Economic and financial barriers block the development of energy conservation

14 june 2016 | Expert

“Analysis of the regional energy conservation programs implemented in 2010-2013 found that only 10 regions out of 89 have full-fledged sets of conservation events and performance indicators,” Analytical Center expert Evgeny Gasho told a correspondent of Expert Magazine

Evgeny Gasho
Evgeny Gasho
Department for Expert Analytics

Most regions have rather abstract energy conservation programs, energy studies of dubious quality. Objective data on the state of the energy sector and the structure of energy consumption is lacking and people often simply do not appreciate the potential of energy conservation, the expert noted. “You will not get far with this sort of baggage. It is a vicious circle you cannot break out of unless the format the regions work in changes.” Mr. Gasho believes.

The expert also noted that the vast majority of companies polled said in their view the potential savings that can come from energy conservation are within 8-10%. And yet case studies of the companies that have introduced energy management demonstrate that far greater savings can be achieved through energy conservation than is generally believed.

“Most energy conservation projects being implemented today are low cost projects with short payback periods. Average annual costs of energy conservation are RUB 38 million. And almost half the companies implementing them spend no more than RUB 5 million a year on energy conservation. The average payback period is 2.5 years. About 70% of the companies use exclusively their own financing to implement energy conservation projects,” Mr. Gasho said, pointing out that those were the replies of the respondents back in 2014, before the economy went into a full-blown crisis mode and most investments were put on hold.

The expert believes that the main obstacle to the implementation of energy conservation measures is economic and financial barriers. Over 45% of the companies noted inefficiency of the state support measures and the vast majority point to the lack of a mechanism for stimulating energy conservation through flexible rates.

Source: Expert