USAID Project Assistance in Raising Investments in Kyiv
The Registry of Investment Projects was developed for presenting to the stakeholders’ representatives the technical and economic characteristics of Kyiv SEAP. Information in the Registry contains data on 13 projects in terms of municipal sectors:
1) heat supply;
2) water supply and sewage;
3) outdoor lighting;
4) public transport;
5) public buildings; and
6) residential buildings; etc.
To assess the investment attractiveness of the projects, different scenarios for energy and energy services price changes were considered, along with the required amounts of investments and the economic performance indicators for each project proposal were indicated. For financing of the Sustainable Energy Action Plan of the city, it is planned to involve several financial sources (funds of the international banking institutions, communal utilities, private investors etc.). The Chart of financing distribution of by sectors is presented below. The total amount of the investment projects financing for the period of 2015-2030 is over UAH 199.7 billion.
Financing of Kyiv SEAP Projects and Programs in 2016-2030 (UAH mln.)
HEAT SUPPLY
Total funding envisaged for eight proposed projects is UAH 13,260.7 mln., average payback period – 11.4 years.
District heat energy supply services in the city of Kyiv are provided by two large heat supply utilities (PJSC “Kyivenergo” and PJSC “Euro-Rekonstruktsiia”), as well as by a significant number of small corporate and industrial boiler houses. Heat energy is supplied to the city from over 800 different heat energy sources with a total installed heat capacity over 13,000 Gcal/h. The total connected heat load is 7,690 Gcal/h(5,620 Gcal/hfor heating and 1,080 Gcal/hfor hot water supply). The average boiler efficiency is about 80-90%. A significant number of the boilers have been operating for more than 30 years, and the equipment is technically and physically outdated. 2,361 heat substation function in the city (of which 1,215 are central heat substations (CHS); 1,146 are individual heat substations (IHS)). The annual amount of heat energy production by the heat supplying utilities as of 2013 was 19,178 GWh (16,490 th. Gcal). The main type of fuel used for heat energy production is natural gas (97%) along with an insignificant amount of coal.
The heating network scheme is double pipe, circular. As of 2013, the water and steam (local) network was 2,275 km long in double pipe measurement. Average heat energy losses in the networks are about 18%, though there are sections where this indicator is much higher. About 1,334 km of the heating network has already exceeded its lifespan and requires replacement. The theoretical potential for a reduction of heat energy losses in the networks is about 50%.
Investment projects of the Registry in this sector envisage the installation of 4,850 IHSs in residential multi-storey buildings plus 598 heat energy meters; reconstruction of 48 block-level boiler houses with the installation of energy efficient boilers, construction of six biofuel-fired block-modular boiler houses; reconstruction of the Energiia waste incineration plant through its extension to a waste incinerating CHP; construction of four biofuel-fired CHPs with 56 MW total capacity; installation of frequency converters on the pumping equipment in 32 boiler houses, and the installation of five surface condensation economizers for cooling exhaust fumes in local boiler houses and CHPs.
If all measures in the heat generation and supply sector included in the Registry are implemented, it would reduce CO2 emissions by 685,800 t/year or 3.87% of the baseline. The total annual reduction of energy resources consumption is expected to amount to 484,700 th. m3 of natural gas and 542,100 MWh of electricity.
WATER SUPPLY AND SEWAGE
The total funding envisaged for three proposed projects is UAH 34,445.4 mln.
District water supply and sewage services to the city residents are provided by PJSC “JSC Kyivvodokanal”. The general scheme of municipal water supply consists of the Dniprovska and Desnianska water supply stations, 364 artesian wells and 74 water pumping stations. The total estimated capacity of the cold water supply of the city is 2,100 m3/day; actual daily average supply of drinking water to the consumers is about 900,000 m3/day. The sewage system includes 33 pumping stations. Sewage purification facilities include the Bortnytska aeration station, where sewage from the city and nearby towns is purified. The actual load of this station is 800,000 - 1 million m3 a day, while the design capacity was 1.8 million m3/day. The water supply network in the city is 4,177.7 km long, of which 1,630.6 km (39% of the total length) requires replacement. The sewage network is 2,638.1 km long, of which 843.2 km (32% of total length) requires replacement. The water supply and sewage system had 8,826 accidents in 2013.
