Why the market of thermo-modernization of multi-apartment housing in Ukraine is interesting

Energy efficiency is a field of great opportunities for Ukraine. According to McKinsey & Company (2014), out of 18 billion cubic meters of gas consumed by the residential sector in Ukraine (individual and multi-apartment buildings), the potential for reduction of gas consumption as a result of thermo-modernization of only the multi-apartment housing stock is 3.5 billion cubic meters of gas per year.

To date, the market of multi-apartment buildings’ thermo-modernization can be estimated at €4.2 billion, given the 32.000 registered condominium associations and building cooperatives. The legislative and financial mechanisms – in other words, the preconditions for launching this market – are already in place in Ukraine.  

At the same time, this market requires modern technical solutions and highly qualified specialists in the whole chain of the process of reconstruction of the building – from energy audit and development of submittals to installation works and maintenance. Only this will allow to achieve the planned indicators of energy consumption reduction (at the level of 40-80%), relevant comfort in the premises and higher income from investments.

On September 11, the Danfoss ReCon conference will bring together professionals from Eastern Europe to discuss best practices and common mistakes in the Ukrainian thermo-modernization market.

Facade heat insulation thermo-modernization

Facade heat insulation does not result a decrease in energy consumption, although the word is still used as a synonym for “thermo-modernization”. It is indeed an important component of integrated thermo-modernization, this measure helps to reduce heat loss through walls, roof and basement. But without modern thermal energy management systems, residents will adjust the temperature manually by keeping the windows open. The heat will also be lost – not through walls, but through open windows.

Modern, economically feasible, approach to the modernization of the multi-apartment building heating system, from a technological perspective, has three components. If implemented in a comprehensive manner, they lead to a reduction in thermal energy consumption and, respectively, costs by 40 – 50%.

The first component of the heating system modernization is ensuring the regulation of the heat medium at the building level. It is the replacement of the hydraulic elevator operating in the mode of constant consumption of the heat medium with an heating substation with automatic weather-dependent regulation of the heat medium. The installation of heating substation leads to a reduction of thermal energy consumption at the level of 20 - 30% due to the operation of weather-dependent automation.

The second component is balancing the heating system. This means an installing of balancing valves on each of all risers. As the result, overexpenditure of the heat medium on individual risers is declining. It reduces heat consumption by 8-12% due to the fact that the heat medium is used more efficiently inside the home heating system, as well as provides relevant comfort in multi-apartment buildings.

Finally, in addition to regulation at building level, there is also room level regulation. This function is performed by radiator thermostats. The use of direct-acting radiator thermostats instead of manual valves on the heating unit results in a 20% reduction in thermal energy consumption.

With an average monthly payment for consumed district heating service for condominium associations and building cooperatives in the amount of 109 670 UAH (before thermo-modernization, in March 2018 – according to the State Agency  on Energy Efficiency) and achieved reduction of consumption by 50% after complete modernization of the home heating system, it is possible to estimate the amount of savings in absolute figures. According to Danish company Danfoss, thermo-modernization measures have a payback period of 3-4 years (and even less if involving financial compensation programs). The company has been operating on the market since 1997 and has implemented dozens of reconstruction projects in Ukraine.

The first results of termo-modernization in Ukraine

The “three-step” approach is enshrined in national building code, but it is too early to say that it has become the norm in the market.

Thus, the official study concluded that “the consumption of services [as a result of implemented energy-efficient measures] has not decreased, but living conditions have become much more comfortable”. The funded measures for 370 condominium associations in the sample of this study are divided into three groups by type: “window replacement” 65.1%; (2) “thermal insulation” 27.6%; and other 36.0% (the amount exceeds 100% as part of the condominiums took loans for 2 or more measures).

The reconstruction of the heating system is not mentioned in this study, in part of recommendations and conclusions as well. However, it is noted that “the greatest savings were achieved by condominium associations and building cooperatives, which have received loans for energy efficiency measures or materials, excluding windows and thermal insulation, and amounts to 9.3%”. Such research highlights illustrate, in general, current market understanding of the priorities and functions of energy efficiency measures implemented.

However, with the efforts of many players, including the State Agency on Energy Efficiency, the Ministry of Regional Development, the Energy Efficiency Fund, international support programs, the financial sector, non-governmental organizations, condominium associations and businesses, the market of thermo-modernization of multi-apartment housing stock in Ukraine has been launched and the work continues.

The process is quite complicated, but it is worth the effort. This is evidenced by examples of Western European countries. For example, Denmark started this process in the late 1970s. Then, in response to the threat to energy security, the concept of a green transition (grøn omstilling) was developed. Along with increasing its own oil and gas production, energy efficiency has become one of the two pillars of this new policy. Green transition has enabled Denmark to build one of the most sustainable energy systems in the world in 30 years.

Currently, Eastern Europe countries (Poland, Hungary, Baltic countries) are also actively moving towards the reconstruction of multi-apartment housing.  Their experience of thermo-modernization for professionals of the Ukrainian market will be performed at a Danfoss ReCon conference.

 

Reference: Danfoss is Denmark's largest industrial company, a world leader in the production of energy efficient solutions: heat and cold supply systems, transmission automated technology, hydraulics and more. The company's revenue in 2018 was €6.098 billion, an operating profit figure – 10.6%.

The Ukrainian office was opened in 1997. The specialists of the company are actively involved in the development of national construction and technical standards, profile legislation, provide the necessary solutions municipal, commercial, industrial and residential sectors in Ukraine. More about Danfoss in Ukraine: http://www.danfoss.ua/

 

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