Merging energy services and overhauls would improve energy efficiency

13 august 2015

The Analytical Center in conjunction with the Russian Association of Energy Service Companies (RAESCO) have held an expert meeting to discuss the current state of the energy service sector and existing opportunities for implementation of energy service projects in Russia. The experts discussed problems with existing regulations and development prospects of the energy service sectors, debated about available options for expanding the clientele and promoting energy services to state organizations, utilities and private companies. The federal authorities, namely the Ministry for Economic Development, the Ministry for Energy and others, presented their positions at the meeting.

“It’s been a little over a year since November 2014 when the Action Plan for Better Public Regulation of Energy Services was adopted,” said the Analytical Center Expert Dmitry Khomchenko. “In this time federal executive authorities, the business community and the banking sector have managed to achieve some results. What we need to understand today is what we succeed at and what we have not been particularly successful at.”

The Ministry for Economic Development representative Andrey Grabov noted that the implementation of the first stage of the plan was practically over, and there were just a few things that needed finishing up. “There are two important elements we are currently working on. The first one is methodological recommendations. At the moment this document is being discussed within the ministry, once that is done, it will be sent for approval to the Ministry for Energy and after that it will be made available for public discussions. It is important that we get some feedback from the state organizations that will be using this methodology,” the specialist said. The second important element has to do with the Russian government’s resolution No 636 dated 18 August 2010, Mr. Grabov noted, adding, that these documents need to be discussed in depth.

The main focus of the Ministry for Energy’s efforts is on improving the legal framework, the ministry’s representative Dmitry Melnikov said. “If we want to improve the performance of energy service companies it is vital that a methodology be developed for assessing their performance using relevant metrics and estimates so as to reduce interest rates and risks,” the specialist said. “That would be the first step after which we would go on to other methods of improving performance that focus more on guaranteeing consistent cash flow and reducing opportunities for abuse by customers.” According to the government official, there are a number of areas where energy service is a good tool for attracting private investments. First of all this applies to street lighting, to a lesser extent this also applies to interior lighting and heating systems where automatic climate control systems could be introduced. In the short term, these are top priorities for the ministry, Mr. Melnikov noted. “In addition, we have abandoned energy studies. These are now being replaced with energy declarations that all state-owned customers must submit,” he concluded. Currently, energy declarations must be submitted every 5 yeas but in the future they are supposed to become the key tool in the arsenal of energy service companies, Mr. Melnikov noted. The specialist also talked about the contest of energy efficiency projects being organized as part of ENES-2015 to popularize energy efficiency as a field.

The experts agreed there is great potential in merging energy services and major overhauls. RAESCO CEO Irina Bulgakova noted that her organizations had proposed a number of amendments to federal and regional legislation to allow for energy service work to be carried out at the same time as major overhauls are being carried out.