Making Russia Energy Efficient - Energy Efficient Cities and Towns
34
© OOO Siemens in Russia Sector Energy Making Russia Energy Efficient - Energy Efficient Cities and Towns Pilote Yekatarinburg: A Cooperation of the Russian Government and Siemens under participation of German and Russian industry, supported by DENA and the German Government Making Russia Energy Efficient - Energy Efficient Cities and Towns June 15, 2010 Hans-Juergen Wio Vice-President of OOO Siemens in Russia CEO Siemens Energy in Russia and Central Asia
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Making Russia Energy Efficient - Energy Efficient Cities and Towns. Making Russia Energy Efficient - Energy Efficient Cities and Towns - PowerPoint PPT Presentation
Transcript of Making Russia Energy Efficient - Energy Efficient Cities and Towns
Corporate Design PowerPoint Basic TemplatesMaking Russia Energy
Efficient -
Pilote Yekatarinburg:
under participation of German and Russian industry,
supported by DENA and the German Government
Making Russia Energy Efficient -
June 15, 2010
CEO Siemens Energy in Russia and Central Asia
*
I have to say when Andrey Yurievich Bykov proposed to us to join this Forum I did not really know what to expect because there are so many round tables on energy efficiency in Russia between Vladivostok to Smolensk that you can join each week, the different ones and there are almost the same information exchange and mostly you may meet the same people there.
I agree with Mr. Hartman that this conference is a different one. I have never joined something so open that have brought across so many accomplishments as we heard so far so thanks a lot for your initiative to bring together this auditorium.
Ladies and Gentlemen!
It is increasingly clear that the battle for environmental sustainability will be won or lost in the cities. Over half of the world’s population now live in urban areas, and this figure which will reach almost 2/3 by 2025.
Already, cities account for a disproportionate share of greenhouse gas emissions. Issues of water and waste management and energy consumption in cities (we have heard about this in the previous presentations) are inter-related with that.
This situation in Russia is of course not so different from any other country in Europe.
This was the reason why President Medvedev and Bundeskanzler Merkel agreed on Yekaterinburg as pilot project for a Russian-German cooperation in energy efficiency.
From German side, Siemens was the leader in this project and I have to say we learnt a lot during this project about the potential, attractive solutions but also about the – let say – reality in Energy Efficiency, which we have to face.
15th June 2010
© Siemens Russia 2010
One of the most discussed topics
«By 2010 Russia should become 40% more energy efficient»
July 2008
..
*
The President and the government made their expectations very clear (-40 %, see the end of the presentation).
Since then 2 years back, Energy Efficiency is definitely one of the most discussed topics in the Russian Federation.
However, it seems to me that most experts and government responsible see a lot of room, let say, to expedite implementation, to come even faster from intelligent analysis to tangible results.
This is not surprising because energy efficiency is definitely no rocket science – everybody from us knows the potential and everybody knows of course the most important measures to accomplish results.
In view of the excellent presentations that we heard before, one of the impression is that we possibly do not sufficiently talk about the accomplishments that we already made and which obviously exist if we refer to the presentations from Kostroma and Petropavlovsk.
15th June 2010
© Siemens Russia 2010
1. The Challenge - Sustainable Urban Infrastructure
2. Energy Efficiency Studies
4. Pre-requisites for success in Russia
In our presentation
we start from the global challenge of City infrastructure
Have a short look on Energy studies in which Siemens participated (one of them - Ekaterinburg)
Give an overview about Siemens solutions
And offer for discussion some pre-requisites, from which we feel, that they could expedite implementation of energy efficiency measures.
So, where does it all come from?
*
Challenge to balance between competitiveness, environment and quality of life
Sustainable
energy / buildings / mobility / water infrastructure are key
Demographic Change
by 2030 (from 7% to 12%)
Need for adequate infrastructures
Climate Change
Need for resource efficiency
attractive to live and to invest in
Megatrends imply significant challenges for city decision makers
Compe-
titiveness
Environment
Quality
Governance
In Siemens we identified some trends, along which we align our strategy. We call those trend megatrends, because they are irreversible ones. Irreversible means, we can manage the consequences but we cannot change or prevent the phenomenon as such (demographic change, climate change, urbanization).
The growth of cities will be a dominant demographic trend of the coming decades. The current proportion of the world’s population living in urban areas just passed the halfway mark. The United Nations expects the number to rise to almost 60% by 2025, and to reach 70% around 2050.
Urban areas are part of today’s environmental problems. According to the United Nations, cities account for roughly 80% of global energy consumption.
The mayor of London said: ” sustainability is not a premium product, it is day to day business to compete.” This means: amongst others the megacities of this world compete in terms of sustainability, of providing attractive living conditions to their inhabitants and – to investors, who have the choice in most cases.
We acknowledge the fact that the Russian economy is not very likely to suffer from shortages in energy supply – let’s say – for the next hundred years. And this is most likely why energy efficiency is probably not the number 1, most pressing issue on the city government’s agenda.
*
2. Energy Efficiency Studies
1. The Challenge - Sustainable Urban Infrastructure
4. Pre-requisites for success in Russia
*
jointly developed with major world cities
Megacity Challenges Study
over 500 city managers in 25 selected megacities
Urban infrastructure trends and challenges as well
as global best practices
Index compares cities across 8 dimensions of sustainability: CO2, Energy, Buildings, Transport,
Waste & Land Use, Water, Air, Governance
Started in Europe, rollout in other regions started
Sustainable urban infrastructure studies / projects
Studies on “how to become a sustainable city”
with focus on resource efficiency
Examples: London, Munich, Yekaterinburg Shanghai, Dublin, Trondheim, ...
Siemens participated in several energy efficiently studies.
The Megacities Study
International research institutes with the support of Siemens, conducted a unique global research project in which more than 500 decision-makers in 25 megacities. The findings provide a fascinating overview of how the individual challenges are prioritized and which infrastructure solutions are most appropriate.
