Improving Energy Efficiency
ECONOMY OF BELARUS No. 1, 2010
FIVE YEAR PLAN: THE FINAL YEAR
The mini-CHP plant in Pruzhany is unique in Belarus, for it uses modern advanced technologies. The high initial gas parameters applied here make it possible to double the production of electricity using heat
76
Improving Energy Efficiency Belarus is one of the European leaders in energy efficiency Leonid SHENETS, Deputy Chairman of the State Standardization Committee of the Republic of Belarus, head of the energy efficiency department Belarus is one of those countries whose mineral wealth is scarce, just like Switzerland, Denmark, or Japan. But these countries have demonstrated that economic growth can be achieved by consuming fuel in an efficient way, by using energy efficient technologies and cutting manufacturing costs.
System-Based Work The past 15 years have witnessed an increasingly intense work in the area of energy efficiency in Belarus. As a result, the energy-intensity of Belarus’ gross domestic product reduced more than 2.8 times in 1990-2008. This was achieved largely by applying a system-based approach to energy saving. An additional impetus in this direction was given by Directive No. 3 of the President of the Republic of Belarus “Economy and Thrift – the Main Factors of the Economic Security of the State” of 14 June 2007 which set the target of reducing the nation’s GDP energy-intensity by 31% in 2006-2010 and by 28% in 2010-2015 to 0.27 and 0.20 tonnes of fuel equivalent (tfe) per $1,000 in accordance with the purchasing power parity. The government is paying close attention to this policy, ensur-
ing its implementation. A special matrix has been designed for this purpose, which provides online data on the progress made in this respect by individual industries and regions of the country. After studying how energy resources are used in the national economy and what fuel reserves we have, we give ministries, agencies and local authorities specific energy efficiency targets which they are to meet within a given period. The main tool used to implement the national energy efficiency policy is national, regional and industry-specific programs. These programs are designed for a period of five years. The first one was launched in 1996. At the moment we are in the process of implementing the 2006-2010 program which states energy efficiency targets and measures to achieve them. Each year energy saving helps Belarus achieve a bigger produc-
tion growth. In 2006-2009 GDP energy intensity was reduced by 23.3%; the best result so far we had in 2008 (8.4%); in 2009 it was 5%, while the target was 8%. The main reasons for that were the slow rate of GDP growth, colder heating season, increased fuel expenditure because of the use of fuel oil (mazut) instead of natural gas at power generating stations, and delays in the financing of energy efficiency activities from government-sponsored innovation support funds. Regardless of the impact of the world financial crisis, there is a need for intensifying the energy efficiency activities and making sure the governmental resolutions No. 92 of 25 January 2010 and No. 248 of 22 February 2010 are met. The purpose of these resolutions is to enhance energy efficiency across the country by keeping a closer eye on the implementation of the energy efficiency projects this year and ensuring that more facilities start running on local fuels; in addition, we plan to hold energy efficiency audits and a range of other activities to that end.
Important Objective We are going to pay close attention to the optimization of the fuel consumption mix in the country and substituting imported fuel resources with local ones. In accordance with Directive No. 3, the share of local fuels in the fuel consumption mix of Belarus should be brought to 25% by 2012. The government is watching closely how this target is being met, and we believe that the ministries and agencies involved, as well as local authorities, should step up their efforts in this area. In the past three years the share of local fuels in the mix reduced by 3.1% to 20.3% in 2009, while the target for the year was 19.4%. But the use of local fuels by the population began falling (by 94,200tfe in 2007; 89,400tfe in 2008; 113,700tfe in 2009). Among other reasons for that reduction was extension of gas supply networks to rural areas and population centers. The following regions met their targets: the city of Minsk, Vitebsk Oblast, Gomel Oblast, Mogilev Oblast. Out of the 24 ministries and agencies that were given specific targets to increase the use of local fuels, the following institutions failed to meet their targets: the Ministry of Housing and Utilities Services, Ministry of Agriculture and Food, Ministry of Transport, Ministry of Culture, Ministry of Sport, Ministry of Forestry, and the state production association “Belenergo” (Picture 2). In 2010 Belarus has to bring the share of local fuels in its fuel consumption mix to no less than 20.5%. In this respect, we believe the Ministry of Energy should undertake bigger commitments and make a more significant contribution towards meeting this target. The companies of the energy industry consume more than 51% of all fuel resources, but their energy efficiency targets are minimal. At the same time, the use of local fuels as reported by some ministries, such as the Ministry of Forestry, Ministry of Education, Ministry of Culture, Ministry of Health-
Picture 1. GDP energy-intensity reduction
112
2009 energy-intensity reduction target is 8% with the GDP growth at 10% to 12% 4.3 % 7.9 %
8.4 %
5.0 %
107 102 97 92
109.9
105.2
108.1
110.0 100.8
99.6
100.2 94.7
87 82 2006 GDP growth rate
2007
2008
2009
Fuel and energy resources growth rate
care, already ranges between 60% to 90%. Our experts are now drafting a program to build a number of power generating stations running on local fuels in 2010-2012 in order to provide enough electrical and heat energy for regional population centers.
