REVIEW OF CURRENT DEVELOPMENTS IN THE DHC/CHP … · 2019-01-11 · HEP-TOPLINARSTVO d.o.o. WORKING...

MEMBER OF HEP GROUPMEMBER OF HEP GROUP12 November 2009

HEP-TOPLINARSTVO d.o.o.

REVIEW OF CURRENT DEVELOPMENTS IN THE REVIEW OF CURRENT DEVELOPMENTS IN THE DHC/CHP SECTORDHC/CHP SECTOR

ININ CROATIA THROUGH THE EXAMPLE OF HEPCROATIA THROUGH THE EXAMPLE OF HEP--TOPLINARSTVOTOPLINARSTVO

D.O.O.D.O.O.

Robert Krklec, B.E.E.

Working group energy policy11 – 12 November 2009

Energy Institute Hrvoje PožarZagreb - Croatia



BASIC INFORMATION ABOUT HEPBASIC INFORMATION ABOUT HEP --TOPLINARSTVO D.O.O.TOPLINARSTVO D.O.O.

� Member of HEP-group

� Performs the following activities:

Heat production

Distribution and supply of heat energy and process steam

Development and construction of heating plants and netw orks

Economic, Financial, Legal affairs and IT support

� Operates in the cities:

Zagreb, Velika Gorica, Samobor, Zapreši ć, Osijek and Sisak

� Mission:

Secure and reliable supply of heat energy and process ste amto all customers



� Number of customers: 121.576

Households: 115.687Business premises: 5.887

�� Connected Power : 1.234 MW

�� Energy: 2.206.902 MWh

Heat: 1.755.641 MWhSteam: 663.618 t

NUMBER OF CUSTOMERS

Business premises

5.887

Households

115.687

HEAT ENERGY SUPPLIED - 2008

Zagreb 1.508.542

MWh

Sisak 61.808 MWh

Osijek 185.291

MWh



CENTRAL HEATING SYSTEM CENTRAL HEATING SYSTEM ZAGREB ZAGREB –– 20082008

Production:- Heat 1.501.739 MWh- Steam 656.392 tSales:- Heat 1.327.369 MWh- Steam 536.655 t

Number of customers: 88.969

LOCAL BOILER PLANTS: ZAGREB, LOCAL BOILER PLANTS: ZAGREB, VELIKA GORICA, SAMOBOR, VELIKA GORICA, SAMOBOR,

ZAPREZAPREŠŠIIĆĆ –– 20082008Production:- Heat 208.695 MWhSales:- Heat 181.173 MWh


CENTRAL HEATING SYSEM CENTRAL HEATING SYSEM OSIJEK OSIJEK –– 20082008

Production:- Heat 196.991 MWh- Steam 144.623 tSales:- Heat 185.291 MWh- Steam 97.992 t


CENTRAL HEATING SYSTEM CENTRAL HEATING SYSTEM SISAK SISAK –– 20082008

Production:- Heat 76.593 MWh- Steam 31.247 tSales:- Heat 61.808 MWh- Steam 28.971 t




LEGISLATION (1)LEGISLATION (1)

� THE ENERGY ACT (OG 68/01 and 177/04)

� THE ACT OF THE REGULATION OF ENERGY ACTIVITIES (OG 177/04)

�� THE ACT OF PRODUCTION, DISTRIBUTION AND SUPPLY OF T HERMALENERGY (OG 42/05)

� GENERAL CONDITIONS FOR THE SUPPLY OF THERMAL ENERGY (OG 129/06 )

� TARIFF SYSTEM FOR SERVICES OF ENERGY ACTIVITIES OF THERMAL ENERGY PRODUCTION, DISTRIBUTION AND SUPPLY, WITHOUT THE AM OUNTSOF TARIFF ITEMS (OG 65/07 and 154/08)

� THE ORDINANCE ON THE METHOD OF COST ALLOCATION AND B ILLING FOR THE HEAT ENERGY SUPPLIED (OG 139/08 and 18/09)



LEGISLATION (2)

