USAID Project Assistance in Raising Investments in Sumy
As stated above, the annex to the Sumy SEAP is a Catalog of Investment Projects (hereinafter – the Catalog). Information is provided in the Catalog in terms of municipal sectors:
1) heat supply;
2) residential buildings;
3) municipal public buildings);
4) tertiary sector public buildings (oblast and state, commercial buildings);
5) water supply and sewage;
6) outdoor lighting;
7) greenery planting; and
8) transport, etc.
For each municipal sector, a list of project proposals is suggested. All of the financial indicators of the projects are evaluated in view of a 15-year planning horizon. To assess the financial flows of the projects, forecasts on prices for energy and energy services were used. Also, the amount of investments and economic performance indicators are presented for each project proposal. The catalog includes only those projects and measures that have the maximum economic, climatic and/or social effect.
It is proposed to finance the Sustainable Energy Action Plan of the city from several financial sources (funds of international banking institutions, private investors, etc.) and implement the schemes with the participation of ESCO companies. To achieve the maximum efficiency in the spending of municipal budget funds, it is also suggested to involve co-financing and public-private partnership mechanisms, as well as create a favorable investment climate and provide local guarantees for the implementation of energy efficiency projects.
The chart of distribution of financing by sectors is presented below. The total amount of investment financing for the period through 2025 is UAH 1,807.6 mln.
Financing of SEAP Projects and Programs in 2015-2025 (UAH mln.)
The total funding envisaged for 3 proposed projects is UAH 31 mln., average payback period – 2 years.
Heat supply services are provided in the city by 15 entities of different forms of ownership. Of the heat energy supply to end consumers, except for the industrial sector, 72.1% comes from LLC “Sumyteploenergo” and 25.0% from PJSC “Sumy Machine Building Scientific and Production Amalgamation” (PJSC “Sumske MNVO”). The consumers connected to the district heating system include primarily the populace (71.1%) and the public buildings sector (12.9%). The total amount of heat energy consumed in the city as of 2013 is 1.647 mln MWh, of which 21.7% is the own needs of the heat generating utilities and losses in external networks. In the structure of total consumption of energy resources for the needs of the municipal heat supply, main resources are natural gas (97%) and coal (3%). The heat supplying utilities have a total of 37 boiler houses. There are also 61 central heat substations and 316 km of networks in double-pipe measures on the balance sheets of the utilities.
The projects included in the catalog of investment projects envisage: modernization and replacement of the boiler house electric equipment; improvement of the technological schemes for heat supply; improved efficiency of the systems for reserve fuel preparation; use of equipment for combined generation of electricity and heat energy.
If the measures proposed in the catalog for the heat generation and transportation sector are implemented, it is possible to reduce CO2 emissions by 9,904 t/year or 1.93% of the baseline. The total annual reduction of energy resources consumption is expected to amount to 637,000 m3 of natural gas and 3,816 MWh of electricity.
The city plans to implement in 2017-2018 the project to reconstruct the boiler house of PJSC “Sumske MNVO”. Plans include the installation of two 4 and 3 MW bio-boilers running on solid fuelthat will generate heat energy for the hot water supply. Bailed straw will be used as bio-fuel. To ensure the reliable work of the boilers, it is planned to arrange a duplicate line of solid bio-fuel (wood chips, pellets produced from wood or agricultural waste). As a result of project implementation, it is expected to have an annual natural gas consumptionof over 30,500. MWh (3,243.8 th. m3 of natural gas) and reduce expenses for energy resources by UAH 71.160 mln. Greenhouse gas output will fall by 6,175.7 t of СО2.
In 2021-2023, the city plans to construct a mini-CHP on solid waste. As a result of project implementation, it is expected to have annual natural gas consumptionin the amount of 167,671.8 MWh. (17.790 mln m3 of natural gas) and reduce expenses for energy resources by UAH 71.160 mln. It is planned to allocate from the municipal budget UAH 30 million. Another UAH 170 million will be attracted via a public-private partnership vehicle.
WATER SUPPLY AND SEWAGE
The total funding envisaged for 8 proposed projects is UAH 8.6 mln., average payback period – 3.3 years.