Making Energy Production Less Expensive In accordance with Directive No. 3, one of the measures to ensure energy security of the state is to reduce the cost of energy production by using energy efficient technologies and equipment. In this respect, the priority is the launching of new efficient power generating facilities. We have already achieved quite a bit in this area. In 2006 and 2007 we launched electricity generating facilities with their aggregate output of 93.2MWt and 93.3MWt respectively; whereas in 2008, due to Directive No. 3, we launched a number of power generating facilities which total output was 123.8MWt, and in 2009 we commissioned some more stations with their total energy production of 363,13MWt. The Belarusian energy system’s yearly output is now 33 billion KWH of electric energy, but the ideal amount would be 36 billion KWH. The remaining 3 billion KWH will be produced additionally by launching new efficient power generating facilities. In 2009 the first phase of the refurbishment project at the Lu-
koml hydroelectric power plant was completed. As a result the output of this power generating facility was increased by 15MWt. A 230MWt steam-gas generator was installed at Minsk CHP 3. In the near future we plan to do as follows: to start a 65MWt gas turbine at Minsk CHP 2, upgrade a power generation unit at Beryoza hydroelectric power plant to produce additionally 65MWt; to start a 110MWt steam-gas generator at Grodno CHP 2, a 399MWt steam-gas generator at Minsk CHP 5; refurbish the combined heat and power plant “Severnaya” in Minsk (installing a 60MWt gas turbine and a 330MWt gas-steam generator) and boiler houses in Borisov and Mogilev (gas-steam generators, 65MWt and 15MWt respectively). Other large-scale projects include the construction of gasturbine-powered plants at the production association Belaruskali (about 60MWt), Mozyr Oil Refinery, and the construction of a 16MWt gas turbine generator at Krichevtsementnoshifer. In addition, power generating units have been installed in a number of boiler houses, including the boiler house “Zhlobinskaya” (a 26MWt gas-piston generator was installed there), Lida CHP (25MWt installation) and others. In other words, we have started a work in Belarus to convert boiler houses into combined heat and power plants producing heat and electricity. In this situation I am convinced that we have
ECONOMY OF BELARUS No. 1, 2010
FIVE YEAR PLAN: THE FINAL YEAR
77
ECONOMY OF BELARUS No. 1, 2010
FIVE YEAR PLAN: THE FINAL YEAR
Picture 2. Contribution of local fuels to Belarus' fuel consumption mix in 2009, % 60 55.4
49.3
10.5
6.8
2.2
1.2 49.0 47.4
50 44.2 41.0
39.7
40 34.8 33.0
31.3
30
26.7 22.7
20
17.2
16.5
17.5 15.9
17.0 11.7 12.0 10.1
10
0
7.7 1.0 1.6 0.3 0.6
Belenergo
2006
2007
Belneftekhim concern
2008
to learn how to use natural gas more efficiently because its price is growing every year. We are now running a pilot project at a mini-CHP plant in the town of Pruzhany to see the effect of applying modern-day technologies. Having analyzed the plant’s performance, we saw that the new technologies were highly efficient. The use of high initial parameters of steam made it possible to increase the production of heat to 339.8KWH/Gcal , which is nearly twice as much as at the mini-CHP plants in Osipovichi and Vileika. With this in mind, we believe it would be good to use these ideas in new mini-CHP plants across the country. The Pruzhany project also contributed to the growth of the local infrastructure and creation of new jobs. A new ice arena was built in the vicinity of the CHP plant, and a swimming pool is now being built there. In 2008-2009 we carried out three pilot projects involving the production of electric and heat energy by using biogas produced from agricultural waste. A total of 4694,3 thousand KWH of electric energy produced by using the biogas tech-
78
3.9
Ministry of Ministry of Housing Ministry of Industry Bellesbumprom Agriculture and and Utilities concern Food
2009
nology substituted 3126,5 thousand cubic meters of imported natural gas and saved us around Br1.8 billion. And if we take into account the ecological aspect of the problem, the advantages of the biogas technology would be evident even to most skeptically-minded specialists. At present we run three biogas plants which aggregate power is 1.19MWt, and we are planning to build another 13 biogas plants with their aggregate output of 12.5MWt as part of industry-specific energyefficiency programs.
