USAID Project Support in Raising Investments
The Registry of Investment Projects (hereinafter – the Registry) was developed to present to stakeholders the technical and economic characteristics of Kherson SEAP. Information in the Registry contains data on 12 projects in terms of municipal sectors:
1) residential buildings;
2) public buildings;
3) heat supply;
4) water supply;
5) lighting; and
6) public transport, etc.
To assess the investment attractiveness of the projects, different price change scenarios for energy and energy services were considered. The required amounts of investments and economic performance indicators for each project proposal are indicated.
For financing the Sustainable Energy Action Plan of the city, it is planned to involve several financial sources, including international banking institutions, communal utilities, private investors etc.). The chart of distribution of financing by sector is presented below. The total amount of investment project financing for the period 2015-2030 is UAH 6,592.5 mln.
Financing of SEAP Projects an d Programs in 2015-2030 (UAH mln.)
The total funding envisaged for 4 proposed projects is UAH 429.9 mln., average payback period – 2.4 years.
District heating and hot water supply services are provided in the city to the populace, public institutions and communal utilities, as well as self-financing organizations by four entities: CU “Khersonteploenergo”; PJSC “Khersonska CHP”; PE “Khersonteplogeneratsiia” and LLC “Teplomerezhi”. The balance sheets of these entities include 46 boiler houses, 73 central heat substations (CHS), 140.3 km of heating networks in double-pipe and 64.1 km in single-pipe measurement. The total connected heat load is 443.1 Gcal/h. The level of depreciation of the fixed assets is about 60%. Significant numbers of consumers disconnecting from the district heating networks is typical for the heat supply sector.
Investment projects in this sector include: improvement of the district heat supply system of MCU “Khersonteploenergo” (technical modernization of two and closing down four inefficient boiler houses, reconstruction of 6.6 km of heating networks with installation of pre-insulated pipelines, reconstruction of 4 CHSs and installation of 21 individual heat substation (IHS), introduction of a SCADA dispatching system in 26 boiler houses, adjustment of the heat and hydraulic mode in the district heating system); construction of block-level biofuel boiler houses for heat supply to multi-apartment residential buildings; implementation of organizational-and-technical measures (modernization of process schemes of boiler houses, automation of fuel combustion modes, installation of new pumps).
If all of the measures in the heat generation and transportation sector included in the Registry are implemented, it is possible to reduce CO2 emissions by 47,500 t/year or 4.98% of the baseline. The total annual reduction of energy resources consumption is expected to amount to 25,400 th. m3 of natural gas and 11,800 MWh of electricity.
The USAID Project conducted energy audits of six boiler houses of MCU“Khersonteploenergo”and found possible projects for the comprehensive modernization of the boiler house heat supply systems.
Kherson became one of the participants of the first phase of the “Energy Efficiency Improvement in District Heating Sector of Ukraine” project which is implemented by Minregion in cooperation with IBRD. The total cost of works to be financed under the project is over $300 million. In 2016, the Kherson municipal administration plans to start works on the reconstruction of six boiler houses and heating networks of the municipal communal sector with the installation of energy efficient boilers equipped with modular burners with oxygen and frequency control (reduction of natural gas consumption by 15%), reconstruction of 140 network inlets for multi-apartment buildings with the installation of heat energy meters, installation in the basements of 13 residential buildings of IHSs with the transfer of the heating systems of these buildings to independent circuits with the replacement of the distribution block-level heating networks.
Kherson is working with the USAID Project on implementing the “Construction of 20 MW Biofuel CHP with Biofuel Production on the basis of Tavriiska Boiler House in Kherson” project, which is planned on the basis of public-private partnership according to the approved SEAP. The USAID Project developed the project feasibility study.
WATER SUPPLY AND SEWAGE
The total funding envisaged for the proposed project is UAH 2.7 mln., average payback period – 3 years.
District water supply and sewage services are provided to the city residentsby CU “Production Department of Water and Sewage Sector of Kherson” (MCU “Kherson VUVKG”). 305,800 consumers are connected to the district water supply system, and 230,500 consumers are connected to the sewage system. MCU “Kherson VUVKG” also services 4,282 enterprises and organizations. The main water supply source for the city is ground water. The utility balance sheet includes 132 water wells, 14 clean water tanks of 41.9 m3 capacity, 6 pumping stations for the water supply system with 26 pumping units, 39 raising stations and 113 third raise pumps, 16 sewage pumping stations with 55 pumping units. The water supply networks is 909 km long, and sewage networks are 289 km long. Fixed assets depreciationruns at 47%. Water is supplied at up to 65-70 th. m3 per day, sewage services – 55-60 th. m3 per day.
The investment project envisaged by the Registry includesthe modernization of the water supply pumping station, installation of three new pumps with a nominal capacity according to consumption and a frequency transformer for productivity control.
If all measures in the water supply and sewage sector are implemented, it is possible to reduce CO2 emissions by 1,000 t/year or 0.11% of the baseline. The total reduction of energy resources consumption is expected to amount to 900 MWh of electricity per year.
The total funding envisaged for the sector project is UAH 4.5 mln., average payback period – 0.6 years.
Public passenger transportation in the city is conducted by CU “Khersonkomuntransservis” and CU “Khersonelectrotrans”, SE “Kherson River Port” and 20 private carriers which service the city residents on 58 routes. 750 buses and microbuses, 80 trolleybuses work daily on the city roads. The bus routes in total cover 89.5 km of the city street network. The length of the 8 trolleybus lines is 160.7 km. In the passenger flow structure, the main carriers are automobile and electric transport – 63.9% and 31.2%, respectively. An insignificant amount of passenger transportation is covered by river transport. The city has 253 units of automobile transport per 1,000 residents; 68% of them are passenger cars.