- The subordinate legislation that need to be prepared

� THE ORDINANCE ON FEE FOR CONECTION TO THE THERMAL P OWER NETWORK AND INCREASING CONNECTED POWER

� THE ORDINANCE ON CONDITIONS FOR GRANTING THE STATUS OF ELIGIBLE PRODUCERS OF THERMAL ENERGY

� THE RULING ON PARAMETERS FOR DETERMINING THE SHARE OF ELIGIBLE PRODUCERS OF THERMAL ENERGY IN THE ENERGY SYSTEM OF CROATIAN AND THE SOURCES AND AMOUNT OF FINANCIAL SUPPORT FOR ENERGY FACILITIES OF ELIGIBLE HEAT PRODUCERS

� THE ORDINANCE ON TECHNICAL REQUIREMENTS FOR THE PRODUCTION OF HEAT ENERGY



THE ACT OF PRODUCTION, DISTRIBUTION AND SUPPLY OF T HERMAL ENERGY (OG 42/05)

� Act came into force on 8 april 2005

� Act is compliant with:

� GUIDELINESS AND DIRECTIVES OF EUROPEAN UNION (Direc tive2004/8/EC)

� THE ENERGY ACT (OG 68/01 and OG 177/04) and other en ergy Acts

Application of the The Act of Production, Distribution and Supply of Thermal Energy

meant the exclusion of thermal energy supply activities from The Law on Local Public

Utilities.



� LEGISLATIVE FRAMEWORK FOR THE

FUNCTIONING AND DEVELOPMENT OF HEAT

ACTIVITIES IN CROATIA

LEGAL REGULATION PROVIDES:

� OBLIGATIONS OF ENERGY COMPANIES AND CUSTOMERS TO R ESPECT AND APPLY TECHNICAL REGULATIONS AND GENERAL CONDITIONS

� POSSIBILITY OF OPENING HEAT ENERGY MARKET

� TRANSPARENCY IN BUSINESS OF ENERGY COMPANIES

� SINGLE TARIFF SYSTEM FOR ALL DISTRIBUTION AREAS IN

CROATIA



THE ADVANTAGES OF THE DISTRICT HEATING SYSTEMTHE ADVANTAGES OF THE DISTRICT HEATING SYSTEM

� Heat energy is generated in one place

� High degree of utilization of energy in cogenerational p roduction(simultaneous production of heat and electricity)

� Very high degree of environmental protection

� There are no potentially flammable and explosive fuels i n the household andbusiness premises

� The distribution of heat energy and its consumption in co nsumers premiseshas been simplified to the maximum possible extent



� UNREALISTIC RATIO OF PRICES OF FUEL AND SELLING PRI CES OFHEAT ENERGY

An unrealistic ratio of prices of fuel (oil and natural ga s), as the main input cost of heatproduction in cogeneration processes and in separate b oiler rooms, and selling pricesof heat energy.

� CONTROLED SELLING PRICES OF HEAT

Until recently, selling prices of heat energy were under t he control of local municipality.Today selling prices are under the control of the CERA and under strong pressure of social policy without subsidies from the budget.

19 December 2008 Croatian Goverment adopted The Decision on the Amount of TariffItems in Tariff System for Services of Energy Activities o f Thermal Energy Production, Distribution and Supply (OG 154/08)

Heat energy prices have risen, but not enough to cover the input costs.

PROBLEMS OF DISTRICT HEATING OPERATIONS AND DEVELOPMENT



� LACK OF FINANCIAL RESOURCES FOR RECONSTRUCTION ANDRENOVATION

Most of district heating companies in Croatia operate wi th losses and sometimes in a complete technological collapse. For the example, there is no possibility of investing in the replacement of the existing separate boiler technolo gy. And their replacement is more than necessary, because the average age of the smal l heating plant and boilerroom is over 20 years , there is low fuel utilization effi ciency, they are expensive to maintain and they have a bad impact on the environment.

Similar problems are present in the business of all other companies engaged in theproduction, distribution and supply of thermal energy (Varazdin, Karlovac, Rijeka, Slavonski Brod, Vukovar, Vinkovci, Koprivnica, Virovitica, Split, etc.).

Solution to these problems definitely started with the adoption of legislation and subordinate legislation. With adoption of subordinate legislation, it will be achievedthe reform of the heating energy sector and will be defined the legal framework forcarrying out energy activities of production, distribution and supply of thermal energyin conformity with EU regulations.