Financial Aspect To succeed in reducing energyintensity of Belarus’ GDP we certainly need a significant financial input. In 2001-2008 the total financing of energy-efficiency activities was $3.865,8 billion. In 2001 we allocated $92.5 million, and the financing has been growing ever since. In 2006 we invested $600 million in it, and in 2009 over $1 billion. We have also changed the character of work in this area by switching to upgrading and refurbishing the active installations accompanied by replacing old equipment with new efficient installations, build-
ing new power and heat generating stations, using the latest technologies of feeding and burning fuel, etc. In 2009 the energy efficiency activities were financed for the most part by the organizations themselves, using their own funds, or by borrowing money from banks; also, funds were being made available from the central and local budgets. Ninety-one percent of all funds for these activities were obtained one of these ways. As for the government-sponsored innovation support funds, they played little role in financing these activities in 2009, contributing merely 6.4% of all funds, as against 18.4% in 2008. In 2009, a total of Br341.59 billion, including Br42.9 billion from the Energy Ministry’s innovation support fund, was made available to increase the use of local fuels, production waste, secondary, untraditional and renewable energy resources, to create an infrastructure for providing power generating facilities with fire-wood as part of energy efficiency programs. Every year we witness a steady increase in investment in energy
saving in the country. If in 2001 we invested around $100 to save one tonne of fuel, than in 2009 we had to invest $726 for it (Picture 3). The decisions leading to the implementation or modernization of technological process at a minimum cost do not always bring the expected results. In our experience, while calculating the efficiency of activities, one should consider all possible aspects: project cost, fuel consumption per product item, maintenance costs, and other things.
Energy-Saving: the Effect of Cooperation In energy saving, Belarus cooperates closely with international organizations, financial institutions and funds, including the World Bank, Global Ecological Fund, European Economic Commission of the United Nations (UNEEC), UNDP. In addition, together with the other CIS member states and Eastern European countries Belarus participates in such international initiatives as Energy Efficiency 2000 and Energy Efficiency 21 aimed at improving energy efficiency, developing the related infrastructure and realizing the participants’ energy
saving potential. For example, as part of the Energy Efficiency 21, Belarus is participating in the project entitled “Financing Investment In Projects In Energy Efficiency and Renewable Energy Sources to Cushion the Impact of Climate Change”. As part of the project “The Use of Biomass in Heating and Hotwater Supply in the Republic of Belarus” we have established a Bioenergy Assets Fund, designed a geographical information system, built five demonstration objects (boiler houses, mini-CHP plants) running on biomass, and another one which we called the supplier of fire-wood. We are now implementing the project “Elimination of Impediments to Improving Energy Efficiency of the Public-Sector Companies of the Republic of Belarus,” which main objective is to reduce the emission of greenhouse gases by 23,500 tonnes per year in the CO2 equivalent by reducing the use of fossil fuels. The purpose of this project is to create additional incentives for state-run organizations to invest in energy saving and use the attracted financial resources in a more efficient way. In accordance with this project, we
are planning to establish an international energy center focusing on attracting investment in long-term energy efficiency projects (five and more years) and on providing consulting services in this area. On the whole, a total of over $5 billion came to Belarus in the form of investments due to Belarus’ involvement in UNDP, GEF and UNEEC projects. In 2002-2008 Belarus and the International Bank for Reconstruction and Development were implementing a joint project, “Modernization of Infrastructure in the Social Sphere”. Under the project, the Bank’s contribution was $22.6 million, with Belarus’ contribution over $18 million. Under the project, improvements were made at 674 facilities. As part of the project 26 boiler houses were refurbished, heat generating installations at 488 facilities were upgraded, 139,000 energy-saving light lamps were installed at 232 facilities, energysaving dual-pane windows were installed at 22 facilities. Simultaneously, the government of Japan allocated $0.996 million as part of this project to build a 5MWt boiler-house module running of fire-wood in the village of Borovlyany, Minsk Region, and to
