Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized December 20th, 2013 1 Public Disclosure Authorized 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. Executive Summary /1 The TRACE diagnostic is part of work done under the Romania Regional Development Program – a Reimbursable Advisory Methodology /8 Service activity, undertaken by the World Bank at the request Background /10 of the Ministry of Regional Development and Public National Legislation Regarding Energy /10 Administration, with EU funding. The report was written by a Background Brașov /16 team comprised of Manuela Moț, Ranjan Bose, Sebastian Burduja, and Marcel Ionescu-Heroiu. Cristina Zirimis has Brașov Sector Analysis /21 provided logistical and administrative support throughout the Street Lighting /21 process. The team would like to thank the colleagues at the Municipal Buildings /23 Ministry of Regional Development and Public Administration Power Sector /26 (particularly Ionuţ Trincă, Costel Jitaru, and Bogdan Ţigău), as Urban Transport /27 well as the colleagues in the Brașov City Hall and the Brașov District Heating /34 County Council, who supported the team throughout. The Water and Wastewater /38 team would also like to thank peer reviewers Stephen Solid Waste /42 Hammer, Feng Liu, Paula Restrepo, and Pedzi Makumbe, for the excellent feed-back provided. Energy Efficiency Recommendations /45 TRACE (Tool for Rapid Assessment of City Energy) was District Heating /46 developed by ESMAP (Energy Sector Management Assistance Urban Transport /49 Program), a unit of the World Bank, and is available for Municipal Buildings /56 download and free use at: http://esmap.org/TRACE. Street Lighting /57 Water/58 Annexes /61 2 1 Executive Summary The limitations of TRACE Why a study on energy efficiency? The fact that TRACE is simple and easy to implement, also means that The main impetus for this report (and for the reports prepared for the there are limitations with respect to the depth of analysis. For example, other six growth poles) is a request received from the Ministry of Regional the tool may identify District Heating as a priority sector in terms of Development and Public Administration. The request came within the potential energy savings, but it does not go into detail on the required context of on-going preparations for the 2014-2020 Programming Period, costs to complete district heating rehabilitation projects. Thus, even if the with Energy Efficiency being one the major themes of the Europe 2020 energy savings potential is assessed to be high, the costs may be even strategy, and a critical priority for all EU Member Countries. Within higher, and an investment in the sector may not be warranted. Similarly, Romania, local authorities that will want to access energy efficiency funds although TRACE specifically focuses on the service areas that fall within under the 2014-2020 Regional Operational Programme will need to first the purview of local authorities, the tool cannot factor in the institutional prepare energy efficiency strategies. The TRACE tool is specifically and legislative mechanisms that need to be in place to make a specific targeted at local authorities, and is a good instrument for drafting such energy efficiency recommendation possible. strategies. Boundaries of studied area What is TRACE? While this work focuses on the growth poles in Romania, the analysis was The Tool for Rapid Assessment of City Energy (TRACE) is a simple and limited to the boundary of the center city. The reasoning for this is quite practical tool for conducting rapid assessments of energy use in cities. The simple: it is prohibitively difficult to collect individual indicators for all the tool helps prioritize sectors with significant energy savings potential, and constituent localities of a metropolitan area. In most cases, this would identifies appropriate energy efficiency interventions across six sectors— have required in-depth discussion with over 20 localities, ensuring that all transport, municipal buildings, water and waste water, public lighting, these localities had the required indicators for a particular service area, solid waste, and power and heat. It is a simple, low-cost, user-friendly, and and ensuring that they used the same methodology for the calculation of practical tool that can be applied in any socioeconomic setting. these indicators. Nonetheless, the sector analysis and recommendations took the metropolitan scale into consideration, and the section on sound The advantages of TRACE urban planning practices was done at the full metropolitan level. TRACE is one of the most powerful energy efficiency tools, specifically developed for cities. It is simple, easy to implement, and quite intuitive, Summary of findings and it allows a quick assessment of energy savings potential in six key After the 1989 Revolution, Romania began its transition from a centralized public service areas: urban transport; water and wastewater; municipal system to a market based economy. Today the country is a member of the buildings; street lighting, power and centralized heating; and, solid waste European Union (EU) and NATO. After more than a decade of economic management. The tool can be implemented relatively quickly and is not restructuring and political change, the country has taken significant steps data- or cost-intensive. Moreover it allows local authorities to get a rapid towards catching up with the economic performance of more developed assessment of their city’s energy performance, and to identify sectors that EU countries. Although radical reforms brought about significant changes may be subjected to a more in-depth analysis. in recent years, the standard of living of Romanians is still behind the EU average. Brașov is one of cities where such disparities are less obvious. This has to do with the relative proximity to București, the wealthiest area 1 in the country (around 160 kilometers away from the capital city), its management, the district heating sector is making serious efforts to strategic trade location (along some of the main European routes improve the quality of services and regain lost market. However, the hot including the second largest one, running from France to Kyrgyzstan), and water heavy losses in the oversized, obsolete network are an area for the also its revenues, which are the highest in central Romania. Despite of the government to look seriously into and try to address. recent economic crisis and economic decline, Brașov County’s GDP has Like every other city in the country, municipal buildings gone up in recent years, at 33% growth rate between 2008 and 2012, constitute one sector that requires proper measures towards improving ranking second in the country. However, like all other cities in Romania, energy efficiency – particularly in health care and education facilities Brașov has suffered from demographic decline, although the city does managed by the City Hall. A benchmarking of the municipal building stock, benefit some from its location along the București – Ploiești – Brașov along with audit and retrofit measures should be performed in order to growth corridor, which is the most densely populated and most developed identify the highest savings potential and proper intervention measures. area in the country. At the same time, although the water system covers the entire city and The economic development in the transition period after the end important investments have been done in recent years (such as household of the communist regime has led to significant changes in the social and water meters and new pumping stations) the network has a high non- economic life of the residents of Brașov. Some of these developments revenue water share. Although the city has implemented the selective have positively affected people’s life, whereas a few came along with collection of waste, the amount of recycled waste is still very low. inconveniences and difficulties. For instance, closing down several There are also many positive things that Brașov has successfully important industrial plants in the city (most notably, Tractorul Brașov) has accomplished recently. Almost all streets in the city are lit, and the local led to an increase in the number of unemployed people, and a difficult government is currently implementing the first intelligent lighting system process of economic restructuring. Today the local economy is driven by in the country. Although the city has given up on trams, they have been the construction and service sectors, which employ almost two thirds of replaced with trolleybuses, which are a good addition to the public the labor force in the city and metropolitan area. transport system. Brașov has a system of good pedestrian networks, and Similar to a country-wide trend, the rising number of cars in the the local administration has plans to continue expanding them in the has caused heavy traffic congestion, increased fuel consumption, and led future. A sophisticated parking payment system, through text messages, an increase in greenhouse emissions from transport. Commuting has has just been implemented, and new parking facilities in the city will be become difficult for both private and public vehicles. The main challenges built very soon. The generation of solid waste is comparable to other cities in the transport sector include: parking, modernization of the bus fleet, in the region and some of the organic waste is used to produce energy. and the development of non-motorized transport by building more bike The heat and hot water production have been taken over by a private lanes in the city and expanding the pedestrian networks. This sector has a company, and there are future plans towards improving the distribution significant potential for energy savings, and therefore the city authorities network and related services, in an attempt to bring back some of the should look into appropriate measures to decrease the fuel consumption customers that the system has lost over the past decade.