In comparison to geothermal gas there is a disadvantage
competence hotel, camping, geothermal drill, swimming because this biogas contents sulfur compounds. These
pool as well as wastewater treatment plant and some boiler have a harmful corrosive impact to equipment. The corro-
rooms. Main activity of them is a service for tourists but sive protection rises operational costs, despite of it a
they have some special problems. With the operation of the shorter life-cycle must be considered. Some of the meas-
thermal swimming pool it was found out that from geother- ures carried out are introduced as follows:
mal drill a mixture of water and gas is flowing. After separa-
• Treating of suction of pipeline of CHP unit;
tion the gas fraction was analyzed. Analysis results:
• modification of heat exchanger (replacement of some
• CH4 71.56% parts for stainless steel), construction adjustment for
• C2H6 0.01% removing of acid deposit from flue gases;
• N2 13.8% • adjustment of flue gas silencers;
• CO2 14.63%. • changing of desulfurization catalyst more frequently;
• modification of cylinder heads at motors with insert ele-
For security reasons arose a necessity to solve this prob-
ments from “stellit” material.
lem and to use that gas because free discharging to at-
mosphere is not allowed. Degasification of water was sug- Due to the above-mentioned measures the operation reli-
gested, by a cascade system of buffer over-connection, ability was improved. The technical-economic parameters
and controlling of constant level as well as constant pres- are proportionate and projected to economy in a positive
sure of separated gas. way. In the next part the comparison of capacity parame-
ters and efficiencies between natural gas and biogas are
Next step towards a solution is the suction of separated
introduced.
gas by two units of CHP, type TEDOM 22A. By this way
gas is utilized for production of power of heat. Both, power Natural gas Biogas
and heat are consumed in neighboring buildings and facili- Max. power output (kWe) 22 20
ties of a sports area. Economic analyses give interesting Consumption of natural gas
8.2 11.2
results: at maximal output
Max. thermal output 45.5 43.0
• annual exploitation (operational time) 8,300 h/a
Efficiency of power prod. (%) 28.4 26.7
• annual power production 157,700 kWh/a
Efficiency of heat prod. (%) 58.8 57.3
• annual heat production 1,195.2 GJ/a.
Total efficiency (%) 87.2 84.0
The financial evaluation represents savings of non bought
electricity from the grid and saved fuel in the value of Average biogas production per day represents an amount
454,583 SKK/a. The investment costs of this project are of 6,160 Nm3/day. This is enough for an operation period of
around 600,000 SKK, simple pay-back money time is 14 hours daily (average). Power production is around 550
around 1.3 years. kWh per day.
Investment costs of two CHP units amount to 1.4 mln SKK. Replacement of old, unsuitable boilers by biomass
The simple pay-back money period is 4.48 years. boilers in Bučina company, Zvolen
Like as in the previous case the experience of implementa- In February 1999, there was a heat production recovery
tion and operation shows that the projects are repeatable contract signed between SES Tlmače and Bučina Zvolen
and could be utilized in other cases too, so for geothermal companies. It was a contract for supply of complete tech-
water use as well as at waste water treatment plants. nology appliance for energy exploitation of waste biomass
from production process. Bučina Zvolen is a well-known
Hydraulic balancing and thermostatic control adjust-
wood processing company in Slovakia. Wood is therefore
ment of heating systems at company OSBD Martin
used as a fuel.
The dwelling heating represents a significant item in total
Project realization: 1999-2000
heat consumption. Heating systems, especially at enlarge-
ment of these ones became sometimes over-dimensioned Basic parameters of project
or under-dimensioned. This fact has an impact on unsteady installed boiler name-plate rating 16t/h
flowing of heat carrier and heat itself. The result of it is, that temperature of supply water 105°C
in some parts the heating system is overheated and in wood waste in pieces (rind, shreds)
fuel
others there occurs a heat deficit. Similarly, the same situa- and fluffy wood waste
tion is at heating corpses - radiators. 11-17 MJ/kg (wood waste in pieces)
low fuel heat value
17,6 MJ/kg (fluffy wood waste)
There is a necessity to remove these shortages. It is possi- boiler effectiveness at name-plate rating 84%
ble to do this via hydraulic balancing and thermostatic con- wood waste in pieces (rind, shreds)
kind of fuel
trol of radiators. fluffy wood waste
An important project of this kind was the implementation of

Short characteristic
these methods in heating systems of the company OSBD
Martin. The heating systems provide heat supply for 3,639 Wood waste is divided according to its size into wood
flats. waste in pieces and fluffy wood waste. Waste in pieces is
once again sorted in sorter into bigger pieces and the rest.
Basic data for this project were gained via audit of heat
Then it is crunched in low-speed grinder and it is trans-
plant and heat distribution net. Investment costs accounted
ported to processing storage. Also the fluffy wood is trans-
for 17,965,000 SKK, represented a modification of sys-
ported there from storage towers. Mixed fuel then goes
tems, searching and monitoring of hydraulic and thermal
from processing storage to boiler’s storage chambers.
relations in systems and hydraulic balancing gradually in all
parts. At radiators thermostatic control valves were in- Evaluation of project
stalled, so correct heating temperature was achieved. There is a significant amelioration in compare to original
The project has gained also a financial support in the condition:
scope of the State Supporting Fund at an amount of • better manipulation and effectiveness increase concern-
3,000,000 SKK. The following audit and evaluation have ing wood waste exploitation;
shown heat savings of 33,040 GJ per year, which is equal • there is a complete combustion of combustion gasses
to 9,912,000 SKK. It a simple pay-back period of the in- with minimum emissions depended on combustion;
vestment of 2.06 years. • amount of emission is less than legally permitted maxi-
mum.
The project and experiences with hydraulic balancing and
thermostatic regulation are valid generally and it is possible
to apply them in similar cases.
Modernization of energy system in Žilina hospital as in our case, often have a constant need for hot water
supply all year round, which means that the solar collectors
Basic parameters of project
work with maximum efficiency throughout the entire year.
start date September 1998
contract duration 6 years The Institution of Social Care for Old People in Nesluša
number of estates 22 community is a facility for mental disturbed women. There
baseline costs 17.15 mln per year are 10 women in the facility. The government finances the
30,230 GJ/year; Institution. The installation of the solar collectors has par-
guaranteed savings
2,360,000 kWh/year tially reduced energy costs. The money saved from the
portion of sponsor at 0%- firmly assigned budget for state budget can be used now for the improvement of ma-
guaranteed savings supplier’s duties
terial supply of the facility, level of nursing, and living stan-
When guarantee promise is broken, spon-
bonus rule dards of the inhabitants of the facility.
sor will obtain 100% of energy savings
investment amount app. 77 mln SKK Basic parameters of project
Management of energy system, financing total annual electric energy 18,958 kWh,
supplier’s and implementation of energy saving demand to supply DHW what is 1,234,47 €
duties measures, realization of payment process, total annual coke demand 9,170 t,
maintenance and monitoring for heating what is 810,37 €
total annual CO2 emissions
28,885 t
Implemented measures: from combusting of coke
type Heliostar 200
• new steam boiler
solar absorbate min 0.94
• 2 co-generation units
thermic emisivity max. 0.16
• complex operation system and dispatching
optical efficiency 80 %
• 8 compact heat exchange stations
max. tention of thermal liquid work 600 kPa
• modernization of lighting
total area 2.03 m2
• hydraulic regulation and thermosetting
absorbent area 1.76 m2
• operation system of electric energy demand – ¼ maxi-
energy gains 700-930 kWh/year
mum
set up on the south wall with the angle of
• heating technology reconstruction in rehabilitation disposition
45° between the wall and a collector
swimming pool.
annual surplus of energy produced by solar
production
collectors is 2,200-3,000 kWh/year
Solar collectors
solar collectors cover 75% cost for heat wa-
possible supplementary renewable energy source for savings
ter needs in summer time (May-September)
preparation of domestic hot water (DHW) annual saved cost using current prices is 0,065 €/kWh,
what represents 195,34 €/year savings
Short characteristic:
realization cost: 3020 €
Conversion of solar energy received at the earth’s surface
in the form of electromagnetic valves into heat performs in Date of realization:
a solar collector on the basis of absorption principle. Ab-
Implementation of one demonstrative project of using of
sorbed heat energy is transferred by a medium (water and
RES in a selected community in Slovakia is a component
glycol) which goes through an absorber directly or through
part of the project. In terms of climate, technical, time and
a heat exchanger to a consumer.
financial conditions we consider the implementation of the
One of the most common ways of using solar energy is the project of the use of solar collectors for heating water as a
preparation of DHW. Solar collectors can play an important proper type of using RES.
role in meeting hot water needs of the public sector. Build-
The solar collectors were installed at the beginning of Oc-
ings such as schools, health clinics or pensioner houses,
tober 2001.
Country Report: Slovenia
Climate Technology and Energy Efficiency - Disseminating "Best Practice" Experience