SWOT ANALYSISSWOT ANALYSIS

WEAKNESSESWEAKNESSES

�� OLD EQUIPMENT AND OLD EQUIPMENT AND INFRASTRUCTUREINFRASTRUCTURE

�� FUEL PRICEFUEL PRICE AND DETERMINATION OF AND DETERMINATION OF FUEL PRICEFUEL PRICE

�� LACK OF FOCUS ON CUSTOMERSLACK OF FOCUS ON CUSTOMERS�� MARKETINGMARKETING�� BILLINGBILLING�� HUMAN RESOURCE MANAGEMENTHUMAN RESOURCE MANAGEMENT

TTHRETASHRETAS

�� INSUFFICIENT LEGAL REGULATIONSINSUFFICIENT LEGAL REGULATIONSRELATED TO ENERGY EFFICIENCYRELATED TO ENERGY EFFICIENCY

�� LOW STANDARD OF LIVINGLOW STANDARD OF LIVING�� INSUFFICIENT LOCAL PLANNINGINSUFFICIENT LOCAL PLANNING�� THERE ARE NO ECONOMIC THERE ARE NO ECONOMIC

INITIATIVES FOR SAVING ENERGYINITIATIVES FOR SAVING ENERGY�� DEVELOPMENT OF GAS HEATINGDEVELOPMENT OF GAS HEATING�� CONSUMERS HAVE A NEGATIVECONSUMERS HAVE A NEGATIVE

PERCEPTION OF COMPANYPERCEPTION OF COMPANY

STRENGHTSSTRENGHTS

�� HIGH STANDARD OF PROVIDINGHIGH STANDARD OF PROVIDINGSERVICESSERVICES

�� ABILITY TO PROVIDE ENERGY ABILITY TO PROVIDE ENERGY SERVICES (ESCO) SERVICES (ESCO)

�� ABILITY OF INDIVIDUAL METERINGABILITY OF INDIVIDUAL METERINGOF HEAT ENERGY IN HOMESOF HEAT ENERGY IN HOMES

�� EFFICIENT USE OF NATURAL GASEFFICIENT USE OF NATURAL GAS�� REDUCTION OF ENVIRONMENTALREDUCTION OF ENVIRONMENTAL

EMISSIONSEMISSIONS�� SECURE SUPPLY SECURE SUPPLY

OPPORTUNITIESOPPORTUNITIES

�� NEW (LARGE) CUSTOMERSNEW (LARGE) CUSTOMERS�� SAVINGS THROUGHSAVINGS THROUGH

REVITALIZATIONREVITALIZATION OF OF THETHEDISTRIBUTION DISTRIBUTION HEHEATATINGING NETWORKNETWORK

�� NEW SYSTEMS FOR RENEWABLENEW SYSTEMS FOR RENEWABLEENERGY SOURCESENERGY SOURCES

�� PUBLICPUBLIC --PRIVATE PARTNERSHIPPRIVATE PARTNERSHIP�� PREPRE--ACCESSION FUNDS ANDACCESSION FUNDS AND

SIMILAR FUNDSSIMILAR FUNDS



� Reduce CO2 emissions by 20 - 30% � Reduce primary energy consumption by 20%� Increase energy production from renewable energy by 20%

EUROPEAN OBJECTIVES BY THE YEAR 2020

About 80% of energy consumption in the residential secto r is wasted on theheating/cooling!

Approximately 85% of the existing buildings does not comp ly with currentregulations of the effitiant use of heat energy!

