Title: Development of municipal District heating supply in Latvia Gaidis Klavs
1- Development of municipal District heating
supply in Latvia Gaidis Klavs - Institute of Physical EnergeticsComponent 2
seminar, Berlin, 8-11of May 2006
2Content of the presentation
- Role of DH in the heat supply system of Latvia
- The main problems and solutions of DHS
development in Latvia - The main challenges of DHS in future
3Final energy demand in Latvia, year 2004
4Final energy consumption in households sector,
year 2004.
5Number of households connected to DHS in Latvia
6District Heating system in Latvia
Big cities Regional towns and willages
Daugavpils 8 Ogre 1,5
Liepaja 6 Jekabpils 1
Ventspils 5 Salaspils 1
Jelgava 4 Valmiera 1
Jurmala 2 Cesis 1
Rezekne 1,5 Bauska 1
7DH production in Latvia
8Fuel consumption in DHS of Latvia
9Development of DH consumption in Latvia and Riga
10(No Transcript)
11The main problems, difficulties, challenges of
DHS in transition economy
12Legends and wrong impressions concerning DHS in
transition economy
- DHS does not have place in market economy
- DHS as centralised form of energy is necessarily
inefficient and inflexible - To improve situation
- At the technical and economic level, each system
should be evaluated for optimal performance. - At the policy level, governments need to develop
regimes that support quality district heating and
do not encourage inefficient district heating.
13The main steps of DHS improvement in Latvia
- Improvement of efficiency in all DHS stages
(production, transmission, distribution). - Installation of control and metering equipment.
- Improvement of regulation (separating regulation
and ownership). - Improvement of management (changing of DH
organisational structure).
14Improvement of production efficiency in DHS of
Riga
15Heat losses in transmission system of Rigas DHS
16Development of DH market in Riga
17A Coherent Policy and Regulatory Framework
- Common regulatory principles to ensure that there
are no major differences in the way various
energy forms are regulated. - Separating regulation and ownership
- The problem of great importance is that of
securing the independence of decisions made by
municipal regulators. There are cases when in
such decision-making process political factors
dominate over economic reasons.
18DH regulation in Latvia
- A two-tier system of public service regulation.
- The first tier regulator the Public Utilities
Commission regulates public services on the
state level (electricity, gas) - The second tier regulators local government
regulators regulate local service providers
including heat supply. - By January 1st of 2006 in the municipality-regulat
ed spheres (heat supply, water supply and waste
management) 81 municipalities together had
created 17 municipal regulators.
19DH tariffs in municipalities in Latvia for the
heating season 2005/2006.
20Development of organisational structure of DH
companies
21The organisational set-up till year 2005 -
Integrated municipal company
22 Disadvantage
- The company management have little freedom to
take necessary actions - There is a risk that the budget of the company
will be to mixed with budget of other municipal
activities - The international banks will not provide loans to
the company if management structure and budget
can not be separated entirely from the municipal
administration - Usually DH tariffs is used as instrument of
political awareness before elections.
23Organisational set-up from year 2005
- According to the new Commercial Law two main set
up forms could exist - limited liability
company and stock company. - The form of limited liability company is more
appropriate for small municipalities and if
municipality would like to remain sole owner of
DH company.
24Organisational set-up from 2005 - Independent
municipal district heating company
25Advantage
- The company can be managed exactly as a privately
owned company in which the management is only
responsible to the board - The activities of the company will be kept
separate from the other municipal activities and
the budget - The natural objective of the company will be to
minimise the costs of heating (and not minimising
the heat price) and the company should therefore
have an initiative to advice consumers on energy
saving.
26Disadvantage
- Board does not understand its role of acting on
behalf of the owner and setting the objectives
for the management - Board is to weak and leaves all power to the
management with no control or the opposite - Board goes into detail and tries to solve the
tasks of management.
27Still challenges for DHS in Latvia
- Improvement of efficiency and more customer
focus - Co-ordination of DH, Housing Policy and Social
Policy. - Development and integration of CHP technology
based on bioenergy. - The need for a Heat Policy?
28Thank you
- Gaidis Klavs
- Institute of Phycical Energetics
- Aizkraukles 21, Riga, LV 1006
- LATVIA
- E mail energy_at_edi.lv