Selected "Best Practice" Projects and Measures in Slovenia
Darko Hrovatin
Mojca Pipan
Franko Nemac
Aleš Bratkovič
Energy Restructuring Agency ApE
1. Best practice: the case of biomass utilization

Title of selected policy / project: Wood Biomass District Heating in Gornji Grad
Basic information on the selected project production facilities, the transmission and the distribution
network. The substations are owned by the consumers.
Gornji Grad is a town with around 800 inhabitants situated
in the mountains north east of Ljubljana. There are around There are 226 individual households in the town and it was
250 apartments and individual homes, various public build- expected that 199 of these households would be con-
ings, industries, enterprises and sports centers and leisure nected to the district heating network. The heat demand for
centers serving the growing tourism. The area is densely these houses was estimated to a total of 8,775 MWh per
forested. The biggest industry, the factory Smreka, which year. SMREKA is estimated to have an annual consump-
produces prefabricated wooden houses and other timber tion of 2,250 MWh per year. The other large consumers are
products, is the major consumer of heat and also the main estimated to 3,465 MWh per year with a further expansion
supplier of wood waste. Smreka has been burning coal for to 7,680 MWh per year in 2004. The heat loss is estimated
heating and drying wood in old boilers, which needed re- to approximately 20%. A maximum heat load of 8 MW was
placement. Individual households have been using a vari- calculated and it was decided to install a bio-fuelled boiler
ety of fuels for heating (coal, light oil, gas and wood). The with a capacity of 4 MW. The two step grate boilers, each
change of fuel from coal to wood waste and a number of of 2 MW, have been delivered and installed by KIV Vran-
individual boilers to district heating system represented an sko, a Slovenian producer. They are designed for a mixture
important contribution to improvement of air quality in the of dry sawdust and wet wood chips. They are equipped
area. The use of wood waste also solved the problem of with multi-cyclones for cleaning of the flue-gas and de-
land filling. signed to an efficiency of 85%, which should give a basis
for installing a flue-gas condenser in the future. The stor-
Investments in district heating system totaled SIT 628 mln
age is 6m wide, 8m long and 4m high. The wood fuel is
(1998 prices). Of these, about 65% were spent on the net-
removed from the storage by scraper conveyors that feed
work including substations. Approx. 30% of the total in-
the wood fuel to a system of screw conveyors.
vestments were provided as grants by the Ministry of Eco-
nomic Affairs, EU (PHARE), the Austrian Eco Fund, and Main project components
other donors. The rest was financed by loans through the
The initiative to study possibilities for using the wood waste
Slovenian Eco Fund. The tariffs are comprised of a fixed
for the supply of process and space heat was given by
part and a variable part.
Smreka in the early nineties. The municipality was also
The district heating enterprise ENGO d.o.o. is formed as a very interested, so a feasibility study was made, which
private shareholding company owned by the municipality of showed that the project is feasible. Afterwards started the
Gornji Grad (75%) and Smreka (25%). ENGO owns the activities to implement the project: project planning, design
of the system, searching financing solutions etc.
262 Darko Hrovatin / Mojca Pipan / Franko Nemac / Aleš Bratkovič
Main "success" indicators applied The cash flows are investigated every year for a period of
20 years (expected lifetime of the plant). They show that
The project in Gornji Grad will over the next 20 years also
the company runs a deficit the first five years of operation
reduce the emissions. Compared to the original individual
(heavy initial investments). The boiler itself is one of the
heating scheme as follows: 83.000 tons of CO2, 100 tons of
large parts of the total costs. For Gornji Grad, the price of
particles, 230 tons of SO2, and 50 tons of NOx.
the boilers were approx. SIT 25 mln per MW. However, this
One of the unique details of this project is the synergy be- is only a part of the total costs. The district heating system
tween a local industry and the municipality. SMREKA is consumes approx. 50-70% of the total investments. In
acting as fuel supplier and as well as heat consumer. Apart Gornji Grad, the price of the network was approx. SIT 35
from SMREKA, a number of residential and municipal con- mln per km exclusive the substations.
sumers are connected to the district heating network and
The implication of phase 2 will increase the number of con-
as SMREKA is not able to supply sufficient wood waste for
nections to the system, as well as further loan financed in-
the total heat demand, a number of external fuel suppliers
vestments in the network. In 2004, it is planned that some
deliver wood waste.
new large consumers are connected to the system, which
In order to keep the fixed costs low, the main part of activi- will impact positive on the cash flow. An increase in the en-
ties are outsourced to external parties. The operation and ergy prices in the future could facilitate a rise in the heat
maintenance are contracted to the municipal company price. In general, a district heating system for less densely
Komunala d.o.o. Further, a number of suppliers have en- populated areas can be expensive. A biomass fuelled dis-
tered into a service agreement with ENGO d.o.o. The ex- trict heating system will generally rely on grants (between
ternal accountant is taking care of the billing of the con- 30% and 50% of the investments) to make it economically
sumers and the general accounting. In relation to legal feasible.
matters as contracting, ENGO is assisted by an external
Duration / follow-ups / sustainability of the project
lawyer. The only permanent staff of the company is the
managing director which also is the mayor of the municipal- The construction of the district heating plant began in 1998
ity. and it was built to almost full capacity from the start in
1999, whereas the network was projected to be developed
in phases. The first phase included SMREKA, some large
The biomass district heating is a welcome addition to the consumers and a fairly limited number of individual house-
scheme of Gornji Grad as an ecologically sound town, holds and it has been already finished. The second phase,
which already includes separate waste collection and some which will take place in the near future, foresees the con-
other projects (wastewater treatment plant etc). The green nection of most households and additional large consum-
image will help Gornji Grad in developing eco-tourism and ers.
production of healthy food. The heat from district heating
will also be used for heating the new tourist settlement and
greenhouses for production of vegetables. The biomass district heating systems are going on well in
some EU countries such as Austria, Denmark etc. The first
information and practical experiences were obtained on the
The heat sales are the only income for a district heating visits of similar systems in Austria. The engineering com-
plant, and the price charged for the heat plays a key role in pany from Austria also collaborated at design of the plant.
the budget. The price must be sufficiently low to make it There are going on the activities for another two new pro-
feasible for the consumers to connect and sufficiently high jects of biomass district heating systems in Preddvor and
to cover all costs for the plant (operation and maintenance Logarska dolina. These two projects were inspired by the
costs, including the repayment of the investment). The tariff Gornji Grad case.
level for heat is designed in a way, that households in
Main reasons for project success
Gornji Grad should pay 90% of the recent expenses on fuel
oil. It is usually necessary to finance between 30% and 50% of
the investments with grants and soft loans. Several institu-
tions are offering grants to projects where the switch to Pre-requisites / limits / recommendations for
cleaner energy production technology is in focus and this successful replication in other transition countries
was also the case in Gornji Grad. Since biomass-fired boil-
This project gives a lot of information and experiences
ers are producing less greenhouse gases than fossil fuel
which are welcomed for the development of similar projects
alternatives, there are a number of funds and institutions,
in our country and in other transmission countries. The de-
both Slovenian and international, e.g. the Slovenian Eco
cision to implement a similar project must be done on the
Fund, which is a non-profit oriented financial organization
analysis of each country’s conditions (policy on the use of
that provides loans for environmental protection invest-
renewable sources, policy regarding reduction of green
ments at favorable interest rates, the World Bank or Euro-
house gases, public awareness of benefits of such projects
pean Bank for Reconstruction and Development (EBRD),
and similar issues). Very important for successful imple-
programs of the European Commission (EC) etc., that can
mentation of similar projects is the creation of a positive
help financing biomass projects.
climate between different actors.
2. Best practice: the case of combined heat and power (CHP)