ECONOMY OF BELARUS No. 1, 2010
FIVE YEAR PLAN: THE FINAL YEAR
Picture 3. Financing of energy efficiency activities and their effect in 2001-2010 1 900
2210.0
1780.0 1687.6
Cost of saving 1 TOC, USD per TOC
1 700
1584.8
Financing, million USD
1 500
1464,0
Saving, thousand tonnes of oil equivalent
1366
1 300
1214 1063.8
1 100
988.5
925.5
951.9 865
843.2
900
682 633.5
700
600
726.6
546
461 439
500 364 360 244
300 100 93
355
206
144 91
100 -100
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
79
ECONOMY OF BELARUS No. 1, 2010
FIVE YEAR PLAN: THE FINAL YEAR
80
develop a standard of the Republic of Belarus for the amount of waste produced by fire-wood-powered boiler houses. The use of this module allows reducing the use of natural gas and ultimately saving more than $500,000 a year. Using renewable fire-wood instead of fossil fuel will reduce the emission of greenhouse gases thus helping Belarus honor her commitments taken under the Kyoto Protocol. The International Bank for Reconstruction and Development valued highly the results of the social infrastructure development project, and following Belarus’ request provided another loan, $15 million, to perform analogous activities in the social sector. Since 2007, Belarus and the IBRD have been implementing the project “Rehabilitation of the Areas Affected by the Catastrophe at the Chernobyl Nuclear Power Plant”. Under this project, the Bank has provided Belarus a loan to the amount of $50 million. The project includes two components: – “Improvement of Energy Efficiency,” which implies modernization of social-sector facilities; – “Gasification,” which implies extension of gas supply networks to population centers. As part of these initiatives, we plan to optimize heat supply, start using energy-saving lamps, perform thermal rehabilitation of
buildings, and other activities at 250 social-sector facilities of the contaminated areas of Mogilev, Gomel and Brest Oblasts. In September 2009 we started a new project, “Improvement of Energy Efficiency in the Republic of Belarus.” The project will run for five year, 2009-2014, and will make use of a $125 million load provided by the IBRD. The project provides for refurbishing six facilities and creation of modern-day energy-efficiency CHP plants, including four boiler houses for the communal and utilities companies and 2 big power generating facilities at the republican unitary enterprise “Minskenergo” and the republican unitary enterprise “Mogilevenergo.” We hope the project will help cushion the negative effect caused by the spike in prices for imported fuels and will also bring about a substantial social effect such as improving the quality and reliability of heat and electricity supply for all categories of consumers, including the population and social-sector facilities. What is also important is that joint energy efficiency projects will not only bring investment to Belarus but also international technologies and give Belarus experience. International financial organizations demonstrate an increasing amount of trust and confidence in Belarus as evidenced by the conclusion of new agree-
ment and a rise in financing from abroad.
The Year of Quality – Year of Energy Efficiency We can name this final year of the five-year period not only the Year of Quality but also the year of energy efficiency, as it will be a time of hard work in energy saving to make sure the ambitious targets in this area are met. In accordance with the national comprehensive program of modernization of main production assets of the Belarusian energy system, energy saving and increased use of Belarus’s own fuel and energy resources for the period ending in 2011, this year there is a need to ensure a 31% reduction in the GDP energy-intensity as against the 2005 level. In addition, what we need to do is as follows: – To continue the work on optimizing the country’s fuel consumption mix and make sure the share of local fuels is no less than 20.5% in the mix; – To obtain no less than 1.99 to 2.2 million tonnes of fuel equivalent by carrying out regional and industry-specific energy saving programs. – To send into operation new power generating installations with a total power output of 292MWt, including 170MWt at the companies subordinate to the Ministry of Energy. Given the world financial crisis, using fuel and energy resources more efficiently becomes vital, and energy saving takes on a special significance for Belarus, becoming a key to ensuring its economic security. Implementation of the aforementioned measures and projects will help strengthen the energy security of Belarus, modernize the energy industry and improve its efficiency, diversify the fuel consumption mix by increasing the use of local fuels and renewables, cut fuel production, transportation and consumption costs and, ultimately, make the Belarusian economy more competitive.