The European Green City Index, this is a study by the independent Economist Intelligence Unit in cooperation with Siemens, which compared the environmental compatibility of 30 European cities. Topping the list is actually Denmark’s capital, Copenhagen. Unfortunately Eastern European cities are generally rated below average in the Green Cities Index, with the highest-ranked city, Vilnius, the capital of Lithuania, finishing in 13th place in the overall index.
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London’s own measures combined with effective policies and supervision
trigger the changes
Siemens Sustainability Study –
Decentral energy (CHP)
A brief look on London. This chart shows the different measures and describes in whose hands they are.
Key finding: Most of the choices are actually in the hands of individuals. The proportion of these technological changes which are controlled by consumers – whether people or businesses – is about three quarters.
But public authorities such as cities have a decisive role as well indeed.
City government efforts, at whatever level, therefore need to address not only what they can do directly to improve efficiency, but also how they can promote greater adoption of technologies by consumers this mean to trigger change.
This means, even if individuals and businesses will cover most of the expenses:
the public sphere has to act as a role model and
need to ensure existence of the required regulatory and legal framework;
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Full impact only if private sector incentivized to take initiative
Findings
Conclusion
Additional invest-ment
bn EUR
Two-third of all CO2- abating technologies pay back their investment
Around 75% of the abatement potential lies in the hands of individuals/ businesses who make technological choices
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Another Key findings of the study include:
London can meet international greenhouse gas targets without a massive shift in its citizens’ life style.
Simple steps can have a big impact. Across all infrastructure areas, there are some relatively simple and often highly economical levers that can substantially reduce carbon emissions.
From the 3 blocks (Buildings, Transport, Energy) the biggest possible potential in London is in the building area, better insulation has the strongest contribution in reduction of green gases and energy efficiency.
15th June 2010
© Siemens Russia 2010
“implementation road map”
Source: McKinsey & Company
0
100
200
300
400
500
-100
-200
Lighting
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This slide shows the same activities but in a slightly different way – to present the implementation roadmap that gives hints for decision-making on which activities to focus first, later or not at all.
Installing energy-efficient lighting in homes actually is the single most cost-effective measure identified for buildings.
On the other side (see right): fashionable solutions are often an expensive means to reduce carbon emissions and energy efficiency.
Some technologies, despite being perceived at the cutting edge of green, are not (yet) capable of reducing carbon emissions in a cost effective way.
Of course, technological development is rapid. But nevertheless, many fashionable green technologies are likely to remain expensive choices in this forecast period until 2020.
I think these are good news. We as managers and responsible city people can make a difference with right project management on energy efficiency.
Germany can offer a lot of experiences in this field through companies such as Siemens, BASF, E.On, Viessman, and also through the organizations such as RUDEA (The German-Russian Energy Agency).
15th June 2010
© Siemens Russia 2010
02.10.2008 – St. Petersburg
Russian/German agreement on cooperation in sphere if energy efficiency between Merkel/ Medwjedew
16.07.1009 – Munich
Energy Dialogue
Europe and Russia pursue many different partnerships and successful cooperations in the sphere of energy efficiency.
In 2008 during the regular German-Russian government meetings Bundeskanzlerin Merkel and President Medvedev decided to nominate the major industrial heart of Russia, the city Ekaterinburg as a pilot city for a comparable analysis.
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Russian/German pilot project with Siemens leadership
Energy efficiency potential 2020 in TWh/a
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…
0
Adoption of "common" technology can save 44% of primary energy by 2020
62
(-79%)
34
(-44%)
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I don’t want to bother you with details we went trough and the painful process. Let me provide just an overview about the key finding:
We established a baseline for 2020 – the target year for the 40% reduction as given by President Medvedev.
Depending on the applied solution – this means whether most common or best in class technologies are applied a saving potential of 44-79% can be achieved.
It is to acknowledge that the existing database was in opposition to initial expectations and it was not very extensive. But the results are quite stable and the key findings are in line with those from other projects which we or DENA conducted in the past.
15th June 2010
© Siemens Russia 2010
Strong commitment and support from Government Sverdlovskaja Oblast
The entire study is presented in the brochure that we distributed today and which contains a mutual foreword of Gouvernor Misharin and our Siemens AG CEO, Peter Loescher.
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12 Key levers
1) Shown impact is after Wall Insulation and Triple-glazed windows are implemented
Source: Team Ekaterinburg
provided by
2) Suggested to implement before levers related to automation of buildings
Payback city & gas provider
w/o capital costs, years
Key levers
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*
*
*
*
*
*
*
*
*
*
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These are the results of the study that are not very much different from what we have heard today.
The reduction potential was broken down into key levers and 4 blocks – Building, Industry, Transport and Energy. The biggest potential is in Buildings and also in Energy (cogeneration).
We calculated the likely payback period and CAPEX for all of the projects and found that some projects have a very short payback period for example lighting project, heating controls devices (within one year). For others this period is 21 years or more (e. g. insulation of buildings). On the average the payback period that we calculated was 5.8 what is fully in line with the other studies.
This is a good guideline to make a decision where to invest and what to do first.
15th June 2010
© Siemens Russia 2010
Source: Ekaterinburg team
Total potential of
Gas suppliers:
Export (or economy) of gas becomes available thanks to reduction of power consumption in the city
Total:
extra profit from country point of view: 3,1 bln. Euro by 2020
44% primary energy reduction by applying "common technology" (~50 levers)
Most relevant 12 levers:
Require €3.6 bil. investments
can be achieved with the 12 levers
Energy usage reduction
*
The purpose of this slide is not to repeat that we have 44% energy reduction potential and we have to realize this potential.
We have a unique Russian phenomenon that distinguishes the situation in Russia from European countries in the field of energy efficiency.