Title of selected project: Co-generation plant in ELAN LINE
Basic information on the selected project (1998 fixed prices) and annual savings are estimated €O
245,000 which implies a payback period of 2.6 years.
The company ELAN was founded in 1945 to produce al-
pine skis. During a period of over 50 years the company Main project components
has grown into an international leisure product manufac-
The first feasibility study for the CHP plant was made in
turer and became an indispensable companion of physical
1987, but the situation in that time was not favorable for in-
culture in Slovenia, former Yugoslavia, and in Eastern
stallation. Ten years later a new feasibility study revealed
Europe. Consumption of electricity in ELAN ranges be-
the achievement of substantial energy costs savings, reli-
tween 7000 and 8000 MWh per year (72 % of total energy
ability of power supply and efficient use of primary energy
costs), while natural gas consumption is app. 13,000 MWh
sources. With the benefit of a favorable loan the CHP pro-
per year (28 %). 600 tons of wood waste from production
ject began in 1997. Project documentation and permits
processes are also consumed each year. Besides space
were prepared at the beginning of 1998, when the supplier
heating and hot sanitary water supply a large share of heat
was selected. Site engineering and equipment installation
is consumed by the ski gluing presses. In addition to the
was completed in December 1998, followed by a commis-
heat and electricity demands the CHP unit was selected
sioning period.
with regard to the existing gas and heat distribution sys-
tems in the machine room, investment costs and energy Main "success" indicators applied
savings and the possibility of quick construction. The se- Constant process heat consumption and unreliable power
lected and installed CATERPILLAR CHP unit was supplied supply were the main reasons for introducing cogeneration
by AMMANN. The gas engine produces nominal outputs of in the company. The CHP unit resulted in substantial en-
770 kW electric power and 1,090 kW heat. Hot water is ergy costs savings, reliability of power supply and efficient
produced with separate high, middle and low temperature use of primary energy sources. In the table are shown data
circuits. The generator complies with the protection regula- for the eight months period.
tions of the power utility company. The CHP plant opera-
During the period of operation the electricity price went
tion is between 6,000 and 6,800 hours per year. The elec-
down and the price of natural gas went up, resulting in
tricity generated is mostly consumed in the ELAN factory,
lower net savings and longer PB period. The main savings
although occasionally surplus electricity is sold to the utility
are due to the reduced use of peak price electric power.
company. Capital cost for CHP plant were €O 640,000
Operation period January 1999 -August 1999 be enumerated among significant obstacles. An obstacle is
Production & consumption also the availability and high costs of capital. Except for the
Operation time hours 5 100 option of achieving a soft-loan or grants through the public
Electricity generated MWh 3 100 tenders initiated by the Ministry of economic affairs
Heat generated MWh 4 000
(Agency for Efficient Use of Energy), there are practically
Gas consumed Nm3 855 000
no other options to the potential investors for low costs
Basis of Analysis (fixed prices) 1998 1999
capital. In Slovenia the main economic, institutional, regula-
Sold generated electricity 42 000 € 35 000 €
Consumed generated electricity 136 000 € 81 000 € tory, and information barriers, which prevent the wider use
Generated heat 118 000 € 118 000 € of co-generation are:
Costs
• low and unstable electricity prices, high subsidies for
Maintenance 24 000 € 24 000 € energy utilities,
Gas 110 000 € 131 000 € • no environmental factor in energy prices,
Net savings over 8 months 162 000 € 79 000 € • high interest rates,
annualized 245 000 € 120 000 € • lack of private/foreign investment,
Capital cost 640 000 € 686 000 € • lack of legislation and regulatory framework,
Simple payback period (years) 2.6 5.7 • lack of supportive involvement of the electricity sector,
• lack of information for small and medium scale CHP,
• few local CHP plants.
The difficulties with reliability of power and heat supply
Duration / follow-ups / sustainability of the project
have been successfully overcome. At the same time the
CHP plant solved the problem with emergency powering of Overall, it took nearly two years (1997 - 1998) to implement
the most important process consumers. It has also proved the CHP plant from concept to operation.
to be very successful reducing peak power consumption Cases of domestic replication
from the network and supplying adequate heat to the com-
The Slovenian Government has stated that it wishes to
pany. It is also important that ELAN can sell its surplus
promote and support the further development of CHP in
power to the utility company, which makes possible the op-
Slovenia. Past estimates suggest that the potential market
timal operation of the CHP unit according to the heat load.
for cogeneration in Slovenia is in the order of 140MWe (ca-
The on-line computer monitoring of the most important op- pacity) supplying approximately 3 PJe/year of electricity
erational parameters of CHP unit makes it possible to (840 GWh/year). The Energy Conservation Strategy for
compare planned and actual monthly results. A thermal ef- Slovenia suggests these estimates to be conservative and
ficiency of between 85% and 95% is achieved. Environ- identifies a longer term potential of 660MWe in three areas:
mental benefits are also recognized.
• replacement of heating systems within existing DH
The benefits of the CHP plant will be even more out- schemes to use gas turbine technology,
standing when other measures for the efficient use of en- • expanding industrial CHP capacity to its cost effective
ergy are carried out in the company. limit at 1993 fuel prices,
Realization problems and difficulties • expanding DH schemes with associated increases in
CHP.
Despite the undisputed advantages of co-generation, nu-
merous obstacles were encountered, which affect the eco- Of these measures, the most cost effective area is CHP in
nomics and consequentially deter potential investors. As an industry and compares very favorably with investment
important obstacle we must consider the non-existence of costs of CHP in existing DH schemes.
long-term stability in prices, price control and the discrep- Main reasons for project success
ancy between the prices of electricity and those of fuels.
The economic and energy savings and the reliability of
This is connected to non-stable profits and problems with
electricity supply as well as the provision of high quality
long-term contracts with the utilities. Poorly defined legal
heat were the facts which finally convinced the manage-
framework of operation of co-generation plants may also
ment of the Elan to invest in CHP. The very high power
peaks and their costs were also a problem, which was vestments in some other transition country. Very important
avoided with the CHP. base for a development of such projects is that a country
states its support to CHP and has an energy policy that
puts incentives on investments in energy efficient systems.
The project is a good example of CHP unit installation in

Slovenia and can be taken as the best case for similar in-
3. Best practice: thermal energy conservation in the building sector

Title of selected policy / project: Encourages of measurers for energy efficiency in households:
Subsidies for energy efficient windows and glasses renovation in the year 2000
Basic information on the selected policy / project (setting up and control of oil burners, insulation of attics,
windows and doors sealing, distribution of energy efficient
In the year 2000 there was the third public call for alloca-
electric bulbs, etc.).
tion of subsidies for building in energy efficient windows
and glasses. On the base of results of public calls from The project was carried out by AURE (Agency for Efficient
previous years, it was noticed a tendency that more and Energy Use) which is part of the Ministry of Environment
more applicants decided to build in energy efficient prod- and Spatial Planning. The budget for this project was 50
ucts, which accord with criteria of previous public calls. The mln SIT (230,000 €).
cause of this tendency is a possibility to submit an applica-
Main project components / policy instruments
tion form for subsidies.
The objective of this project is stimulation of usage of en-
Encourages of measurements in households have a great
ergy efficient glasses and windows. The policy instrument
effect on the decision to invest in energy efficiency and on
used in this project are subsidies, which represents a com-
selection of appropriate materials, products and technolo-
pensation for an investor who decided to invest in glasses
gies. Before this project there have been subsidies mainly
and windows with better thermal characteristics. Criteria for
for less costly investments with shorter pay back period
allocation of subsidies were:
Investment Subsidy amount Calculation of subsidy

