barriers for implementing joint implementation projects in romania

Romanian Energy Policy Association

Barriers for implementing

Joint Implementation projects in Romania

Honoriu PITARU, Executive Director - APER

REGIONAL REEEP MEETINGSzentendre, July 3, 2003


Who is APER ?

ROLE: Provides information and knowledge to decision makers and experts with respect to energy policy development and analysis. Acts as independent forum for exchange of experience and opinions Supports business development in the energy and environment fields

ACTIVITIES: Round tables, seminars, conferences, exhibitions Training sessions and assistance for industry and municipalities Consultancy and support for legislative initiatives Market analysis and presentations Project portfolio & specific data basis Publications, Library etc.


43 individual Romanian and foreign engineers, economists, consultants, professors

Managers, Members of Romanian Academy, Governmental Experts, Senators, Investors

41 corporate Companies, Institutions, Municipalities

APER Members


APER International Programs

APER establishment in 1995 (SYNERGY) Dynamic campaign for sustaining and promoting the Energy Efficiency Law (World Learning Program-USAID)

Activities for Promoting Energy Efficiency topics (ASE -USAID) Seminars for decision makers ( Dundee University - UK) Training courses for Municipal energy officers (SAVE II) Training on energy audit, M & T in industry (BSREC ) MUNEE – Municipal Network for EE (ASE – USAID)


Primary Resources in RENEUER Countries


Resources per capita


Installed capacities in RENEUER countries


Installed capacities / capita

Average: 0.89 kW / capita


Power & Gas Tariffs


Fuel & Power imports in RENEUER countries

Source: IEA statistics


Energy Losses in RENEUER Countries

Average RENEUER = 32% !!!


EE investments Vs. Fuel imports

!!! 701.3 Mill. USD / EE ???


GHG emissions in RENEUER Countries( Mtone equiv.. CO2 )

325 Mtones / 28 Mtones

120 Mill. USD!


Legislative framework in RENEUER countries

** = Under preparation

Item/Country AL BH BG HR MK MD RO YU

Energy sector restructuring x x x x **Investments x x x x x xPrivatization x x x x x x xRegulatory bodies x x x x **Market opening x xElectricity Law x ** x xThermal energy Law x x xEE Law ** x xThermal reabilitation plans x **Environment x x x x **


Romanian Energy Sector

Reserves: 68716 PJ

natural gas 21369 PJ

coal 38967 PJ

oil 8380 PJ Primary Energy 1651.7 PJ

Power production 53.8 TWh / ‘01

Average efficiency in generating 33.4 %

Losses 12.7 %


DH Sector

Connected flats: 2 820 000 DH system: 26 CHP plants

3560 Thermal substations

HOB 2 770 (9,230 MW)-1461 / natural

gas

- 560 / oil

- 749 / coal

Heat production: 140, 310 TJ - 2001 126, 285 TJ / tap water 14, 025 TJ / steam 111, 294 TJ / residential sector 29, 016 TJ / industry

Losses >30%; Average 70%; M & C equip. <30%


Gas sector

Own resources approx. 510 Bill. Nm3; Gas production approx. 14 Bill. Nm3/yr.;

Gas deliveries Year Production Import Bill. Nm3 Bill. Nm3

1990 25.6 7.3

1992 21.8 4.4

1994 18.7 4.4

2000 14.6 3.2

Length of the transport pipes approx.. 12,000 Km; Transport capacity 135 mil. Nm3 / day; Transport pressure 20 / 40 bars; Compressing stations 17 (total installed capacity 51470 kW)

Length of the distribution pipes approx. 21,598 Km; Connected localities 1022 Gas deposits 5 Storage capacity 1.5 Bill. Nm3;


Energy tariffs

Heat: 23.08 USD / Gcal

19.90 USD / MWh

Power:

residential : 57.7 USD / MWh

industry : 46.4 USD /

MWh

Natural Gas : 0.825 USD / Nm3


Evolution of power tariff

!

45.5

48.8

41.6

33.8

53.3

50.550.0 49.3

50.551.7

47.2

57.7

48.246.8 46.4

42.441.4

40.439.5

38.6

37.539.1

39.5

37.7

30.0

35.0

40.0

45.0

50.0

55.0

60.0

15.10.99 18.06.00 15.08.00 17.04.01 11.07.01 13.10.01 1.11.01 1.12.01 1.01.02 1.02.02 1.03.02 10.04.02