Here it is not only the city benefits from investments in energy efficiency but more important the gas supplier enjoys the biggest benefits from export opportunities or better utilization of rare resources, which allows to stretch re-investment.
This aspect should be taken into account as well when we consider the financing of energy efficiency measures. At the end of the day we have to find someone who pays the bill and we may have discussions not only with the cities but with other parties who benefit from this as well.
15th June 2010
© Siemens Russia 2010
Key 12 levers:
would generate ~100 billion EUR benefits by 2020
Krasnoyarsk
Yakutsk
Murmansk
Moskau
*
The last but not least what the team did (I acknowledge that we are open for any debates on this) was to extrapolate the findings made in Yekaterinburg to the situation in Russia.
By our estimate it requires investment in € 100 bln and we have a payback of this in € 100 bln. This means after 2020 you are in business and you earn money with energy efficiency.
So the job can be done.
15th June 2010
© Siemens Russia 2010
2. Energy Efficiency Studies
1. The Challenge - Sustainable Urban Infrastructure
4. Pre-requisites for success in Russia
*
Existing technology achieves high gains along entire energy conversion chain
CO2-free energy
energy management
per ship and day by local grid connection
High-voltage urban link
Industry
Complete Mobility
Higher attractiveness of public transport (reduced waiting and up to 20% fuel savings)
Street lighting
Renewables
Efficient energy production
Steam Power Plant: from 40% to 47%
Traffic management system
*
This slide shows the entire energy conversion chain.
Siemens support this chain from the beginning: from the exploitation of oil and gas (onshore and offshore), renewables, trough the power generation of different types (fossil, oil, coal, nuclear) as well as transmission, distribution and application in the industry and households.
For all these areas we have our comprehensive solutions by applying which we have the potential in energy saving.
Let me give you a very brief snapshot of our products that shows how they could be applied.
15th June 2010
© Siemens Russia 2010
proven efficiency and output
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Let me start with power generation. This is big utility – turbine. It has 400 Mw for single operation and 600 Mw for combine cycle with more than 40-60% efficiency. If you compare this with the average efficiency of the standard blocks in Russia – Kaliningrad, St.-Petersburg this means 52% increase in efficiency with such technology.
This is something that we offer alone at the moment. We have a pilot project in Germany (lose to Munich) and I was just informed that today we closed another contract for the United States with this solutions.
I am sure this will drive the technology for power generation utilities to the new level.
15th June 2010
© Siemens Russia 2010
SWT-2.3 (-82-93-101)
SWT-3.0-101 DD
SWT-3.6 (-107-120)
4 2007: 35 « »; 3 2008: 426 « »
8 2009 : 1-, . 2020 4,5 % , 80 . .
2020 2020 4,75
2020 7,5
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Wind power is deliberately added here, it is not existing today. We have some big projects: Russkii ostrov, Volgograd, Anapa, and Kaliningrad projects. This projects are intensively discussed with customers and they are very likely to be realized in the next 5 years.
The overall potential of the wind power until 2020 is estimated between 5 to 7 GW. This means very significant market that may improve the overall efficiency on the national level. The requirement for this is to change tariffs, it is under discussion and we hope that this issue will be successfully closed by the government by the end of this year.
15th June 2010
© Siemens Russia 2010
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60 %
25-40 %
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But the abovementioned wind solution you may find in West Europe everywhere, at different scale. And we have something new that we would like to introduce and to build here with our partners and we highlighted for this the Far East region.
This is wind-diesel combination, that means small wind combines jointly with diesel aggregate to produce power 24 hours 7 days at lower rates, as it is done today. We are looking for pilot projects in the Far East and it would be a pleasure for us if we could talk in the city of Petropavlovsk about one of the first projects there.
15th June 2010
© Siemens Russia 2010
Pilot Ekaterinburg: proposed technology
Electricity
Heat
Heat
Gas
Electricity
Another area that we found in Yekaterinburg as well is the cogeneration. Quite often we have here the heat houses and the boiler stations with very low efficiency – between 20-25% at the max, and of course big utilities – steam power plants to provide electricity.
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CHP allows to increase energy efficiency by 35%
Leasing finance model reduces investment for cities
Source: SMART CHP Russia
Technical features:
Increase in energy efficiency:
For this we need of course the connection to the grid. One of the issues that we are always in discussion with MRSK, is to get this connection and to fit in this power. If this is done, then I think it is very beneficial way to save energy.
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Water: Waste water treatment plant at Khon Khaen, Thailand
Metals: Arvedi strip production
Energy savings compared to
Energy savings after upgrade
Compact hot strip process
Transformation principle based on
cast-rolling technology
Higher energy efficiency due to lower power consumption of the new wastewater treatment plant
401′
* Building Automation and Control System
No BACS*
BACS* without
Importance of building automation and a life cycle approach
Heating energy demand reduced by 34%
Electricity demand reduced by 15%
ROI of less than 2 years
*
Another area is buildings. You know about HVAC, insulation, valves, heating control, I’ve talked about.
Here is also described something different – performance contracting. Actually Siemens takes responsibility for the energy supply of entire building blocks. This could be universities, administrative buildings, the whole residential district.
With this model we guarantee reduced energy consumption over the given rate and we benefit both from that the contractor and Siemens, but we take the risks that always leading technology is supplied to reduce energy consumption (see the green line).
OSRAM Charts | FY 2009 | Page * 091204_OSRAM_Charts_GB_ls.ppt | Date: 12.4.2009 | PR
OSRAM - Potential of sustainable development
Example with home lamp
3 rub/KWh
Possibilities in professional lighting
More installed power capacities
MORE POSSIBILITIES FOR
More effective luminaries
OSRAM: world‘s principal manufacturer of light sources
Established in 1906 as joint venture of SIEMENS and 2 other companies
100% SIEMENS owned from 1978
Market leader in Russia
OSRAM at glance
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Let’s have a look on lighting as well because this is one of the leading and most attractive solutions. We do this with our company OSRAM that is a 100% Daughter Company and the only of international lighting manufacturer that has its own factory in Russia, in the city of Smolensk. And here the savings amount up to 30%. About 20% of consumed energy is used for lighting and about 1/3 could be easily saved.
