Social 1Discussion: How social problems can be solved with the support of energy saving: ways to red

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Social 1-Discussion How social problems can be
solved with the support of energy saving ways to
reduce the cost of energy supply for end
customers Lithuania
Ramune Kmieliauskaite Lithuanian District Heating
Association Specialist 2 November, 2005 CSR
Seminar Tallinn, Estonia
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Key indicators of the DH sector
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Heat balance, 2004
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Average DH tariff in Lithuania, 2004

• The average price of heat is dropping down
• it was 115.1 LTL/MWh (33.3 EUR/MWh) in 2003,
  while in 2004 113.5 LTL/MWh (32,9 EUR/MWh)

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Heat energy consumption, 2004
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Structure of households consumption expenditures
for housing maintenance (per capita per month),
2004
37 for heat and hot water
During winter season the average expenditure for
heat energy makes about 20 of total family
monthly income
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Heat users

• difficult economical situation of the residents
  in the country determine that debts for the
  consumed heat in the DH sector are still great.
• the average debt level is about 20

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Distribution of heat consumers debt

• In the end of 2004, the total debt of the heat
  users was 150.9 million LTL(43.70 mio EUR), i. e.
  about 17 of annual revenue of DH companies.
• 80 of the total sum makes the debt of
  inhabitants.

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Subsidies

• In order to decrease the amount of expenditures,
  the State Support system is applied in Lithuania
  from 1996.
• State subsidies for heat and hot water are
  applied to consumers with low incomes.
• In 2004, the subsidies were provided to 11 of
  the Lithuanian population, and payments out of
  the budget exceeded 60 million LTL (17.4 mio
  EUR).

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Disconnections

• DH supplied at relatively high cost level creates
  a strong incentive of society to switch to other
  energy sources such as gas.
• The majority of lately built new apartment houses
  are equipped with modern gas-based installations
  for production of heat and hot water.
• The uncontrolled competition between district
  heating and decentralized heating mostly based on
  individual natural gas fired boilers undermines
  the DH position and may lead to irrational
  solutions with heavy long-term consequences.

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• Why heat expenditures are so high?

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Housing stock

• There are about 35000 multi-family apartment
  buildings in Lithuania
• 66 of Lithuanian population reside in
  multi-apartment buildings constructed between
  1961-1990
• Heat consumption in old houses 3 times bigger
  than in new ones.

Life-time of dwellings (Vilnius ?ity)
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Heat consumption in old and new erected houses
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Administration and maintenance

• No sufficient attention was paid to the
  establishment of an institutional and legal
  system for housing maintenance and exploitation,
  for this reason housing maintenance problem
  exists.
• Only 17 of the total number of apartment
  buildings are managed and maintained by the
  housing owners who establish home owners
  associations.
• When establishing home owners' associations, the
  owners often lack initiative, as well as
  information and organisational-technical support
  by the public and local government institutions.
• Home owners' associations usually are not able to
  ensure appropriate maintenance of common
  ownership in the multi-apartment buildings.
• They can contract maintenance companies operating
  on the market, however, shortage of companies
  providing good quality services is noticed.

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Energy efficiency of end-users

• Why heat expenditures are so high?

• The Lithuanian housing stock without proper
  maintenance depreciated.
• About 90 of multi-family apartment houses need
  to be renovated in the country.

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Housing renovation process

• Prior to 1996 no housing renovation and
  maintenance projects were implemented in
  Lithuania.
• 1996-2004 In 1996 the Government of Lithuania
  and the World Bank initiated and implemented the
  Energy Efficiency/Housing Pilot Project. Over 500
  multi-apartment buildings were renovated in towns
  and cities throughout Lithuania. Much attention
  was focused on the implementation of the energy
  efficiency measures. Home owners reduced energy
  consumption by an average of 24. There were also
  few other alternative projects implemented during
  1996-2004.However the housing modernisation
  problem was not solved due to insufficient State
  attention.
• 2004-2005 problem solution at national level -
  legislation

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Legal Acts on Renovation of Multy-family
Apartment Houses

• Lithuanian Housing Strategy (Adopted on
  21-01-2004)
• Support Programme on Renovation of Multy-family
  Apartment Houses (Adopted on 23-09-2004, modified
  on 21-06-2005)
• Measures and terms of implementation of Directive
  2002/91/EC of the European Parliament and of the
  Council on the energy performance of buildings
  (Adopted on 27-12-2004)
• Law on State Support for Housings Procure or
  Rent and Modernization of Multy-family Apartment
  Houses (Adopted with modifications on 24-03-2005)

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Lithuanian Housing Strategy (January, 2004)

