TRANSITION TO RENEWABLE ENERGY SOURCES AS THE BASIS OF INCREASING THE RESILIENCE OF DISTRICT HEATING IN THE CONDITIONS OF MARKET REGULATION
DOI:
https://doi.org/10.56197/2786-5827/2024-3-4-3Keywords:
district heating, renewable energy sources, tariff, market regulationAbstract
Introduction. Despite significant efforts to reduce the use of fossil fuels, a sharp limitation in the supply of key resources still leads to significant price fluctuations and energy challenges. The transition to alternative energy sources makes it possible to partially eliminate these threats and accelerate the introduction of the latest technologies in the conditions of market regulation.
Materials and methods. The study employed various methods, including, system analysis, economic-statistical analysis, correlation, and regression techniques. The statistical base of the study is obtained from open resources, in particular, the National Energy Regulatory Council of Lithuania (NERC).
Results and discussion. Implementing market regulation into district heating (DH) in Lithuania contributed to a gradual decrease in heating end-prices. However, the limited supply of natural gas in the EU market and high dependence on the key global supplier caused an energy crisis and significant fluctuations in the prices of fossil and renewable fuels, e.g., solid biomass. District heating systems, which managed to minimize dependence on natural gas before the beginning of the crisis, turned out to be more resistant to shock fluctuations in the energy markets, but it was not possible to avoid the negative impact. This is due to the high dependence of solid biofuel prices on price fluctuations on fossil fuel markets. At the peak of the energy crisis, when the natural gas price was the highest (heating season 2021-2022), the heating tariff (variable costs) increased by 2.2 times in the system based mainly on solid biofuel (Kaunas), while in the system dependent on natural gas (Vilnius) a similar increase was 3.5 times compared to the 2020-2021 season. However, in the post-crisis heating season, tariff increases in both compared systems were similar (2.5 versus 2.4 times), and the difference in tariffs returned to pre-crisis levels ( in Kaunas, the tariff is more than 30% lower). The relative stability of the DH system in Kaunas is due to the developed market of solid biofuels in Lithuania (functioning of the biofuel exchange) and high competition among heat producers. However, smaller DH systems are characterized by low competition among heat producers.
Conclusions. The strengthening of price competition in the heat market contributes to the reduction of tariffs and accelerates the transition to RES. However, fossil fuel price fluctuation affects the formation of relevant trends in the RES market, particularly solid biomass. Despite this, district heating systems with a high share of biomass use are more resistant to crisis, smoothing out price shocks in the energy market. The further increase in the share of RES within the diversification of green energy sources in the production of heat energy can contribute to increasing the resistance of DH systems to market fluctuations.
References
Diachuk, O. (2016), “Ukraine’s contribution to the new global Agreement on climate change”, Economy and Forecasting, 1, pp. 129-141. URL: http://www.irbis-nbuv.gov.ua/cgi-bin/irbis_nbuv/cgiirbis_64.exe?I21DBN=LINK&P21DBN=UJRN&Z21ID=&S21REF=10&S21CNR=20&S21STN=1&S21FMT=ASP_meta&C21COM=S&2_S21P03=FILA=&2_S21STR=econprog_2016_1_11
Farghali, M., et al. (2023), “Strategies to save energy in the context of the energy crisis: a review”, Environ Chem Lett 21, pp. 2003–2039, URL: https://doi.org/10.1007/s10311-023-01591-5
Zakeri, B., et al. (2023), “The role of natural gas in setting electricity prices in Europe”, Energy Reports, Volume 10, November, pp. 2778-2792, URL: https://doi.org/10.1016/j.egyr.2023.09.069
Kovalenko, Y., Lazarenko, D., Marchenko, O. (2024), “Energy security of country during the war: barriers and prospects for overcoming”, Herald of Khmelnytskyi National University. Economic sciences, 1, pp. 262-266. URL: https://doi.org/10.31891/2307-5740-2024-326-41
Liadze, I. et al. (2023), “Economic costs of Russia-Ukraine war”, The World Economy. Volume 46, Issue 4, pp. 874-886. URL: https://doi.org/10.1111/twec.13336
Chepeliev, Maksym et al. (2023), “Can Ukraine go “green” on the post-war path?” Joule, Volume 7, Issue 4, pp. 606 – 611. URL: https://doi.org/10.1016/j.joule.2023.02.007
Kyzym, M. and Kotlyarov, Y. (2024), Napriamky rynkovykh peretvoren u sferi teplopostachannia Ukrainy: monohrafiia [Directions of marketing transformations in the heating sphere of Ukraine: monograph]. PE Liburkina L.M. Kharkiv, Ukraine, 338 p.
Yushchenko, N. (2021), “Economic feasibility of development in Ukraine moderate liberalized market of thermal energy”, Economy and Society, (23), URL: https://doi.org/10.32782/2524-0072/2021-23-21
Gajdzik, B., Wolniak, R., Nagaj, R., Žuromskaitė-Nagaj, B., Grebski, W.W. (2024), “The Influence of the Global Energy Crisis on Energy Efficiency: A Comprehensive Analysis”, Energies. 17, 947, URL: https://doi.org/10.3390/en17040947
Yang, Z., et al. (2023), “Causes, impacts and mitigation measures of European energy crisis”, Automation of Electric Power Systems, 47 (17), pp. 1-13. https://doi.org/10.7500/AEPS20230129006
Kogut-Ferens, O., Masevych, A. (2023), “Causes and current state of the energy crisis in european countries”, The Actual Problems of Regional Economy Development, 1(19), pp. 61–69, URL: https://doi.org/10.15330/apred.1.19.61-69
Geletukha, G., Zheliezna, T. and Bashtovyi, A. (2018), “Problems and prospects of long-term planning in the heat supply sector of Ukraine”, Thermophysics and Thermal Power Engineering, 41(2), pp. 72-77. URL: https://doi.org/10.31472/ttpe.2.2019.10
Malinovskyi, A.A., Turkovskyi, V.G. and Muzychak, A. Z. (2009), “Cenralized heat supply has a prospect in Ukraine”, System Research in Energy, 1 (19), pp. 50-56. URL: https://systemre.org/index.php/journal/article/view/365/306
Geletukha, G., Kramar, V., Oliynyk, Y. and Antonenko, V. (2018), “Analysis of the possibilities for saving and development of district heating systems іn Ukraine”, Thermophysics and Thermal Power Engineering, 41(1), pp. 53-58. URL: https://doi.org/https://doi.org/10.31472/ttpe.1.2019.7
Pažėraitė, A., Lekavičius, V. and Gatautis, R. (2022), “District heating system as the infrastructure for competition among producers in the heat market”, Renewable and Sustainable Energy Reviews, Elsevier, vol. 169(C), URL: https://doi.org/10.1016/j.rser.2022.112888
Ziemele, J., Gravelsins, A., Blumberga, A. and Blumberga, D. (2017), “Sustainability of heat energy tariff in district heating system: statistic and dynamic methodologies”, Energy, URL: https://doi.org/10.1016/j.energy.2017.04.130
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2024 Сергій Киризюк
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