Paradigm shift in power grids:
The new age of electricity
Electrification of society
'Age of Coal'
Supply island with
'Age of fossil fuels'
Fossil energy source,
Challenges require rethinking:
'Energy system shifting'
Early 21st Century
The new age of electricity
Electricity will be the energy source for most applications in daily life.
Integrated energy system
'Load follows generation'
bi-directional energy flow
'clean' coal, gas, nuclear
End of 21st Century
*
If we don’t talk about smart grids then we have a wrong table on energy efficiency. This transition is to complete paradigm shift from traditional systems when the generation follows the loads to intelligent system (see the right side of the slide) when the load follows the generation and power flows into two directions depending on the demand and which decentralize generation sources are operated.
There are a lot of statements which predict us this already for the next ten years. We are less optimistic, the systems exist but this would be a long process and we think at the moment we are just at the beginning of the transitional process. But it offers huge advantages to the cities to decentralize power to renewable energies to provide reliable grid.
15th June 2010
© Siemens Russia 2010
Slide *
Moscow Ring / Beskudnikovo – Switchgear view 27 ha AIS or 6 ha GIS
GIS and AIS, flexible in cost position or
environmental ground savings
Coupling of today’s separated resources supply systems
Energy
Management
Building
Management
Water
Management
Energy
Management
Building
Management
Water
Management
District
Heating
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In summary, what we propose and what we analyzed in Yekaterinburg was not decoupled individual optimization, but the optimization of the entire integrated systems, this means the city management along the entire energy conversion scheme from the source to the consumer.
There should be also considered such areas as district heating, building management and water management and of course transportation as one of the major consumer of power.
15th June 2010
© Siemens Russia 2010
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2. Energy Efficiency Studies
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In achieving Russian energy efficiency goals international experience can be leveraged
Source: European Council Directives (96/93, 2003/54, 2001/77, 2009/28, 2004/8/EC); Russian Energy Strategy for 2030; German Electricity Feed Act (1991); German Renewable Energy Sources Act (2000, 2004, 2009); Renewables Global Status Report 2009 Update
Goals of energy programs worldwide and ways to achieve them
The European Union created different directives for its member countries in order to reach goals
Germany: incentive model for renewables (& CHP)
was most successful and served as an example for 47 countries worldwide
can be implemented in Russia due to similar goals (Energy Strategy for 2030)
Russia already created good preconditions for reaching energy efficiency goals:
Liberalization of electricity market in progress
Feed-in tariffs being discussed
Increase of renewable energy
Efficiency in Energy Sector
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For the sake of the discussion, some prerequisites that we observed during our project in Yekaterinburg.
I think in Russia it was created good preconditions with liberalization of the electricity market and also fitting tariffs for renewables are under discussion, that means some major steps are made. But nevertheless there is a long way ahead and it’s not only about technology it’s also about legal framework that needs to be provided to make something to drive this process.
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be optimized
2003
3) Cogeneration Act 5) Renewable Energy Sources Act
4) Renewable Energies in the Heat Sector Promotion Act 6) Federal Tariff Service
1
2
3
Cost transfer system Completion of liberalization Tariff regulation by FTS6)
Network authority structure reform Reduction of cross-subsidizing Penalties for de-installed meters
Adjusted to Russia
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In West Europe the European Union was actually the major driver for this. We propose to get into a deeper exchange of experiences on the regulatory framework that provided the basis for energy efficiency and implementation of renewable energies in Germany and in West Europe.
As one of the partners DENA, the German Energy Agency, would be very pleased to facilitate this process and it concerns different areas: creating incentives to make things happen, establishing financing incentives (somebody has to pay the bill) and supporting incentives, initiatives that have to be done so that energy efficiency becomes a topic for normal people as well and not only for round tables.
The process in Germany (I can judge about this quite well) started in the early 80-ies and it took us up today to make some progress. There is no need to repeat this painful way we can expedite this by using the experience.
15th June 2010
© Siemens Russia 2010
Comprehensive energy efficiency stimulus measures (e.g. loan subsidies, attractive tariff structure)
Involvement of key beneficiaries of gas savings (gas providers e.g. Gazprom)
Legally worked out “menu” of financing mechanisms, e.g. Energy Contracting
Advertising geared towards changing consumer behavior
PR campaigns
Well defined energy efficiency program office at the country level with clearly assigned responsibilities
Targets cascaded from the country level down to regions, cities / towns
Implementation systematic (tools, access to necessary data, clear milestones to reach targets)
Statistics
Energy consumption statistics at multiple levels: city, region, country
Transparency of and accessibility to energy consumption and efficiency measures across cities
Beyond technology, there are 4 prerequisites
for successful energy efficiency program
Here are our recommendations in this area.
First, we need a project office, implementation systematic. It is necessary to have in the field of energy efficiency a phone number for people where they can ask the questions. This belongs to the area of Minenergo or Ministry of Economic Development. It is necessary to have one project office that drives this process.
Second, it is necessary to have statistics. You need a common basis from which you may derive the activities. It was very difficult to find this in Yekaterinburg. In some areas it was partly existing but there were no data at all in other areas such as traffic, industry. They have to be provided on a regular basis.
Third, we need financing to provide us stimulus for measures to trigger investments from private sector.
And the last but not least we need social mobilizations – a campaign so that energy efficiency becomes a topic to everybody from the household to the government.