Water supply and sewage services are provided to municipal consumers by the communal utility “Miskvodokanal”. The utility’s balance sheet includes 527 km of water pipelines (in unsatisfactory and emergency condition – 40%) and 330 km of sewage pipelines (depreciation – 65%), six underground water intakes with 75 artesian wells, 19 sewage pumping stations. The total capacity of the 51 operating wells is 88,400 m3/day, actual water supply to the city – 55-60,000 m3/day. Beginning from 2014, the amount of water consumption by end usershas trended upward (up to 6% a year).
Investment projects in the sector envisage: re-equipment of energy consuming pumping units at the water intakes; modernization of the sludge pumping station; reconstruction of water pipelines.
If all measures in the water supply and sewage sector are implemented, it is possible to reduce CO2 emissions by 3,723 t/year or 0.73% of the baseline. The total reduction of energy resources consumption is expected to amount to 3,210 MWh of electricity a year.
Total funding envisaged for 2 proposed projects is UAH 315.3 mln., average payback period – 8 years.
The municipal passenger transport structure includes automobile transport (private and communal forms of ownership) and electric transport. There are 23 fixed-route taxi routes in the city (mostly, small capacity passenger buses), 13 bus routes and 18 trolleybus routes. The trolleybus routes are operated by CU “Electroavtotrans”. The trolleybus rolling stock of the company includes 62 units, of which 53 trolleybuses already exceed their standard useful life, are generally outdated, have energy consuming equipment, do not comply with the modern comfort requirements for passenger transportation, and require replacement. The number of passengers transported by passenger electric transport in 2014 was 15.6 million persons.
The projects included in the catalog of investment projects provide for: replacement of outdated trolley buses and increasing the number of trolleybus rolling stock; extension of the electric transport route network; creation and development of bicycle lanes.
If all measures in the transport sector are implemented, it is possible to reduce CO2 emissions by 10,122 t/year or 1.98% of the baseline. The otal reduction of energy resources consumption is expected to amount to 1,264 t of gasoline, 1,050 t of diesel fuel and 2,513 MWh of electricity a year.
The total funding envisaged for the proposed project is UAH 4.5 mln., average payback period – 2 years.
The servicing of the municipal outdoor lighting networks and their operation are conducted by CU “Misksvitlo”. The company balance sheet includes 15,904 outdoor lighting units, 8,297 of which (as of 2014) are energy saving ones, and over 600 km of cable and aerial power transmission lines. In the municipal outdoor lighting system, sodium lamps of the DNaT type account for 52% of light fixturesand incandescent lamps account for 45%. Electricity consumption in the outdoor lighting sector in 2014 was 6,365 MWh.
The investment project in the sector provides for: replacement of the incandescent lamp fixtures with energy efficient LED lamps. At the end of July 2016, within the framework of cooperation with UNDP for modernization of the outdoor lighting system, Sumy received 850 energy efficient lamps. The total cost of lamps is about UAH 100,000.
If all measures in the outdoor lighting sector included in the investment catalog are implemented, it is possible to reduce CO2 emissions by 2,496 t/year or 0.49% of the baseline. The total annual reduction of energy resources consumption is expected to amount to 2,152 MWh of electricity.
Total funding envisaged for 6 proposed projects is UAH 123.7 mln., average payback period – 6.3 years.
The public buildings sector in the city includes 513 institutions: 79 educational establishments, 8 health protection establishments, 23 organizations of culture and tourism and 5 social affairs institutions. Most of the public buildings were constructed in 1960s-1980s under conditions including the long-term underfinancing of public buildings, especially in terms of capital expenditure items. Many of them are not able to have energy saving measures implemented, and due to the architectural features and special operation mode belong to the class of buildings with significant energy consumption indicators, which do not comply with the current norms. The total heated space of the public buildings is 398,900 m2, and the largest electricity and heat energy consumers in the sector are the educational and health protection establishments.
