Environmental and social benefits of energy efficiency

Avan district boiler house

Energy is so much a part of life that we often use it without thinking about the sources and impacts on the environment. The fact is that most of energy is generated from burning fossil fuels like coal, gas or oil. As of today, fossil fuels provide around 66 percent of the world’s electrical power, and 95 percent of the world’s total energy demands, including heating, transport, electricity generation and other uses.  Accumulation of carbon dioxide in the atmosphere, released from burning of fossil fuel, contributes to global warming and triggers changes in surrounding environment and, ultimately, on our social and economic realities.

Some Highlights

  • UNDP Climate Change Programme is already 15 years on the ground, assisting Armenia in planning and implementing activities aimed at reduction of impacts of climate change, as well as active participation of the country in international cooperation mechanisms.
  • UNDP implemented energy efficiency projects can serve as an exemplary model for implementing energy saving measures in other communities of Armenia.

Increasing efficiency of energy consumption seems to be the most straightforward and practical way to climate change mitigation. In addition, the emerging constraints on energy supply have raised the importance given to energy efficiency policies.

In developing countries, including Armenia, energy efficiency is an important issue, too, but often with different driving forces compared to developed countries. In our reality, alleviating the financial burden of oil imports, reducing energy investment requirement, and making the best use of existing supply capacities to improve the access to energy come as a key priority followed by the  need to reduce greenhouse gas (GHG) emissions and local pollution. Ultimately, the more efficient use of energy   country-wide will result in less money spent on energy by households, schools, government agencies, businesses, and industries. The money that would have been spent on energy can instead be spent on consumer goods, education, services, and products.

UNDP Climate Change Programme is already 15 years on the ground, assisting Armenia in planning and implementing activities aimed at reduction of impacts of climate change, as well as active participation of the country in international cooperation mechanisms.

After the collapse of municipal heating systems in Armenia in early 2000s, the residents of the multi-apartment buildings were forced to find individual solutions for heating their apartments, which often was not the most efficient and environmentally safe measure to tackle the problem. Considering the sustainable growth of living standards of the population, the consumption of thermal energy may constitute 1/3 of the primary energy carriers imported to the country and its usage efficiency is an issue of social well-being and national energy safety. 

Since 2005, UNDP in Armenia, in close cooperation with national partners - ministries, municipalities, households associations and the private sector - is implementing a project aimed at creating proper regulatory and enabling framework for promotion of efficient models of heating and hot water provision. The efforts resulted in creating a private public partnership scheme between Yerevan municipality, Public Services Regulatory Commission, Avan district in Yerevan and a private investor. The municipality of Yerevan provided previous district heating facilities without rent to the private investor and gave state guarantees for the purchase of generated energy. During the last 3 years more than USD 8 million direct private investments were made in full reconstruction of the Avan district heat supply system based on the combined heat and power technology. As a result, currently 30 multi-apartment buildings are connected to the system and 210 apartments are receiving heat and hot water supply from that center. The residents have a possibility to regulate their heat demand and to pay based on the amount of used heat due to metering devices provided by the UNDP. The tariff of the delivered heat in 2009 and 2010 was only 16 AMD/kWh, while in the case of individual apartment boilers it makes 20 AMD/kWh. This proves the advantages of the applied technology. “The residents are satisfied with the heating services and the number of residents willing to be switched to the system is constantly increasing,” Smbat Titoyan, head of “Avan 3” condominium said. According to the estimations of the project, district heating implementation in 76 buildings of Avan district is going to result in reduction of GHG emission by 7,300 tons per year. In addition, the economic benefits become even more obvious in light of possible further increase of the natural gas prices.

Based on the successful experience in Yerevan, in 2010 UNDP initiated several new projects in the regions, namely in the towns of Aparan, Spitak and Kajaran, aimed at increasing the energy efficiency of heating systems in residential and public buildings.

Aparan, located 1,100m above sea level with cold and snowy winters and lowest recorded air temperature in Armenia, has more than 180 days of heating season. The poverty rate is one of the highest in the country, thus, the costs for heating are draining the considerable portion of the scarce family budgets.

