Improving of CHP/DHC in Central and Eastern European Countries - ISPE, Romania

Summary
The project aimed at a systematic effort to ensure the further use and market uptake of the different CHP/DHC technologies in favour of EU policies. The OPET network served as facilitator. The consortium of 38 OPET partner organisations in the OPET CHP/DH project saw a great challenge in carrying out market oriented activities as part of the OPET action, that can help support the implementation of EU energy policies and contribute to overcome the existing market barriers. Most of the actions comprised networking with other OPET partners in addition to other activities such as elaboration of a report on CHP/DHC policy and recommended measures, a report on recommended tools to overcome barriers in RUE at the DH sector, a report on pilot projects on RUE enhancement tools and workshops targeted at and participated by relevant decision-makers and market actors. The project was co-funded by the European Commission under the 5th Framework Programme. The main result of the action was the production of recommendations for policy measures and market tools for the development of CHP/DHC sectors in CEEC.

End-user area	Legal initiatives (municipal regulations, directives, etc) Planning issues
Target audience	Decision makers Financial institutions Local and regional authorities
Technical scope	CHP District Heating

Context
District Heating has a long tradition in the Central and European Countries (CEEC) and a large share in the heat market. More than 40 million people in the CEE countries are DH users and its share in the residential heat market is approximately 37%. The DH production decreased significantly in almost all CEE countries in the last decade due to the reduction of heat consumption both in industrial and residential sectors.

ISPE has been mainly involved in "Improving CHP/DHC systems in CEEC" -work package of the OPET CHP/DHC action. The work package aimed a systematic effort towards improving the economic and environmental performance of CHP/DHC sectors in the CEEC. It made maximum use of previous studies and project activities in the same area and built on intensive co-operation with national district heating associations and market actors. It entailed operations on the policy level, on the CHP/DHC sector level, as well as pilot projects targeting at individual companies. The project period was 14 months from April 2003 to May 2004.

Objectives
As the work package addressed most of the Central and Eastern European countries (CEEC), the intention was to raise understanding of problems related with district heating supply and find ways to improve the sector performance via an action and networking oriented approach.

The objective was to develop policy measures and market tools for the development of CHP/DHC sectors in CEEC. The Work package Improving CHP/DHC systems in CEEC of the OPET CHP/DHC Cluster addressed a number of targets, which are of key importance for the development of the CHP/DHC sector:

• Meeting the challenge of modernisation of the DH systems in CEEC, and improving the sector's economic and environmental performance;
• Stimulation of the market development and elimination of barriers for the utilisation of new/innovative CHP technologies, small, mini and micro scale CHP.

Process
The work was divided into activities targeting the policy framework conditions as well as the current sector situation. The task involved the following activities:

• The OPET partners produced country reports on policy measures, outlining the scope of the district heating and CHP policy and legislation. The reports addressed the driving forces, barriers and actual implementation of legislation. The reports contain issues on legal and policy framework related to CHP/DH, price regulation and taxation and financial mechanisms specific for each participant country. The report created the basis for specific recommendations to the national governments concerning possible improvements of national DH/CHP/energy efficiency policies and programmes and to exchange experience between the OPET countries involved.
• The OPET partners produced DH sector reports, outlining the key challenges connected with the development of the DH sectors and harvesting of the related energy efficiency and renewable energy potential. The reports included a review of the key actors on the electricity and heat markets, availability of financing for DH/CHP investments for refurbishment and upgrades and identification of the technical and organisational development tools for the DH sector, such as: local energy planning, benchmarking of DH, guidelines for introduction of CHP in existing DH systems, etc. This report created the basis for the development and dissemination of DH sector development tools.
• The OPET partners performed a project screening with a view to establish the overall need for technical improvement in the DH/CHP sector as well as identifying potential Joint Implementation projects. The report created knowledge of the existence of suitable projects and indication of the conditions for their implementation
• ISPE prepared a paper on "Local energy / heat planning" containing a description of the local energy planning as a very efficient tool enabling the development and operation of the energy sector with minimum expenses and, at the same time, having high reliability of energy supply and a minimum impact on the environment, financing options and examples of good practice on energy planning field in different European countries (Denmark, Austria, Poland, Lithuania, Latvia).
• The results of the country reports and recommendations for improvements of national energy regulation and development tools for CHP/DH sector were presented in workshops organised in each participant country. In this respect ISPE organised two events: one in Bucharest - Romania, on October 8, 2003 and a second one in Brasov - Romania on 5 December, 2003

