Low-Energy Future of Russian Building Sector

CEU eTD Collection

A THESIS SUBMITTED T SUBMITTED THESIS A Low - Energy Future of Russian Building Sector Russian Building of Future Energy Central European University in partCentral in UniversityEuropean SCIENCES AND POLICY POLICY AND SCIENCES DegreeofMaster of Science Ksenia PETRICHENKO Ksenia O THE DEPARTMENT OF OF DEPARTMENT THE O July, 2010 July, B udapest

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OF OF

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CEU eTD Collection CentralUniversity. European Depa take the of may Head the exploitation from and available is disclosures place which under conditions the on information Further thesis,CentralUniversity, European Budapest. Petrichenko (3) University,which willtermstheprescribe conditionsofsuch and anyagreement. be not may and contrary, the to agreement prior any to subject University, European Central the in vested is (2) the (inwriting) Author. ofthe from obtained be m be not may instructions maysuch with accordance in made copies of Details Library. University process) any (bycopies made. Further copies suchany of part form must European page ThisLibrarian. Central the in lodged byinstructionsinwithmay accordance madegiven be only offull, extracts, or (1) copyrightand theNoteson ownership rights:ofpropertyintellectual

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niversity or other institute other or niversity KseniaPETRICHENKO

CEU eTD Collection instruments Keywords: reduc i plans, and activities improvement efficiency energy towards The advancedconstruction and 2009. in Savings…” Energy made poli efficiency energy of analysis The to realize To buildings. estimated considerable most the is effect” sector the paper this In switch potential saving According Sector degreethe for of ofScience Master entitled:and Low KseniaPETRICHENKO OFTHESISABSTRACT

address present present ing

in ing are

itsenergy consumption. this this

to a moreaefficient to

In case no policieno Incase o te scenario the for existing barriers and drive market transformation towards higher energy efficiency. higherefficiency. energy transformationtowards market drive and barriers existing estimated by means of modeling final energy use energy final modeling of means by estimated the the path the

energylockRussia, efficiency, analysis of recent projects in Russia shows that that shows Russia in projects recent of analysis direction potential energy savings energy

potential of energy savings energy of potential a be can final - dependency theory dependency t is very is t

. energy savings energy energy h ms sgiiat tp s h aoto o te eea Lw “On Law Federal the of adoption the is step significant most The

“ CENTRALEUROPEANUNIVERSITY locked

renovation

submitted by:submitted s are introduced, thissare of te

potential active policy development has to take place take to has development policy active potential chnology likely that the building sector will follow the path of active of path the follow will sector building the that likely a However, further development of policies policies of development further However, use - significant increase in the market penetration of advanced advanced of penetration market the in increase significant

in ” savings

by isrequired cy instruments has shown that certain steps have been have steps certain that shown has instruments cy

un implement .

nfiin ue f energy of use inefficient

tappe n Russia in - inmarket effect, policy transformation, Monthand ofYearsubmission: 2010. July, and lock and and and iv d

. potentiallessis2%. than the due to th to due

ed to the pattern of energy use, energy of pattern the to ed . - “lock - EnergyofRussian Future Building aig no con te government‟s the account into Taking in effect effect in - e lack of policy development. T development. policy of lack e in

effect for space heating. space for (more than 50% by 2050) 2050) by 50% than (more there is a positive tendency tendency positive a is there ” u to due

for

the

the Russian building building Russian ih h focus the with

ih ot of costs high The

the in Russia in “

l energy ock are - he ly in

CEU eTD Collection modeland Russianbuildingforcalibratingsector the results. andSustainableEnergyPolicy am I skillsproof and writing academicmy improving in assistanceher for Timar Eszter Prof. to thankful veryam I ideasmaterials,inandmeinspiringmynavigating anduseful research work. thank to likewould I Acknowledgements

also grateful to Andrew Butcher, gratefulto also - reading of myofreading the my supervisor supervisor my

, Central European University European Central , sis. Prof

the former researcher of the Center for Climate Change ClimateChange for Center the researcherof former the . DianaÜrge v