• Main goals of this strategy regarding energy
  conservation is to ensure efficient use,
  maintenance, renovation and modernization of
  existing housing, as well as efficient energy
  use.
• The poor condition of the existing housing stock
  will improve, with its value being preserved and
  increased where possible, the dwellings will be
  adapted to the new needs of households, the
  social segregation will be mitigated.
• Prior to 2020 it is necessary
• to modernize based on the economic feasibility
  principle the heating systems in the existing
  multi-apartment buildings,
• to renovate and insulate roof structures,
• to change or replace windows and entrance doors,
• to remove joint defects of panel walls and
  increase the thermal resistance of external
  walls,
• to reduce heat energy costs per unit of useful
  floor space up to 30.
• to foresee efficient state social allowances to
  low income households, also to apply other
  financial measures.

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Support Program for Multi-family apartment houses
modernization (September 2004, (modified in
June, 2005))

• Main objective of this programme to help home
  owners and especially families of low income to
  renovate their multi-family apartment buildings
  by increasing the energy efficiency and
  decreasing heat cost.
• Tasks
• Create credit support system for modernization of
  multi-family apartment buildings. This system
  should form favourable conditions for commercial
  banks to finance the renovation projects of
  buildings at the minimal State budget
  expenditures.
• The credits of commercial banks to be obtainable
  for homeowners to implement the renovation
  projects.
• Compensate a part of expenditures taking into
  account the energy efficiency of investment
  projects to support the families of low incomes
  defray the initial contribution or the part of
  it, credit insurance contribution or the part of
  it, interest or the part of it.
• Secure the quality of projects implementation.
• Secure the direct financial, juridical, technical
  and organizational support and consultation to
  homeowners in every possible way.

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Support Program for Multi-family apartment houses
modernization (September 2004, (modified in
June, 2005))

• Expected results
• about 70 (20 000 units) of multi-family
  apartment houses will be renovated during
  2005-2020
• heat expenditures will be decreased up to 30
• the payments out of the State budget for
  subsidies for heat and hot water will be
  decreased by 35
• about 7 billion LTL (2 billion EUR) will be
  invested in housing renovation field during
  2005-2020

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Municipal level

• There are 60 municipalities in Lithuania. Only
  Vilnius City municipality is a pioneer in this
  process of modernization
• Energy efficiency fund (February 2002)
• Long-term renovation program Lets renovate
  dwelling- renovate City (June 2004)

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Energy Efficiency Fund

• On February 2002, Vilnius City Municipality and
  JSC Vilniaus energija (lease holder of Vilnius
  DH) established a specialized Energy Efficiency
  fund (20 million LTL), which gave the possibility
  for inhabitants of Multi-flat apartment buildings
  of Vilnius City to equip an individual accounting
  and regulation system inside their flats.
• In 2003 GEF/WB dedicated 2.5 million USD grant
  for the extension of this project.
• Objectives
• to induce the rational use of heat energy
• to decrease the payments for heat used
• to distribute heat cost inside building correctly
  (according amount of heat consumed not the area
  of individual flat).
• It is planned in the future (during 5 year
  period) to install heat cost allocating systems
  in 500-600 multi-flat apartment buildings of
  Vilnius City

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Long-term renovation program Lets renovate
dwelling- renovate City

• On June 2004 Vilnius City Municipality started
  the implementation of long term renovation
  program Lets renovate dwelling - renovate
  City.
• World fund for Environmental Protection gave a
  loan of 6,5 million USD (3 million USD is
  intended for building renovation).
• Pilot project overall renovation of 3
  multi-family apartment buildings - is implemented
  within this project framework.

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Would you agree to participate in housing
renovation?
Survey of the public opinion of inhabitants of
Vilnius City (September, 2004)
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How much money would you be able to pay for
renovation per month?
Survey of the public opinion of inhabitants of
Vilnius City (September, 2004)
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Do you know who and what services are providing
for housing renovation?
Survey of the public opinion of inhabitants of
Vilnius City (September, 2004)
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Social 1-Discussion How social problems can be
solved with the support of energy saving ways
to reduce the cost of energy supply for end
customers

• Housing maintenance
• depreciation existing quality of housing does
  not comply with the effective technical
  requirements
• shortage of companies providing good quality
  services.
• Consumer debts are still great - State support is
  required for covering a part of investments.
• State subsidies for heat and hot water. Is it
  rational? Inhabitants have no motivation to
  save energy
• How to avoid disconnections? -
• DH still has a bad image among costumers
  awareness of society about the sector problems,
  energy efficiency should be increased.
• Other?