Russia, Belarus and Ukraine have – like other countries of Central and Eastern Europe and the former Soviet Union – traditionally been using energy very intensively and are also today characterized by a high energy intensity and poor energy efficiency. Thus, the potential for energy efficiency is very high in all three countries.

The ARCEE project aims at improving energy efficiency in the residential sector in Russia (St. Petersburg and Leningrad Region), Belarus (Minsk) and Ukraine (Odessa). In the frame of the project, a background research on legal, financial and social conditions as well as technical approaches was conducted.

Russia

The energy inefficiency in Russia is immense, with the residential sector being one of those sectors with the highest energy efficiency potential. However, due to the abundantly available energy resources, until recently energy efficiency has received little attention in Russia.

The housing stock and its management

Most of the existing houses in Russia were built during Soviet times in pre-cast large panel construction. The housing sector is predominated by multi-apartment houses with the vast majority of apartments having been privatised since the early 1990ies. Privatisation meant also transferring common spaces into the joint ownership of the flat owners – including all relevant rights and responsibilities.

Homeowner associations which allow flat owners to take over the management and maintenance of the apartment buildings are still established rarely. Different reasons contribute to this fact: the low awareness of homeowners on their rights and obligations, a still deficient regulatory framework and little assistance in the establishment by the public authorities. In case no homeowner associations are established, the houses are managed and maintained by management companies. While homeowner associations are often seeking to manage and maintain the house in the best interest of the owners, management companies are mostly driven by economic interests.

Both homeowner associations and management companies are still at the initial stage of their professional development and often lack expertise and experience. The availability of meters for monitoring energy consumption in Russia remains comparatively low. In absence of such metering facilities it is difficult to encourage consumers to adopt energy-saving initiatives or behaviours.

Legislation on energy efficiency in buildings

The concept of energy efficiency has had limited acknowledgement in Russian legislation for many years. In the recent years, however, improving energy efficiency has been taken more seriously in Russia. The Presidential Decree No. 899 “On measures to increase energy and ecological safety of Russia”, adopted in 2008, announces the ambitious goal to reduce the GDP energy intensity of the country by 40% until 2020 compared to the 2007 level. Among the most important national legislation aiming at achieving the decree is the Law No. 261 “Concerning Energy Conservation and the Raising of Energy Efficiency and Concerning the Introduction of Amendments to Certain Legislative Acts of the Russian Federation”. Notwithstanding its deficiencies and gaps, Law No. 261 represents an important step forward with regard to energy efficiency.

Due to the new legislation adopted in the past few years, new services and products regarding energy efficiency technologies, materials, energy audits and other aspects have been introduced to the Russian market and an increased demand for professionals in the field of energy efficient construction is expected. However, significant parts of the housing market have not yet responded to the new legislation – the traditionally high consumption of resources seems to be deeply rooted and the implementation will need to be observed in the coming years.

Liability for construction quality

The experience of the ARCEE project shows, that low energy efficiency in Russia is very often directly related to the poor quality of the construction. Even if the technical documentation assumes proper insulation and other energy-efficiency related measures, the non-sufficient quality of the implemented construction works, may reduce the expected results.

What can the house owners do, if they notice defects in their apartments? Who is liable for the bad quality of the implemented works? The construction process involves a lot of stakeholders, responsible for different aspects. Sometimes it is very difficult for ordinary residences without background in Law to understand who shall take the responsibility for the insufficient construction quality and whether it is realistic for home owners to demand compensation.

In the context of the ARCEE project, a research was conducted on the issue of liability in the construction sector in Russia. In the summary paper a reader can find information on who are the actors involved in the construction process, who is responsible for the overall building quality, and what can a flat owner do in case of noticed defects. Basic legislative acts and laws, which define the regulation on the topic, are also provided.

Additionally, the paper give an overview on what is the common practice with the court cases proceedings on the building quality in the country, and whether it is possible for building companies to get an insurance against liability claims.

The paper can be found here.

Refurbishment

Due to its low-quality construction and poor maintenance, a major part of the housing stock in Russia is in bad conditions. Not only the buildings themselves and the related heating systems suffer technical deficit and serious maintenance backlogs, also the district energy supply infrastructure, such as power stations, hot water networks, and piping systems are in urgent need of modernisation.

A small survey of dwellers of multi apartment buildings in St. Petersburg, Russia was carried out during January and February 2014. The aim of the questionnaire was to obtain an impression what are the most common measures being already implemented or desired to increase energy performance of a building, changes observed after implementation of measures, main motivating factors and obstacles to perform a complex refurbishment, open questions were additional information needs to be provided.