3.000 SIT (13,64 €)/m2
A glass exchange glass area without window frame
max 30.000 SIT (136,4 €) per household
new windows for 3.000 SIT (13,64 €)/m2 windows area and factor 0,8 regarding the relation
B
new buildings max 30.000 SIT (136,4 €) per household glass area window area
new windows for 5.500 SIT (25 €)/m2
C windows area
old buildings max 66.000 SIT (300 €) per household
windows frame 5.500 SIT (25 €)/m2
D windows area
exchange max 66.000 SIT (300 €) per household
There was a general condition regarding the fact, that the was a little bit more than 80%. This means that 1,034
applicant can submit an application form only for an in- households got the subsidy from 1,123 households that
vestment that has been already done. had sent the application form.
Main "success" indicators applied On the base of formally complete application forms there
have been signed contracts in the amount of app. 47,8 mln
It was expected that something more than 500 households
SIT (217.000 €). Average subsidy per applicant was app.
would reply on the public call and send their application
46.260 SIT (210 €). Average subsidy/investment rate was
form. At the end the figure almost doubled: 1,123 house-
6,7%.
holds replayed on that call. The rate of subsidies approved
Results of project (taking into consideration only 1,034 forms. Over 50% of received documentation was incorrect
households who received subsidy): and had to be improved in correlation with corresponding
conditions and regulations.
windows and glass built in 15.458 m2
energy savings (quantity) 4434 MWh/year There were also some problems with misunderstanding
energy savings (value) 34,12 mln SIT (155.000 €) when some media did not check the time schedule or verify
CO2 savings 939 t CO2 the information about project status and then gave the
pay back period for subsidy 1,4 year wrong information to the public.
total investments 720 mio SIT (3,3 mio €)
Duration / follow-ups / sustainability of the project /
total subsidies 47,8 mio SIT (217.000 €)
policy
subsidy rate 6,7%
average subsidy per applicant 46.260 SIT (210 €) There were 3 separate actions in the years 1998,1999 and
2000. A comparison of effects of up to day actions to en-
Results / impact / side effects courage energy efficiency savings in households shows:
Rapidly increasing of energy efficient windows and glass- 1998 1999 2000 Total
ing, estimated of 3% in the year 1998 to near 50% in the Heating area M2 3.854 8.977 15.458 24.435
Savings MWh 814 1.653 4.434 6.087
year 2000.
Number of subsidies 289 673 1034 1.707
The project is an important factor at improving a pay back Value of subsidies Mio SIT 11,5 30 47,833 78,433
period for this kind of investment. Estimation of the pay
Extended renovation of windows process is still not in pro-
back period for investment in energy efficient windows and
gress in correlation to the great efficiency potential. Addi-
glasses is 15-20 years without subsidies. Taking into con-
tional state action is estimated to be useful and the meas-
sideration app. 7% of subsidy, the pay back period is lower
ures of thermal standard regulations will be followed.
for 2-3 years.
The project had a special positive promotion effect on the
general application of energy efficient use in households First case of adequate action of Municipality in the year
and on the use of energy consultancy services for house- 2000.
holds, because the network of energy consultancy offices
Main reasons for policy / project success
in Slovenia was included in the preparation of application
forms (investment in windows and glass renovation, Successful information dissemination to customers, com-
planned by households, had to be approved by energy mercial energy efficiency windows offer improved, quality
consultants before the submittal of application form). Indi- regulated system has been established on the market.
rect result of this project is the increased awareness of en- Pre-requisites / limits / recommendations for
ergy consultancy network and recognition of its services. successful replication in other transition countries
Realization problems and difficulties Subsidizing scheme developed, investment capital insur-
The project leaders dealt with a very wide range of docu- ance, transparent objective criteria use, quality verification
mentation, because of the high number of application support institutions (public quality insurance system).
4. Best practice: energy service companies (ESCOs) and third party financing
Title of selected project: Support for the promotion of Third Party Financing of energy efficiency investments in Slovenia
Basic information on the selected policy / project to be 34% of consumed energy, which amounts to 17 mil-
lion €O. The disclosure of this potential asks for extensive
Slovenia has, similar to other transformation countries, a
investment and operation modernization, but financing of
considerable economically detectable energy saving poten-
energy saving investments is often opposed by restrictions
tial in industry, service, and building sector. Only in the
in money and juridical obstacles.
public sector the total energy saving potential is assumed
The currently on-going project "Support for the Promotion Main "success" indicators applied
of Third Party Financing of Energy Efficiency Investments
The main success indicator of the project is the promotion
in Slovenia" within the Transform Program in the frame of
of TPF through the pilot project, which is not yet finished,
the bilateral co-operation between Slovenia and Germany
the number of municipalities interested in carrying out simi-
is aimed at supporting the sustainable increase of energy
lar projects by themselves and a number of participants at-
efficiency in Slovenia by overcoming the above mentioned
tending the promotional workshops. The pilot project is cur-
restrictions to financing of energy saving investments. The
rently in the phase of negotiations and at least one other
main overall objective of the project is to promote third
municipality is showing a substantial interest in carrying out
party financing (TPF) as an appropriate and powerful fi-
a PC project. While the first workshop was attended by
nancing instrument for efficient energy use in Slovenia.
over 40 potential TPF users in public sector and potential
Further overall objectives are to improve the competitive-
TPF providers, the second workshop is still going to be or-
ness of the Slovenian economy, support its integration into
ganized.
the €opean structures, and to protect the environment.
Main project components / policy instruments
With the adaptation of the PC model contract to Slovene
The project, which started in the year 1999, is divided into
conditions and a successful promotional workshop on TPF
three phases. Within the first phase the basic conditions for
and especially PC with participation of over 40 potential
TPF in Slovenia have been evaluated. As an appropriate
users in public sector and potential providers, a consider-
target group of TPF users the non commercial public sec-
able interest for TPF was raised. Out of the 50 biggest Slo-
tor, known for its lack of money for financing necessary en-
vene municipalities invited to participate in the project, 9
ergy saving investments out of the public budget, has been
municipalities showed interest for implementing the PC
identified, and enterprises which offer investment goods or
model and 3 were chosen for a detailed analysis of the en-
services for energy saving have been seen as potential
ergy supply and use. As a pilot project one of these mu-
TPF providers. It was also established that several laws
nicipalities has successfully carried out the tendering pro-
and administration directives are not suitable to the de-
cedure and is now in the phase of negotiations with the
mands of TPF projects.
TPF provider.
The second phase of the project is aimed at the promotion
of performance contracting (PC) as a suitable instrument
for organization and financing of the realization of rational Introducing of TPF as a new financing tool in Slovenia
energy use in the Slovenian public sector. The emphasis is needs a considerable support from the state, which was
on making potential providers and users aware and in- partly hindered by the Government instabilities in the year
formed about PC and motivate them for the realization of 2000, and resulted in the need for the prolongation of the
the TPF projects. The PC model contracts were revised project, which was also partly caused by the time consum-
and adopted to Slovene conditions and a pilot project of PC ing adaptation of the PC model contract to Slovene legisla-
in one of Slovene municipalities has been initiated and is tion. A lack of experiences about TPF and PC on all sides
currently in the phase of negotiations. caused a lot of problems in the phase of preparing the ten-
der documentation and carrying out the tendering proce-
Simultaneously with the second phase of the project is al-
dure. Because of the uncertainties and risks connected
ready on-going also the third phase. The aim of this phase
with TPF on the providers side, some more time is going to
is to promote another TPF method, energy supply or deliv-
be needed for more Slovene providers to offer this service.
ery contracting (DC), and to offer an awareness campaign
One of the major problems for the providers showed up to
for the broader implementation of the PC and DC schemes
be especially a poor overview of the supply and use of en-
in Slovenia. Following the successful promotional work-
ergy in the public sector, which makes an estimation of the
shop held within the second phase another workshop is go-
energy reduction potential difficult.
ing to be organized and promotional brochures on PC and
DC are going to be published.
Duration / follow-ups / sustainability of the project / TPF procedure are going to contribute to the replication of
policy the first pilot project on PC in other bigger Slovene munici-
palities, hospitals and perhaps also in smaller and medium
The project started in 1999 and it is going to be finished at
enterprises. The experiences gained are also going to be
the beginning of 2002. For the further promotion of TPF in
exchanged with other countries within the coming up pro-
Slovenia and support of the pilot project and other TPF us-
ject.
ers in public sector it is essential to continue the work
started in this project. The Agency for Efficient Use of En- Main reasons for policy / project success
ergy within the Ministry of Environment and Spatial Plan-
The main task of the project, promotion of TPF through the
ning has therefore decided to support another project in
pilot project, is not yet finished, which makes it difficult to
this area for the next 2 years, which is overall aimed at the
already measure the final success of the project. Until the
improvement of energy efficiency in Slovenia by using in-
end of the project there are foreseen also the organization
novative financing schemes. With the fulfillment of the main
of another promotional workshop and the publication of
objectives of this coming up project, further promotion of
promotional brochures about performance and delivery
TPF, continuous fostering and support of the new invest-
contracting.
ments in energy efficiency or decentralized energy produc-
tion using TPF schemes, stimulation of EU and local TPF Pre-requisites / limits / recommendations for
providers to enter the Slovenian market, and the develop- successful replication in other transition countries
ment of the national TPF program, represent a new project With the transfer of the foreign experiences, models, and
in a logical continuation and gives an additional value to approaches, especially if they are so closely related to dif-
the work already done. ferent legal and financial aspects as TPF is, it is essential
Cases of domestic/international replication not just to transfer the existing models and approaches but
to adopt them to the specific country conditions. The repli-
Experiences learned through the first pilot project are going
cation of the Slovene project is therefore possible also
to be used for improving the whole approach to TPF and
abroad, but only by taking into account other countries´
PC in Slovene public sector. More information and easier
particularities.
5. Best practice: Rational energy use in industry and household appliances

