Individual heating stations in buildings are to be made mandatory: who will pay for it
13 November 17:01
ANALYSIS FROM 
This is often the case: when it comes to mandatory measures, attention is focused more on the advantages and less on the disadvantages. It seems that the decision to mandate the installation of individual heating points in apartment buildings also falls into this category. What should we expect from such a decision, found out
Creating favorable conditions for the modernization, development and efficient operation of district heating systems is how the Ukrainian Cabinet of Ministers, which initiated the innovation, formulated its goal. In addition, the explanations to draft law No. 14067, which focuses on supporting the development of efficient and sustainable district heating, say a lot about encouraging energy saving, modernization and reconstruction of heating systems, and the introduction of energy-efficient technologies.
All of this is possible thanks to the installation of individual heating points (IHPs) in apartment buildings connected to district heating systems. The document says very little about who will pay for such installation. This part of the explanation reads as follows: the draft law provides for “improvement of the procedure for setting tariffs for heat energy, in particular, inclusion of the costs of installing IHS in the tariff for heat energy transportation.” And these magic words about “costs” and “tariff” immediately raise fears that changes in payments are possible.
We will help you to understand the pros and cons of the legislative innovation, which provides for the mandatory installation of IHS,
So, what should change with the installation of individual heating stations in buildings?
Currently, the main disadvantage of centralized heat supply systems is that we cannot control our consumption at the building level. Individual heat points allow us to do this and adjust the consumption of each building to its real needs. And this gives an effect for residential apartment buildings, somewhere from 10 to sometimes 30% of heat energy savings,” the expert said.
Vadym Lytvyn also explained how an individual heating point works.
A control system is installed that monitors the outside temperature. It adjusts to the heat engineering parameters of a particular building and, accordingly, regulates the temperature of our batteries throughout the house in accordance with the external weather conditions. That is, if it is warm outside, and the boiler house or CHP plant cannot physically react quickly to this and, for example, lower the temperature, the heat station will close the valve, reduce the heat supply, and the rooms will have a comfortable temperature. And at the same time, we will consume less heat energy when it is warm outside,” emphasizes the head of the Association of Energy Auditors of Ukraine.
For greater clarity, Vadym Lytvyn gave an example of his own home.
“With the old system without a heat point, we had a decrease in the supply to the upper rooms and apartments, they were not heated and had to turn on heaters. After the installation of the IHS, the circulation improved and the heat carrier began to reach the upper floors faster. Thus, with an overall reduction in heat consumption in the building, it allowed us to heat all the apartments better,” the expert concludes.
“The key question is: who will pay for everything, i.e. installation and maintenance of IHS? First of all, Vadym Lytvyn spoke about how the installation of the heating station is currently financed.
There are programs of the Energy Efficiency Fund that provide for financing of part of the costs, and there are relevant city programs. For example, in Kyiv, these costs are shared between the city and the condominium in a 70-30 ratio. For example, a condominium insulates pipelines and other measures for 30% of the total cost, and then the city contributes not money but work and equipment, implements the project in its part and installs IHS,” the expert explains.
“The draft law proposes to improve the procedure for setting tariffs for heat energy and, in particular, to include the cost of installing IHS in the tariff for heat energy transportation. And here, suspicions immediately arise that this could lead to an increase in the amount of payments. That is, again, the question logically arises: who will eventually pay and how. Vadym Lytvyn’s view.
The answer to the question of who will pay is clear: the end user always pays anyway. And it’s important to remember: the more transparent the financing and payment mechanism is, the better, because then it will be possible to influence it,” the expert states.
It is not known what will happen in the final version of the law, as the draft law is only being prepared for consideration. However, Vadym Lytvyn, head of the Association of Energy Auditors of Ukraine, has a vision of what such a mechanism could look like.
“I would like to see payment for the installation of IHS made at the expense of the savings achieved. That is, so that the total payment for the consumer does not increase. Let’s imagine that a house spends a million hryvnias on IHS and that the payment will be tied to savings. For example, UAH 200 thousand per year is saved after the installation of IHS, and, accordingly, this heat point is paid for for five years, taking advantage of the fact that the heat bill does not decrease. And then all the savings remain with the residents. This is one of the possible options,” the expert notes.
Vadym Lytvyn also considers it advisable to provide a mechanism that would financially incentivize the efficient maintenance and adjustment of IHS.
“If a heat supply organization is going to be engaged in the installation, then, in my opinion, there should be a financial mechanism that would make it a party interested in saving. For example, if we create such conditions that when an IHS is installed or adjusted and it allows for some savings, then this heat supply organization could receive a part of it. And then this organization, which is actually profitable to supply more heat carrier, has a good incentive to save on the consumer side, because its profit will increase. That is, in fact, the heat supply organization begins to sell savings, and this will be beneficial for both this organization and consumers,” Vadym Lytvyn emphasizes.
And, by the way, this approach, according to the expert, is enshrined in the European energy efficiency directives and the Ukrainian law on energy efficiency.
Author – Sergey Vasilevich
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