Removing Barriers to Energy Efficiency in Municipal Heat and Hot Water Supply

GEO/98/G42/1G/99
Total budget: USD 211,150
UNDP sector: Energy
Starting date: July 1999
Duration: 12 months

Background

Until 1993 Georgia’s heat and hot water supply was based 99 % on imported fuels—natural gas and oil. Heat was produced mainly in centralised district heating plants, and distributed via district heating networks. In 1993 the heat and hot water supply as well as the gas supply for cooking ceased practically all over Georgia, because the Government could no longer pay for the imported fuels whose prices had increased significantly as a result of removing the Soviet-time subsidies. In 1993 the district heating system was already in poor condition, and after that the system has been further deteriorating due to the disuse and lack of any preservation measures taken after the operation was stopped. Today people use whatever means to survive, using kerosene, propane, wood, coal or electricity for their heating and cooking needs. These measures are often very inefficient, resulting in unnecessarily large use of scarce resources.

Objective

The objective of the full-scale project to be developed with the PDF (Project Development Facility) is to remove barriers to, and leverage additional financial resources for improving the energy efficiency of the municipal heat and hot water supply and use in Georgia, thereby lowering the overall fossil fuel consumption and the associated greenhouse gas emissions. The focus of the project will be on the municipal heat and hot water supply in the city of Tbilisi and other major cities of Georgia.

Strategy

The project is built around a co-operative approach with a wide stakeholder base involved in its implementation. Identification of the barriers to energy efficiency in municipal heat and hot water supply, strategy formulation to their removal, and taking the first demonstrative measures to implement the strategy will be realised through:

1. Building institutional capacity of the local stakeholders for planning, evaluation, initiation and implementation of different strategies and available energy efficiency measures and technologies.

2. Reducing the uncertainties and the risk of the potential investors regarding the costs, technical issues, and implementation procedures.

3. Demonstrating the technical, economic and financial feasibility of the initiative by applying selected energy efficiency measures and technologies.

4. Disseminating the information and project experience throughout the country as well as among the potential sources of follow-up financing of the project

Expected outcomes

1. Description of all the key barriers relevant to the project, and a strategy formulated for their removal.

2. Comparative analysis of the different strategies for the development of the municipal heat and hot water system, taking into account the economic as well as the local and global environmental aspects.

3. Technical, economic, social and environmental feasibility study of the proposed measures.

4. Assessment of the economically feasible energy saving potential on the demand side.

5. Assessment of the financial resources required for restoring and improving the energy efficiency of the heat and hot water supply system.

6. Strategic and financial plan formulated, together with the realised co-funders, for the subsequent large-scale project for a broad implementation of the suggested measures.