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Replicating the Results in Other Cities
Why is MUNEE cataloging success stories? Because what cities have done in Ukraine and what is replicable without donor financing can convince other cities to do the same. From here, MUNEE will work with the Association of Ukrainian Cities (AUC) to provide a basket of tools and ideas from which cities can choose what works for them. These case studies in Ukraine (and others in Russia) show some of the following reforms are possible and can have an impact:
- Innovations in billing and collection methods
- Tariff redesigns and subsidy reforms
- Incentives to install heat and water meters √ both on the building level and in individual apartments
- Municipal software and energy accounting systems
- Reforms in the relationship between the heating company, housing maintenance company and consumer
- Developing methodologies for public-sector buildings keep the energy savings they generate
- Experience with financing from local sources
- Showing the benefits of technologies that save energy, particularly controls that regulate heat in public buildings during unoccupied times of the day and week.
Program Development Highlights:
Installing real-time, remote monitoring equipment in Ukraine
For many years, donors and innovative city officials have worked to create a system of privatized housing maintenance services and have the market work to improve the housing stock in Eastern Europe and the Soviet Union. When it does happen, companies compete for contracts with housing associations and local governments to maintain residential buildings, and the result is better service. One of the new companies in this emerging market, MZhK, is based in the Ukrainian City of Lutsk. MZhK has maintenance contracts with 90 high-rise buildings where 40,000 people live.
With the Alliance's help, MZhK is now undertaking an experiment, which if successful could be a model for other cities. The project now being implemented is installing real-time, remote monitoring equipment, measuring and controlling the flow of heat and water into and within the building. Most residents in the city - and the country - pay for heat and water regardless of the quality of service. This system will measure heat and water around the clock, identifying both spikes in consumption and areas within the building where heat and water are being lost. When a leak or other problem occurs, MZhK will see it right away and be able to repair the damage quickly, reducing utility costs for the residents.
This effort will help give the company an edge over its competition and provide better service. Perhaps most important, it will be almost impossible for the heat and water suppliers to charge for service they are not providing - which is fairly common. For example, if the temperature in a building is too low, the residents are entitled to discounts under Ukrainian law, but this is difficult to measure and prove. MZhK will use this project as an opportunity to change that, measuring indoor temperature and ensuring that residents pay for what they get. Valeriy Kovalyuk, President of MZhK, is also the President of the Association of Ukrainian Housing Servicing Companies. The association organizes annual conferences for their members (more than 400 members took part in the last conference).═
Implementation of Efficiency Project in the City of Ivano-Frankivsk
The Alliance has signed its first carbon-finance agreement to implement an efficiency project in the City of Ivano-Frankivsk. The project will upgrade a boiler and two schools that are served by that boiler. The carbon savings will be high enough so that the buyer, Swiss Re's Centre for Global Dialogue in Ruschlikon, will be CarbonNeutralў, meaning that the Centre's carbon emissions will be 100% offset by the CO2 savings from this project for the next eight years. CarbonNeutral is a trademark of FutureForests, a UK-based company that is also a partner in this project. The Centre for Global Dialogue plans to develop its relationship with the schools over the coming years and hopes to involve the staff and pupils in programs run by the Centre.
Wastewater Treatment in Ukraine
Lviv, like many other Ukrainian cities, experiences significant problems with its water supply and sanitation system. Based on results of an EcoLinks-funded feasibility study, Alliance staff in Ukraine took part in negotiations with the management of the ENZYM, a company that produces yeast, and arranged a site visit to a similar industry in Santiago, Chile to demonstrate a relevant wastewater pretreatment technology in action. Following this visit, ENZYM signed a $1,500,000 commercial contract with the US-Dutch company Biothane and the German company Biogest for anaerobic-aerobic pretreatment of wastewater before discharge into the municipal system. The total investment will be more than $4 million. Expected electricity savings for the Lviv water utility will likely exceed 15 million kWh per year, with annual greenhouse gas reductions of 36,000 tons of CO2 equivalent. This will result from almost 25% reduction of energy consumption and excess sludge at the municipal wastewater treatment facilities and the utilization of biogas generated by the anaerobic wastewater treatment.
The technology is highly replicable within other urban industries (breweries, dairies, distilleries, recycled paper plants) that currently overload municipal wastewater treatment facilities in Ukraine. In fact, the Alliance helped prepare a second Ecolinks project, which was approved for a partnership that will hopefully lead to the installation of the same technology in another company, Nadezhda, located in the Dnipropetrovsk oblast.
Financial Incentives for Energy Efficiency
Many cities in Ukraine and Russia devote a third or more of their budgets to energy costs, and often the bulk of that money is used to pay heat subsidies. Recent analysis by the Alliance demonstrates something that many experts have been saying for a long time - cities have a financial incentive to improve energy efficiency in housing because it lowers subsidies and saves the cities money.
In Lviv, the Alliance examined residential buildings with heat meters, looking at subsidy payments before and after the meters were installed. The reductions in heat payments - created because building managers now had an incentive to reduce heat flow and because the housing blocs were not charged for heat distribution losses - led to SUBSIDY reductions in two buildings ONLY - of more than 12,000 UAH ($2,250) in one heating season. Total subsidy amount per apartment fell from 144 to 61 UAH (57%) in the first building and from 111 to 98 UAH (12%) in the second building. Although the heat company lost the income that supported their line losses, non-payment was also reduced, compensating for lost revenues. The key issue for a city to keep in mind: if subsidies are targeted for the poor only, it is most profitable to invest in energy efficiency improvements in buildings with the largest concentrations of low-income people. It is also good politics. The Alliance is expanding this analysis to other housing blocs in Lviv.
Energy Efficiency Documentary
The Alliance and the Center for Ukrainian Reforms through Education developed a documentary on energy efficiency in Ukrainian municipalities for broadcasting on national television. The documentary is based partly on the results of USAID-sponsored municipal energy efficiency programs implemented by the Alliance from 1997 to 2001. The documentary takes place in the cities of Khmelnytskiy, Lviv and Lutsk, and one municipal representative from each city provided support for the documentary. Residents of the City of Lviv, municipal officials, directors of communal enterprises, and an Alliance representative were interviewed for the documentary. The documentary materials appeared on the first national TV channel in late September.
For More Information on MUNEE Ukraine contact:
Angela Morin Allen
Alliance to Save Energy
amorin@ase.org
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