FIVE YEAR PLAN: THE FINAL YEAR
The mini-CHP plant in Pruzhany is unique in Belarus, for it uses modern advanced technologies. The high initial gas parameters applied here make it possible to double the production of electricity using heat
76
Improving Energy Efficiency Belarus is one of the European leaders in energy efficiency Leonid SHENETS, Deputy Chairman of the State Standardization Committee of the Republic of Belarus, head of the energy efficiency department Belarus is one of those countries whose mineral wealth is scarce, just like Switzerland, Denmark, or Japan. But these countries have demonstrated that economic growth can be achieved by consuming fuel in an efficient way, by using energy efficient technologies and cutting manufacturing costs.
System-Based Work The past 15 years have witnessed an increasingly intense work in the area of energy efficiency in Belarus. As a result, the energy-intensity of Belarus’ gross domestic product reduced more than 2.8 times in 1990-2008. This was achieved largely by applying a system-based approach to energy saving. An additional impetus in this direction was given by Directive No. 3 of the President of the Republic of Belarus “Economy and Thrift – the Main Factors of the Economic Security of the State” of 14 June 2007 which set the target of reducing the nation’s GDP energy-intensity by 31% in 2006-2010 and by 28% in 2010-2015 to 0.27 and 0.20 tonnes of fuel equivalent (tfe) per $1,000 in accordance with the purchasing power parity. The government is paying close attention to this policy, ensur-
ing its implementation. A special matrix has been designed for this purpose, which provides online data on the progress made in this respect by individual industries and regions of the country. After studying how energy resources are used in the national economy and what fuel reserves we have, we give ministries, agencies and local authorities specific energy efficiency targets which they are to meet within a given period. The main tool used to implement the national energy efficiency policy is national, regional and industry-specific programs. These programs are designed for a period of five years. The first one was launched in 1996. At the moment we are in the process of implementing the 2006-2010 program which states energy efficiency targets and measures to achieve them. Each year energy saving helps Belarus achieve a bigger produc-
tion growth. In 2006-2009 GDP energy intensity was reduced by 23.3%; the best result so far we had in 2008 (8.4%); in 2009 it was 5%, while the target was 8%. The main reasons for that were the slow rate of GDP growth, colder heating season, increased fuel expenditure because of the use of fuel oil (mazut) instead of natural gas at power generating stations, and delays in the financing of energy efficiency activities from government-sponsored innovation support funds. Regardless of the impact of the world financial crisis, there is a need for intensifying the energy efficiency activities and making sure the governmental resolutions No. 92 of 25 January 2010 and No. 248 of 22 February 2010 are met. The purpose of these resolutions is to enhance energy efficiency across the country by keeping a closer eye on the implementation of the energy efficiency projects this year and ensuring that more facilities start running on local fuels; in addition, we plan to hold energy efficiency audits and a range of other activities to that end.
Important Objective We are going to pay close attention to the optimization of the fuel consumption mix in the country and substituting imported fuel resources with local ones. In accordance with Directive No. 3, the share of local fuels in the fuel consumption mix of Belarus should be brought to 25% by 2012. The government is watching closely how this target is being met, and we believe that the ministries and agencies involved, as well as local authorities, should step up their efforts in this area. In the past three years the share of local fuels in the mix reduced by 3.1% to 20.3% in 2009, while the target for the year was 19.4%. But the use of local fuels by the population began falling (by 94,200tfe in 2007; 89,400tfe in 2008; 113,700tfe in 2009). Among other reasons for that reduction was extension of gas supply networks to rural areas and population centers. The following regions met their targets: the city of Minsk, Vitebsk Oblast, Gomel Oblast, Mogilev Oblast. Out of the 24 ministries and agencies that were given specific targets to increase the use of local fuels, the following institutions failed to meet their targets: the Ministry of Housing and Utilities Services, Ministry of Agriculture and Food, Ministry of Transport, Ministry of Culture, Ministry of Sport, Ministry of Forestry, and the state production association “Belenergo” (Picture 2). In 2010 Belarus has to bring the share of local fuels in its fuel consumption mix to no less than 20.5%. In this respect, we believe the Ministry of Energy should undertake bigger commitments and make a more significant contribution towards meeting this target. The companies of the energy industry consume more than 51% of all fuel resources, but their energy efficiency targets are minimal. At the same time, the use of local fuels as reported by some ministries, such as the Ministry of Forestry, Ministry of Education, Ministry of Culture, Ministry of Health-
Picture 1. GDP energy-intensity reduction
112
2009 energy-intensity reduction target is 8% with the GDP growth at 10% to 12% 4.3 % 7.9 %
8.4 %
5.0 %
107 102 97 92
109.9
105.2
108.1
110.0 100.8
99.6
100.2 94.7
87 82 2006 GDP growth rate
2007
2008
2009
Fuel and energy resources growth rate
care, already ranges between 60% to 90%. Our experts are now drafting a program to build a number of power generating stations running on local fuels in 2010-2012 in order to provide enough electrical and heat energy for regional population centers.