ENVIRONMENTAL PROTECTION AND ENERGY EFFICIENCY IN ENVIRONMENTAL PROTECTION AND ENERGY EFFICIENCY IN RESIDENTIAL SECTORRESIDENTIAL SECTOR



THE MAJOR DEVELOPMENT PROJECTS OF HEPTHE MAJOR DEVELOPMENT PROJECTS OF HEP --TOPLINARSTVO TOPLINARSTVO D.O.O. IN EFFICIENT ENERGY MANAGEMENTD.O.O. IN EFFICIENT ENERGY MANAGEMENT

1.1. TheThe RevitalizationRevitalization Project of Project of thethe DistributionDistribution HeatingHeating NetworkNetwork in Zagreb in Zagreb and and OsijekOsijek

2.2. IndividualIndividual measurmentmeasurment and and regulationregulation of of heatheat consumptionconsumption in in buildingsbuildingswithwith a a commoncommon heatingheating installationsinstallations ((HeatHeat costcost allocatorsallocators and and ThermostaticThermostatic radiatorradiator valvesvalves ))

3.3. MeteringMetering of of HeatHeat EnergyEnergy byby installinginstalling HeatHeat EnergyEnergy MetersMeters forfor eacheachapartmentapartment

4.4. IndividualIndividual HeatingHeating SubstationSubstation –– equipmentequipment forfor completecomplete comfortcomfort in in heatingheating and hot and hot waterwater heatingheating process on apartment levelprocess on apartment level



1. REVITALIZATION OF THE DISTRIBUTION HEATING NETWO RK IN 1. REVITALIZATION OF THE DISTRIBUTION HEATING NETWO RK IN ZAGREB AND OSIJEKZAGREB AND OSIJEK

�� ReplacingReplacing thethe most most vunerable and oldestvunerable and oldestpartsparts of of networknetwork withwith prepre --insulatedinsulatedpipespipes

�� TheThe plan is to plan is to replacereplace 2222 km of km of hothot waterwaternetworknetwork in in thethe 44 yearsyears of of revitalizationrevitalization

(2007(2007--2010)2010)

�� HeatHeat losseslosses in in thethe distributiondistribution of of energyenergy willwill bebe reducedreduced fromfrom 1010--12% to 12% to thethe acceptableacceptable 66--8%8%

�� Total Project costs are 24 million Total Project costs are 24 million €€

�� 75% of costs are secured from the EBRD loan and the rest is prov75% of costs are secured from the EBRD loan and the rest is prov ided by ided by HEPHEP--Toplinarstvo d.o.o.Toplinarstvo d.o.o.



WORKING PLAN SHOWN ON ZAGREB CITY MAP WORKING PLAN SHOWN ON ZAGREB CITY MAP –– COMPLETE COMPLETE PROJECT (2006PROJECT (2006--2010)2010)

�� DarkerDarker Green lines Green lines –– Year 2006Year 2006 –– 1,5 km of Hot 1,5 km of Hot waterwater pipelinespipelines , 3 km , 3 km pipespipes�� Blue lines Blue lines –– Year 2007 Year 2007 –– 5,5 km of Hot 5,5 km of Hot waterwater pipelinespipelines , 11 km , 11 km pipespipes�� Red lines Red lines –– Year 200Year 2009 9 –– 8 km of Hot 8 km of Hot waterwater pipelinespipelines , 16 km , 16 km pipespipes�� LightLight GreenGreen –– YearYear 2009/2010 2009/2010 –– 5,5 km of Hot 5,5 km of Hot waterwater pipelinespipelines , 11 km , 11 km pipespipes



WORKING PLANWORKING PLAN SHOWNSHOWN ONON OSIJEKOSIJEK CITYCITY MAPMAP –– COMPLETECOMPLETEPROJECT (2007PROJECT (2007--2010)2010)

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�� Blue lines Blue lines –– Year 2007 Year 2007 –– 1,8 km of Hot 1,8 km of Hot waterwater pipelinespipelines , 3,2 km , 3,2 km pipespipes�� GreenGreen lineslines –– YearYear 2008 2008 –– 0,8 km of Hot 0,8 km of Hot waterwater pipelinespipelines , 1,6 km , 1,6 km pipespipes�� Red lines Red lines –– Year 200Year 2009 9 –– 4,3 km of Hot 4,3 km of Hot waterwater pipelinespipelines , 8,6 km , 8,6 km pipespipes�� YelowYelow lineslines –– YearYear 2009/2010 2009/2010 –– 1,9 km of Hot 1,9 km of Hot waterwater pipelinespipelines , 3,8 km , 3,8 km pipespipes