- Vorsatz for providing me with valuable withprovidingme for Vorsatz ,

for helpingfor me

inthedeveloping CEU eTD Collection 4.4. Theofanalysisefficiency energythe policy 4.3. Theofanalysis the passive 4.2. Themodelestimating for energyfinal andlockuse Research4.1. design usedscheme anddata ChapterResearch 4. anddesignmethodology Quantification3.5. theof “lock Market3.4. transformation the as wayto overcome “lock the 3.3. The“lock 3.2. Thetechnological understanding of “lock the 3.1. Traditionalpath respectenergyofefficiency ChapterTheoretical 3. framework. Path 2.3. Theevol 2.2. Theenergyefficiency concept Energy2.1. use inRussia ChapterEnergy 2. efficiency background Russiaof 1.3. Themainquestion,aim, objectives and theofstructure research 1.2. Theofscopethe study 1.1. Theenergyofproblem efficiency inbuildings ChapterIn 1. Listof Figures Listof Tables Contents of Table

4.4.2. Budgetary 4.4.2. mechanisms 4.4.1. Command 4.2.7. Scenariosand “lock Assumptions 4.2.6. Russia for Limitations 4.2.5. modelof the 4.2.4. Themainmethodological steps 4.2.3. Theassumptions changeof floorarea the 4.2.3. Climatetypes Building 4.2.2. stock types Building 4.2.1. types ution of the energyutiontheof efficiency concept inRussia - troduction

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48 47 47 45 43 38 36 31 30 30 29 29 28 26 26 24 21 19 17 15 15 11 10 ix

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CEU eTD Collection Annex.Dataformodel the finalof energyin Russianthe buildin References Conclusion Discussion Results5.2. forthe ofanalysis passive Results5.1. forthe modelofenergyfinal use ChapterResults 5.

5.3.6 Recommendations5.3.6 further policiesfor EE development Limitations 5.3.6. energyof efficien Influence 5.3.5. energyofefficiency policiesmarket transformationon Informatio 5.3.4. 5.3.3. Market Budgetary 5.3.2. Instruments 5.3.1. Commandand mechanismscontrol 5.1.5. Modelresults‟summary 5.1.4. “Advancedbuildings”scenario 5.1.3. “Advancedconstruction” scenario 5.1.2. “A 5.1.1. “Incrementaldiffusion” scenario Evalua 4.4.5. Information 4.4.4. instruments 4.4.3. Market

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CEU eTD Collection TableCommercial 18. in floorarea Russia and OECD, 2005 TableGDP and17. commercial floorareain FormerSoviet Union,2005 Table(PPP)GDP of16. Russia2005 TableFloorarea per capita15. occupied eachbuildingsintype of TableUrbanization 14. inrate 2005 Russia TablePopulation 13. 2005in Russia T Table Summary11. evaluation for energy ofefficiencypolicy instruments Tab TableMain results9. forfourscenarios TableA country‟s8. evaluation check TableRelation 7. between houses‟embeddingpassive processmarket and EE transformation TableEnergy 6. consumption space for heating inRussian buil TableTablePopulation 5. 5. shareeach in climatetype TableClimate 4. zonesin Russia TableThe 3. sample outputofforenergy calculationuse randoma of buildingstock type TableMajorbarriers 2. toin EE the building andpossiblesector instrumentspolicy TableResidential 1. sectorend energy Tables ofList

...... ableEnergy 12. intensity inUnitedthe Kingdom, France, Germanyfrom andRussia to2007 1992 leBuilding 10. Codes classification inRussia

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CEU eTD Collection Figure 25. AdministrativeFigure 25. borders of worldthe Figure 24. Regions which Russia of haveBuilding Codes Figure 23. Passive hous Figure 22. Finalenergy dynamicsuse andlock Figure 21. Finalenergy foruseheating inRussian building sector.“Advanced buildings”scenario Figure 20. Finalenergy foruseheating. “Advanced construction” scenario Figure 19. Finalenergy foruseheating. “A Figure 18. Finalenergy foruseheating. “Incremental Figure 17. OverlayingFigure 16. theof withfiles climatezones andthe populatedplaces Figure 15. Selection of Russia Figure 14. Selection offrom Russia datasetthe“Climate ofworld…”zonesthe Figure 13. Selection offrom Russia datasetthe“Administrative borders of world”the Figure 12. The calculation of t Figure 11. The calculation of thebuilding retrofit stock Figure 10. The calculation of newthe buildingstock Figure 9. The calculation of standard building stock Figure 8. The calculation of requiredarea floor Figure7 WorldFigure 6. of theMap Köppen Figure 5. The schemethe of re Figure 4. Path Figure 3. Finalener EnergyFigure 2. intensityinFrance, Russia, Germany andUKthe EnergyFigure 1. 1992Intensity inRussia, Figures ofList Figure 27. Populated placesworldthe of Figure 26. Climate zonesof worldthe . . Themainmethodological stepsmodel theof Curveembeddingfor process innovationsof - dependency gyconsumption sector,2006 by

