On the Approval of the Directions of the Heat Sector Development

Published: 0000-00-00

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Government of the Republic of Lithuania
Resolution No 307
of 22 March 2004
Acting pursuant to Article 8(1) of the Law of the Republic of Lithuania on Heat Sector (Valstybės Žinios (Official Gazette) No 51-2254, 2003) and seeking to restructure the district heat supply with the view of meeting the needs of consumers at least cost and with minimum pollution by combining this method with decentralised heat sources, the Government of the Republic of Lithuania has resolved:
To approve the following directions of the heat sector development:
1. To extend competitive relations in the heat sector:
1.1. In the area of maintenance of heating and hot water supply systems of buildings – to provide heat consumers with a possibility to choose enterprises providing maintenance of heating and hot water supply systems in buildings, as well as to create conditions for the development of these enterprises.
1.2. In the area of heat generation:
1.2.1. to reorganise or privatise heat generating enterprises;
1.2.2. to obligate heat suppliers to purchase heat conforming to quality, supply reliability and environmental requirements from independent heat producers selling heat at a price (taking into account its transmission costs) lower than the generation cost of the heat supplier or than the prices offered by other independent heat producers (taking into account its transmission costs);
1.2.3. to create more favourable conditions to use different types of fuel (low sulphur heavy fuel oil, domestic heating fuel, liquefied gas, wood, its pellets, straw) for heat generation, as well as to aim at ensuring better accessibility of these fuels to small-sized heat producers.
2. To systematically develop the heat sector:
2.1. to prepare special heat sector plans for municipalities at their own expense and to implement them with the funds of municipalities, enterprises and consumers:
2.1.1. to balance the interests of the State, municipalities, energy enterprises, legal and natural persons or their groups when supplying consumers with heat and energy resources for heat generation;
2.1.2. to accelerate the introduction of technological innovations, to diversify fuels and to reduce emissions from heat generating facilities, while retaining the current district heating systems where their use is environmentally and economically feasible and efficient, as well as making better use of the advantages of these systems;
2.1.3. to follow the national priorities of the energy sector, the rational development of combined heat and electric power generation, the efficient use of the existing indigenous and renewable energy resources, as well as to take into account the current and forecasted infrastructure of the energy sector in accordance with the security, reliability and environmental criteria for energy supply;
2.1.4. to provide consumers with a possibility to choose a desirable method of heating in buildings in planned new housing areas.
2.2. To improve and develop the database of enterprises operating in the heat sector and their activities, which is designed by the State Control Commission for Prices and Energy, with the view of using the collected data for scientific research, the planning of the national heat sector, the update of development directions, as well as monitoring of and control over the activities of enterprises in the heat sector.
3. To develop the capacities of CHP plants with the view of increasing the efficiency of energy generation and reducing environmental pollution:
3.1. To promote the development of CHP plants based on heat demands by purchasing the electricity generated by these plants in accordance with the established procedure and at set prices; to forecast the feasibility of constructing new or modernising the existing CHP plants with the funds of enterprises and private investors (where possible, also using support from the EU funds), should new electricity capacities be required:
3.1.1. to modernise the Vilnius and Kaunas CHP plants and to construct a modern demonstrational CHP plant in Panevėžys;
3.1.2. to construct CHP plants in Šiauliai and Klaipėda by 2015;
3.1.3. to construct CHP plants of approximately 400 MW capacity in Alytus, Marijampolė and other cities by 2020.
3.2. To modernise the existing heat generating facilities or to install the new ones, taking account of a possibility to use co-generation.
3.3. To achieve that in 2020:
3.3.1. the electricity generated by CHP plants would account for at least 35% of the total electricity balance;
3.3.2. the heat generated by CHP plants would account for at least 75% of the total district heat balance.
4. To reduce environmental pollution by using different types of energy resources for heat generation:
4.1. When constructing new boiler-houses, reconstructing the existing ones and choosing fuel to be used, to give priority to indigenous and renewable energy resources, natural gas and harmless organic substances.
4.2. For the purpose of implementing the requirements laid down in legal acts of the Republic of Lithuania and of the European Union as regards the limitation of emissions of pollutants into the air from combustion plants:
4.2.1. to aim at ensuring that the content of sulphur dioxide in gas emissions from boiler-houses and power plants would not exceed the standards established in legal acts;
4.2.2. from 2015, to burn only natural gas in the 2nd and 3rd CHP plants in Vilnius, the Kaunas CHP plant, as well as Petrašiūnai and Mažeikiai co-generation plants or to install fume desulphurisation equipment in these plants.
4.3. For the purposes of improving the procedure for promoting energy generation from indigenous, renewable and waste energy resources and purchasing this energy, implementing competition among producers, applying a transparent and non-discriminatory system of economic levers (providing more favourable conditions for investments, higher electricity purchasing prices), taking account of the national interests and international obligations of the country, to aim at:
4.3.1. ensuring that the heat generated from indigenous, renewable and waste energy resources would account for 17% of the total heat generation balance in 2010, and 23% – in 2020;
4.3.2. constructing, by 2010, 2 or 3 small CHP plants burning wood, its waste, straw and other renewable resources.
4.4. To use domestic waste, as well as waste heat for the generation of heat and electricity (where it is economically and ecologically feasible), foreseeing a possible construction of waste incineration facilities:
4.4.1. by 2010 – in Vilnius (intended annual capacity – approximately 200 000 tonnes of domestic waste);
4.4.2. after 2010 – in Alytus, Kaunas and Klaipėda.
4.5. With the view of ensuring the implementation of sustainable development principles in the heat sector and implementing the provisions of international conventions and European Union directives:
4.5.1. to draw up the necessary documents and develop a system for implementing the mechanisms defined in the Kyoto Protocol to the United Nations Framework Convention on Climate Change and European Union legislation;
4.5.2. to improve the environmental taxation system promoting to increase energy efficiency and to reduce negative impact on the environment, pursuing the principle that all polluters should pay for pollution.
5. To increase the efficiency of heat consumption by households:
5.1. To renovate buildings and modernise their energy facilities while implementing the measures of the National Energy Efficiency Programme.
5.2. To lower heating costs for the population by reconstructing heating and hot water supply systems in multi-family apartment houses, as well as by gradually liquidating group boiler-houses and improving thermal insulation of buildings.
6. To modernise heating (as well as accounting and parameter control) systems, to improve possibilities for heat consumers to install heat regulation facilities, to regulate temperature in their premises as needed, as well as to pay heat suppliers for the amount of heat actually consumed.
7. To implement legal and economic measures promoting the participation of economic entities in the renovation of multi-family apartment houses.
Prime Minister                                                                                 Algirdas Brazauskas
Minister of Economy                                                                      Petras Čėsna