15th June 2010
© Siemens Russia 2010
One of the most discussed topics
«By 2010 Russia should become 40%
more energy efficient»
«The key in not to produce something on paper, but actually
to do something about it»
September 2009
D.A. Medvedev
President of the Russian Federation
*
So as I said at the beginning we will have the slide again and I think that after the first statement that by 2010 Russia should become 40% more energy efficient.
One year later President Medvedev said the key is not to produce something on paper, but actually to do something about it. Now we have June 2010 and my person impression is, if I listen to the presentations we heard before and to this what we learned before, the statement in Russia on energy efficiency is very much different.
It goes beyond paper, it is real.
Page *
Pilote Yekatarinburg:
under participation of German and Russian industry,
supported by DENA and the German Government
Making Russia Energy Efficient -
June 15, 2010
CEO Siemens Energy in Russia and Central Asia
*
I have to say when Andrey Yurievich Bykov proposed to us to join this Forum I did not really know what to expect because there are so many round tables on energy efficiency in Russia between Vladivostok to Smolensk that you can join each week, the different ones and there are almost the same information exchange and mostly you may meet the same people there.
I agree with Mr. Hartman that this conference is a different one. I have never joined something so open that have brought across so many accomplishments as we heard so far so thanks a lot for your initiative to bring together this auditorium.
Ladies and Gentlemen!
It is increasingly clear that the battle for environmental sustainability will be won or lost in the cities. Over half of the world’s population now live in urban areas, and this figure which will reach almost 2/3 by 2025.
Already, cities account for a disproportionate share of greenhouse gas emissions. Issues of water and waste management and energy consumption in cities (we have heard about this in the previous presentations) are inter-related with that.
This situation in Russia is of course not so different from any other country in Europe.
This was the reason why President Medvedev and Bundeskanzler Merkel agreed on Yekaterinburg as pilot project for a Russian-German cooperation in energy efficiency.
From German side, Siemens was the leader in this project and I have to say we learnt a lot during this project about the potential, attractive solutions but also about the – let say – reality in Energy Efficiency, which we have to face.
15th June 2010
© Siemens Russia 2010
One of the most discussed topics
«By 2010 Russia should become 40% more energy efficient»
July 2008
..
*
The President and the government made their expectations very clear (-40 %, see the end of the presentation).
Since then 2 years back, Energy Efficiency is definitely one of the most discussed topics in the Russian Federation.
However, it seems to me that most experts and government responsible see a lot of room, let say, to expedite implementation, to come even faster from intelligent analysis to tangible results.
This is not surprising because energy efficiency is definitely no rocket science – everybody from us knows the potential and everybody knows of course the most important measures to accomplish results.
In view of the excellent presentations that we heard before, one of the impression is that we possibly do not sufficiently talk about the accomplishments that we already made and which obviously exist if we refer to the presentations from Kostroma and Petropavlovsk.
15th June 2010
© Siemens Russia 2010
1. The Challenge - Sustainable Urban Infrastructure
2. Energy Efficiency Studies
4. Pre-requisites for success in Russia
In our presentation
we start from the global challenge of City infrastructure
Have a short look on Energy studies in which Siemens participated (one of them - Ekaterinburg)
Give an overview about Siemens solutions
And offer for discussion some pre-requisites, from which we feel, that they could expedite implementation of energy efficiency measures.
So, where does it all come from?
*
Challenge to balance between competitiveness, environment and quality of life
Sustainable
energy / buildings / mobility / water infrastructure are key
Demographic Change
by 2030 (from 7% to 12%)
Need for adequate infrastructures
Climate Change
Need for resource efficiency
attractive to live and to invest in
Megatrends imply significant challenges for city decision makers
Compe-
titiveness
Environment
Quality
Governance
In Siemens we identified some trends, along which we align our strategy. We call those trend megatrends, because they are irreversible ones. Irreversible means, we can manage the consequences but we cannot change or prevent the phenomenon as such (demographic change, climate change, urbanization).
The growth of cities will be a dominant demographic trend of the coming decades. The current proportion of the world’s population living in urban areas just passed the halfway mark. The United Nations expects the number to rise to almost 60% by 2025, and to reach 70% around 2050.
Urban areas are part of today’s environmental problems. According to the United Nations, cities account for roughly 80% of global energy consumption.
The mayor of London said: ” sustainability is not a premium product, it is day to day business to compete.” This means: amongst others the megacities of this world compete in terms of sustainability, of providing attractive living conditions to their inhabitants and – to investors, who have the choice in most cases.
We acknowledge the fact that the Russian economy is not very likely to suffer from shortages in energy supply – let’s say – for the next hundred years. And this is most likely why energy efficiency is probably not the number 1, most pressing issue on the city government’s agenda.
*
2. Energy Efficiency Studies
1. The Challenge - Sustainable Urban Infrastructure
4. Pre-requisites for success in Russia
*
jointly developed with major world cities
Megacity Challenges Study
over 500 city managers in 25 selected megacities
Urban infrastructure trends and challenges as well
as global best practices
Index compares cities across 8 dimensions of sustainability: CO2, Energy, Buildings, Transport,
Waste & Land Use, Water, Air, Governance
Started in Europe, rollout in other regions started
Sustainable urban infrastructure studies / projects
Studies on “how to become a sustainable city”
with focus on resource efficiency
Examples: London, Munich, Yekaterinburg Shanghai, Dublin, Trondheim, ...
Siemens participated in several energy efficiently studies.
The Megacities Study
International research institutes with the support of Siemens, conducted a unique global research project in which more than 500 decision-makers in 25 megacities. The findings provide a fascinating overview of how the individual challenges are prioritized and which infrastructure solutions are most appropriate.
