competitive district heating l.georgieva bulgaria
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COMPETITIVE DISTRICT HEATING
L.GEORGIEVA
BULGARIA
WHAT WAS DONE
Energy prices in line with the justified economic costs and phasing
Financial recovering and establishment of energy companies operating on a commercial bases
Property functioning regulatory authorities and mechanisms
Market rules and structures
Strategy
A review of the governmental role in the provision of energy services
Reforms with the main goal of deregulation - replacement of regulation with competition
BENEFITS- economic (cost minimization) and social (shift of savings to end prices)
Strategy
Strategy DocumentContents of this document -district heating sector status
-reforms - financial restructuring,
institutional changes, deregulation, legal changes, privatization
Pricing policy
Medium- term prioritiesReduction and phasing out of
subsidies for energy Introduction of regulatory rules for
setting energy prices - electricity, heat and natural gas
Indicative schedule for the increase in electricity prices for the household sector
Pricing policy
Schedule for the increase in heat prices for household purposes
Block Tariff for heat Implementation of measures for
improved efficiency (substation and individual metering and controlling devices)
To keep the bills at the current level
Pricing policy
Prices are controlled by the State Energy and Water Regulation Commission.
They are proposed by the Energy Production and Distribution Facilities and, after revision and correction of the expenses, and following the procedure of public discussions, a decision for their approval is taken.
District heating
District heating is the most cost effective and environmentally friendly option for densely populated areas
It should be provide by flexible and cost effective systems whose development and introduction is a strategic objective
Competitiveness
Alternatives
The local fired heating plants and the direct burning of natural gas is a serious alternative to district heating
The new gas networks is not competitive if compared with the already constructed district heating network
Alternatives
Investments in construction of distribution networks for low pressure gas and the costs of their maintenance make the cost per heat unit significantly higher than are the costs of the existing district heating network are modernized
Alternatives
Electricity was an acceptable alternative for the consumers disconnected from the district heating system.
Due to the price, today the electricity is not acceptable alternative, especially for multi-family houses.
The preparation of financial recovering plans for the selected companies has shown, that reducing the heat consumption of the final consumer is a matter of survival for the district heating companies.
This was one important step to make the cost of heating affordable and competitive.
Basically, this can be supported by installing efficient heat regulators (such as thermostatic valves) and cost allocation.
Economic analysis of district heating rehabilitation
DH Companies had to perform cost-benefit analyses of investment programs to support the financial recovery of DH systems and to demonstrate an efficient district heating system
Two cities, Sofia and Pernik are under
implementation the investment programs with loans by the EBRD and the World Bank.
Network rehabilitation in Sofia-36 km of pipes, valves and compensators, variable flow pumps
Sub-station - about 8 000 -installation of regulators and equipment
This was one important step to make the cost of heating affordable and competitive.
EU Directives
Promotion of Combined heat and power production - high efficiency cogeneration
new initiatives - a directive on heat from renewable source and energy services
EU requirements on technical institutions
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