Title of selected policy/project: Energy Saving Fund for Energy Efficiency Investments in Slovenia
Basic information on the selected policy / project Main project components / policy instruments
To realize the goals from the National Energy Strategy in The Fund is supplied from a mix of financial sources. The
terms of improving energy efficiency, supporting of energy commercial part of the Fund is provided by the fund man-
efficiency investments is crucial. Therefore, an energy effi- ager in a value of 10 million €O. An attractive all-in interest
ciency investment fund was established. The fund goal is rate on the level of 60% of commercial interest rate is
to provide the industrial enterprises, institutions and build- achieved by a grant from the national budget of the Repub-
ing managers with financial resources under attractive in- lic of Slovenia in a value of 300 mln SIT for interest rate
terest rates, and thereby to decrease energy costs in the subsidy and by a zero-interest loan granted by the Euro-
long term. pean Union PHARE Program in a value of 2 million €O.
This is an advantage of this fund in comparison to other
The fund is not organized as a legal entity, therefore an in-
Slovene funds.
novative organization scheme had to be developed. With a
joint effort of European Commission, Ministry of Finance, The blending of the funds is the responsibility of the bank
and Ministry of Economic Affairs, the organization is opti- awarded the contract of managing the Fund. The values of
mized in a manner, that rational granting of loans is se- the elements of the total endowment and its employment
cured. allow an interest rate 40% lower than commercial interest
rates. The amount of any loan is limited to the minimum
value of €O 50,000 and to the maximum value of €O Realization problems and difficulties
500,000. The maturity of any loan is limited to the maxi-
The Fund itself is not sufficient to increase energy effi-
mum of 8 years including a grace period of maximum 2
ciency investments. To assure a successful operation of
years for the commencement of principal repayment.
the Fund, a number of complementary measures were de-
Following the main purpose of the Fund, the most impor- veloped and supported from the governmental budget.
tant criteria for the projects is, that the direct energy sav- Among all, the most important are: energy advising for
ings resulting from implementation of the investment which large industrial energy consumers, an energy audit
forms the object of the loan should, in monetary terms, be supporting scheme, a feasibility studies supporting
projected to provide at least half the return on the invest- scheme, demonstration projects for energy efficiency
ment share financed by the loan. investment. With those activities we succeed to create a
good environment for energy efficiency investments.
Main "success" indicators applied
Duration / follow-ups / sustainability
The relatively high cost-effective saving potential of 20% in
of the project / policy
the industry and 30% in the buildings implicating an
amount of close to 200 millions €O of investments in the The Fund was established in December 1997 and it started
industry and 800 million €O of investments in the building with operation in beginning 1998. It operates on a revolving
sector, requires a comprehensive approach to stimulate principle. The planned term of fund operation is ten years.
energy users for energy savings and to create a proper en-
vironment for energy efficiency investments.
Not known.
Till the end of the second quarter of 2001 the Fund has
granted 1,751 mln SIT of loans for energy efficiency pro- Main reasons for policy / project success
jects. Loans were granted to 21 applicants for 24 projects. Successful operation of the Fund for energy efficiency in-
20 of these projects are already in function and operating. vestment is not only depending on its attractive interest
Results / impact / side effects rate and longer repayment, but also on other supporting
programs, starting from education, information, and aware-
The Energy Saving Fund has a unique organizational
ness building to stimulating preparatory activities for energy
scheme in the Slovene funds field. The most important ad-
efficiency investments.
vantage is, that the fund is not a legal person, but just a
logical organizational scheme with minimum operational The overall success of such an approach can only be
costs. achieved if some state institution (like the Agency for En-
ergy Efficiency of the Republic of Slovenia) is responsible
Experiences given from the evaluation procedures of the
to harmonize the design, scope and timing of the fund
projects submitted to the Fund, confirm that the projects of
activities and the supporting programs.
the borrowers, which were included in the supporting pro-
grams, particularly those with performed energy audits, Pre-requisites / limits / recommendations for
passed the evaluation procedures smoothly and with high successful replication in other transition countries
cost benefit ratio, while for others improvements were re- This Slovene project can be replicated in other transition
quired or they were rejected. countries, but it is necessary to take into account the spe-
cific country's conditions.
6. References
• Wood Biomass District Heating, A guidebook, 1999 (with special reference to biomass district heating system in Gornji Grad)
• Promotion of Small-scale Co-generation Solutions in CEECs, Case Study: Co-generation in Elan Line, 1999
• Energy saving fund for energy efficiency investments in Slovenia, Franc Beravs, Ministry of the Environment and Spatial Pan-
ning, Agency for Efficient Energy Use, Ljubljana, Slovenia, 2001
• Final report of the project: Public call for distribution of subsidies for building in energy efficient windows for the year 2000,
AURE, March 2001.
270 Sergiy M. Bevz / Georgiy G.Geletukha / Valentyn Seredyuk
Country Report: Ukraine
Selected “Best Practice” Projects and Measures in Ukraine
Sergiy M. Bevz
State Committee of Ukraine for Energy Conservation

Scientific Engineering Centre „BIOMASS“
Valentyn Seredyuk
Agency for Rational Energy Use and Ecology
1. CO2 reduction and energy saving in wood processing industry of Ukraine

Basic information project manager. Capital investments came to about
500,000 $ of Dutch grant plus 20,000 $ of recipient’s con-
Ukraine has a rather big potential of wood biomass that
tribution.
can be used as fuel – about 1.1 mtoe/year. A big amount of
wood residues (0.206 mtoe/year) is generated at timber Activity on the project
and woodworking enterprises and can be used at zero
Activity carried out within the frame of the project included:
cost. The most reasonable way of wood residues utilization
delivery and installation of 5 MW steam wood-fired boiler at
is direct combustion. This idea was demonstrated in the
“Odek Ukraine” – veneer plant in Orzhiv, Rivne oblast;
Netherlands-Ukraine technical assistance project “CO2 re-
starting-up and adjustment of the boiler equipment; training
duction and energy saving in wood processing industry of
course for boiler operators; dissemination of knowledge
Ukraine” supported by PSO-program. The project was car-
and project results.
ried out in 1999-2001. The main goal of the project lay in
demonstration of economically efficient implementation of Success indicators
modern boiler equipment operating on wood biomass. Put into operation in August 2000 the steam boiler covers
Involved parties were Senter Internationaal (the Nether- 70% of the veneer plant’s demand in process steam. That
lands) - financing, KARA Energy Systems (the Nether- gave an opportunity to take gas boilers out of operation.
lands) – equipment supplier, TNO-MEP (the Netherlands) – Tthe technical and economic parameters of a 5 MW wood-
project manager, “Odek Ukraine” Ltd. (Ukraine) - recipient, fired boiler demonstrated during one-year operation are
Scientific Engineering Centre “Biomass” (Ukraine) – local presented below.
Technical parameters Economic parameters

Nominal thermal capacity, MW 5 Capital costs, thous. $ 520
Operation time, hr/year 8000 Operational costs, thous. $ 93
Steam production, t/year 7.8 Fuel cost, $/t 0
Steam pressure, bar 10 Prime cost of heat, $/GJ 0.9
Furnace type moving grate $/MWh 3.3
Fuel consumption (50%), t/year 15750 Saved natural gas, thous. $/yr 224
Heating value of fuel, MJ/kg 8 CO2 emission reduction costs, $/t 4.6
Heat production, GJ/year 100800 Payback period 2.3
Saved natural gas, mill m3/yr 2.8
Reduction of CO2 emission, thous. t/yr 9.8
Impact / Side effects • Zero cost of the fuel for wood-fired boiler.
• Replacement of natural gas by wood residues that re-
Putting into operation of a new 5 MW wood-fired boiler let
sults in good economic indices.
the enterprise enlarge production of finished product and
• All-the-year-round consumption of produced steam that
plan further development.
results in good economic indices.
The only serious problem connected with project realization
It should be mentioned that only equipment delivered within
lay in passing of the foreign boiler through certification pro-
the frame of technical assistance projects is free from cus-
cedure in Ukraine. Due to differences in Dutch and Ukrain-
tom duties and VAT. In other cases when purchasing
ian rules on boiler construction, it took much time and ef-
equipment abroad, custom duties are 25% of equipment
forts to adjust the design of boiler installation to Ukrainian
cost and VAT is 20%. Because of that, the final cost of the
rules. There was also one technical problem connected
equipment increases significantly and such conditions are
with the fact that the enterprise had wood wastes with 50%
hardly acceptable for most Ukrainian enterprises. So it is
average moisture content but with moisture fluctuations
reasonable to establish joint ventures for production of
from 30% to 60%. Operation of the furnace on dry wood
wood-fired boilers in Ukraine. In that case the price of
fuel during long time causes the increase of temperature
equipment will be much less as compared with foreign
inside the furnace and may lead to melting of firebricks.
boilers, and it will encourage implementation of the boilers
Special adaptation of automatics and control system was
at Ukrainian enterprises.
done to avoid this problem.
Another important factor influencing project replication is
Follow-ups
that a lot of Ukrainian timber and wood working enterprises
The project results have been published in several papers. have self-reconstructed wood-fired boilers. Such boilers
A final seminar devoted to detail statement of project re- were originally designed for coal and oil combustion and
sults was held after the end of the project. Now follow-up later on converted to wood combustion by the enterprises'
activity is aimed at looking for potential investors/financing strength. As a rule such boilers have fixed grates, batch
to replicate the project or to launch the production of wood- fuel loading, low efficiency and high emission. But they are
fired boilers in Ukraine. cheap and suit the enterprises. Therefore, wood-fired boil-
Cases of domestic replication ers that will be produced in Ukraine must be competitive
not only with expensive foreign equipment but first of all
Within the frame of the same The Netherlands-Ukraine
with existing self-converted wood-fired boilers. Thus, condi-
technical assistance project the second steam wood-fired
tions for successful replication of the project are as follows:
boiler of 1.5 MW capacity was installed at Malin timber en-
terprise (Ukraine). Besides that, so far there is not any • An enterprise has enough amount of free of charge or
case of project replication in Ukraine. Potential of wood cheap wood residues.
residues available at timber and wood processing enter- • An enterprise has the whole-year consumption of pro-
prises of Ukraine let install about 180 boilers of 1.5 MW duced heat/process steam.
average capacity. • An enterprise is financially stable and has good pros-
pects for development.
Success factors
• The best economic indicators will be in the case of fossil
Main reasons for project success are as follows: fuel (as a rule gas or oil) replacement.
2. Implementation of CHP plant on the basis of “Yuzhnaya” boiler house,