A full report can be found here:

Results of the survey of dwellers living in multi-apartment buildings in St.Petersburg

Financing refurbishment

A functioning financing structure for energy efficiency measures in multi-apartment houses is not available in Russia. The few existing state programs that provide funding for refurbishment measures require very complicated application procedures which often represent a barrier for homeowners. Inhabitants pay monthly fees for the maintenance of their building, but these are in many cases not even sufficient for the day-to-day maintenance. The often low income level of the inhabitants make higher monthly contributions or one-off payments difficult. Difficulties in receiving bank loans for refurbishment measures represent another obstacle. If no funding for a general refurbishment can be collected, only low-cost individual measures can be implemented, which however can lead to problems such as mould or poor ventilation in the flats.

Energy tariffs

Both gas and electricity continue to be sold in Russia at prices which are well below the international market prices. The continued political interference in tariff setting, discourages energy service providers from making investments in energy efficiency. Also citizens lack incentives to save energy. However, the subsidies are each year slightly reduced.

Public awareness

The awareness on the importance of energy efficiency among the general public is crucial for achieving reduced energy consumption. Various information sources on different aspects of energy efficiency addressed at different target groups are available on internet and in general, citizens can be regarded as being aware about the need for and benefits of energy efficiency. Why a complex approach in refurbishment is important is much less known. Also, the often existing general mistrust among people towards public authorities makes homeowners sceptical to any measures to be implemented on their building.

Recommendations

Based on the background research conducted for Russia and experience gained in the frame of ARCEE project a series of country-specific recommendations has been developed. In order to avoid duplication, a research on existing recommendations prepared by other organizations has been performed and some information has been included into the common paper.

In the final document a reader can find the recommendations that cover many different topics, and in general can be structured to legal and institutional changes, technical reform, financing, information and education of population and relevant specialists.

A full paper can be found here.

The Country Dossier Russia can be downloaded here.

Belarus

As in other countries of the former Soviet Union the energy efficiency in the residential sector in Belarus is very low. Since the 1990s, the Government of Belarus has recognized the importance of reducing its historically excessive dependence on energy imports from Russia and the need for action to strengthen its energy security. This has been reflected in a number of government programs that outline the government strategy and develop concrete action plans to modernize the energy sector, improve energy efficiency, and increase the use of domestic energy resources.

The housing stock and its management

The vast majority of the buildings in Belarus are pre-fabricated panel houses built in Soviet times, representing mainly one of the few standard building types. During Soviet times, little or no attention was paid to the energy performance of buildings, thus these apartment houses are characterised by very high energy consumption. After decades of insufficient maintenance and lacking refurbishment measures, a big part of the buildings also show defects and damages regarding the building structure and technical installation.

With the end of the former Soviet Union, most of the housing stock in Belarus has been privatised. Privatisation required from the new flat owners also to choose whether their house shall be managed by a homeowners association, a housing construction cooperative (ZhSK) or a house management company. Despite this in principle existing choice, the management and maintenance of the existing housing stock is still carried out with the very active participation of the State – during the past 20 years, only 2% of the residents in multi-apartment houses have established a homeowners association.

The demand for new residential buildings is very high in Belarus and a lot of new multi-storey apartments are constructed each year. The state has formulated the ambitious goal to construct 60% of the new residential buildings in an energy efficient way. However, in the past years only a much lower share of buildings was built in such way.

It seems obvious that with the construction, maintenance, management and refurbishment of houses being strongly dominated by the State, the difficulties in the country’s housing sector cannot be addressed successfully. The necessary changes would need to be developed and supported jointly by governmental and non-governmental actors.

Legislation on energy efficiency in buildings

Housing policy has been recognised as one of the priorities of the Belarusian government with energy saving and energy efficiency being among the most pressing challenges. The general policy goals regarding energy efficiency have been set in the “National Program for Energy Efficiency from 2011-2015” and in the new energy strategy for the period 2011-2020. Various laws on energy efficiency and technical norms have been adopted on national and local level with the aim to achieve the set goals.

Liability for construction quality

The experience of the ARCEE project shows, that low energy efficiency in Belarus is very often directly related to the poor quality of the construction. Even if the technical documentation assumes proper insulation and other energy-efficiency related measures, the non-sufficient quality of the implemented construction works, may reduce the expected results.

