Municipal energy services

Lecture content:

1. International experience of energy agencies
2. Ukrainian realities
3. Energy consumption management structure in cities
4. Implementation of an energy management system
5. Recommendations on the organizational and quantitative composition of energy management units
6. The role of a utility company in the energy management system
7. Energy manager of a structural unit
8. Indicative list of documents regulating the activities of city energy management services
9. Conclusions
10. Active links (NPA, standards, resources)
11. Glossary
12. Questions for self-testing

International Experience of Energy Agencies

Energy Agencies (EA) are an effective tool for implementing state and municipal energy strategies and programs.
Goal: to introduce the principles of public-private partnership in the implementation of energy efficiency projects.
Target groups:

• state and local authorities;
• private sector (industry, SMEs);
• housing and communal services.

EA activity levels:

• National – development and implementation of energy strategies.
• Regional – adaptation of strategies to regional conditions.
• Local – consulting clients, project implementation, support for RES.

Areas of activity:

• information and consulting (press work, individual consultations);
• services for political circles (concepts, subsidy programs);
• mediation (selection of contractors, financing, operation models);
• project implementation (planning, implementation, financing, operation);
• detailed consultations (energy concepts for cities, enterprises, buildings).

Advantages of municipal EA:

• taking into account local characteristics;
• closeness to consumers;
• independent consulting;
• transfer of knowledge and technologies;
• stimulation of the local economy;
• reduction of local budget expenses;
• reduction of risks in project implementation.

2. Ukrainian realities

Legislative framework: over 250 legislative and by-laws regulating the field of energy efficiency.

Organizational support:

• National level – State Energy Efficiency Agency.
• Regional level – regional state administration departments.
• Local level – structural units of local councils, municipal and private ESCOs.
• Civil organizations – associations, NGOs.
• MTD projects – GIZ, USAID, SIDA.

Main barriers:

• political (lack of strategic documents),
• legislative (inconsistency of norms),
• institutional (underdevelopment of market infrastructure),
• economic (lack of incentives),
• financial (insufficient availability of credit),
• regulatory (ineffective mechanisms),
• technical (need to adapt to EU standards),
• informational and educational (low awareness and shortage of personnel).

The problems are gradually being resolved, but they still significantly slow down the implementation of energy efficiency in Ukraine.

3. Structure of energy consumption management in cities

Currently, relatively uniform structures of urban management have been developed in Ukraine. If we look through the prism of energy consumption control and inclusion in the energy management system, we distinguish the following units:

1. Main budget administrators (departments of education, health, culture, sports):

• budgetary institutions are subordinate to them;
• these institutions are building balance holders and main consumers of energy resources;
• tasks – planning of energy resource expenditures, organization of repairs that affect consumption.

2. Finance Department (local financial authority):

• ensures distribution of city budget funds, incl. on energy carriers;
• is responsible for raising funds from international financial institutions.

3. Department of Economics:

• plans expenditures for the functioning of the city economy;
• is responsible for financing measures to increase energy efficiency;
• seeks and attracts extra-budgetary funds.

4. Department of Capital Construction:

• organizes reconstructions and overhauls of budgetary institutions;
• the further energy consumption of buildings directly depends on its decisions.

5. Energy Department:

• is engaged in providing the municipal economy with energy resources, including budgetary institutions.

6. Energy Efficiency / Energy Management Department:

• may exist as an independent executive body or a division of another department;
• is responsible for controlling energy consumption;
• prepares proposals for increasing energy efficiency.

4. Implementation of an energy management system

Municipal Energy Reform was developed within the framework of the USAID project together with State Energy Efficiency.
Its goal is to offer the maximum possible options for optimizing energy efficiency and energy saving at the local level.

Main approaches to forming an energy management system:

1. Financing the service.

• Total expenses for its operation not more than 5% of expenses for energy resources.
• This also takes into account additional bonuses for those responsible for efficient energy consumption.

2. Coverage of buildings.

• The system should include all buildings where energy resources are paid for from the budget by 50% or more.

3. Coverage of units.

• The system should cover all structural subdivisions that:

• influence the formation of the energy budget,

• participate in the implementation of measures related to changes in energy consumption.

5. Recommendations on the organizational and quantitative composition of energy management units

Organization options:

Option 1. For cities with up to 100 institutions

Responsible for energy management:

• mayor or profile deputy;
• directly manages the energy management unit (3 specialists on staff);
• if institutions >50 – a separate position of energy manager is created;
• if ≤50 – an energy manager is appointed part-time;
• each institution has a person responsible for energy efficiency (also part-time).

Main responsibilities

Mayor/Deputy:

• coordinates the work of the unit;
• interacts with other departments;
• represents the city in negotiations with government agencies and international organizations;
• monitors the state of energy efficiency and the implementation of projects.