The investment project envisaged by the Registry proposed to modernize the municipal public transport (450 fixed-route taxies, mostly small capacity buses) by switching from gasoline and diesel engines to a more ecological and energy efficient motor fuel – liquefied natural gas.
No reduction of CO2 emissions is expected in the public transport sector, but it is possible to reduce emissions into the atmosphere of other hazardous substances (smoke gas, nitrogen oxides, non-methane organic compounds) which will improve the environmental situation and save funds in fuel procurement.
The total funding envisaged for the 2 proposed projects is UAH 86.2 mln., average payback period – 13 years.
Works on technical maintenance, renewal, reconstruction and capital renovation of the municipal outdoor lighting electric networks are conducted by CU “Khersonmisksvitlo”. Within the city territory, there are 276 lit streets and objects, 7,808 operating lighting fixtures, 393 km of cable and air electric lines, 131 distribution station and 53 traffic lights. For the purposes of outdoor lighting, lighting fixtures with different types of lamps are used: arc sodium tubing lamps – 62%, arc mercury fluorescent lamps – 29% and incandescent lamps – 9%. A major portion of the electricity for outdoor lighting is consumed at night and is 88% of total consumption.
Investment projects in this sector provide for: the modernization of the outdoor lighting system through equipment with 8,564 LED lamps; introduction of a system for electricity metering with differentiation by the time of day; installation of a solar power station with a total peak capacity of 1.55 MW, which will be equivalent to the energy consumption by the outdoor lighting system.
If all measures in the outdoor lighting sector are implemented, it is possible to reduce CO2 emissions by 4,300 t/year or 0.45% of the baseline. The total annual reduction of energy resources consumption is expected to amount to 1,700 MWh of electricity per year.
The total funding envisaged for 2 proposed projects is UAH 458.4 mln., average payback period – 10.2 years.
The total number of public buildings subordinated to the City Council is 198 buildings with a heated space of 489,1 m2 (90 educational establishments, 8 cultural institutions and 77 buildings of health protection sector). Most of the buildings were constructed in the Soviet era. They have significant heat losses through the building envelope and require a significant amount of heat for heating. The specific energy consumption for heating is within the range of 139-240 kWh/m2 a year, which is significantly higher than the European norms (15-45 kWh/m2) and normative values (45-70 kWh/m2) according to DBN B.2.6-31:2006 “Heat Insulation of Buildings” amendment # 1.
Projects from the investment registry in this sector include: comprehensive thermal modernization of 169 public buildings (insulation of the building envelope, roof and basement; installation of HIS, balancing of the heating systems, installation of modern radiator systems; replacement of windows and balcony blocks; modernization of the ventilation systems); two-phase conversion of the heat supply fuel in 169 public buildings to granulated fuel and heat pumps.
The implementation of the project proposals in this sector will reduce CO2 emissions into the atmosphere by 18,300 t/year or 1.92% of the baseline. The total reduction of energy resources consumption is expected to amount to 7,100 m3 of natural gas per year.
The “Municipal Infrastructure Development Program in Ukraine” investment projectis being implemented in Kherson over 2016-2020. It envisages a set of measures for the insulation of building envelopes and reconstruction of the engineering systems of the buildings, installation of IHSs, equipping them with automated weather-based controls, as well as commercial meters for heat energy consumption. The project will reduce heat energy consumption for the heating of public buildings in the city by three times on average. 169 buildings are included in the Project.
The total funding envisaged for the 2 proposed projects in the sector is UAH 5,596.7 mln., average payback period – 12.8 years.
The residential housing stock of the city consists of 51,900 buildings with a total space of 9,059.4 th. m2.Of these, 932 buildings are connected to the district heating network (mostly multi-storeymulti-apartment buildings) with a space of 2,585.2 th. m2. Most of the buildings were constructed in the period of 1950-1970, have significant heat losses through the building envelopes and require a significant amount of heat energy for heating. According to energy audit data, the specific average energy consumption for heating in the residential buildings of the city is 120 kWh/m2, which is significantly higher than the European norms (15-45 kWh/m2) and normative values (45-70 kWh/m2). Despite significant energy consumption, residential premises in the majority of buildings are under-heated – the indoor temperature in the heating season is 14-20°С, while the normative parameter is 18-22°С.
Investment projects in the residential building sector include: comprehensive thermal modernization of 821 multi-apartment residential buildings (installation of individual heat substations; balancing of the heating systems and installation of modern radiators; insulation of building envelopes, roof and basement; replacement of windows and balcony blocks; modernization of the ventilation systems); the installation of heat pumps for use in the ventilation systems and roof solar collectors for water heating in 821 buildings.
The general reduction of CO2 emissions in the residential building sector (on the stage of heat consumption) is 269,800 t/year or 28.26% of the baseline. The total annual reduction of energy resources consumption is expected to amount to 50,100 th. m3 of natural gas and 127,800 MWh of electricity.
The total funding envisaged for the measures in the sector is UAH 5.3 mln., average payback period – 0.4 years.
A significant portion of energy resource losses occur during production and transportation to the end users, which is caused by low work efficiency and interaction of the communal utilities personnel, their insufficient qualification or qualifications that do not correlate with the tasks, the lack or inefficiency of the system for metering and the calculation of losses, and lack of managerial and personnel incentives for implementing energy efficiency measures.
The investment project in the energy management sector envisages: trainings for personnel and management of the communal utilitieswith the introduction of the energy manager’s position; installation of systems for the automated metering of energy resources; analysis of energy consumption by the companies and the creation of incentives for the managers to adopt the relevant managerial decisions.
The expected reduction of CO2 emissions into the atmosphere is 6,000 t/year or 0.63% of the baseline. Energy resources consumption is expected to fall by 5,600 m3 of natural gas and 2,500 MWh of electricity a year.