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CEU eTD Collection policyof efficient instrumentscausesineffi relevan intensity of energyhigh bythe worsenedbe information scientific of lack sector building the in instruments the by caused mainly is energy of use inefficient in” “locked are savings policies buildi existing by the covered in not are efficiency opportunities these energy Consequently, improve to opportunities the of clear understanding no is there transition, in economies and countries developing in especially However, t in efficiencyhas buildingfocussector beeninto rapidly (Ürge coming energy challenge, change climate the meeting to relation in Thus, 2008). (Ürge reduction emissions‟ GHGand savings energy problemtheof to of gase emissionsgreenhouse the and consumption energy growing to contribute which sources the of One forvery isimportant the which isgrowth, vital especial time same the At to change. climate contribution anthropogenic is use energy irrational by caused impacts the of effect acute currently and (Lapoche planet our on life ofsides different affect (Metz resources world the in challenges global greatest the of One effi energy of 1.1. Theproblem structure thesis.ofthe presentsmain This chapter the researchaim,asthethe well problem and of as objectives the Chapter

1. Introduction s (GHG) is the building sector. This sector also provides lower alsoprovides sector This sector. building theis (GHG) s t al. et

2007 secountries . h ipcs f hs hnmnn r eteey ies and diverse extremely are phenomenon this of impacts The ). lydevelopingforitin economiescountriesandThus, transition.

, use of fossil fuels and old technolog old and fuels fossil of use ,

to useenergyin resources to ciency in buildings ciency in cient useof energy cient and the 1

economy, which in combination with the lack the within combination which economy,

, (Lechtenbohmer and Tomas 2003). This fact This 2003). Tomas and (Lechtenbohmer

the use of energy is essential for economic for essential is energy of use the et today al . 1997). Perhaps the most devastating devastating most Perhapsthe 1997). . - Vorsatzand Koeppel 2007).

the a

moreefficientway. unsustainable us unsustainable substantial t ipeet policy implement to t - Vorsatz and Novikova Vorsatz ies

n a o o energy of lot a and . This situation can can situation This

energy losses.energy - cost solutions cost e of energy energy of e ng sector. sector. ng

CEU eTD Collection In this regard, the mainInthis theregard, researchquestio final transformation market how analyze and stock building Th 1.3. T is development policy EE further for required. substantiation scientific strong a situation this In considerableasa considerable lead It place. take should institutions EE of work savings energy for potential moving for sufficient not are steps separate these However, Russia. in (EE) efficiency energy of institutionalization Rus in adopted was Efficiency Energy on Law Federal (Bashmakov country the in issues efficiency energy of problem the raised also 2006 in Petersburg St. in summit G8 The efficiency. energy promote fed a of modernization the on working presently is government The itischosen mainofbecauseonethe inconsumersenergy barrierdifferent to due moment the at samethetime change climate of problem the to greatly contributes thus, and, it because analysis the for examples the of One 1.2.

policiesin the Russian Federation? dev the account into taking it, “unlock” to “locked savingsis energy for potential What us, the main aim of aimmain the us,

The scope of the The scopeof the energy use modeling and modeling use energy he aim,

unlocking of of unlocking ,

it has a great potential for energy efficiency improvement which is not realized not iswhich improvement efficiencyenergyfor potential great hasa it main question, i ncrease insupplyandncrease demand of of of

the thesis the the oad hge eeg efficiency energy higher towards an

energy savings. savings. energy beRussia. can intransition economy remains study usa eooy oad hge EE higher towards economy Russian . For this p this For . potential energy savings energy potential

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h dvlpet f nry efficiency energy of development the - one of one

objectives objectives Russian Federation Russian s estimate the potential for energy savings in the Russian Russian the in savings energy for potential the estimate (Bashmakov n can be formulatedasfollows n canbe urpose - lpet f nry fiiny ocp ad h current the and concept efficiency energy of elopment in” in the Russian building sector and what can be done done be can what and sector buildingRussianthe in in” t In this paper EE market EE paper this In he most energy int energy most he 2 ,

a complex EE policy supported by effective by supported policy EE complex a s to s and structure EE products andproducts technologies. EE

et.al.