The European Green City Index, this is a study by the independent Economist Intelligence Unit in cooperation with Siemens, which compared the environmental compatibility of 30 European cities. Topping the list is actually Denmark’s capital, Copenhagen. Unfortunately Eastern European cities are generally rated below average in the Green Cities Index, with the highest-ranked city, Vilnius, the capital of Lithuania, finishing in 13th place in the overall index.
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London’s own measures combined with effective policies and supervision
trigger the changes
Siemens Sustainability Study –
Decentral energy (CHP)
A brief look on London. This chart shows the different measures and describes in whose hands they are.
Key finding: Most of the choices are actually in the hands of individuals. The proportion of these technological changes which are controlled by consumers – whether people or businesses – is about three quarters.
But public authorities such as cities have a decisive role as well indeed.
City government efforts, at whatever level, therefore need to address not only what they can do directly to improve efficiency, but also how they can promote greater adoption of technologies by consumers this mean to trigger change.
This means, even if individuals and businesses will cover most of the expenses:
the public sphere has to act as a role model and
need to ensure existence of the required regulatory and legal framework;
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Full impact only if private sector incentivized to take initiative
Findings
Conclusion
Additional invest-ment
bn EUR
Two-third of all CO2- abating technologies pay back their investment
Around 75% of the abatement potential lies in the hands of individuals/ businesses who make technological choices
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Another Key findings of the study include:
London can meet international greenhouse gas targets without a massive shift in its citizens’ life style.
Simple steps can have a big impact. Across all infrastructure areas, there are some relatively simple and often highly economical levers that can substantially reduce carbon emissions.
From the 3 blocks (Buildings, Transport, Energy) the biggest possible potential in London is in the building area, better insulation has the strongest contribution in reduction of green gases and energy efficiency.
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© Siemens Russia 2010
“implementation road map”
Source: McKinsey & Company
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100
200
300
400
500
-100
-200
Lighting
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This slide shows the same activities but in a slightly different way – to present the implementation roadmap that gives hints for decision-making on which activities to focus first, later or not at all.
Installing energy-efficient lighting in homes actually is the single most cost-effective measure identified for buildings.
On the other side (see right): fashionable solutions are often an expensive means to reduce carbon emissions and energy efficiency.
Some technologies, despite being perceived at the cutting edge of green, are not (yet) capable of reducing carbon emissions in a cost effective way.
Of course, technological development is rapid. But nevertheless, many fashionable green technologies are likely to remain expensive choices in this forecast period until 2020.
I think these are good news. We as managers and responsible city people can make a difference with right project management on energy efficiency.
Germany can offer a lot of experiences in this field through companies such as Siemens, BASF, E.On, Viessman, and also through the organizations such as RUDEA (The German-Russian Energy Agency).
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© Siemens Russia 2010
02.10.2008 – St. Petersburg
Russian/German agreement on cooperation in sphere if energy efficiency between Merkel/ Medwjedew
16.07.1009 – Munich
Energy Dialogue
Europe and Russia pursue many different partnerships and successful cooperations in the sphere of energy efficiency.
In 2008 during the regular German-Russian government meetings Bundeskanzlerin Merkel and President Medvedev decided to nominate the major industrial heart of Russia, the city Ekaterinburg as a pilot city for a comparable analysis.
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Russian/German pilot project with Siemens leadership
Energy efficiency potential 2020 in TWh/a
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Adoption of "common" technology can save 44% of primary energy by 2020
62
(-79%)
34
(-44%)
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I don’t want to bother you with details we went trough and the painful process. Let me provide just an overview about the key finding:
We established a baseline for 2020 – the target year for the 40% reduction as given by President Medvedev.
Depending on the applied solution – this means whether most common or best in class technologies are applied a saving potential of 44-79% can be achieved.
It is to acknowledge that the existing database was in opposition to initial expectations and it was not very extensive. But the results are quite stable and the key findings are in line with those from other projects which we or DENA conducted in the past.
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© Siemens Russia 2010
Strong commitment and support from Government Sverdlovskaja Oblast
The entire study is presented in the brochure that we distributed today and which contains a mutual foreword of Gouvernor Misharin and our Siemens AG CEO, Peter Loescher.
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12 Key levers
1) Shown impact is after Wall Insulation and Triple-glazed windows are implemented
Source: Team Ekaterinburg
provided by
2) Suggested to implement before levers related to automation of buildings
Payback city & gas provider
w/o capital costs, years
Key levers
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These are the results of the study that are not very much different from what we have heard today.
The reduction potential was broken down into key levers and 4 blocks – Building, Industry, Transport and Energy. The biggest potential is in Buildings and also in Energy (cogeneration).
We calculated the likely payback period and CAPEX for all of the projects and found that some projects have a very short payback period for example lighting project, heating controls devices (within one year). For others this period is 21 years or more (e. g. insulation of buildings). On the average the payback period that we calculated was 5.8 what is fully in line with the other studies.
This is a good guideline to make a decision where to invest and what to do first.
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© Siemens Russia 2010
Source: Ekaterinburg team
Total potential of
Gas suppliers:
Export (or economy) of gas becomes available thanks to reduction of power consumption in the city
Total:
extra profit from country point of view: 3,1 bln. Euro by 2020
44% primary energy reduction by applying "common technology" (~50 levers)
Most relevant 12 levers:
Require €3.6 bil. investments
can be achieved with the 12 levers
Energy usage reduction
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The purpose of this slide is not to repeat that we have 44% energy reduction potential and we have to realize this potential.
We have a unique Russian phenomenon that distinguishes the situation in Russia from European countries in the field of energy efficiency.
Here it is not only the city benefits from investments in energy efficiency but more important the gas supplier enjoys the biggest benefits from export opportunities or better utilization of rare resources, which allows to stretch re-investment.
This aspect should be taken into account as well when we consider the financing of energy efficiency measures. At the end of the day we have to find someone who pays the bill and we may have discussions not only with the cities but with other parties who benefit from this as well.