Drinking water consumption in the city keeps falling. It fell between 2009 and 2013 by 1.2 times to the level of 224 l/day per resident, which is explained first of all by the increased level of meter installation by consumers and by tariff growth. The average specific electricity consumption is 800 kWh/th. m3 for water supply and 630 kWh/th. m3 for sewage. The theoretical potential for reducing specific water consumption is about40%, and the potential for reducing electricity consumption for the water supply and sewage services isup to 50%.
The Registry of Investment Projects includes the following measures: modernization of Dniprovska and Desnianska water supply stations, replacing pumping units with energy efficient ones and the installation of frequency converters at 20 pumping stations; reconstructing the sewage purification facilities and construction of the process line for sludge treatment and utilization at the Bortnytska aeration station.
If all measures in the water supply and sewage sector are implemented, it would reduce CO2 emissions by 80,400 t/year or 0.45% of the baseline. The total reduction of energy resources consumption is expected to amount to 68,000 MWh of electricity a year.
One of the largest investment projects of the country is in Kyiv: the reconstruction of the Bortnytska aeration station. In June 2015, the Governments of Ukraine and Japan signed the credit agreement on attraction of funds from the Japanese International Cooperation Agency (JICA) for reconstruction on favorable terms. The credit provided by JICA totals 108 billion Yen. The Government of Japan has already allocated UAH 380 million for the development of technical documentation and the preparation of the Bortnytska aeration stationfor reconstruction. UAH 63 million was allocated in 2016 from the Ukrainian state budget for preparatory works (completion of which is planned for the end of 2016).
OUTDOOR LIGHTING
The total funding envisaged for the proposed project is UAH 108.9 mln., payback period – 10 years.
Operation, repair, and maintenance of the municipal outdoor lighting is conducted by CU “Kyivmisksvitlo”. The utility’s balance sheet includes 1,802.8 km of cable electric lines (66% - underground) and 2,250.7 km of air electric lines; 1,454 distribution units, and 182,642 lighting fixtures installed on 70,670 pylons. The lighting of streets and roads covers 99.9% of those within the city limits, and the total length of this is 1,617 km. The sources of outdoor lighting are mainly lighting fixtures with sodium lamps (DNaT) – 111,412 pcs. (61% of total number of lamps), as well as 20,514 lighting fixtures (11%) with mercury lamps (DRL) which are environmentally hazardous, energy intensive, technically outdated and require regular maintenance and lamp replacement with consequent utilization.
The annual time of outdoor lighting is 2,998 hours, of which 60% is standby mode (from 23.00 to 6.00). As of 2013, the total amount of electricity consumption for the needs of outdoor lighting was 61,320 MWh. Electricity consumption has been growing, which is caused by the annual growth of the level of lighting of the city. The theoretical potential of energy saving for the needs of outdoor lighting is about 50%.
The investment project in the sector includes: replacement of 15,700 low luminous efficiency street lighting fixtures equipped with mercury arc lamps (DRL) with energy efficient (LED) lighting fixtures featuring high luminous efficiency and a high index of color transfer.
If all measures in the outdoor lighting sector are implemented, it is possible to reduce CO2 emissions by 8,900 t/year or 0.05% of the baseline. The total annual reduction of energy resources consumption is expected to amount to 6,100 MWh of electricity a year.
PUBLIC TRANSPORT
The total funding envisaged for four proposed projects is UAH 7,055 mln.