2. INDIVIDUAL MEASUREMENT AND REGULATION OF HEAT2. INDIVIDUAL MEASUREMENT AND REGULATION OF HEATCONSUMPTION IN BUILDINGS WITH A COMMON HEATING CONSUMPTION IN BUILDINGS WITH A COMMON HEATING

INSTALLATIONSINSTALLATIONS

�� OverOver 2500 2500 residentialresidential bulidingsbulidings withwith a a commoncommon heatingheating installationsinstallations

�� MethodMethod of of distributiondistribution of of delivereddeliveredthermalthermal energyenergy measuredmeasured on on heatheat metermeterbyby shareshare of of thethe heatedheated flatflat surface (m2)surface (m2) in in thethe total total heatedheated areaarea of of thethe buildingbuilding((doesndoesn ´́t t encourageencourage rationalrational use of use of energyenergy ))

� 11 november 2008. THE ORDINANCE ON THE METHOD OF COST ALLOCATION AND BILLING FOR THE HEAT ENERGY SUPLIED (OG 139/08 and 18/09)TheThe OrdinanceOrdinance regulateregulate thethe areaarea of of heatheatconsumptionconsumption managementmanagement byby usersusers andandinstallationinstallation of of devicesdevices forfor heatheat controlcontroland and locallocal distributiondistribution of of heatheat suppliedsupplied on on individualindividual levellevel

�� HEPHEP--ToplinarstvoToplinarstvo d.o.o. d.o.o. specialistsspecialistsactivelyactively participatedparticipated in in preparingpreparing thetheOrdinanceOrdinance



�� InstallationInstallation of of HEAT COST ALLOCATORSHEAT COST ALLOCATORS and and THERMOSTATIC RADIATOR THERMOSTATIC RADIATOR VALVESVALVES in in eacheach apartmentapartment in in existingexisting buildingsbuildings (not mondatory)(not mondatory)

�� EncouragesEncourages consumersconsumers to to rationalrational use of use of heatheat energyenergy

�� EveryEvery useruser payspays justjust as as muchmuch energyenergy as he as he hashas actuallyactually

consumedconsumed

�� ThereThere is is greatgreat interestinterest of our of our customerscustomers forfor thetheinstallationinstallation of of thethe equipmentequipment

�� 1998 1998 -- TheThe PilotPilot --project project ““ Kninski trg 4Kninski trg 4 --55”” (2001 (2001 implementedimplemented ))

�� SystemSystem is is nownow embeddedembedded in 11 in 11 residentialresidential buildingsbuildings withwith 592 592 apartmentsapartmentsand 2474 and 2474 HeatHeat costcost allocatorsallocators havehave beenbeen installedinstalled

�� 5% to 40% 5% to 40% -- RealizedRealized costcost savingssavings comparedcompared to to thethe period period untiluntil thetheallocatoresallocatores waswas notnot installedinstalled



3. METERING OF HEAT ENERGY BY INSTALLING HEAT ENERG Y 3. METERING OF HEAT ENERGY BY INSTALLING HEAT ENERG Y METERS METERS FORFOR EACH APARTMENTEACH APARTMENT

� Installation of individual heat cells for each apartment in new buildings

� Complete individualization and total control of heat an d hot waterconsumption and costs for each customer individually

�� A new way of setting heating installation enabled i nstalling heaA new way of setting heating installation enabled i nstalling hea t energy t energy metersmeters

�� SinceSince 2000 all 2000 all residentialresidential buildingsbuildings connectedconnected to to thethe DistrictDistrict HeatingHeatingSystemsSystems must must havehave HeatHeat energyenergy MetersMeters forfor eacheach apartmentapartment and and ThermostaticThermostatic radiatorradiator valvesvalves installedinstalled on on eacheach radiatorradiator



4. INDIVIDUAL HEATING SUBSTATION4. INDIVIDUAL HEATING SUBSTATION

�� AllowsAllows individualindividual heatingheating and DHW (and DHW ( DomesticDomestic Hot Hot WaterWater ) ) preparationpreparation

�� TheThe consumerconsumer hashas completecomplete controlcontrol overover thethe heatheat energyenergy consumptionconsumptionand and controlcontrol overover costscosts forfor thethe consumedconsumed heatheat energyenergy