Actions
- Workshop
- Seminar
- Market Analysis
- Webpage

Financial resources and partners
Partners in this work package were:

• DTI - Danish Technological Institute (Denmark) - work package leader
• EERI - Estonian Energy Research Institute at Tallinn Technical University (Estonia)
• Ekodoma (Latvia)
• LEI - Lithuanian Energy Institute (Lithuania)
• KAPE - The Polish National Energy Conservation Agency (Poland)
• ECCB - Energy Centre Ceske Budejovice (Czech Republic)
• ECB - Energy Centre Bratislava (Slovakia)
• ISPE - Institute of Studies and Power Engineering (Romania)
• SEC - Sofia Energy Centre (Bulgaria)
• STEM - Swedish Energy Agency (Sweden)
• EHP - Euroheat & Power (Belgium)

All partners organised workshops and made reports containing policy measures and market tools for the development of CHP/DHC sectors in their country. Overall indicative budget of the work package: 455,000 Euro.

Results
The results of the Work package are included in four main deliverables, which are available from the OPET CHP/DH website:

• Report on CHP/DHC policy and recommended measures
• Report on recommended tools to overcome barriers to RUE at the DH sector level
• Report on pilot projects on RUE enhancement tools
• Arranged workshops in order to promote recommended policy measures and company tools and carrying out of related dissemination activities:
  • Workshop "The organization and operation of public services supplying heat produced in cogeneration and district heating", October 8, 2003, Bucharest, Romania
  • Workshop "The future potential of District Heating and Cogeneration for environmental protection and reduction of heat supply cost", December 5, 2003, Bucharest, Romania

The work package led to development of policy measures and market tools aiming at improving the performance of the CHP/DHC sectors in CEEC. The co-operation between the 11 OPETs participating in the work package was close and fruitful. The findings were disseminated through a number of dissemination activities like workshops, internet, e-newsletter etc.

The reports showed the importance of solving the accumulated inefficiency existing within the Romanian energy sector and the measures that should be approached in this respect:

• measures without costs: promotion of a legal and institutional framework of regulations adapted to the market economy, promotion of competition and private investment, promotion of modern management techniques; this measures package needs to be adapted to the Romania's integration to European Union;
• measures with low costs: training of personnel and especially of managers, introducing modern control devices, automation and metering;
• measures with high costs: rehabilitation, modernisation, advanced technologies.

The dissemination of the project results was achieved in the context of the two workshops. In Bucharest, the target group was the district heating companies and the municipalities, while in Brasov workshop the target group was the decision-makers (representatives of the Government, regulation authorities and local public administration authorities).

key result of the work package is expected to be increased understanding of the complex problems related to the upgrading and modernisation of the existing CHP/DH systems and a wide spread of appropriate tools and measures at the policy and sector level.

Lessons learned and replication potential
There is a need to support the development towards improved economic and environmental performance of the district heating and cogeneration sectors in the Central/Eastern European Countries. It is apparent that the OPETs have a key role in developing and promoting appropriate tools and measures to overcome barriers towards improvements in the sector, and thereby to provide key market actors with an increased understanding of the problems related with upgrading and modernisation of the existing systems and of the possible solutions to these problems. Furthermore, a series of pilot projects were initiated and case studies were investigated to show the application of the tools and measures in practice.

During the project, discussions with the DH companies and the municipalities confirmed that they were having different kinds of organisational and financial problems related to the promotion of various projects that they were willing to implement. To overcome the problems, financial institutions, equipment producers and decision-makers were also invited to participate in the discussions. This situation showed that the activities need to be planned in a flexible way in order to cover the technical and economical as well as the legislative problems specific to the CHP/DH sector.

Printed reports or other literature available
- Report on CHP/DHC policy and recommended measures
- Report on recommended tools to overcome barriers to RUE at the DH sector level
- Report on pilot projects on RUE enhancement tools
These reports are at no charge downloadable from the OPET CHP/DH website (www.opet-chp.net).

Other contacts
www.opet.dk