In 2003 the municipality initiated and the RoA Government supported construction of heat supply systems for 8 multi-apartment residential buildings with the funding from “Hayastan” All-Armenian Fund. In 2007 UNDP assisted the condominiums of these buildings to renovate three boiler houses and to increase the number of apartments receiving heat supply from 160 to 240. However, the monitoring of the system during 2009-2010 heating season revealed that in all buildings, due to poor condition and even absence of entrance doors and windows, there were huge heat losses and more than 20 percent over-consumption of thermal energy.  In August 2010 UNDP and Aparan municipality signed a Letter of Intent with the main goal to implement energy efficiency improvement measures on co-sharing basis in the above mentioned buildings to ensure sustainable operation of the centralized heat supply systems.

Prior to the 2010-2011 heating season, in all 8 buildings 40 entrance doors with enhanced thermal insulation and 180 windows were installed. The improved weatherization of the buildings will ensure savings in the consumed natural gas for heating by 10-20 percent and reduce the GHG emissions by around 35 tons of CO2 per year. Besides, new gas metering system was installed which will allow paying for the gas by wholesale tariff which is low from retail price by 40 percent. Around 1,234 residents of Aparan will directly benefit from the project. UNDP is conducting continuous monitoring of the comfort level and energy consumption and the results will be analyzed and shared with stakeholders after the heating season. “The residents were not expecting that the installation of windows and doors will have such a significant impact on the energy saving for heating, and they highly appreciate the works done in the buildings,” the Deputy Mayor of Aparan Jora Yeremyan stressed.

UNDP has a history of successful cooperation with the administration of the Spitak municipality aimed at improving the living conditions of more than 18,000 residents of the municipality and recovering the urban infrastructures after the devastating earthquake of 1988.  In 2010, on a cost-sharing basis, UNDP and Spitak municipality initiated the reconstruction of the boiler house, which provides heating to the community kindergarten #2, Spitak School #3 and the Spitak City Hall. The boiler house constructed in 1990s was in a poor condition and was operating with less than 60 percent efficiency. As a result of reconstruction in the fall of 2010, it is estimated that 30,000 cubic meters of gas and 57 percent of electricity savings can be achieved annually, and correspondingly the GHG emissions reduction will make 47 tons of CO2. The system started its operation in December 2010 providing heat to 200 children attending the kindergarten, 400 pupils of the school and the staff of the City Hall.

In 2010 Kajaran municipality administration drafted a proposal for improving the energy performance of the community kindergarten, in the framework of Kajaran town environment and population health protection program for 2009-2010. UNDP produced a comprehensive feasibility study of energy efficiency and energy saving measures. As part of the program, solar water supply system was installed, as well as all repair works were entailed to ensure energy savings. It is estimated that the introduction of the solar water heaters will decrease the natural gas consumption for hot water supply purposes by about 40 percent, while the installation of energy saving doors and windows (that decrease heat losses) will decrease natural gas consumption in heating season by another 10 percent. Total natural gas saving will reach about 4,500 cubic meters resulting in GHG emission reduction of about 9 tons annually. The actual savings will be evaluated during the monitoring period in 2011 and the results will be shared with Kajaran community. The project beneficiaries are not only 116 children of the kindergarten, but also the community residents as the project provides a relief to family and community budgets with decreasing significantly the amounts payable for energy consumption. It is also a good example of the economic benefits from implementation of complex energy saving measures in social institutions. “This is an excellent gift for our children who will receive constant and reliable heating services due to the support of the UNDP in Armenia,” Karine Mkrtchyan, director of the kindergarten said.

Replication potential of introduction of hot water supply system with solar heaters is first of all conditioned by relatively short investment payback period: with current natural gas tariffs and market prices for solar equipment, simple payback period is about 8 years, however the upfront investments are high to be widely implemented without assistance schemes. Nonetheless, UNDP implemented energy efficiency projects can serve as an exemplary model for implementing energy saving measures in other communities of Armenia.

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