the need for reform, in the form of general
energy sector restructuring and the commercialization of utility services.
The countries of CEE have generally
had some success in integrating the urban
heating sector into the national policy
agenda and in reforming and restructuring
it – transferring ownership and management of district heating assets and
opening the heating sector for private
participation and investment. This transformation started soon after the market
liberalization in the early 1990s and lasted
about 15 years, until just about the time
of several CEE countries’ accession to the
European Union.
The heating sector in the CIS
countries has been regularly
ignored in national energy
policy discussions.
At the same time, the heating sector
in the CIS countries has been regularly
ignored in national energy policy discussions. This happens in spite of the fact
that the heating sector in the CIS region
accounts for between 20 percent to 45
percent of all domestic energy consumption and about 20 percent to 50 percent
of fossil fuel use.
In many places within the CIS, the
district heating systems need substantial
modernization and restructuring to eliminate large network losses, introduce control and metering, and improve generating
capacity efficiency and automation. There
is also a need in urban areas for an analysis
of all possible heat supply options (i.e.,
small-scale local heating systems and
apartment-level electric, natural gas or
other direct-fuel heaters and boilers) –
with district heating maintained in those
places where it is cost-effective, provides
fuel flexibility and allows for the utilization of waste heat and cogeneration.
Municipal energy planning can play has
a vital role in optimizing the supply of
different heating options in urban areas.
With the average fuel efficiency of
district heating in the CIS and Southeast
Europe region ranging from 55 percent
to 90 percent, and transportation and
distribution losses ranging from 15 percent
Figure 2. Key Indicators of District Heating Performance in Selected Countries: Average Efficiency and
Distribution Losses.
Average Distribution Heat Loss (%)
Average Generating Fuel Efficiency (%)
30
90
100
25
80
20
70
15
10
5
60
50
40
30
20
10
Source: Compiled by Astghine Pasoyan, Alliance to Save Energy.
Ukraine
00
Poland
MacedoniaFYR
Latvia
Russia
Romania
Moldova
Slovenia
Bulgaria
CzechRepublic
to 70 percent, it is critical that the energy
performance of end-users – including
internal heating networks, buildings’
thermal insulation, and thermal regulation
and control – be as high as possible.
Although the deficiencies of central heating
systems are well-known (fig. 2) and have
been analyzed and documented many
times, little has been done to eliminate
these problems in most of the CIS and
some of the ex-Yugoslav countries (Albania,
Macedonia, and Bosnia and Herzegovina).
Lack of incentives for energy efficiency,
coupled with lack of financing, have left
this sector without much attention. This
has led to continued deterioration of
technical structures, poor service quality
and low payments, further hampering
the ability of heating enterprises to carry
out routine maintenance and repairs. The
potential social, health and safety impact
of long-term failures in central heat supply – as well as the heavy financial burden on municipal and state budgets, constant political pressure and escalating
fuel prices – have motivated governments to acknowledge the need for
reform in this sector as a high priority.
In the CIS and Balkans, the public
sector still predominantly maintains
municipal ownership of heating assets.
Past efforts have focused on reforming
legislation, introducing market principles, creating independent regulation
and gradually eliminating subsidies.
Little has yet been accomplished in the
next phase of reform, which involves
establishing service quality requirements,
creating a favorable investment climate,
providing incentives for energy efficiency
improvements and attracting private-sector
participation. Hence, most of the aforementioned technical problems still
remain acute in the CIS and Balkans.
Moreover, some of these countries –
Russia, Ukraine, Belarus and the Central
Asian Republics – still have a very high
share of district heat. The need for reform
there is acute to help make heating service
cost-effective, because climate conditions,
high population density, growing housing
stock and industrial heat demand make
district heating a desirable heating source.
Conversely, in Moldova, Albania and
countries of the South Caucasus, prolonged
poor maintenance and underinvestment
in the sector have left district heating
systems either on the verge of collapse
or completely collapsed. In their place,
decentralized small heating systems or
individual apartment heating schemes
have been developing haphazardly. The
heating markets in other countries of
Southeast Europe, such as the ex-Yugoslav