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© Siemens Russia 2010
Key 12 levers:
would generate ~100 billion EUR benefits by 2020
Krasnoyarsk
Yakutsk
Murmansk
Moskau
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The last but not least what the team did (I acknowledge that we are open for any debates on this) was to extrapolate the findings made in Yekaterinburg to the situation in Russia.
By our estimate it requires investment in € 100 bln and we have a payback of this in € 100 bln. This means after 2020 you are in business and you earn money with energy efficiency.
So the job can be done.
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© Siemens Russia 2010
2. Energy Efficiency Studies
1. The Challenge - Sustainable Urban Infrastructure
4. Pre-requisites for success in Russia
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Existing technology achieves high gains along entire energy conversion chain
CO2-free energy
energy management
per ship and day by local grid connection
High-voltage urban link
Industry
Complete Mobility
Higher attractiveness of public transport (reduced waiting and up to 20% fuel savings)
Street lighting
Renewables
Efficient energy production
Steam Power Plant: from 40% to 47%
Traffic management system
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This slide shows the entire energy conversion chain.
Siemens support this chain from the beginning: from the exploitation of oil and gas (onshore and offshore), renewables, trough the power generation of different types (fossil, oil, coal, nuclear) as well as transmission, distribution and application in the industry and households.
For all these areas we have our comprehensive solutions by applying which we have the potential in energy saving.
Let me give you a very brief snapshot of our products that shows how they could be applied.
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© Siemens Russia 2010
proven efficiency and output
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Let me start with power generation. This is big utility – turbine. It has 400 Mw for single operation and 600 Mw for combine cycle with more than 40-60% efficiency. If you compare this with the average efficiency of the standard blocks in Russia – Kaliningrad, St.-Petersburg this means 52% increase in efficiency with such technology.
This is something that we offer alone at the moment. We have a pilot project in Germany (lose to Munich) and I was just informed that today we closed another contract for the United States with this solutions.
I am sure this will drive the technology for power generation utilities to the new level.
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© Siemens Russia 2010
SWT-2.3 (-82-93-101)
SWT-3.0-101 DD
SWT-3.6 (-107-120)
4 2007: 35 « »; 3 2008: 426 « »
8 2009 : 1-, . 2020 4,5 % , 80 . .
2020 2020 4,75
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Wind power is deliberately added here, it is not existing today. We have some big projects: Russkii ostrov, Volgograd, Anapa, and Kaliningrad projects. This projects are intensively discussed with customers and they are very likely to be realized in the next 5 years.
The overall potential of the wind power until 2020 is estimated between 5 to 7 GW. This means very significant market that may improve the overall efficiency on the national level. The requirement for this is to change tariffs, it is under discussion and we hope that this issue will be successfully closed by the government by the end of this year.
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© Siemens Russia 2010
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60 %
25-40 %
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But the abovementioned wind solution you may find in West Europe everywhere, at different scale. And we have something new that we would like to introduce and to build here with our partners and we highlighted for this the Far East region.
This is wind-diesel combination, that means small wind combines jointly with diesel aggregate to produce power 24 hours 7 days at lower rates, as it is done today. We are looking for pilot projects in the Far East and it would be a pleasure for us if we could talk in the city of Petropavlovsk about one of the first projects there.
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© Siemens Russia 2010
Pilot Ekaterinburg: proposed technology
Electricity
Heat
Heat
Gas
Electricity
Another area that we found in Yekaterinburg as well is the cogeneration. Quite often we have here the heat houses and the boiler stations with very low efficiency – between 20-25% at the max, and of course big utilities – steam power plants to provide electricity.
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CHP allows to increase energy efficiency by 35%
Leasing finance model reduces investment for cities
Source: SMART CHP Russia
Technical features:
Increase in energy efficiency:
For this we need of course the connection to the grid. One of the issues that we are always in discussion with MRSK, is to get this connection and to fit in this power. If this is done, then I think it is very beneficial way to save energy.
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Water: Waste water treatment plant at Khon Khaen, Thailand
Metals: Arvedi strip production
Energy savings compared to
Energy savings after upgrade
Compact hot strip process
Transformation principle based on
cast-rolling technology
Higher energy efficiency due to lower power consumption of the new wastewater treatment plant
401′
* Building Automation and Control System
No BACS*
BACS* without
Importance of building automation and a life cycle approach
Heating energy demand reduced by 34%
Electricity demand reduced by 15%
ROI of less than 2 years
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Another area is buildings. You know about HVAC, insulation, valves, heating control, I’ve talked about.
Here is also described something different – performance contracting. Actually Siemens takes responsibility for the energy supply of entire building blocks. This could be universities, administrative buildings, the whole residential district.
With this model we guarantee reduced energy consumption over the given rate and we benefit both from that the contractor and Siemens, but we take the risks that always leading technology is supplied to reduce energy consumption (see the green line).
OSRAM Charts | FY 2009 | Page * 091204_OSRAM_Charts_GB_ls.ppt | Date: 12.4.2009 | PR
OSRAM - Potential of sustainable development
Example with home lamp
3 rub/KWh
Possibilities in professional lighting
More installed power capacities
MORE POSSIBILITIES FOR
More effective luminaries
OSRAM: world‘s principal manufacturer of light sources
Established in 1906 as joint venture of SIEMENS and 2 other companies
100% SIEMENS owned from 1978
Market leader in Russia
OSRAM at glance
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Let’s have a look on lighting as well because this is one of the leading and most attractive solutions. We do this with our company OSRAM that is a 100% Daughter Company and the only of international lighting manufacturer that has its own factory in Russia, in the city of Smolensk. And here the savings amount up to 30%. About 20% of consumed energy is used for lighting and about 1/3 could be easily saved.
