Economic Benefit of Energy Saving Is Impeded with 'Expensive' Money rather Than 'Cheap' Power

13 february 2017 | Energosberezhenie

Elektrosnabzhenie magazine published article by Evgeny Gasho, the expert of the Analytical Center, titled “Handling the Problem of Energy Saving in Russia. Certain Results and Myths.” The article addresses some widespread myths preventing energy saving in our country.

Evgeny Gasho
Evgeny Gasho
Department for Expert Analytics

In his article Evgeny Gasho says, “It has been over nine years since the contemporary state policy took the path of energy efficiency, however, paper-based projects do not always get implemented without changes. We can now state that the approved legal documents were based on incorrect data on GDP energy intensity, buildings’ energy losses, etc., usually provided by foreign experts. In fact, we consume power some 2.0-2.5 times less than required for our climatic conditions and distances, subject to state-of-the-art technology-based economy development.”

Moreover, according to the expert, a great deal of power consumption is accounted for by heat power for buildings in wintertime rather than high-quality electric power. Recently clear light has been shed upon the situation due to thousands of energy audits and myriads of metered values of water and heat consumption.

The expert states that “The analysis of data received suggests that our buildings are 'worse' than the Western ones by 30-45%, in average (including overheating), rather than 2-3 times. This is to say Russian consumers’ heat payment amounts up to 250-300% of the economically justified tariffs, instead of 60-70% claimed.

Another widespread myth proclaims high potential of electric power saving. Mr. Gasho says that “where in calculations one applies inaccurate power consumption data to the formula numerator, the result will be false. And where the denominator does not account for all financial receipts of major power consuming facilities, the error range will increase. For example, such through calculation of GRP power consumption in 'cold' Moscow, performed through full balance, showed that its value is less than this figure of 'warm' Belgium by some 10%. And 11.5 mln Belgians consume electric power almost twice as much as 12 mln Moscow residents.”

Therefore, it turned out the enormous potential of energy saving, we were used to appeal to, did not exist. And indeed, return on various energy-efficient innovations depends on the bank rate, rather than the fuel prices. In other words, the economic benefit of energy saving is impeded with 'expensive' money rather than “cheap” power. That is why energy service does not develop, and the projects do not repay.

“Another myth deals with energy efficiency of our home industry. There is a belief that we can do no right; and an expert shall come to train our engineers to introduce energy management. However, many companies and sectors at large performed major upgrading before Federal law No. 261-FZ was adopted, and still run it now. First of all, these include sectors pressed with the global marketplace competition, such as the metal industry, the petrochemical industry, and the fertilizer industry.

The state of business of Russian major holdings and certain enterprises proves that, for ages and even decades, they have been developing their own power management systems, computerizing technical record-keeping, developing procedures of rate setting and benchmarking, implementing comprehensive upgrading measures, training projects, etc. Implementation of programs is analyzed and adjusted. We can see the actual power consumption figures per one ton of cast iron, steel, rolled products and bricks are just as high as those registered with plant in the US or Japan – all that against cut budgets.”