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analysis et.al.

the Russianeconomythe (see 2008). sia, which which sia, n usa I i md by made is It Russia. in

ensive economies ensive 2008). 2008).

This country has been chosen beenchosen has country This

(Bashmakov (Bashmakov The building sector has been has buildingsector The and the analysis of policies of analysis the and

n lcig u te huge the out locking and

of the research of the transformation is defined is transformation eral program targeted to targeted program eral is : In November 2009 the the 2009 November In

get tp towards step great a policies et.al.

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Figure 2008). 2008). can means of of means

drive drive and 1 At ). .

CEU eTD Collection pote savings energy estimate to opportunity the gives which heating space for use energy final of fo The market the transformationhigherenergy towards efficiency. 2003). even periods extended for persist escap to costly and lock “lock technological is study by proposed timefirst the for dependency, path of theory traditional the of concepts main the on the thirdInpart the energyofthe in concept efficiency Rus evolution the illustrates also It specifically. sector building the for data statistical of overview the including Russia, in use energy about information general the presents part second The mainstudy,ofthe researchand aim,objectives, the question presented. of consists paper The achieve To bethis have severalgoalobjectives to Th Russia. in instruments policy efficiency energy existing of analysis the proposes also It scenarios. and assumptions steps, methodological main the David (1985) and Arthur (1989) Arthur and (1985) David - ntial and “lock and ntial in is that technologies and technological systems follow specific paths that are difficult are that paths specific follow systems technological and technologies that is in u In order to overcome the lock the overcome to order In reduction of the barriers to energy reductionbarriersoflimitations.theto efficiency and 4. resultsinterpret theand 3. by buildingstock 2050 2. buildings 1. achieveenergy s 5. rth chapter presents the methodological design of the study. the of design methodological the presents chapter rth

As was shown above, i above, shown Aswas o ie eomnain o eeg efcec plce dvlpet to development policies efficiency energy on recommendations give To To sc each for savings energypotential the calculate To Russian of consumption energy in trends the of scenarios several elaborate To To

nlz te xsig e existing the analyze eeo a oe fr usa bidn sok n fnl nry s in use energy final and stock building Russian for model a develop - e. Thus, the technologies existing in the economy at the moment tend to to tend moment the at economy the in existing technologies the Thus, e. theoretical framework is elaborated for research. theis frameworkelaborated theoretical in effect” in the Russian building sector by 2050. The chapter describes chapter The 2050. by sector building Russian the in effect” in avings eight - in”. parts

when there are already more advanced competitors advanced more already are there when the problem, research the of descriptionincludes the t The main idea of the technological understanding of the the of understanding technological the of idea main The I te is chapter first the In . . The key The . - in sian energy policy. sianenergy ,

first of all institutional change is required to pr to required is change institutional all of first nergy efficiency policies policies efficiency nergy

3 aspect of this theory related to the topic of the the of topic the to related theory this of aspect

attained : the

structure study.ofthe nrdcin o h rsac is research the to introduction enario, the “lockthe enario,

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the rol the inefficien

e of policy of e eto peet aayi o te ot rbbe eeomna pt fr the for path developmental probable most the of analysis presents section

development

the results of model stimulation for four scenarios four for stimulation model of results the t

energy use energy

instruments for overcoming the barriers to EE improvement EE to barriers the overcoming for instruments . This paper might be interesting for policy for interesting be might paper This .

and “unlock” potential energy savings energy potential “unlock” and andfurtherthefordirections the research infield. the

and recommendation

issues 4

mrvmn i Rsi. ial, conclusion Finally, Russia. in improvement

andinterestedpeoplein other subje the s

of Russian building sector. ofRussianbuildingsector.

for further EE policydevelopment. EE further for

potential and potential . And the second part part second the And .

by means of energy energy of means by - makers, specialists specialists makers,

possibilities to to possibilities arts. The arts.