USD/MWh

population

industry

DATE


Evolution of Heat tariff

13.6

15.2

20

1918.5

10

12

14

16

18

20

22

1.11.99 1.09.00 1.08.01 1.01.02 1.07.02

USD/Gcal

DATE


Supporting Legal Frame

L 199 / 2000 - Rational use of energy

OU 124 / 2001 - Romanian Fund for Energy Efficiency L 73 / 2000, OU 93 / 2001- Environmental Fund OG 29 / 1994, OG 60 / 2001 - Special Fund for the

Development of the National Energy System

OG 29 / 2000 - Thermal Rehabilitation of the Buildings OG 73 / 2002 - The organization and operation of public utilities

OG 16 / 2002 - Public Private Partnership L332/2001 - Promotion of Direct Investments L137/2002 - Measures for accelerating the privatization


MUNEE Program

Organizing EE Professional Forum 20 September ‘01

Constituting REEN • 70 members

• 51 Municipalities

+ Parliament, Ministries, Research Institutes, Media

Actions:


MUNEE Actions

EE info;

Web-site Energy Efficiency topics - www.aper.ro

Constant information of the decision-makers / EE (Parliament; ministries and specific agencies)

Meetings with commercial banks, IFI, investors etc.

Regional exchange of experience & ConferencesKrakow, Warsaw, Kiev, Sofia, Geneva

Visits to City Halls (41 / 70);

EE Seminars & Training sessions; (Cheia - 22 students/ 17 Municipalities; Sighisoara - 19 students/ 14

Municipalities; Neptun - 20 students / 18 municipalities)

Comparative analysis / Municipal DH systems (technical situation, losses, tariffs, metering, fuel, disconnection)


22 Municipalities - 1 800 000 inhabitants(93 Municipalities)

Heat loses12.7% (9.5% - tap water; 9.7% - heating) [!!!min.

35%]

Metering DH municipal systems– 25 - 30 % tap water for residential users– 15 - 20 % heating agent for residential users– 85 - 90 % tap water at the exit of Th.S / HOB– 88 - 92 % heating agent at the exit of Th.S / HOB

Comparative Analysis (I)


Comparative Analysis (II)Notices vs. Meters usage

Bills by towns!!! 85-100% - 13.4% (Fagaras) & 19.4% (Targoviste)!!! 0- 10% - 2.1% (Rm.Sarat) & 3.9% (Caracal)

Bills by years 2000 2001 (tap water)

Targoviste 14.8% 19.4%Giurgiu < 2.0% 8.8%15 Municipalities 6.0% 9.5%


!!! Debts vs. Heat Losses !!!(e.g)

Heat Production / Termoelectrica

Production : 107 200 TJ / 2001

Losses: 12.7 %

Efficiency: 80% - gas; 75% - oil

Cost import: 98 USD / 1000 Nm3-Gas

200 USD / tone hard oil

??? USD spends Romania

for heating the Earth

Comparative Analysis (III)


200 Mill. USD savings + 3.6 Mtones GHG / 2001 in utilities

Better to increase the debts by importing fuel

and spending part for heating the Earth

or

to invest in EE and JI projects?


Available local funds for EE projects CO2


Barriers for implementing

JI projects in Romania (I) Low availability of the needed data (energy sector,

inventory of the emissions; investment need);

Insufficient expertise in implementing the flexible mechanisms;

Hard currency risk; Insufficient communication between Municipalities and

Ministries and / or between the involved Ministries;

Overloaded personnel of the city halls; Low interest and involvement of the local

commercial banks and the investment funds;


Lack of professionals providers for experiences;

Barriers for implementing JI projects in Romania (II)

Lack of experts for project financing;

The transparency of the local budgets;

High preparation costs for small size projects;

Lack of financial resources; FRM still pending; Inconsistent and non-harmonized legislative frame and Ministerial orders (Administrative costs vs.

investments);

Book-keeping law does not allow SAVINGS;


Inadequate mentality concerning the EE concept;

Barriers for implementing JI projects in Romania (III)

Reluctance in offering commercial guarantees (PPA)

No minimal price for extra-power / CHP projects; Social Aspects vs. higher tariffs.

Please feel free to completeor to solve such barriers!


! ! !

THERE ARE NO

BAD HABITS

BUT

THERE ARE BAD INCENTIVES!

Thank you for your attention!Thank you for your attention!

• Address:Address:

• Casa Academiei, Casa Academiei,

• 13, Calea 13 Septembrie Room 6223-622513, Calea 13 Septembrie Room 6223-6225

• Bucuresti, ROMANIABucuresti, ROMANIA

• Tel: +4021 411 9829 Tel/Fax: +4021 335 0280Tel: +4021 411 9829 Tel/Fax: +4021 335 0280

• E-mail: [email protected] E-mail: [email protected] www.aper.rowww.aper.ro

barriers for implementing joint implementation projects in romania

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