As of 2013, there were about 2,000 km of highways in the city, 169 bridges and overpasses, and 221 underground pedestrian crossings. Passenger transportation includes almost all known types of public transport: metro, trams, trolleybuses, public buses, fixed route taxis (small capacity buses), taxis, private cars and a funicular. Private vehicles and taxis accounted for 94% of fuel and energy resources that municipal transport consumed. Public passenger transportation in the city is performed by two communal utilities – CU "Kyivskyi Metropoliten", CU "Kyivpastrans" – and 37 privately owned carriers serving the residents on routes covering the entire territory of the city. The current municipal public transportation network includes: three metro lines (52 stations), 41 trolleybuses, 19 trams, 69 urban and 9 suburban bus routes and 54 fixed routes for private small capacity buses. The municipal public transportation involves 3,307 units of transport: 794 metro cars, 481 trams, 540 trolleybuses, 972 municipal buses, 520 private fixed route taxis of large, medium and small capacity. A common problem for all types of transport is low capacity, insufficient rolling stock and depreciation. A significant part of public transport is more than ten years old (in EU countries, operation is limited to 10 years) and is a major source of CO2 emissions and emissions of particulate pollutants and heavy metals into the atmosphere, which affects the overall environmental condition of the city. The theoretical potential for energy savings in the sector is around 35-50%. The total number of private vehicles is 846,000 pcs. (as of 2013). Over 150,000 cars enter Kyiv from other regions of Ukraine and from abroad daily. The overall level of car ownership in the city is 308 cars per 1,000 inhabitants.
The Registry of Investment Projects in this sector includes: the comprehensive modernization of 160 units of metro rolling stock (“Е” class cars) with the introduction of asynchronous traction drive; renovation of 260 tram cars (replacement of two outdated tram cars with one larger passenger capacity car); renovation of 202 communal trolleybuses (12 m long trolleybuses – 97 pcs., 18.7 m long trolleybuses – 105 pcs.); modernization of lighting systems in 536 metro cars (replacement of outdated and energy intensive light sources with modern energy efficient and LED lamps).
If all measures in the transport sector are implemented, it would reduce CO2 emissions by 50,900 t/year or 0.29% of the baseline. The total annual reduction of energy resources consumption is expected to amount to 47,000 MWh of electricity a year.
Kyiv is currently replacing the rolling stock of its utilities with funds from a credit line issued by the European Bank for Reconstruction and Development (EBRD). By the end of Autumn 2016, it is planned to supply 20 trolleybuses for different municipal depots. Altogether, with EBRD loan money, Kyiv will procure 105 long trolleybuses and 97 regular trolleybuses. The total amount of the loan is about Euro 46 million.
PUBLIC BUILDINGS
The total funding envisaged for eight proposed projects in the sector is UAH 17,282.4 mln., average payback period – 11.4 years.
There are a total of 1,784 public buildings of municipal subordination in Kyiv; the total space of the buildings is 6,096.53 th. m2 (including 1,090 education and science sector buildings, 566 health protection sector buildings, 53 culture and arts sector buildings, 55 social protection sector buildings, and 20 other public buildings. The amount of fuel and energy resources consumed by municipal public buildings in 2013 was 966 th. Gcal (1,123.6 GWh) of heat energy and 147 GWh of electricity. Heat energy consumption accounts for 86% of all consumed resources.
Heat energy consumption by public buildings of the city is on the level of 186 kWh/m2, which is significantly higher than current 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” with amendment # 1. Meanwhile, the specific consumption of electricity by public buildings is 23 kWh/m2 which is a rather high indicator of energy efficiency. The theoretical potential of energy savings is about 60%.
The Registry of Investment Projects includes the following measures: comprehensive thermal modernization of 1,026 education buildings, 566 health protection buildings, 90 administrative buildings and cultural institutions (heat insulation of outer walls and roofs, replacement of windows and entrance doors, re-equipment of the heating system with installation of automated controls and energy meters); installation of 24 and modernization of 200 IHSs in public buildings; reconstruction of heating systems in 66 public buildings (installation of solid fuel boilers); reconstruction of hot water supply systems in 290 public buildingswith use of renewable energy sources (solar collectors and heat pumps), and thereplacement of electric stoves in 182 education buildings.
