Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized December 20 December th , 2013 , 1 1 The findings, interpretations, and conclusions expressed in this report do not necessarily reflect the views and position of the Executive Directors of the World Bank, the European Union, or Table of Contents the Government of Romania. The TRACE diagnostic is part of work done under the Romania Executive Summary /1 Regional Development Program – a Reimbursable Advisory Service activity, undertaken by the World Bank at the request Methodology /8 of the Ministry of Regional Development and Public Background /11 Administration, with EU funding. The report was written by a National Legislation Regarding Energy /11 team comprised of Manuela Moț, Ranjan Bose, Sebastian Background on Iași /17 Burduja, and Marcel Ionescu-Heroiu. Cristina Zirimis has provided logistical and administrative support throughout the Iași Sector Analysis /21 process. The team would like to thank the colleagues at the Power Sector /21 Ministry of Regional Development and Public Administration Street Lighting /23 (particularly Ionuţ Trincă, Costel Jitaru and Bogdan Ţigău), as Municipal Buildings /24 well as the colleagues in the Iași City Hall and the Iași County Solid Waste /26 Council, who supported the team throughout. The team would District Heating /29 also like to thank peer reviewers Stephen Hammer, Feng Liu, Water Sector /32 Paula Restrepo, and Pedzi Makumbe, for the excellent feed- Urban Transport /36 back provided. Energy Efficiency Recommendations /47 TRACE (Tool for Rapid Assessment of City Energy) was Energy Efficiency Strategy and Action Plan /48 developed by ESMAP (Energy Sector Management Assistance District Heating/49 Program), a unit of the World Bank, and is available for Urban Transport /52 download and free use at: http://esmap.org/TRACE. Municipal Buildings /59 Street Lighting /62 Annexes /65 1 1 Executive Summary The limitations of TRACE The fact that TRACE is simple and easy to implement, also means that Why a study on energy efficiency? there are limitations with respect to the depth of analysis. For example, The main impetus for this report (and for the reports prepared for the the tool may identify District Heating as the a priority sector in terms of other six growth poles) is a request received from the Ministry of Regional potential energy savings, but it does not go into detail on the required Development and Public Administration. The request came within the costs to complete district heating rehabilitation projects. Thus, even if the context of on-going preparations for the 2014-2020 Programming Period, energy savings potential is assessed to be high, the costs may be even with Energy Efficiency being one the major themes of the Europe 2020 higher, and an investment in the sector may not be warranted. Similarly, strategy, and a critical priority for all EU Member Countries. Within although TRACE specifically focuses on the service areas that fall within Romania, local authorities that will want to access energy efficiency funds the purview of local authorities, the tool cannot factor in the institutional under the 2014-2020 Regional Operational Programme will need to first and legislative mechanisms that need to be in place to make a specific prepare energy efficiency strategies. The TRACE tool is specifically energy efficiency recommendation possible. targeted at local authorities, and is a good instrument for drafting such strategies. Boundaries of studied area While this work focuses on the growth poles in Romania, the analysis was What is TRACE? limited to the boundary of the center city. The reasoning for this is quite The Tool for Rapid Assessment of City Energy (TRACE) is a simple and simple: it is prohibitively difficult to collect individual indicators for all the practical tool for conducting rapid assessments of energy use in cities, The constituent localities of a metropolitan area. In most cases, this would tool helps prioritize sectors with significant energy savings potential, and have required in-depth discussion with over 20 localities, ensuring that all identifies appropriate energy efficiency interventions across six sectors— these localities had the required indicators for a particular service area, transport, municipal buildings, water and waste water, public lighting, and ensuring that they used the same methodology for the calculation of solid waste, and power and heat. It is a simple, low-cost, user-friendly, and these indicators. Nonetheless, the sector analysis and recommendations practical tool that can be applied in any socioeconomic setting. took the metropolitan scale into consideration, and the section on sound urban planning practices was done at the full metropolitan level. The advantages of TRACE TRACE is one of the most powerful energy efficiency tools, specifically Summary of findings developed for cities. It is simple, easy to implement, and quite intuitive, After the 1989 Revolution, Romania began its transition from a centralized and it allows a quick assessment of energy savings potential in six key system to a market-based economy. Today the country is a member of the public service areas: urban transport; water and wastewater; municipal European Union (EU) and NATO. After more than a decade of economic buildings; street lighting, power and centralized heating; and, solid waste restructuring and political change, the country has taken significant steps management. The tool can be implemented relatively quickly and is not toward catching up with the economic performance of more developed data or cost-intensive. Moreover it allows local authorities to get a rapid EU countries. Although radical reforms brought about significant changes assessment of their city’s energy performance, and to identify sectors that in recent years, the standard of living of Romanians is still behind the EU may be subjected to a more in-depth analysis. average. Iași is a regional point of interest in North-Eastern Romania, located near the Eastern border of the EU, close to the Republic of Moldova and Ukraine. It is on the Pan European Corridor IX that connects 1 Northern to Southern Europe. The city is also a linking point from Western currently the system has been taken over by a public private partnership Europe to the Commonwealth of Independent States, as it is located on between the City Hall and a private district heating operator. the European Route E58, connecting Vienna to Rostov in Russia. Iași is the Today, the main challenges to the district heating system concern most important academic center in the North-Eastern part of Romania. the upgrading of the hot water/heat pipes, in order to diminish hot water However, Iași is some distance away from București, the wealthiest region leakages, maintain the heat price at an affordable rate for the population, in Romania. It also suffers from being some distance away from the rich and gain back market share following the massive disconnections from the export markets in the West, which affects its business and trade centralized heating network in the last 10 years. Like every other city in opportunities. The airport is located just a few kilometers away from the the country, municipal buildings in Iași demand proper measures toward city and is connecting Iași to București and a few destinations in Europe. improving energy efficiency – particularly in health care and education Iași shifted from a highly industrialized economy during the facilities managed by the city government. Although the local public communist regime to an academic and predominantly service-based administration keeps track on energy consumption and expenditures in economy. The service sector has developed rapidly in the last two municipal entities, the building stock under the city government needs a decades, as the number of IT and construction companies have increased proper benchmarking, along with audit and retrofit measures in order to five times since 2000, thus becoming the engine of the local economy. identify the highest energy savings potential and optimal interventions. Several multinational companies in the field of IT&C have opened their At the same time, although the selective collection has been implemented businesses in the city. Today, Iași has a diverse economic base; besides in the city since mid-2000s, the percentage of recycled waste is low. service and academics, the local economy includes some industry (such as The city accomplished a number of positive things to date. For oil extraction, primary products processing, chemical, pharmaceutical, one, although it incurs losses in the network, the water sector covers the tourism), and a very small share of agriculture (especially in the wider entire city and the related connections are metered. Since the beginning metropolitan area). of 2000s, hundreds of millions of euros were invested in the expansion of The transition period after the end of the communist regime has the water network and rehabilitation and modernization of the water led to significant changes in the social and economic life of the residents plants and wastewater facilities in the city. 95% of the streets in the city of Iași. Some of these developments have positively affected people’s are lit, and mercury lamps have been replaced with more efficient sodium lives, whereas a few came along with inconveniences and difficulties. Like vapor bulbs. Iași has a very efficient public transport system, with small many cities in the country, Iași lost almost 10% of its residents in the last energy consumption, operated by buses and trams. The tram network is decade. From the second most populous city in Romania in 2002, after the one of the lengthiest in the country, and it is undergoing important capital București, Iași fell to fourth. rehabilitation work. A few pedestrian networks have been developed in Similar to a country-wide trend, the rising number of cars in the the city in recent years, and more bike lanes are under way.