Zaporizhzhia, Ukraine
Basic information technological processes (boilers, kilns and other equipment
operating on natural gas). Thermal equipment is overbuilt
The project is based on a new approach to CHP production
by gas turbine or gas reciprocating power units. Advan-
- building of CHP plants on the basis of existing thermal-
tages of such scheme are as follows: guaranteed heat (Zaporizhzhia, Ukraine) and the Institute of Engineering
consumption, up to 40% fuel saving as compared with Thermophysics of the National Academy of Sciences of
separate heat and power production, high coefficient of fuel Ukraine (Kyiv, Ukraine). Capital investments on the project
use – 0.8-0.92, positive environmental effect. Efficiency of are 1,300 US$ (financing is realized through commercial
driving engine is not so important for such kind of CHP credit taken by “Rassvet”).
plants (it influences mainly the produced heat and power
Success indicators
ratio). This fact creates wide opportunities for applying out-
of-date gas-turbine units, which are available in big amount Technical and economic parameters of CHP plant are pre-
in Ukraine. These units are much cheaper than modern sented in the table below.
ones and as a rule have long enough life time. Especially it Activity on the project
concerns mobile gas-turbine power plants of PAES-2500
Activity planned within the frame of the project is as fol-
type manufactured by the enterprise “Motor-Sich”
lows: development of CHP plant design; installation of 2.5
(Zaporizhzhia). Based on the powerful and distributed dis-
MW gas turbine power generator at “Yuzhnaya” boiler
trict heating network existing in Ukraine, it is economically
house; starting-up and adjustment of the plant; test opera-
reasonable to build CHP plants on the basis of steam and
tion and operational monitoring; dissemination of knowl-
hot-water boilers. Thus, the main goal of the project is
edge and project results. The CHP plant has been com-
demonstration of successful operation of such type CHP
missioned in November 2001.
plant constructed on the basis of “Yuzhnaya” boiler house
intended for hot water supply of Zaporizhzhia. According to Impact / side effects
CHP plant flow-sheet diagram, exhaust gases from the 2.5
After-burning of exhaust gases from the gas turbine in hot-
MW gas-turbine power generator AI-2500 (updated by
water boilers reduces the NOx emission by 30-50% as
ZMKB “Progress”) come to boiler-utilizer providing 5.38
compared with operation of the gas turbine without after-
MW thermal capacity. Then the gases are directed into
burning. Another side effect of CHP plant is connected with
three KVGM-6.5 hot-water boilers, in which additional fuel
new jobs creation both on the place of exploitation and at
is combusted. Contact heat exchangers (scrubbers) are in-
gas-turbine manufacturing plant.
stalled after the boilers for deeper utilization of flue gas
heat. The heat is spent in water-water heat-exchanger for Realization problems and difficulties
preheating of water from the hot-water supply system. Ap- Project realization was not connected with essential prob-
plication of deep cooling of flue gases results in 13-15% lems. The main difficulty lay in carrying out all necessary
fuel saving and 10-12.5% increase of boiler efficiency, activities within the limits of available financing. Some ad-
which after modernization comes to 19.3 MW. The next ministrative problems were connected with the necessity to
parties are involved in the project: OJSC “Rassvet” obtain permission for supplying power to the grid.
Technical characteristics Operation program

Power capacity 2500 kW
Thermal capacity 71.2 GJ/hr Operation time 8000 hr
Gas consumption in gas turbine 1108 nm3/hr Power production 18 mill kWh/yr; 347 thous. $/yr
Gas consumption in boilers 1570 nm3/hr Heat production 569840 GJ/yr; 1399 thous. $/yr
Gas consumption in boilers Total 1746 thous. $/yr
Before reconstruction 2670 nm3/hr
Operating costs Economic parameters
Total gas consumption 21.4 mill. m3/yr Capital investments 1308 thous. $
Gas costs 959 thous. $/yr Specific capital investments 500 $/kWe
Other costs 323 thous. $/yr Prime cost of electricity 0.016 $/kWh
Total 1282 thous. $/yr Prime cost of heat 1.86 $/GJ
Avoidance of CO2 emission 27.5 thous. t/yr Saving of natural gas 14 mill m3/yr;
Costs of CO2 emission reduction 2.4 $/t CO2 Payback period 2.8 years
Follow-ups reasonable to construct CHP plants on the basis of stan-

dard (most common used) hot-water boilers PTVM-30.
The CHP plant at “Yuzhnaya” boiler house is the first oper-
Such boiler installation can be built with a 2.5 MW gas-
ating plant of such type in Ukraine. The plant will demon-
turbine unit. Preliminary calculations show that the specific
strate to general public and potential customers the big
fuel rate for power production in that case is 98-133g of oil
economic advantages of combined heat and power produc-
equivalent per kWh which is 2-2.5 times less than the indi-
tion based on existing thermal generators operating on gas
cator for a typical power plant of the condensation type.
fuel.
Another big niche for implementation of CHP technolo-
Cases of domestic replication gies/replication of project results would be enterprises with
Now there are no examples yet of replication of such a pro- available natural gas and powerful heat-generators (for in-
ject in Ukraine. There are about 20 potential clients waiting stance, kilns for baking of claydite or cement kilns). Intro-
for first results of “Yuzhnaya” CHP plant exploitation. duction of CHP plants at the enterprise lets reduce prime
cost of the end product due to generation of own cheap
Success factors
electricity. Thus, the best places for successful replication
Main reasons for project success are as follows: of the project are the following:
• Low specific capital investments (500 $/kWe). On the basis of standard gas-fired hot-water boilers for dis-
• Existing all-the-year-round heat consumption (boilers trict heating and hot water supply.
KVGM-6.5 for hot water supply).
On the basis of industrial powerful heat-generators operat-
• Short payback period (2.8 years).
ing on natural gas with long operation period.
• All components of equipment are of Ukrainian manufac-
ture. Complex implementation of such type CHP plants in
Ukraine can result in gas saving of about 25,000 mln m3/yr,
CO2 emission reduction – 17 mln t/yr, electricity production
The project has good prospects for replication. Ukraine has – 116,271 mln kWh/yr, savings on costs due to reduction of
a powerful and distributed heating network operating on gas consumption – 1,123 mln $/yr.
natural gas. From technical and economic point of view it is
3. Kiev public buildings energy efficiency investment project

The government of Ukraine, through the State Committee cultural institutions, with total annual heat consumption of
for Energy Conservation (State Committee) has confirmed more than 1 million Gcal. Quick-return measures were se-
the possibility of implementing energy efficiency measures lected for implementation, such as upgrading building sub-
in state and municipal public buildings in the city of Kiev. stations with installation of heat meters and consumption
The State Committee entered into an agreement with the controls, weatherization of windows and doors, installation
U.S. Department of Energy to assess the efficiency poten- of radiator reflectors, faucet aerators and low-flow shower
tial in the public buildings sector in Kiev. Results of this as- heads, installation of hot water heat exchangers and hot
sessment were used to support a loan of the World Bank water controls in individual substations. Estimated heat en-
for financing of the Kiev public buildings energy efficiency ergy savings from recommended measures make up about
investment project . 27% of baseline consumption, or 298 Gcal/year.
The advantage of public buildings with respect to imple- The program also included an assessment of lending and
menting efficiency improvements are presence of only one implementation schemes. The demonstration project in four
owner, which allows using only one set of equipment, and Kiev schools targeted at finalizing technical aspects of the
occupancy schedule that allows reduced temperatures dur- implementation process and verifying the cost and per-
ing nights, weekends and holidays. formance of the ECOs was implemented.
The prepared investment project covers more than 1,300 The estimated energy efficiency potential improvements
buildings of hospitals, polyclinics, kindergartens, schools, can result in the reduction of heat consumption by ap-
proximately 25%, which translates into about $8.5 million of Indicators:

annual budget savings. Total investment requirements
Total investments $ 30.4 million
make $38 million. The internal rate of return, by major
Implementation period 5 years
building category, ranges from 13% to 32%, with a
Average annual costs savings about $ 4.1 mln/year
weighted average of 29%. The proposed project also would
Net present value (discount rate 10% $ 3.7 mln
have secondary benefits including reduced air pollutant
Internal rate of return 13%;
emissions, increased employment, reduced energy im-
Payback period about 7 years
ports, and development of energy services infrastructure
Fuel savings 58.1 thous. t.c.e./year
that could be replicated in other sectors of economy.
Emissions NOx – 238 t/year; SO2 – 166 t/year;
The assessment was conducted by the Pacific Northwest reduction СО2 – 61,183 t/year
National Laboratory (PNNL) and its subcontractors, Tysak Sources of financing:
Engineering, a U.S.-based engineering consultancy; and
World Bank (loan $18.3 million),
the Agency for Rational Energy Use and Ecology (ARENA-
Kiev Municipality (internal financing $ 10.1 million),
ECO), a Ukrainian non-governmental organization that
Swedish agency SIDA (grant $ 2 million).
specializes in energy efficiency assessments.
Stage of the project cycle: implementation.
4. Energy efficiency in residential buildings