Within the framework of the USAID Project, energy audits of eight public buildings were conducted in 2015. According to the technical solutions suggested in the energy audit reports, it is planned to implement a number of projects on the partial and full thermal modernization of buildings: modernization of engineering networks with the use of energy efficient technologies, reconstruction of the heating systems etc. The city authorities initiated the “Improved Energy Efficiency in Public Buildings of Sumy for 2016-2025” program. Six pools were created for the Program implementation; they include 85 public buildings. To implement this project, Sumy started working with NEFCO in 2015, and has already signed a loan agreement for a total amount over UAH 9 mln. The project envisages the partial thermal modernization of 4 educational establishments (three kindergartens and a school).
Investment projects in the catalog of investment projects for the public buildings include: heat insulation of the building envelopes, roofs and floors; window replacement; modernization of the entrance groups with door replacement; equipment of individual heat substations; hydraulic and thermal adjusting of the heating systems; installation of automated boiler houses running on biofuel; heat insulation of the heat pipelines and heat exchangers; replacement of indoor and outdoor lamps; recovery of ventilation systems with the installation of heat recovery units.
The implementation of the project proposals in the sector of public buildings would reduce CO2 emissions into the atmosphere by 5,679 t/year or 1.11% of the baseline. The total reduction of energy resources consumption per year is expected to amount to 2,230 m3 of natural gas and 1,025 MWh of electricity.
The total funding envisaged for 2 proposed projects is UAH 413.4 mln., average payback period – 3.5 years.
In 2014, the total space of the city residential stock was 6.256 mln m2and was represented predominantly with multi-apartment multi-storied buildings (5.076 mln m2) and private buildings (1.180 mln m2). As of 30 June 2016, 184 condominiums had been established in Sumy.
Residential buildings are the largest consumers of fuel and energy resources in the city, which makes this sector a priority for planning sustainable energy development in Sumy. The city authorities have initiated the development of the program “Improved Energy Efficiency in Residential Buildings of Sumy for 2016-2025”.This program envisages the energy efficiency and energy saving projects for 1,113 residential buildings. It is planned to implement the program in two phases.The first phase includesseven residential buildings with condominiums and housing cooperatives. For these buildings, the USAID Project conducted energy audits and identified the measures allowing to reduce heat energy consumption for heating needs by 20-25%. The project calls for the implementation of a set of energy saving and energy efficiency measures: replacement of old wooden windows with new energy efficient PVC windows in common areas (staircases), introduction of weather-based control, adjustment of the hydraulic and thermal modes in the internal heating systemsand elimination of heat losses in non-heated premises. The implementation of the second phase is planned for 2017-2024. It includes the partial thermal modernization of 1,106 multi-apartment residential buildings.
The catalog of investment projects in the residential sector includes: modernization of the heat inlets in the buildings, installation of individual heat substations and units for weather-based heat supply; adjustment of the heating systems and installation of thermostatic radiator controls; insulation of pipelines in the heating and hot water supply systems in non-heated premises; window replacement in common areas.
The general reduction of CO2 emissions in the residential (building) sector on the stage of heat consumption is 42,002 t/year or 8.2% of the baseline. The total reduction of energy resources consumption is expected to amount to 20.048 mln m3 of natural gas and 28 MWh of electricity a year.
TERTIARY SECTOR PUBLIC BUILDINGS
The total funding envisaged for the proposed projects is UAH 21.9 mln., average payback period – 1 year.
Public tertiary sector buildings are buildings that do not belong to the housing stock and are not on the City Council balance sheet – that is, they are mostly commercial buildings. Despite significant interest by the building operators in saving energy resources, there are some difficulties with the development of the feasibility studies for energy efficiency projects and receiving the permit documents for the works.
The investment project in the tertiary buildings sector include: installation of automatic units for heat energy supply; balancing of one-pipe and two-pipe heating systems, installation of screens behind radiators; insulation of pipelines in the heating systems and hot water supply systems in non-heated premises. It is planned to implement these measures exclusively at the expense of the owners of buildings in this sector.
If all planned measures in the tertiary buildings sector are implemented, the total reduction of CO2 emissions will be 3,085 t/year or 0.6% of the baseline. The total annual reduction of energy resources consumption is expected to amount to 1.387 mln m3 of natural gas.