Report - UNDP Russia

networks. In 2007 government budgets at alllevels spent 99 billion rubles on household sectorheating.Consumption of heat did not rise in2000–2008 despite the growth of Russian GDP,although it stabilized after the fall of the 1990s.Increased demand for heating due to newhousing construction compensated reductionof heat consumption by existing users, asmetering instruments and heat-savingmeasures became more widespread. Contraryto trends in the rest of the world, Russia’s CHPssaw a reduction in their share of the heatmarket.Efficiency of heat production anddistribution changed little in 2000–2007.Production costs of many small boiler facilitiesare much higher than recommended levels.Relative consumption of electricity forproduction and transportation of heat is alsoabove recommended levels at many suchfacilities. Losses in 70% of heating networks(mostly small networks) are 20-60% (Figure 5.7).However, Russia has improved its heating systemefficiency in recent years by use of newtechnologies, and this trend needs to becontinued.Potential efficiency increases in heatutilization and transportation are estimated at840 million Gcal, which is 58% of totalconsumption of heat produced by centralizedsystems. Potential improvements to productionefficiency at boiler houses are estimated at 15million tonnes of fuel equivalent or 8.4% of2005 consumption. Heat load of 70% of Russia’sheating networks is beyond the range of highlyefficient operation and even beyondacceptable efficiency limits. These systemsrequire full or partial decentralization. Potentialfor cutting heat losses in networks bydecentralization, upgrading and heat saving byconsumers is 212 million Gcal. Efficiency of heatproduction and utilization needs to be greatlyincreased in order to achieve national energyefficiency goals.Compulsory inclusion of energyefficiency targets in all developmentFigure 5.7Rating of 230 Russian heat utilitiesby distribution lossesHeat loss ratio (%)10090807060504030201000 20 40 60 80 100 120 140 160 180 200Number of municipal heat utilitiesAgeing of heatingnetworks and pooroperating standardsSource: CENEfExcessive centralization ofheating servicesAcceptable lossesin municipal heatingnetworksprogrammes for household utilities could be agood way of increasing efficiency of heatingsystems. Movement towards energy efficiencywill also require: development of municipalenergy and heating plans; modeling of theheating market and implementation of models,which encourage competition; changing theprinciples of heating network managementthrough different planning approaches;organization of heat energy accounting throughmeter installation; changing operating methodsof municipal heating networks by conversion ofmunicipally owned enterprises into privatebusinesses; a more efficient tariff system; andcreation of ‘smart’ heating systems.5.8. Raisingenergy efficiencyin industryIn 2007 processing industries consumed44% of all energy used in Russia. Primary energyintensity of industrial production (per GDP unit)fell by 35% in 2000–2007, and end-user intensityin industry was down by 39%. But, despite thesetrends, growth of energy consumption in Russiain recent years has been largely due to industry.Energy intensity of several industrialcommodities has decreased more slowly than97