There exists a substantial cost-effective potential for en- ties, the idea of a special-purpose revolving fund was sug-
ergy efficiency improvement related to heat consumption in gested as the most viable fund. This scheme is being
Ukrainian buildings. tested now on the pilot buildings and includes shared-
savings contracts with housing cooperatives (owners of the
On initiative of Swiss Agency for Development and Coop-
buildings) together with the procedure for determining en-
eration (SDC) and with support of the State Committee of
ergy savings. Performance guarantee is a part of the con-
Ukraine for Energy Conservation, the Agency for Rational
tracts to ensure that the cooperatives are able to meet their
Energy Use and Ecology in cooperation with INFRAS con-
repayment commitments to the revolving funds. Initial capi-
sulting firm is implementing a project on energy efficiency
talization for the fund as the pilot phase has been provided
improvement in residential buildings.
both from the local authorities (the city district administra-
The project preparation phase determined low-cost energy tion) and SDC.
efficiency measures in cooperatively owned residential
Indicators:
buildings as the primary target for sustainable financing.
Investment-grade energy audits were implemented in sev- Total project cost $ 103,000
eral typical buildings and most feasible efficiency measures Implementation period 1year
were identified. They include building-level heat energy and Actual heating cost savings in the range 15-25%
water metering, apartment-level hot water metering, heat Payback period 4 years
consumption regulation, installation of radiator reflectors in Average annual fuel savings 126 thous. t.c.e. per year
apartments, heat insulation of pipes and balancing of build- Average annual
about 204 tons per year
ing heating system, and offer attractive returns in terms of CO2 emissions reduction
overall energy cost savings. The pilot implementation of ef- Sources of financing
ficiency measures was performed on two residential build-
Moskovsky district administration of the city of Kiev (23% of
ings in Kiev (9-storey and 12-storey high with more than
investment),
150 apartments owned by housing cooperatives) under
Swiss Agency for Development and Cooperation (77% of
joint financing of local authorities and SDC.
investment)
The major focus of the project is on developing and staring
Stage of the project cycle
sustainable mechanism for financing energy efficiency in
residential sector. Based on discussions with local authori- Monitoring and evaluation of results.
5. Development and operation of a Ukraine Energy Service Company

Basic information • UkrEsco initially has a joint-stock company majority
owned by the State. It is intended that control of Uk-
One solution to the problem of financing for energy effi-
rEsco will later be transferred to the private sector.
ciency projects is the use of Energy Service Companies
(ESCOs), i.e. companies that invest directly in the client’s The selected western company has become the Project
premises and are reimbursed from the realized energy sav- Management Unit (“PMU”), which helped to launch and
ings. This approach is now particularly relevant in the now operates UkrEsco. The PMU was composed of opera-
Ukraine where energy saving needs are so great but few tional staff including both Ukrainian and Western European
organizations have the financial, legal and technical know- experts. At the end of the two years PMU’s Ukrainian staff
how to implement such projects. in principle has become UkrEsco staff.
The Joint Stock Company “Ukraine Energy Service Com- Primary objects solved by UkrEsco are: Project identifica-
pany” (UkrEsco) was founded by the Government of tion; energy auditing; client due diligence; technical audit-
Ukraine in collaboration with the European Bank for Re- ing; financial analysis of projects; marketing and informa-
construction and Development (“EBRD”) and Commission tion dissemination; procurement in accordance with EBRD
of the European Communities DG 1A, the latter represent- rules; project implementation; monitoring of the realized
ing the European Union. energy savings and taking corrective action as necessary.
Finance for UkrEsco was provided as follows: Activity on the project
• by way of a sovereign guaranteed loan from the EBRD UkrEsco carries out studies of the market on services in
of $ 30 million; the savings of energy. Financial, power and legal audit for
• by way of a grant from TACIS of ECU 3 million to act as more than 100 enterprises are carried out. Now the com-
an incentive for Ukrainian enterprises that sign an en- pany is at the stage of signing and realization of projects on
ergy performance contract with UkrEsco (through a 10% a total sum of $ 2,000,000. The list of projects which are at
subsidy of the contract price); and the stage of implementation can be divided into three cate-
• by way of technical assistance from TACIS of ECU 3 gories: (1) Already realized or being at the stage of pur-
million for UkrEsco to operate UkrEsco over the initial chases; (2) Already signed or being authorized for signing;
two-year period (Project Management Unit). (3) Preliminary coordinated with customers.
Company Scope of Work Cost $

Category 1
1 Gostomel glass works Replacement of compressors 195,000
2 Freedom Farm Agricultural equipment 204,140
3 Vinnitsa meat plant Replacement of compressors 300,000
Replacement of boiler-house for increase of a production efficiency and
4 Shostka milk 390,000
transfer pair
Category 2
1 Cherkassy food Thermal treatment equipment 350,000
Kharkov machine-building
2 Modernization of system of manufacture and distribution of compressed air 250 000
factory
3 Coctebel winery Boilerhouse / Condensate return / Bottle washing machine / Lighting 200,000
Metallurgical equipment Modernization of the automated system of the commercial account and the
4 200,000
factory Dneprotjasmah technological account of power resources
Category 3
1 Gostomel glass works reconstruction of the furnace for cooking a glass 800,000
2 Bilosvit milk plant CHP 0.5 MWt 500,000
Realization problems and difficulties are now materializing with companies are smaller in
size. This may be due to a number of factors. Projects
• Unfortunately, the majority of them are not capable to
with reasonable energy saving components may be
provide appropriate returning of the proceed of credit,
smaller in terms of investment levels. Also, given the
given by Bank.
traditional shortage of capital, companies have under-
• Energy saving is not the primary ‘driver’ for many pro-
taken such projects in an incremental approach, and
jects undertaken ‘in the name of energy efficiency’. This
may still be more comfortable with this approach even
is primarily due to the prevailing low prices of energy,
with UkrEsco financing.
and additional problems associated with poor payments
by companies for energy supplied to them. In many Recommendations for successful replication
cases the primary drivers relate to technical refurbish- in other transition countries
ment and upgrading of outdated equipment, improve-
Prepare a business plan ESCO, to provide a clear vision of
ments in equipment reliability, improvements in product
the future prospects for the company.
quality, and security of energy supply.
• The interest rate offered by UkrEsco (12%) is not par- All parties should agree on the interest rate to be charged,
ticularly attractive to the ‘prosperous’ companies noted including the mechanism by which a grant provides an in-
above, who have access to cheaper international capi- centive to the client.
tal. This means that, in general, it is the smaller and Key barriers to operation, emerging from the initial con-
medium sized companies (who by nature may have less tracts, should be quickly resolved.
opportunities for energy saving) who are attracted to the
All parties should be comfortable with the nature of the
UkrEsco financing mechanism. Hence the level of the
ESCO business in the country’s current economic and
UkrEsco interest rate may be contributing to the difficul-
regulatory environment. Many projects will initially be ‘infra-
ties of finding ‘creditworthy’ companies and companies
structure development loans with an energy saving com-
with real energy saving potential.
ponent’. As prices rise to market levels with market reform,
• While the initial intention was to target reasonably large
the energy saving component will grow.
projects (approx. $1mln investment), the projects that
6. Industrial energy efficiency in Ukraine