What can the house owners do, if they notice defects in their apartments? Who is liable for the bad quality of the implemented works? The construction process involves a lot of stakeholders, responsible for different aspects. Sometimes it is very difficult for ordinary residences without background in Law to understand who shall take the responsibility for the insufficient construction quality and whether it is realistic for home owners to demand compensation.

In the context of the ARCEE project, a research was conducted on the issue of liability in the construction sector in Belarus. In the summary paper a reader can find information on who are the actors involved in the construction process, who is responsible for the overall building quality, and what can a flat owner do in case of noticed defects. Basic legislative acts and laws, which define the regulation on the topic, are also provided.

Additionally, the paper give an overview on what is the common practice with the court cases proceedings on the building quality in the country, and whether it is possible for building companies to get an insurance against liability claims.

The paper can be found here.

Refurbishment

Despite the bad conditions of the housing stock and the strong need for refurbishment, the refurbishment of houses proceeds only very slowly in Belarus and the waiting periods for better housing are long – without any possibilities for homeowners to influence the decision process on repair and modernization measures. Consequently, not only the huge waste of energy continues, but at the same time building more and more lack structural safety and stability.

Financing refurbishment

Like housing construction, maintenance, modernisation and management also the system of housing finance is dominated by State-owned companies and banks. Although public subsidies for refurbishment do in principle exist, the eligibility criteria to apply for them are not always clear and it is in general difficult to receive financial support for energy efficiency measures in buildings.

Energy tariffs

In Belarus, energy tariffs for residential users are set by the Council of Ministers. The rates depend on the type of consumer, the use of the building, the time and period of use, the region and other factors. Energy prices for households have long time been strongly subsidised by the Belarusian State. However, in 2010, the Council of Ministers adopted the objective to phase subsidies completely out by 2014 and accordingly, the electricity and gas prices have been noticeably increased in the past few years – a tendency which is expected to continue in nearer future leading to a further increase of the heating costs for citizens and thus representing a strong incentive for energy efficiency measures.

Public awareness

The awareness on the importance of energy efficiency among the general public is crucial for achieving reduced energy consumption. In Belarus, however, citizens have very low possibilities to influence the refurbishment of their house and implement modernization measures, and energy prices for residents have been very low for long time. Due to these reasons, the awareness of the general public on energy efficiency in general and the importance of a complex refurbishment approach in particular is rather low. However, there are a few institutions which aim at informing the citizens on energy efficiency, e.g. by organising exhibitions and mass media projects. Considering the national objective to fully phase out energy subsidies, raising the awareness of inhabitants on energy saving measures will become even more important in future.

Recommendations

Based on the background research conducted for Belarus and experience gained in the frame of ARCEE project a series of country-specific recommendations has been developed. In order to avoid duplication, a research on existing recommendations prepared by other organizations has been performed and some information has been included into the common paper.

In the final document a reader can find the recommendations that cover many different topics, and in general can be structured to legal and institutional changes, technical reform, financing, information and education of population and relevant specialists.

A full paper can be found here.

The full Country Dossier Belarus can be downloaded here. 

Ukraine

Ukraine is among the world’s most energy intensive economies with the country’s residential housing sector consuming approximately 25% of Ukraine’s electricity and 40% of its heat energy resources. The potential for achieving energy savings in the residential sector is therefore very high.

The housing stock and its management

The majority of the existing buildings in Ukraine dates back to Soviet times. Two thirds of the population live in multi-apartment buildings, the vast majority of flats (>90%) in multi-apartment buildings having been privatized with only a small number of flats being owned by municipalities or the state. Privatisation implies joint ownership of common spaces by the owners with all relevant rights and responsibilities.

According to Ukrainian Law, the apartment owners may establish associations of individual apartment owners in form of a homeowner association which provides the flat owners of a residential building with the possibility to take all decisions and assume the responsibility for the management and maintenance of their building. In case homeowners choose not to establish an association, their building is managed and maintained by housing and maintenance organisations selected by the local government - often with lower quality than when performed by homeowner associations. 

Today, after decades of insufficient maintenance and lacking refurbishment measures, the housing stock in Ukraine is in bad conditions. The constantly deteriorating situation leads to increasing waste of energy as well as decreasing structural safety of the buildings and living quality for the inhabitants. According to experts, more than 80% of the housing stock is in need of refurbishment of heating and water supply systems. 

Legislation on energy efficiency in buildings

The Law “About energy saving”, enacted in 1994, for the first time addressed legal, economic, social and environmental aspects of energy efficiency in Ukraine, having however a rather declarative character. Since then, different legal documents including aspects of energy efficiency have been adopted. However, their implementation is often not sufficient to successfully address the problems with regard to energy efficiency. 