Paradigm shift in power grids:
The new age of electricity
Electrification of society
'Age of Coal'
Supply island with
'Age of fossil fuels'
Fossil energy source,
Challenges require rethinking:
'Energy system shifting'
Early 21st Century
The new age of electricity
Electricity will be the energy source for most applications in daily life.
Integrated energy system
'Load follows generation'
bi-directional energy flow
'clean' coal, gas, nuclear
End of 21st Century
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If we don’t talk about smart grids then we have a wrong table on energy efficiency. This transition is to complete paradigm shift from traditional systems when the generation follows the loads to intelligent system (see the right side of the slide) when the load follows the generation and power flows into two directions depending on the demand and which decentralize generation sources are operated.
There are a lot of statements which predict us this already for the next ten years. We are less optimistic, the systems exist but this would be a long process and we think at the moment we are just at the beginning of the transitional process. But it offers huge advantages to the cities to decentralize power to renewable energies to provide reliable grid.
15th June 2010
© Siemens Russia 2010
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Moscow Ring / Beskudnikovo – Switchgear view 27 ha AIS or 6 ha GIS
GIS and AIS, flexible in cost position or
environmental ground savings
Coupling of today’s separated resources supply systems
Energy
Management
Building
Management
Water
Management
Energy
Management
Building
Management
Water
Management
District
Heating
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In summary, what we propose and what we analyzed in Yekaterinburg was not decoupled individual optimization, but the optimization of the entire integrated systems, this means the city management along the entire energy conversion scheme from the source to the consumer.
There should be also considered such areas as district heating, building management and water management and of course transportation as one of the major consumer of power.
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© Siemens Russia 2010
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2. Energy Efficiency Studies
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In achieving Russian energy efficiency goals international experience can be leveraged
Source: European Council Directives (96/93, 2003/54, 2001/77, 2009/28, 2004/8/EC); Russian Energy Strategy for 2030; German Electricity Feed Act (1991); German Renewable Energy Sources Act (2000, 2004, 2009); Renewables Global Status Report 2009 Update
Goals of energy programs worldwide and ways to achieve them
The European Union created different directives for its member countries in order to reach goals
Germany: incentive model for renewables (& CHP)
was most successful and served as an example for 47 countries worldwide
can be implemented in Russia due to similar goals (Energy Strategy for 2030)
Russia already created good preconditions for reaching energy efficiency goals:
Liberalization of electricity market in progress
Feed-in tariffs being discussed
Increase of renewable energy
Efficiency in Energy Sector
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For the sake of the discussion, some prerequisites that we observed during our project in Yekaterinburg.
I think in Russia it was created good preconditions with liberalization of the electricity market and also fitting tariffs for renewables are under discussion, that means some major steps are made. But nevertheless there is a long way ahead and it’s not only about technology it’s also about legal framework that needs to be provided to make something to drive this process.
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be optimized
2003
3) Cogeneration Act 5) Renewable Energy Sources Act
4) Renewable Energies in the Heat Sector Promotion Act 6) Federal Tariff Service
1
2
3
Cost transfer system Completion of liberalization Tariff regulation by FTS6)
Network authority structure reform Reduction of cross-subsidizing Penalties for de-installed meters
Adjusted to Russia
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In West Europe the European Union was actually the major driver for this. We propose to get into a deeper exchange of experiences on the regulatory framework that provided the basis for energy efficiency and implementation of renewable energies in Germany and in West Europe.
As one of the partners DENA, the German Energy Agency, would be very pleased to facilitate this process and it concerns different areas: creating incentives to make things happen, establishing financing incentives (somebody has to pay the bill) and supporting incentives, initiatives that have to be done so that energy efficiency becomes a topic for normal people as well and not only for round tables.
The process in Germany (I can judge about this quite well) started in the early 80-ies and it took us up today to make some progress. There is no need to repeat this painful way we can expedite this by using the experience.
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© Siemens Russia 2010
Comprehensive energy efficiency stimulus measures (e.g. loan subsidies, attractive tariff structure)
Involvement of key beneficiaries of gas savings (gas providers e.g. Gazprom)
Legally worked out “menu” of financing mechanisms, e.g. Energy Contracting
Advertising geared towards changing consumer behavior
PR campaigns
Well defined energy efficiency program office at the country level with clearly assigned responsibilities
Targets cascaded from the country level down to regions, cities / towns
Implementation systematic (tools, access to necessary data, clear milestones to reach targets)
Statistics
Energy consumption statistics at multiple levels: city, region, country
Transparency of and accessibility to energy consumption and efficiency measures across cities
Beyond technology, there are 4 prerequisites
for successful energy efficiency program
Here are our recommendations in this area.
First, we need a project office, implementation systematic. It is necessary to have in the field of energy efficiency a phone number for people where they can ask the questions. This belongs to the area of Minenergo or Ministry of Economic Development. It is necessary to have one project office that drives this process.
Second, it is necessary to have statistics. You need a common basis from which you may derive the activities. It was very difficult to find this in Yekaterinburg. In some areas it was partly existing but there were no data at all in other areas such as traffic, industry. They have to be provided on a regular basis.
Third, we need financing to provide us stimulus for measures to trigger investments from private sector.
And the last but not least we need social mobilizations – a campaign so that energy efficiency becomes a topic to everybody from the household to the government.
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© Siemens Russia 2010
One of the most discussed topics
«By 2010 Russia should become 40%
more energy efficient»
«The key in not to produce something on paper, but actually
to do something about it»
September 2009
D.A. Medvedev
President of the Russian Federation
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So as I said at the beginning we will have the slide again and I think that after the first statement that by 2010 Russia should become 40% more energy efficient.
One year later President Medvedev said the key is not to produce something on paper, but actually to do something about it. Now we have June 2010 and my person impression is, if I listen to the presentations we heard before and to this what we learned before, the statement in Russia on energy efficiency is very much different.
It goes beyond paper, it is real.
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