�� ThermostaticThermostatic radiatorradiator valvesvalves providesprovides a a centralcentral temperature temperature controlcontrol

�� AccordingAccording to to thethe needsneeds and and abilitiesabilities of of eacheach consumerconsumer , , therethere is is thethepossibilitypossibility of of settingsetting dailydaily //nightnight regimeregime of of heatingheating

�� RealizedRealized savingssavings of 10of 10 --45% 45% comparedcompared to to thethe averageaverage consumptionconsumption of of thermalthermal energyenergy in in thethe DistrictDistrict HeatingHeating SystemSystem in Zagrebin Zagreb



ENERGY PLANT FOR THE UNIVERSITY HOSPITAL CENTER ENERGY PLANT FOR THE UNIVERSITY HOSPITAL CENTER ZAGREBZAGREB

�� LocationLocation : : HospitalHospital Rebro, ZagrebRebro, Zagreb

�� ConstructionConstruction , , operationoperation and and maintenancemaintenance of of thethe overalloverall hospitalhospital ’’s s energyenergysystemsystem ((heatingheating , , coolingcooling and and distributiondistribution of of electricityelectricity ))

�� Project Project startedstarted at at thethe endend of of thethe 20062006

�� PublicPublic -- privateprivate partnershippartnership modelmodel

�� CoolingCooling systemsystem poweredpowered byby steamsteam fromfrom districtdistrict heatingheating systemsystem((apsorbtionapsorbtion chillerschillers ))

�� IncreaseIncrease thethe usabilityusability of of existingexisting steamsteam pipelinespipelines

�� DecreaseDecrease electricityelectricity demanddemand forfor coolingcooling duringduring summersummer monthsmonths

�� PossibilityPossibility of of similarsimilar technicaltechnical and and financialfinancial solutionssolutions forfor thethe supplysupply and and maintenancemaintenance of of energyenergy systemssystems of of hospitalshospitals and and otherother facilitiesfacilities in Croatiain Croatia



PLANS FOR THE FUTUREPLANS FOR THE FUTURE

�� MAINTAIN THE SIGNIFICANCE MAINTAIN THE SIGNIFICANCE OF THE COMPANY AS THE OF THE COMPANY AS THE LARGEST AND THE MOST LARGEST AND THE MOST IMPORTANT DISTRICT HEATING IMPORTANT DISTRICT HEATING COMPANY IN CROATIACOMPANY IN CROATIA

�� CONTINUOSLY INCREASE THE CONTINUOSLY INCREASE THE TECHNOLOGICAL LEVEL OF TECHNOLOGICAL LEVEL OF THE SYSTEM AND INTRODUCE THE SYSTEM AND INTRODUCE NEW SERVICES NEW SERVICES

�� IMPROVE RELATIONS WITH IMPROVE RELATIONS WITH CUSTOMERSCUSTOMERS

�� IMPROVE ENERGY EFFICIENCY IMPROVE ENERGY EFFICIENCY AND ENVIRONMENTAL AND ENVIRONMENTAL PROTECTIONPROTECTION

�� ENCOURAGE INSTALLATION ENCOURAGE INSTALLATION OF HEAT COST ALLOCATORS OF HEAT COST ALLOCATORS AND THERMOSTATIC AND THERMOSTATIC RADIATOR VALVES RADIATOR VALVES

�� INVEST INTO SYSTEM INVEST INTO SYSTEM DEVELOPMENT AND DEVELOPMENT AND EXPANSION OF THE DISTRICT EXPANSION OF THE DISTRICT HEATING SYSTEMHEATING SYSTEM

�� CONNECT NEW CUSTOMERSCONNECT NEW CUSTOMERS

�� CONTINUOUSLY INVEST INTO CONTINUOUSLY INVEST INTO KNOWLEDGE OF ALL KNOWLEDGE OF ALL EMPLOYEESEMPLOYEES

�� IMPLEMENT LEGISLATION IMPLEMENT LEGISLATION RELATING TO HEATING RELATING TO HEATING ENERGY SECTORENERGY SECTOR



THANK YOU FOR YOUR THANK YOU FOR YOUR ATTENTION.ATTENTION.

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