Since 2011, Ukraine is Contracting Party to the Energy Community Treaty, having committed itself to implementing part of the EU legislation on energy, environment, and renewable energies including the EU’s Energy Performance and Building Directive (EPBD). As a consequence of joining the Energy Community, the development and/ or revision of energy efficiency legislation has been started. However, the requirements are not achieved so far. Several Draft Laws on Energy Efficiency in Buildings intending to reflect the EPBD requirements were submitted by different parties (including the Ministry of Regional Development, Housing Construction and Communal Services) for approval to the Parliament – none of the versions having been adopted yet.

Liability for construction quality

The experience of the ARCEE project shows, that low energy efficiency in Ukraine is very often directly related to the poor quality of the construction. Even if the technical documentation assumes proper insulation and other energy-efficiency related measures, the non-sufficient quality of the implemented construction works, may reduce the expected results.

What can the house owners do, if they notice defects in their apartments? Who is liable for the bad quality of the implemented works? The construction process involves a lot of stakeholders, responsible for different aspects. Sometimes it is very difficult for ordinary residences without background in Law to understand who shall take the responsibility for the insufficient construction quality and whether it is realistic for home owners to demand compensation.

In the context of the ARCEE project, a research was conducted on the issue of liability in the construction sector in Ukraine. In the summary paper a reader can find information on who are the actors involved in the construction process, who is responsible for the overall building quality, and what can a flat owner do in case of noticed defects. Basic legislative acts and laws, which define the regulation on the topic, are also provided.

Additionally, the paper give an overview on what is the common practice with the court cases proceedings on the building quality in the country, and whether it is possible for building companies to get an insurance against liability claims.

The paper can be found here.

Refurbishment

Despite the bad conditions of the housing stock and the high need for refurbishment, investments in the renovation of the housing stock are still low. If refurbishment is undertaken, homeowners often choose to implement single measures rather than a complex refurbishment for which an agreement among the other co-owners is necessary. However, implementing single measures such as exchanging windows, without at the same time applying insulation to the façade, has only a very limited effect regarding energy efficiency and may even have negative impacts on the building, such as mould.

Financing refurbishment

In Ukraine, yearly adopted programmes on housing reconstruction and renovation shall provide the basis for the refurbishment of residential buildings with financial support from the state or municipal budget. However, the public money allocated to the refurbishment of multi-apartment houses is very limited, and refurbishment and energy saving measures in practice mostly need to be financed by the homeowners or homeowner associations themselves. Besides the limited availability of public financing options and programmes, also the banking sector in general and the rare supply of credits in particular represent a major obstacle for financing energy efficiency improvements in the housing sector. 

Energy tariffs

Energy tariffs in the Ukraine continue to be well below their production costs covering the remaining costs from other sources or subsidies and cross subsidies of the residential sector by the non-residential consumers. The heat tariffs in Ukraine vary across regions and depend on the category of user, residential customers having a much lower heat tariff compared to other categories of consumers. The monthly heat costs per flat owner or tenant is calculated on the basis of the total heated area of the apartment. In houses with metering equipment, each flat owner pays his or her share of the building’s total heat energy. Flat owners of houses without heat meters pay the tariffs per square meter adopted by the city council. 

In order to increase energy efficiency in the residential sector, stronger incentives to save energy are needed. More realistic gas and electricity tariffs which are less subsidized by the state would increase the living costs of the population in the short term, but also be a motivation for investing in energy efficiency and reducing the energy use. 

Awareness raising on energy efficiency

Besides an appropriate legislative framework, favourable socio-economic conditions and the availability of technical solutions, awareness on energy efficiency issues as well as engagement and active participation of wide stakeholder groups are essential for reaching the energy efficiency targets in Ukraine. A variety of online sources and a wide range of tools are used to provide information and awareness raising material to different stakeholder groups in Ukraine, from professionals to the general public. Arguments used for highlighting the need of energy savings often regard economic benefits for households and decreasing the strong dependency of Ukraine on imports from neighbouring countries.

Recommendation

Based on the background research conducted for Ukraine and experience gained in the frame of ARCEE project a series of country-specific recommendations has been developed. In order to avoid duplication, a research on existing recommendations prepared by other organizations has been performed and some information has been included into the common paper.

In the final document a reader can find the recommendations that cover many different topics, and in general can be structured to legal and institutional changes, technical reform, financing, information and education of population and relevant specialists.

A full paper can be found here.

The Country Dossier Ukraine can be downloaded here.