Ukraine is one of the most energy-intensive countries of Rational Energy Use and Ecology to identify and apprise
the world. Thus, before becoming independent Ukraine had industrial energy efficiency projects in Ukraine.
one of the highest energy intensity indices – 3.25 t of oil
The key objective of the Program is to provide assistance
equivalent per $1000 of gross domestic product (GDP).
in improving industrial energy efficiency of Ukraine by de-
Over the ten last years this index has reduced to a certain
veloping energy efficiency projects for the most promising
extent, but presently specific energy consumption in
enterprises and companies, and in obtaining over $100 mil-
Ukraine per unit of GDP is extremely high, and makes 2.4-
lion financing means for this purpose. It builds on a sev-
2.8 t of oil equivalent per $1000 of GDP, but in Western
eral-years effort that has already developed a $30 million
Europe it makes on average 0.22 t of oil equivalent per
financing scheme for efficiency improvements. This effort
$1000 of GDP.
supports the shut down of the dangerous Chornobyl power
The significant energy efficiency potential of Ukraine might plant by helping provide electricity alternatives. Background
to its economic growth, competitiveness, and at the same of the project:
time to reduction of environmental pollution.
• Industry accounts for about 60% of overall Ukraine’s
Under the urgent energy assistance program to help energy consumption;
Ukraine shut down the Chornobyl reactors, the U.S. De- • high potential for industrial energy efficiency improve-
partment of Energy (DOE) has asked the Pacific Northwest ments;
National Laboratory (PNNL) and the Ukrainian Agency for • energy prices in Ukraine have grown close to the world
level;
• industrial enterprises do not have enough financing Implementation of energy efficiency measures results both
means for energy efficiency improvements; in reduction of energy consumption and GHG emissions.
• managers lack skills on business planning and develop- Participation in Activities Implemented Jointly (AIJ) and
ing investment projects which makes it difficult to attract emission trading will allow to attract financing for energy ef-
external financing for project implementation. ficiency projects. Ukraine is one of the largest GHG emit-
ters in the world, therefore the developed countries are
11 Ukrainian industrial enterprises have participated in the
likely to cooperate with Ukraine on climate change mitiga-
program since 1997, investing over $1.5 million of their eq-
tion. Enterprises and main data on developed energy effi-
uity in energy efficiency. Energy audits aimed at energy
ciency measures are listed in the table below.
and cost efficiency measures were conducted at all these
enterprises.
Annual energy savings Imple- Simple GHG

Annual
Natural mentation payback emission
Enterprises and main developed energy efficiency measures Heat Electricity costs savings
period reduction
gas
Brief information on the measures
CO2 in
1000 m3 1000 GJ mln kWh $1000 $1000 years
t/a
JSC “Gostomel Glass Plant”, Kyiv oblast
$750 thousand of equity financing and $3.88 million of Western NIS Enter-
prise and UkrESCO investments in energy efficiency measures were at-
tracted. All measures identified for the first stage were implemented: in-
2,060 - 4.9 1,542 367 4.2 7 680
stalled a new furnace, heat recovery boilers, efficient compressors etc.
The Association of Energy Engineers awarded this project its prestigious
International Energy Project of the Year Award in 2000.
JSC “Avdeevka Coke Chemical Plant”, Dontesk oblast
Measures for cogeneration system including utilization of excessive coke
gas for gas turbines (capacity of 15 MW) and utilization of waste gas heat
- 2,363 142.85 13,610 5,238 2.6 281 389
in heat exchangers were developed. Over $370 thousand was invested in
upgrading steam pipelines, heat insulation and efficient lighting.
JSC “Stalkanat”, city of Odessa
Energy efficiency measures for $790,000 and estimated upgrades of wear
production were identified. UkrESCO board has agreed to provide financ- 4,555 - 2.14 1,455 522 2.8 10 125
ing for several measures.
JSC "Rosich" Bila Tserkva, Kyiv oblast
Rosich has implemented all but one of the energy audit recommendations
with the assistance of the local energy service company. Now these meas- 106 - 0.1 19.1 15.3 1.3 275
ures are saving to Rosich over $12,000 annually.
JSC “Zaporizhzhya Abrasives Plant”
The company has invested $232,500 in compressors, lighting and other
equipment based on the project energy audit. The company is also dis- 1,800 - 9.76 812 710 1.1 11 031
cussing a larger investment in a power plant with EBRD.
JSC “Rosava” Bila Tserkva, Kyiv oblast
The project energy audit revealed $4 million of cost-effective energy effi-
ciency opportunities. UkrESCO has agreed to finance these investments in
two stages with the first $1 million installment in 2000 or early 2001. - 306 17.33 4,128 1,632 2.5 35 517
Rosava is also working with its new Austrian investor on a $75 million
modernization effort
JSC “Кyiv Khlib”, Bakery 1
Identified cost-effective energy efficiency measures for amount of $58,000.
Kyiv Khlib has committed to invest half of these measures and to look for 548 - 0.03 58.3 22.8 2.6 1 039
financing sources for the rest.
JSC “Sevastopol Marine Plant”
Measures on heat supply system retrofit including installing cogeneration
units in two boiler plants for $3.4 million were developed. Other cost-
effective energy efficiency measures for the total amount of $229,000 were
-391 - 22.2 3,656 810 4.5 16 782
identified. The plant’s owner, SGMA Group has committed to finance most
measures identified in the energy audit. Besides, the Defense Enterprise
Fund and UkrESCO have expressed interest to participate in financing
JSC «Zaporizhzhya Ferroalloy Plan”
Cost-effective measures for the total cost of $2.9 million were identified.
JSC «Zaporizhzhya Ferroalloy Plan” has committed to implement majority
-2,568 135.7 39.6 2,869 1,590 1.8 36 160
of these measures using equity financing and look for additional financing
sources, if necessary.
Close company «Kostopil Glass Plant » Rivne oblast and JSC “Gostomel Glass Plant”, Kyiv oblast
Energy efficiency measures in compressed air system and measures on
- - 4.3 593 150 4.0 3 391
energy cost reduction were developed.
JSC «Kramatorsk Cement and Asbestos Sheeting Plant – Pushka”, Donetsk oblast
Energy efficiency measures for overall cost of $2 million and estimated im-
provements of rotary kiln burners for clinker production were identified. Uk- 8,547 - 5.6 2,089 535 3.9 20 248
rESCO expressed interest in co-financing of the measures.
Total 14,657 2,804.7 247.8 30,831.4 11,592.1 2.7 423 637

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Climate Tech

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Climate Change

Climate Technology Initiative

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Publisher: Federal Environmental Agency (Umweltbundesamt)

Edited by: Federal Environmental Agency

Environmental Policy Research Unit

Berlin, November 2002

Ture Hammar, Representative of the Danish Presidency of CTI

Results of the Last Ostritz Seminar in 1999 6

U.S. Climate Change Policy 8

Lessons Learned in Technology Deployment 10

Municipal Climate Protection 16

Energy and Carbon Intensities in Central Europe: A Decade of Transition in Review 22

Overview of Biomass Use for Energy in Poland 28

Biomass Use in Germany 36

Biomass Success Stories in Ukraine 49

Biomass CHP Unit in Pfaffenhofen / Germany 56

Biomass Success Stories in Romania 59

Best Practice: The Case of Biomass Utilization 62

EBRD and Energy Efficiency 66

Financial Tools for CEE/FSU Countries 70

Co-Generation and Energy Supply - The Success Story of the Netherlands 73

CHP Policy in Germany 76

Design of CHP Incentives - Based on Achievements in Denmark 82

Overview of Slovak Energy Systems Regarding Cogeneration Technologies 89

The Austrian-Slovak Competence Centre for CHP Diffusion 92

Thermal Energy Conservation in the Building Sector 96

Implementation of Thermo-modernization Law in Poland 97

KfW-Housing Modernization Program 100

Best Practice: Thermal Energy Conservation in the Building Sector 102

Good Energy Efficiency Practices in Bulgaria 106

The Energy Efficiency Housing Pilot Project in Lithuania 110

Regional Networking to Promote EU Accession Process – RENEUER 115

Discussant Notes 118

Prospects of Performance Contracting in CEE Countries 120

Best Practice: Energy Service Company (ESCO) in Tbilisi (Georgia) 126

Energy Audits: Lessons Learned in the Czech Republic 129

Rational Energy Use in the Russian Industry 132

Energy Auditing in Estonia 134

Efficient Lighting Initiative: Grassroots Approach in Residential Sector in Latvia 137

Japanese Industry Efforts for Energy Conservation and Technology Transfer on

Leaking Electricity? Standby Power Losses in Bulgarian, Romanian and Hungarian

Really off? Stand-by Campaign by Energy Foundation Schleswig-Holstein, Germany 148

The Kyoto Mechanisms 156

Country Report: Belarus 179

Country Report: Bulgaria 185

Country Report: Czech Republic 193

Country Report: Estonia 202

Country Report: Georgia 207

Country Report: Hungary 213

Country Report: Latvia 220

Country Report: Poland 233

Country Report: Romania 241

Country Report: Russia 248

Country Report: Slovakia 254

Country Report: Slovenia 261