No One Reform Model
While the remedy recipes are clear
and success stories are documented, the
CIS and West Balkan countries have not
yet completed urban heat-sector reform
due to a multitude of other general bottlenecks. Not only did the market liberalization begin several years later in the CIS
and West Balkans, but their economies
started from much harder conditions: more
poverty, fuel dependence, some further
aggravated by war, geopolitical instability,
etc. Additionally, the slow development of
civil society and weak democracies have
played their role in slowing progress.
The largest CIS nations, Russia and
particularly Ukraine, have started making
some progress in heat-sector reform. While
still far behind their Central European
neighbors, they have made ambitious legislative attempts in the sector; and Ukraine
recently adopted heat and CHP laws and
a national heat strategy. Increasing fuel
prices and burdens on municipal budgets
motivated some system modernization.
Nevertheless, the modernization and
implementation of reform should be fur-
ther promoted to minimize supply costs,
promote efficiency and provide the large
populations of these nations with affordable heat.
There is, however, no single reform
model that fits and can be adopted by all.
Heat-sector reform is a multi-component
process. It is critical to steer the path to
reform along a sequence of milestones in
order to avoid pushing the sector in the
wrong direction. A heat-sector policy needs
to encompass all aspects of the heating
chain in its entirety, including private-sector
participation, investment financing mechanisms, efficiency on both the supply and
demand sides, metering and billing, energy
planning at the local level, heat assistance
schemes and effective contractual
arrangements for heat supply service.
Those countries that have only
recently embarked on restructuring their
district heating industries can benefit
greatly from the lessons learned by other
CEE and CIS nations that are farther
down the path of reform. Further reform
of the urban heating sphere in CEE and
the CIS will improve efficiency, mitigate
the environmental impact of the region’s
largest fossil-fuel-use sector, reduce
reliance on imported fuels and alleviate
the subsidy burden on municipal and
national budgets – all benefiting the sustainable development of the region.
Author’s Note: The author wishes to
acknowledge that experts and organizations
from numerous countries throughout the
CEE and CIS region have written supporting
country briefs, sections of which have been
integrated in this article.
Astghine Pasoyan is a specialist
in energy efficiency policy in Central
and Eastern Europe and the
Commonwealth of Independent
States. She is senior program manager for those regions for the
Alliance to Save Energy. In her 13 years of
experience, she has managed energy efficiency
planning and legal reform efforts, market
assessment and identification of potential for
the promotion of energy conservation and
efficiency. She has also authored numerous
research papers. Pasoyan may be contacted at
apasoyan@ase.org.