Making Energy Production Less Expensive In accordance with Directive No. 3, one of the measures to ensure energy security of the state is to reduce the cost of energy production by using energy efficient technologies and equipment. In this respect, the priority is the launching of new efficient power generating facilities. We have already achieved quite a bit in this area. In 2006 and 2007 we launched electricity generating facilities with their aggregate output of 93.2MWt and 93.3MWt respectively; whereas in 2008, due to Directive No. 3, we launched a number of power generating facilities which total output was 123.8MWt, and in 2009 we commissioned some more stations with their total energy production of 363,13MWt. The Belarusian energy system’s yearly output is now 33 billion KWH of electric energy, but the ideal amount would be 36 billion KWH. The remaining 3 billion KWH will be produced additionally by launching new efficient power generating facilities. In 2009 the first phase of the refurbishment project at the Lu-
koml hydroelectric power plant was completed. As a result the output of this power generating facility was increased by 15MWt. A 230MWt steam-gas generator was installed at Minsk CHP 3. In the near future we plan to do as follows: to start a 65MWt gas turbine at Minsk CHP 2, upgrade a power generation unit at Beryoza hydroelectric power plant to produce additionally 65MWt; to start a 110MWt steam-gas generator at Grodno CHP 2, a 399MWt steam-gas generator at Minsk CHP 5; refurbish the combined heat and power plant “Severnaya” in Minsk (installing a 60MWt gas turbine and a 330MWt gas-steam generator) and boiler houses in Borisov and Mogilev (gas-steam generators, 65MWt and 15MWt respectively). Other large-scale projects include the construction of gasturbine-powered plants at the production association Belaruskali (about 60MWt), Mozyr Oil Refinery, and the construction of a 16MWt gas turbine generator at Krichevtsementnoshifer. In addition, power generating units have been installed in a number of boiler houses, including the boiler house “Zhlobinskaya” (a 26MWt gas-piston generator was installed there), Lida CHP (25MWt installation) and others. In other words, we have started a work in Belarus to convert boiler houses into combined heat and power plants producing heat and electricity. In this situation I am convinced that we have
ECONOMY OF BELARUS No. 1, 2010
FIVE YEAR PLAN: THE FINAL YEAR
77
ECONOMY OF BELARUS No. 1, 2010
FIVE YEAR PLAN: THE FINAL YEAR
Picture 2. Contribution of local fuels to Belarus' fuel consumption mix in 2009, % 60 55.4
49.3
10.5
6.8
2.2
1.2 49.0 47.4
50 44.2 41.0
39.7
40 34.8 33.0
31.3
30
26.7 22.7
20
17.2
16.5
17.5 15.9
17.0 11.7 12.0 10.1
10
0
7.7 1.0 1.6 0.3 0.6
Belenergo
2006
2007
Belneftekhim concern
2008
to learn how to use natural gas more efficiently because its price is growing every year. We are now running a pilot project at a mini-CHP plant in the town of Pruzhany to see the effect of applying modern-day technologies. Having analyzed the plant’s performance, we saw that the new technologies were highly efficient. The use of high initial parameters of steam made it possible to increase the production of heat to 339.8KWH/Gcal , which is nearly twice as much as at the mini-CHP plants in Osipovichi and Vileika. With this in mind, we believe it would be good to use these ideas in new mini-CHP plants across the country. The Pruzhany project also contributed to the growth of the local infrastructure and creation of new jobs. A new ice arena was built in the vicinity of the CHP plant, and a swimming pool is now being built there. In 2008-2009 we carried out three pilot projects involving the production of electric and heat energy by using biogas produced from agricultural waste. A total of 4694,3 thousand KWH of electric energy produced by using the biogas tech-
78
3.9
Ministry of Ministry of Housing Ministry of Industry Bellesbumprom Agriculture and and Utilities concern Food
2009
nology substituted 3126,5 thousand cubic meters of imported natural gas and saved us around Br1.8 billion. And if we take into account the ecological aspect of the problem, the advantages of the biogas technology would be evident even to most skeptically-minded specialists. At present we run three biogas plants which aggregate power is 1.19MWt, and we are planning to build another 13 biogas plants with their aggregate output of 12.5MWt as part of industry-specific energyefficiency programs.
