Case studies

Technical assistance for preparing projects portfolio – District Heating

Short description:

The Master Plan is the first stage in preparing the Aplication, to achieve investment financed from Cohesion Fund in the Sectoral Operational Program Environment 2007 – 2013 – Priority Axis 3 in the district heating sector (Support the financing of Large Combustion Plants (IMA) owned by local authorities, under operation in the municipal heating systems, to reduce pollutant emissions and emissions of greenhouse gases at IMA level, and aimed at improving energy efficiency and network installation).The Master Plan is prepared for Large Combustion Plants (IMA) and centralized heat-supply systems in: Botosani, Focsani, Resita, Ramnicu-Valcea, Oradea, covering production, transport and heat distribution to the consumers for a period of 20 years.The purpose of the Master Plan was to identify and prioritize investment needs to meet – at the low cost – the compliance with the EC directive of the environmental sector, taken into account the supportability of the investments by the population and local capacity of project implementation.There were analyzed scenarios and options that took into account :

The Feasibility studies were prepared for Large Combustion Plants (IMA) and centralized heating system in: Botosani, Focsani, Resita, Ramnicu-Valcea, Oradea, covering the production, transport and distribution of heat to the consumers for a period of 20 years.

Studies analyzed three strategic scenarios of heat supply:

The three strategic scenarios of heat supply were compared in the multi criteria analysis, on the following criteria:

Environmental criteria:

Financial criteria:

Basic principles taken into account in defining the options were:

The options were compared based on financial analysis and have been calculated on the financial performance indicators of the project. The analysis was carried out in terms of project beneficiary by the incremental cost-benefit method, taking into account the updating technique. The financial analysis also contained incomes resulted only from heat and expenses during the entire period of analysis. Options resulted were ranked based on cost benefit analysis of financial investment. In order to select which option to be financed from grants an economic analysis was used, which assesses the project in terms of economic impact on society (economic, social and environmental). Economic analysis is conducted from the perspective of society as a whole and not just a facility owner, as in financial analysis. The economic analysis took into account the externalities which lead to costs and economic, social and environment benefits, which were not considered in the financial analysis, because it does not generate monetary incomes or expenses.

The starting point for the economic analysis was the incremental financial analysis of investments and was adjusted to reflect the economic cash flow obtained:

Cost-Benefit Economic Analysis included the following steps:

Determination of economic performance indicators:

The feasibility study prepared for the option chosen includes:

 Services offered:

Country and location:

Romania - Focsani, Botosani, Govora, Oradea, Resita

Client:

Ministry of Environment – Directorate General for Management of Structural Instruments

Start / Completion date:

2009 - 2010

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