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CEU eTD Collection unbalanced energy pricing policies, the lackunbalancedthelegislation energy of proper inpricingregulations andpolicies, energy the of absence an by marked been has recovery declined GDP Russian of intensity increase. demand the caused recovery economic the 2000s early (1990 use. energy capita per in fall the and depression economic general the of spite in increased intensity energy country‟s the 1990s the During 30%: decrease The thispoint improvement factors. micro and is intensityenergy However, place. takinghasbeen improvement energyefficiency means that years),that 10 least (at time inten energy in decrease significant a has country a if Thus, negative period. where Formula accordingto 2: is there then 2009) period, (Belyi country a the in improvement of beginning the to relation in period is It 2

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. The decrease in energy intensity energy in decrease The . EI hwdrcl hte hr i neeg efficiency energy an is there whether directly show 22336

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n 2000 in begin

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2008) :

SustainableEnergy Development hs te conside the Thus,

(27%) . In other words, during the analyzed period there was no market transformation transformation market no was there period analyzed the during words, other In s the leading energy end energy leading the s , commercial and public buildings commercial public and, - use sectors in Russia is the building sector. It consumes about about consumes It sector. building the is Russia in sectors use Figure al dces i eeg intensity energy in decrease rable et al. et 3 e

2010). (Mitthone

Finalenergy consumption by 2006 sector, eutd “ resulted energy 2008). ( 2007) (Mitthone 2010). (Mitthone

gas and, in turn, increase its exports of natural gas and and natural gas of increaseexports its turn, in and, gas

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nd the cumulative reduction of 59 millionndcumulativetheCO of59 reduction tons 2008 which set the goal of 40% reduction of energy use for heating in buildingsector heatingforgoalenergy thereduction the ofuse of 40% set which 2008 : Bashmakov : 1

shows in the building sector sector building the in - 2010 the with attractive market is 72% viable, economically is potential technical rise houses must be designed as B as designed bemust houses rise

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from absolute values absolute –

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Table n tons (Matrosov (Matrosov tons n Table 1 January 2010 multi 2010 January 1

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20% reduction ( reduction 20% by energy source. It can be seen that the mothe that seen becan It source. energy by 1 1 . .

et al. et Residentialsector energy end

Residentialsector energy end in terms of primary energy were around 240 PJ, or 8.6 million 8.6 or PJ, 240 around were energy primary of terms in (in mtoe) mtoe) (in

2008). 2008). a 40% reduction of energy use for heating and other multi other and heating for use energy of reduction 40% urgent et.al Int for Matrosov 2009 Matrosov

family houses of four storeys or less and premium premium and less or storeys four of houses family

2007 he period from 2002 to 2005 the calculated energy calculated the 2005 fromto 2002 period he -

in the light of RF Presidential Edict No.889 No.889 Edict Presidential RF of light the in energy use of different activities inresidential the activities energydifferent of use class buildings with 20% reduction 20% with buildings class 9

?). By the end of 2008 the cumulative energy energy cumulative the 2008 of end the By ?). from 2 - - usestructure, 2005 (mtoe) ( usestructure, 2005 (mtoe) Matrosov2009

1 January 2016 these types of buildings of types these January2016 1 ).

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reinforcing - in of energy savings, which could have been achieved in the situation when when situation the in achieved been have could which savings, energy of in - mtig usiue. t a b epand y h fc ta hydrocarbon that fact the by explained be can It substitutes. emitting - n no eaiey neir ehoois Frs ht ae dpe the adopted have that Firms technologies. inferior relatively into in p

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“energy efficiency paradox” efficiency“energy et al. et 20 -

effective technologies available at some point point some at available effectivetechnologies s copne b ipsiiiy o switch to impossibility by accompanied is apply

uncertain nature of technological progress. progress. technological of nature uncertain 2001). Thus, such subsidies can create the create can subsidies such Thus, 2001).