Financial Aspect To succeed in reducing energyintensity of Belarus’ GDP we certainly need a significant financial input. In 2001-2008 the total financing of energy-efficiency activities was $3.865,8 billion. In 2001 we allocated $92.5 million, and the financing has been growing ever since. In 2006 we invested $600 million in it, and in 2009 over $1 billion. We have also changed the character of work in this area by switching to upgrading and refurbishing the active installations accompanied by replacing old equipment with new efficient installations, build-
ing new power and heat generating stations, using the latest technologies of feeding and burning fuel, etc. In 2009 the energy efficiency activities were financed for the most part by the organizations themselves, using their own funds, or by borrowing money from banks; also, funds were being made available from the central and local budgets. Ninety-one percent of all funds for these activities were obtained one of these ways. As for the government-sponsored innovation support funds, they played little role in financing these activities in 2009, contributing merely 6.4% of all funds, as against 18.4% in 2008. In 2009, a total of Br341.59 billion, including Br42.9 billion from the Energy Ministry’s innovation support fund, was made available to increase the use of local fuels, production waste, secondary, untraditional and renewable energy resources, to create an infrastructure for providing power generating facilities with fire-wood as part of energy efficiency programs. Every year we witness a steady increase in investment in energy
saving in the country. If in 2001 we invested around $100 to save one tonne of fuel, than in 2009 we had to invest $726 for it (Picture 3). The decisions leading to the implementation or modernization of technological process at a minimum cost do not always bring the expected results. In our experience, while calculating the efficiency of activities, one should consider all possible aspects: project cost, fuel consumption per product item, maintenance costs, and other things.
Energy-Saving: the Effect of Cooperation In energy saving, Belarus cooperates closely with international organizations, financial institutions and funds, including the World Bank, Global Ecological Fund, European Economic Commission of the United Nations (UNEEC), UNDP. In addition, together with the other CIS member states and Eastern European countries Belarus participates in such international initiatives as Energy Efficiency 2000 and Energy Efficiency 21 aimed at improving energy efficiency, developing the related infrastructure and realizing the participants’ energy
saving potential. For example, as part of the Energy Efficiency 21, Belarus is participating in the project entitled “Financing Investment In Projects In Energy Efficiency and Renewable Energy Sources to Cushion the Impact of Climate Change”. As part of the project “The Use of Biomass in Heating and Hotwater Supply in the Republic of Belarus” we have established a Bioenergy Assets Fund, designed a geographical information system, built five demonstration objects (boiler houses, mini-CHP plants) running on biomass, and another one which we called the supplier of fire-wood. We are now implementing the project “Elimination of Impediments to Improving Energy Efficiency of the Public-Sector Companies of the Republic of Belarus,” which main objective is to reduce the emission of greenhouse gases by 23,500 tonnes per year in the CO2 equivalent by reducing the use of fossil fuels. The purpose of this project is to create additional incentives for state-run organizations to invest in energy saving and use the attracted financial resources in a more efficient way. In accordance with this project, we
are planning to establish an international energy center focusing on attracting investment in long-term energy efficiency projects (five and more years) and on providing consulting services in this area. On the whole, a total of over $5 billion came to Belarus in the form of investments due to Belarus’ involvement in UNDP, GEF and UNEEC projects. In 2002-2008 Belarus and the International Bank for Reconstruction and Development were implementing a joint project, “Modernization of Infrastructure in the Social Sphere”. Under the project, the Bank’s contribution was $22.6 million, with Belarus’ contribution over $18 million. Under the project, improvements were made at 674 facilities. As part of the project 26 boiler houses were refurbished, heat generating installations at 488 facilities were upgraded, 139,000 energy-saving light lamps were installed at 232 facilities, energysaving dual-pane windows were installed at 22 facilities. Simultaneously, the government of Japan allocated $0.996 million as part of this project to build a 5MWt boiler-house module running of fire-wood in the village of Borovlyany, Minsk Region, and to
