Experts Propose a Variety of Solutions for Energy Efficient Modernization of Cities

14 july 2015

“Utility rates, transport, and urban lighting are some of the areas of municipal economy development in which we see a lot of variation from region to region,” said Analytical Center expert Dmitry Khomchenko, opening a round table titled Modernization of Cities on an Energy Efficient Basis: Search for Replicable Solutions that was held at the international industrial exhibition Innoprom.

Analytical Center experts concluded there was significant variation in the development of municipal economies from region to region after conducting a survey on the state of regional energy efficiency in various sectors such as industry, agriculture, utilities, housing and municipal services. The findings of the survey are currently being processed but it is already clear there is a lot of variation from region to region. “The fact that there is variation between regions is normal. However it does mean efforts are needed to address the problems that exist in those regions that are lagging behind,” Mr. Khomchenko noted. "Today we are going to talk about the obstacles that hinder the adoption of energy efficiency and about what needs to be done to implement municipal and regional programs in this area.”

Modernization of cities through energy efficiency is done first and foremost for the people living in them and there is more and more talk of self-organization of residents. A good example of how residents can care about their own home is the apartment block council chair Galina Khoroshavina from Sverdlovsk Oblast whose efforts resulted in her apartment block being repaired ‘from top to bottom.’ She was proud to show off her utility bill for June that includes revised heating figures for past periods and in which the total is negative RUR 3,750 (USD 65.8, EUR 59.9 with today's exchange rates). Ms. Khoroshavina then talked about what she did. “We had the roof replaced and heat insulated, the main heating pipes in the basement and in the common stair areas were replaced and heat-insulated as well, the same was done to the cold and hot water pipes and sewage removal systems, then we sorted things out with internet providers that used to regularly punch holes in our roof. As a result energy consumption of our building fell by a factor of 1.5-2,” she reported. The motion sensors alone, which were installed to automatically activate and switch off the lamps in common areas, saved more than RUR 2 million (USD 35 102, EUR 31 937) in 2011-2013. This money was allocated to major repairs and whatever was left was divided up among the residents. “Having the lamps replaced saved 833KW in just one building,” Ms. Khoroshavina continued. “Now think about how much energy savings could be achieved if lamps were replaced in an entire neighborhood or even in the whole city?” Ms. Khoroshavina is sure that people living in apartment buildings need to realize that they are responsible not just for their apartment but for the whole building, for the neighborhood and for the city as a whole. As one of the founders of the smart consumer school in Sverdlovsk Oblast, Ms. Khoroshavina hopes to see a lot of information explaining what can be done in this area to all people across Russia.

The first step a consumer can make on the way towards energy efficiency is to install a meter. “By default, over several years people have come to believe that getting a meter always saves money. But in reality, getting a meter is not about money, it is about the truth,” NPO Karat CEO Sergey Ledovsky believes. “And it is the truth that is needed not just by the utility company and the consumer to figure out who owes whom how much but by the municipal government and the state as a whole as well.” However, meters cannot be such a good thing for all participants in the process, the specialist noted. The thing is, though, that meters must be made a top priority regardless of economics. It is not always the case that modernization improves energy efficiency and automatically leads to lower utility bills. “Modernization does not always get translated into lower utility bills for the consumer,” Mr. Ledovsky points out. Often times, after getting constant hot water supply, i.e. a quality service, people are then unwilling to pay for the extra rates associated with this amenity.

The Head of the Perm branch of KES-Holding Sergey Boguslavsky talked about his experience modernizing the heat supply system in Perm. Their project’s slogan was ‘Helsinki is our Inspiration!’ after a trip to Finland during which it transpired that the two cities are similar in a lot of ways and employ similar central heating systems as well as similar methods for calculating heating bills. However, despite the similar conditions, Helsinki’s energy company is much more profitable. “We chose the Kirov district in Perm for our experiments. It has got 140,000 residents and about 1,100 buildings. The problems there are typical for any Russian city: lots of pipes that nobody is taking care of, 30% of the residents do not have meters, the district heating substations are manually operated, heat consumption systems are not set up properly, with the overall result being that about 14% of the energy dispatched to consumers gets lost en route,” the specialist explained. A project worth a total of RUR 2.4 billion (USD 42 121 964, EUR 38 324 026) (RUR 1.5 billion for a new heating substation and RUR 900 million for the pipes) took about a year to develop. It involved abandoning using a central district heating substation and instead using local heating substations with 100% of the distribution pipes being replaced. “As a result, the heating system was completely overhauled, the amount of emergency shutdowns and wear and tear went down by 23%, losses were reduced by 18% while the amount of heat consumed went down 20%, according to our estimates,” Mr. Boguslavsky explained. He noted that while the project was being implemented a number of problematic buildings were identified for which money was allocated from the treasury of Perm Krai.

However, some regions do not have money to spare on the modernization of their heating systems. As energy consumption decreases, the amount of money utilities can make off selling heat goes down too and after that rates increases follow inevitably, so it is important to work on the other end of the pipe as well. The CEO of Omsk’s Territorial Utility Company Anton Shibanov talked about modernizing boiler rooms. “Heating is a special resource that cannot be switched off even if customers do not pay for it,” Mr. Shibanov said. "As a result, we started looking for responsible investors, manufacturers of heating equipment, to sort out this problem. In a radius of 150 km of Omsk, 29 boiler rooms with excess capacity were servicing towns with populations of under 250,000 people and losing money. So an offer was made to manufactures of low capacity boilers to get them to modernize those boiler rooms: they would provide their equipment and instead of being paid in cash, which the towns in question did not have anyway, they would be paid in a share in the business and a say on the board of the managing companies operating in a market that was guaranteed for several years into the future. In this manner, Mr. Shibanov believes, not only utility companies get the upgrades they need, but areas of growth are created as well.

Philips representative Dmitry Pantushin noted the growth in projects to implement energy efficient urban lighting systems: today urban lighting makes up 20% of total urban energy consumption while back in 2005 its share was 15% only. The expert believes that this increase does not mean that cities are now better lit, but rather, that the other users of energy have become more energy efficient and are now consuming less power. “New forms of urban lighting have developed in Russia since 2010,”Mr.  Pantushin believes. “However so far all that is usually done is lamps get replaced with ‘more energy efficient’ light sources.” The expert does not think that is enough, though. He shared data that show that in 2014 RUR 744 million (USD 13 057 809, EUR 11 880 448) was spent in Russia on inefficient light sources. The solution is to change the whole approach to urban lighting, the expert believes. This can and should be started in new developments. Lighting solutions should be integrated into the design of pedestrian areas, small structures and buildings and this is not going to increase energy consumption if smart lighting system designs and smart lighting management systems are used in conjunction with proper health and safety measures. There is also the issue of how to make urban areas more appealing to people: ideally we want cities where people want to spend time on the streets.

The round table was organized by the Analytical Center of the Government of the Russian Federation, SRO NP Energy Efficiency and NPO Karat as part of the business program of the 6th international industrial exhibition Innoprom. More than 150 events in different formats were held during the exhibition.