Implementing all of the project proposals in this sector will reduce CO2 emissions into the atmosphere by 222,500 t/year or 1.26% of the baseline. The total reduction of energy resources consumption is expected to amount to 111,500 m3 of natural gas and 4,300 MWh of electricity a year.
On 30 June 2016, the deputies of the Kyiv Council supported the participation of Kyiv communal utilities in the project “Ukraine Municipal Infrastructure Development Program” to be implemented with credit funds from the European Investment Bank. This includes, in particular, two sub-projects: “Thermal Modernization of Kyiv Public Buildings”worth up to Euro 11 million and “Capital Renovation of Lighting Systems with the Replacement of Lighting Elements with LED Elements in Kyiv Public Buildings” worth up to Euro 22.5 million. The projects are being considered by the Ministry of Finance and the Ministry of Regional Development of Ukraine.
In spring 2016, the USAID Project assessed the readiness of Kyiv to implement clean energy projects in terms of public-private partnership (PPP) and prepared the relevant pre-feasibility studies. This includes Sviatoshynskyi psychoneurological boarding-school, Darnytskyi orphanage - boarding school, sanatorium boarding school #19 and Kyiv care home for labor veterans. The Kyiv City State Administration expressed its readiness to support the implementation of the above projects. It is already clear that it is planned to implement them on a PPP basis in the form of a concession. The Project considered three implementation scenarios: (1) municipal investments in fast-payback measures; (2) investments by ESCO infast-payback measures; (3) municipal investments in the complete thermal modernization of the buildings. The interim results of the work on the projects will be presented in October 2016.
The USAID Project will conduct seminars and workshops on implementing clean energy projects on terms of PPP and will provide technical support to the municipality in preparing the relevant package of documents (technical, economic, legal and tender documentation), in the organization of public hearings, and support and give consultations for the process of project development and implementation.
In 2016, the city continues implementing the project “Thermal Modernization of Kyiv Public Buildings” after taking out NEFCO credit funds.
RESIDENTIAL BUILDINGS
Total funding envisaged for two proposed projects in the sector is UAH 126,844.8 mln., average payback period – 12.2 years.
There are 104 communal and 9 private housing management organizations operating and maintaining the residential stock in communal ownership; 82 private companies service the residential stock of non-communal form of ownership, as well as 375 (of 700) condominiums and 911 housing and construction cooperatives. As of 2013, the residential stock of the city consisted of 11,194 multi-apartment buildings and 23,054 private buildings, with the space of multi-apartment residential stock totaling 79,893 th. m2. Most of themare multi-apartment buildings constructed in the 1950-1970s. They have significant heat losses through the building envelopes and require a significant amount of heat energy for heating the premises. The specific consumption of the fuel and energy resources for heating in the residential buildings of the city is 79-153 kWh/m2 a year, which is significantly higher than modern 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” with amendment # 1. The district heating system accounts for 71% of the fuel and energy resources consumed by the residential stock (heating – 44%, hot water supply – 27%), 17% is in the form of natural gas for household needs and autonomous heating, and 12% is electricity.
Investment projects in this sector include: thepartial thermal modernization of 433 typical 9-storey residential buildings (installation of heat flow valves at building entrances, renovation of entrance vestibules and window replacement on staircases, closing of elevator shaft perimeters in winter and equipment of ventilation openings with adjustable shutters) and thecomprehensive thermal modernization of 4,500 multi-apartment buildings (heat insulation of outer walls and roofs, replacement of windows and balcony blocks, adjustment of the heating systems, heat insulation of internal pipelines, installation of new heating devices, thermostatic controls and meters, and re-equipment of the ventilation systems).
The general reduction of CO2 emissions in the residential building sector (on the stage of heat consumption) is assessed at 1,469,800 t/year or 8.30% of the baseline. The annual reduction of energy resources consumption is expected to amount to 582,500 th. m3 of natural gas.