ECONOMY OF BELARUS No. 1, 2010
FIVE YEAR PLAN: THE FINAL YEAR
Picture 3. Financing of energy efficiency activities and their effect in 2001-2010 1 900
2210.0
1780.0 1687.6
Cost of saving 1 TOC, USD per TOC
1 700
1584.8
Financing, million USD
1 500
1464,0
Saving, thousand tonnes of oil equivalent
1366
1 300
1214 1063.8
1 100
988.5
925.5
951.9 865
843.2
900
682 633.5
700
600
726.6
546
461 439
500 364 360 244
300 100 93
355
206
144 91
100 -100
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
79
ECONOMY OF BELARUS No. 1, 2010
FIVE YEAR PLAN: THE FINAL YEAR
80
develop a standard of the Republic of Belarus for the amount of waste produced by fire-wood-powered boiler houses. The use of this module allows reducing the use of natural gas and ultimately saving more than $500,000 a year. Using renewable fire-wood instead of fossil fuel will reduce the emission of greenhouse gases thus helping Belarus honor her commitments taken under the Kyoto Protocol. The International Bank for Reconstruction and Development valued highly the results of the social infrastructure development project, and following Belarus’ request provided another loan, $15 million, to perform analogous activities in the social sector. Since 2007, Belarus and the IBRD have been implementing the project “Rehabilitation of the Areas Affected by the Catastrophe at the Chernobyl Nuclear Power Plant”. Under this project, the Bank has provided Belarus a loan to the amount of $50 million. The project includes two components: – “Improvement of Energy Efficiency,” which implies modernization of social-sector facilities; – “Gasification,” which implies extension of gas supply networks to population centers. As part of these initiatives, we plan to optimize heat supply, start using energy-saving lamps, perform thermal rehabilitation of
buildings, and other activities at 250 social-sector facilities of the contaminated areas of Mogilev, Gomel and Brest Oblasts. In September 2009 we started a new project, “Improvement of Energy Efficiency in the Republic of Belarus.” The project will run for five year, 2009-2014, and will make use of a $125 million load provided by the IBRD. The project provides for refurbishing six facilities and creation of modern-day energy-efficiency CHP plants, including four boiler houses for the communal and utilities companies and 2 big power generating facilities at the republican unitary enterprise “Minskenergo” and the republican unitary enterprise “Mogilevenergo.” We hope the project will help cushion the negative effect caused by the spike in prices for imported fuels and will also bring about a substantial social effect such as improving the quality and reliability of heat and electricity supply for all categories of consumers, including the population and social-sector facilities. What is also important is that joint energy efficiency projects will not only bring investment to Belarus but also international technologies and give Belarus experience. International financial organizations demonstrate an increasing amount of trust and confidence in Belarus as evidenced by the conclusion of new agree-
ment and a rise in financing from abroad.
The Year of Quality – Year of Energy Efficiency We can name this final year of the five-year period not only the Year of Quality but also the year of energy efficiency, as it will be a time of hard work in energy saving to make sure the ambitious targets in this area are met. In accordance with the national comprehensive program of modernization of main production assets of the Belarusian energy system, energy saving and increased use of Belarus’s own fuel and energy resources for the period ending in 2011, this year there is a need to ensure a 31% reduction in the GDP energy-intensity as against the 2005 level. In addition, what we need to do is as follows: – To continue the work on optimizing the country’s fuel consumption mix and make sure the share of local fuels is no less than 20.5% in the mix; – To obtain no less than 1.99 to 2.2 million tonnes of fuel equivalent by carrying out regional and industry-specific energy saving programs. – To send into operation new power generating installations with a total power output of 292MWt, including 170MWt at the companies subordinate to the Ministry of Energy. Given the world financial crisis, using fuel and energy resources more efficiently becomes vital, and energy saving takes on a special significance for Belarus, becoming a key to ensuring its economic security. Implementation of the aforementioned measures and projects will help strengthen the energy security of Belarus, modernize the energy industry and improve its efficiency, diversify the fuel consumption mix by increasing the use of local fuels and renewables, cut fuel production, transportation and consumption costs and, ultimately, make the Belarusian economy more competitive.