Energy Management Unit:

• collects and analyzes data on energy consumption;
• formulates recommendations for improving efficiency;
• determines baseline levels and consumption limits;
• develops instructions for saving energy consumption;
• analyzes completed and planned repairs;
• prepares technical specifications for efficiency improvement work;
• participates in the preparation of specifications for maintenance of engineering systems;
• proposes projects for inclusion in the socio-economic development program;
• analyzes sources of extrabudgetary financing;
• monitors the implementation of projects, including through ESCO mechanisms;
• prepares or orders energy audits, feasibility studies, energy efficiency programs;
• interacts with other units and organizations.

Energy manager of a structural unit:

• analyzes consumption in his unit;
• prepares recommendations for reducing costs;
• collects data on repairs that affect energy consumption;
• develops technical specifications;
• proposes projects for inclusion in city programs;
• monitors the effectiveness of implemented measures, including ESCO.

Responsible for energy consumption in the institution:

• collects and transmits daily data on consumption and microclimate;
• reports on emergency situations;
• monitors the implementation of energy saving instructions;
• controls the maintenance of equipment;
• proposes measures to improve efficiency at the institution level.

Option 2. For cities with more than 200 institutions

Responsible for energy management:

• mayor or relevant deputy;
• directly manages the energy management unit;
• unit staff: 2 people + 1 for every 200–300 budget institutions;
• as part of the unitsthe position of energy manager is created (if there are more than 50 institutions);
• if there are ≤50 institutions, the energy manager works part-time;
• in each institution, there is a person responsible for the efficient consumption of energy resources.

Feature:

• a municipal enterprise is created under the subordination of the unit, which is engaged in the preparation, implementation and support of energy efficiency projects.
• The KP can perform the functions of a municipal ESCO.

Main responsibilities

Mayor/Deputy Mayor:

• coordinates the work of the unit;
• interacts with other departments;
• represents the city in negotiations with government bodies and international organizations;
• monitors the state of energy efficiency and the progress of project implementation.

Energy Management Unit:

• collects and analyzes data on energy consumption;
• formulates recommendations for improving efficiency;
• determines baseline levels and consumption limits;
• develops instructions for the economical use of energy resources;
• analyzes repairs and reconstructions that affect consumption;
• prepares technical specifications for energy efficiency measures and system maintenance;
• proposes projects for inclusion in the socio-economic development program;
• analyzes extrabudgetary sources of financing;
• controls the implementation of projects, including under the ESCO mechanism;
• prepares energy efficiency programs and guidance documents;
• interacts with other units and external organizations.

The utility company (MC):

• prepares proposals for project implementation;
• acts as a customer for works to improve efficiency in the budget sector;
• attracts grant and credit resources;
• supports projects at all stages – from feasibility studies to monitoring results;
• ensures the implementation of energy consumption monitoring systems.

6. The role of the utility company in the energy management system

The energy management unit may delegate part of its powers to a subordinate utility company (MC).

Main functions of the CP:

• prepares proposals for the implementation of energy-efficient projects;
• acts as a customer of works in the budgetary sector;
• attracts loans and grants for financing;
• supports projects at all stages: from the preparation of the feasibility study to monitoring results and service;
• develops instructions for energy saving;
• prepares technical specifications for work and maintenance of engineering systems;
• formulates proposals for including projects in the socio-economic development program;
• analyzes extrabudgetary sources of financing;
• independently or with by involving third-party organizations, it performs feasibility studies, energy audits, energy efficiency programs;
• ensures the implementation and operation of energy consumption monitoring systems;
• may act as a municipal ESCO company.

Number of KPs:

• depends on the distribution of functions between the KP and the energy management unit;
• may increase during the implementation of large-scale projects;
• financing of the enterprise is proportional to the savings achieved and the volume of implemented projects.

7. Energy manager of a structural unit

Main functions:

• collects and analyzes data on energy consumption in his/her unit;
• prepares recommendations for increasing energy efficiency;
• analyzes completed and planned repairs that affect consumption;
• develops technical specifications for energy-efficient work and maintenance of engineering systems;
• prepares proposals for including projects in city development programs;
• monitors the implementation of measures to increase energy efficiency, including through ESCO mechanisms.

8. Indicative list of documents regulating the activities of city energy management services

9. Decisions of the city council session and orders of heads of municipal enterprises.

10. Regulations on the energy management service.

11. Job descriptions of energy managers.

12. Conclusions

• Municipal energy services are a key link in the implementation of energy efficiency at the local level.
• There are still few full-fledged municipal energy services in Ukraine – their functions are oftendivided between different departments.
• The development of local Energy Agencies can significantly reduce budget costs, stimulate the economy and facilitate the transition to EU standards.

Active links

• State Energy Efficiency of Ukraine: https://saee.gov.ua/
• GIZ – Energy Efficiency in Ukraine: https://www.giz.de/en/expertise
• European Association of Energy Agencies FEDARENE: https://fedarene.org/
• ICLEI – Local Governments for Sustainability: https://iclei.org/