The USAID Energy Security Project (ESP), together with the State Energy Efficiency Agency of Ukraine, representatives of communities, businesses, and other stakeholders, took part in a roundtable organized by the Khmelnytskyi Oblast Military Administration to discuss the development of the Regional Energy Efficiency Program (REEP) for Khmelnytskyi Oblast, including the setting up of an energy management system and preparation of specific projects.
During the roundtable, Vira Bryhadyr, Director of the Construction and Residential and Utility Sector Development Department at the Khmelnytskyi Oblast Military Administration, said that local communities must address the issues of reducing energy consumption, energy product cost accounting, implementation of measures to ensure energy efficiency, and the use of energy saving potential. Considering the importance of energy security and rational use of available resources, the energy management system is increasingly becoming an integral component of efficiently managing the community’s budgetary and utility sectors.
Energy management is critical, as the cost of energy supply to public buildings constitutes between 5% to 20% of the local budget, depending on the number and purpose of the buildings. These funds can be significantly saved due to the implementation of energy efficiency measures in the framework of the Regional Energy Efficiency Program in Khmelnytskyi Oblast.
Hanna Zamazeeva, Head of the State Energy Efficiency Agency, noted that implementing energy efficiency measures is extremely important, and local communities must already be engaged in developing energy efficiency projects and preparing professional energy managers to work at the local level.
Hanna Zamazeeva thanked USAID ESP for its support for Ukraine’s energy sector, as well as its professionalism and expertise in cooperation, ranging from financing individual projects to providing expert recommendations on the restoration of the energy sector facilities. She informed the participants that to ensure the energy independence and energy security of local communities, on April 11th, 2023, the first financial instrument – the Fund for Decarbonization and Energy Transformation of Ukraine – was created and will be financed from CO2 taxes. This money is intended for the needs of municipalities, territorial communities, businesses, and households to implement energy efficiency measures and develop the renewable energy sector and alternative fuel types.
Vadym Virchenko, Deputy Chief of Party at USAID ESP, said that the Project had supported Khmelnytskyi Oblast since the beginning of developing REEP, the concept of which was approved in April 2023. Currently, USAID ESP is initiating and developing energy-efficient activities, which include small and medium-sized cogeneration, disposal of rejected heat, use of energy potential of wastewater, etc.
“We would like to see the creation of an energy management system in Khmelnytskyi Oblast to initiate energy efficient projects and attract investments for their successful implementation,” Vadym Virchenko added.
The USAID ESP representative also emphasized the consistency of the local communities’ energy plans and REEP. On the one hand, REEP is based on the communities’ energy plans, and the other hand, it sets priorities for developing local energy plans. Therefore, REEP is an important integrating document that summarizes projects at the local level and includes projects and measures at the regional level. USAID ESP will continue to provide support in coordination with the State Energy Efficiency Agency. In addition, in the framework of donor assistance, USAID ESP plans to deliver eight cogeneration plants in four communities of Khmelnytskyi Oblast to improve the resilience of heat supply systems and critical infrastructure facilities.
Diana Korsakaite, District Heating Sector Lead at the USAID ESP, said: “The Energy Security Project provides multimillion-dollar support to district heating utilities and local governments, including Khmelnytskyi Oblast. And this support will continue! The intention to install eight cogenerating plants is only part of a large program for installing cogeneration plants with a capacity of 22 MW in 19 inhabited areas of Ukraine. “Diana Korsakaite also said that USAID ESP is gradually resuming technical assistance to Ukraine’s heat supply sector, particularly in planning for heat-generating companies and developing investment projects.
“We expect that during the cycle of developing the Regional Energy Efficiency Program for Khmelnytskyi Oblast, USAID ESP will be able to participate in developing a preliminary feasibility study for one to two projects as part of this program implementation.”
Ievgen Nikitin, USAID ESP’s expert, told in the presentation about the current condition and specifics of the REEP for Khmelnytskyi Oblast, as well as about the opportunities to implement small-size distributed generation as a promising way to ensure the resilience and energy efficiency of inhabited areas.
According to the USAID ESP’s analysis, all regional energy efficiency programs developed in 2010 – 2015 under the methodology related to the budgetary sector, mainly to buildings. Thus, no programs and methods comprehensively address the oblast’s energy efficiency (generation, transportation, and consumption of various energy types), and developing comprehensive energy efficiency programs is extremely important.
Below is the developed concept of REEP for Khmelnytskyi Oblast:
- based on a holistic approach to the energy generation and consumption sectors (electricity, heat, gas supply, utility infrastructure, industry, agriculture, and other sectors), detecting and using intersectoral synergy with the priority development of multi-effective projects;
- specifies finance and resource provision for each REEP project, including bank financing, own funds of economic entities, state, and private partnerships, ESCO-schemes;
- considers the specifics of wartime conditions and the importance of an energy supply resilience criterion.
According to Ievgen Nikitin, the local authorities will be vital in filling REEP with specific projects. Therefore, incentivizing local communities is critically important. Currently, an energy efficiency project database has already been created and should be filled.
The main technical directions for implementing REEP under the approved concept:
- improvement of the energy efficiency of buildings, mainly in the budgetary sector;
- creation of a regional network of small-size distributed cogeneration and strengthening the resilience of regional electricity supply;
- energy efficiency transformation of heat supply systems in inhabited areas, including district heating. An increase in a share of electrical heating using electric boilers, heat pumps, and heat accumulators;
- use of the rejected heat and long-distance transportation of heat from Khmelnytskyi Nuclear Power Plant;
- generation of energy from solid domestic wastes and landfill gas from the solid domestic waste landfills;
- creation of energy and environment complexes and sewage treatment facilities for the production of biofuel from sludge sediments;
- creation of resilient regional solar generation using the combination of solar power plants and the balancing small-size gas-fired cogeneration;
- implementation of cogeneration plants and biofuel-fired boilers;
- creation of energy plantations and a regional biofuel market.
In the framework of developing REEP for Khmelnytskyi Oblast, cogeneration is considered a key project for energy supply resilience and energy efficiency because electricity and heat generation during specific process cycles require a significant amount of primary energy, unlike cogeneration when electricity and heat are generated during the one process cycle and therefore the need for primary energy is reduced by 10% – 30%.
As a tool for energy independence and energy supply sustainability, small-size distributed generation can be installed at boiler houses within the district heating system, autonomous heat supply systems, and small-size stable energy complexes as part of solar plants and cogeneration plants.
According to Ievgen Nikitin, cogeneration will be effective during and after the war. It should be noted that certain district heating utilities in Khmelnytskyi Oblast have already successful experience in using cogeneration plants to satisfy their own needs as well as for inhabited areas and critical infrastructure facilities. Following the changes in legislation adopted in the first half of 2023, heat-generating companies now have the opportunity to sell the surplus of electricity to the grid.
Participants of the round table aimed to incentivize and interest local communities of Khmelnytskyi Oblast in developing energy efficient projects also discussed the organizational and legal support and methodological aspects of creating local energy management systems, state and private partnerships, the attraction of international funds and energy service contracts (ЕSCO-schemes) as sources to finance the projects, etc.
Regional energy efficiency programs for Khmelnytskyi Oblast will be considered as a pilot project for scaling up in other oblasts of Ukraine.