Unruh 2000)

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energytechnol efficient

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af ad Stavins and Jaffe cannot have ion of energy of ion

revealed that “artificially low” energy prices can provide another market another provide can prices energy low” “artificially that revealed

rnfr qiky rm l iefcet ehoois o e mr energy more new to technologies inefficient old from quickly transform

demonstrate rnia/gn problems principal/agent

ae lo oe ote ocuin that conclusion the to come also have - - barriers saving technologies saving in is rather common for the building sector. Rohracher(200 sector. building thefor common rather isin

technology. Among other factors they noted noted they factors other Among technology.

how the diffusion of energy efficiency technologies can can technologies efficiency energy of diffusion the how

(see arket will not deliver energy efficiency naturally naturally efficiency energy deliver not will arket for Table Table 21

energy efficient products and technologies products efficient energy

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Command Table -

and and the recommendationsfurtherthefor and development. ,

7 To give recommendations on how the energy savings potential can be unlocked unlocked be can potential savings energy thehow ongive recommendations To the policy instruments in Russia are divided into into divided are Russia in instruments policy the - .

control (CAC) control Relationbetween pas - and

n ifrain ehnss The mechanisms. information and sting sting that that - control mechanisms control the oiy ntuet i a country a in instruments policy

mechanisms can reduce the barriers of cost competitiveness by competitiveness cost of barriers the reduce can mechanisms

akt transformation market sivehouses‟ embedding process andEE market transformation information 47

ly hae, rdcs rm h mre and market the from products cheaper, ally

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or specified more precisely for more effective work. CAC mechanisms can also also can mechanisms CAC work. effective more for precisely more specified or new actors at the nation and/or localatfor levelsnation thepromotion ofand/or thenewenergy responsible actors mechanisms could reduce financial barriers to energy efficiency by creating creating by efficiency energy to barriers financial reduce could mechanisms energylowsupportandefficiency activities also itical will. Thus, to increase their effectiveness their increase to Thus, will. itical

mechanisms - term benefits of energy efficiency (e.g. reduced energy bills, positive positive bills, energy reduced (e.g. efficiency energy of benefits term

lready exist by means of CAC instrumentsCAClreadymeans by exist of on and on budgetary

to budgetary

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instruments can be limited by unclear jurisdiction unclear by limited be can instruments 48 - income households, which often can not afford not can oftenwhich households,income

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structural, political and also also and political structural,

their competence can betheir competence can

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They

e fr nry supplier energy for set istributors, who have achieved larger energy savings that it was prescribed by prescribed was it that savings energy larger achieved have who istributors, - - reduce purchasing reduce income house income based mechanisms based , -

hold market income households as companies, participating, for example, in example,for participating, companies, ashouseholdsincome s. Such combination helps both partially cover the costs of costs the cover partially both helps combination Such s. power tiveness. tiveness. o dsrbtr wo ut ufl tee eurmns by requirements these fulfill must who distributors or s -

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f low of ctivities.

- income people and cause public resistance. resistance. public cause and people income for a company a for ates for energy efficiency and subsidies subsidies and efficiency energy for ates

MBMs “soft” methods (incentives) rather rather (incentives) methods “soft”

)

(Karp and (Karp are mainly presented inthe mainlypresented are sset.

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other policies, other suchas CAC energy efficiency policyinstruments efficiency energy

energy use of appliances, cars and buildings. Another widely used used widely Another buildings. and cars appliances, of use energy erview of different policy instruments policydifferent of erview

50 is Te as hl t cet dmn fr EE for demand create to help also They cies. or or

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18 - into “Incrementalthe relation diffusion” 5 house market penetration and analysis of energy efficiency policies. These blocks of of blocks These policies. efficiency energy of analysis and penetration market house

hr ae he mi prs f h analysis: the of parts main three are there presentsindynamicsthe final 2050.fromof Russianbuildings to energy2005 use for the Figure h bss o te eomnain n ute plc dvlpet This development. policy further on recommendation the for basis the 18

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Russian building sector building Russian energy use of an existing building without renovation. Thus, Thus, renovation. without building existing an of use energy

scenario Russian Building Codes. Codes. RussianBuilding inc estimated . diffusion s bcue f t dmlto ad renovation and demolition its of because ,

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are insignificant are 

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Energy  Lock

42 nry aig ptnil f Iceetl ifso” n “A and diffusion” “Incremental of potential savings energy

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