Why is energy conservation not yet in demand?
“Experts estimate that in 20 years humanity will need 30 percent more energy than today. This is due to the development of the world economy, the growth of the world’s population, the improvement of the quality of life and the level of consumption, especially in developing countries. Let me remind you that today, according to statistics, up to two billion people on the planet do not yet have full access to energy sources.” This statement was made at a recent Russian Energy Week. And what about the electric cars? Electric vehicles have to get electric power, which first has to be generated by a power plant. And what about renewable energy sources? Given that today the main source of energy is not even oil but coal, renewable sources will hardly reach the first place in the generation system in less than 30 years. All this, however, does not negate the key importance of energy efficiency. After all, it is important for an economy, no matter how much energy the economy uses.
CONSERVATION IN FIGURES
- 7,21–8,4% ENERGY SAVING EXPECTED BY 2020 BY THE MINISTRY OF ENERGY
- 2 416 000 JOBS CREATED IN ENERGY-SAVING COMPANIES IN EUROPE
- 367 000 EUROS — SAVINGS FROM ENERGY EFFICIENT UPGRADES OF NON- RESIDENTIAL PREMISES IN THE UK
Roman Sergeevich Golov, Director of the Institute of Management, Economics and Social Technologies of the MAI National Research University, Editor-in-chief of the journal “Economics and Management in Mechanical Engineering” Member of the Presidium of the FES of Russia, Doctor of Economic Sciences, Professor.
— Under the current circumstances, in times of crisis, energy saving is one of the possible sources of economic growth in Russia. There is a huge potential for energy saving, and the implementation of this potential will let us save actual money resources. Experts estimate the country’s energy saving potential to be 470 to 481 million tons of equivalent fuel. This volume is equivalent to 50% of all types of energy and fuel annually consumed throughout Russia.
KEY MEASURES
- First of all, the improvement of the regulatory framework that defines the context of energy-saving activities.
- Training of energy saving professionals. According to many expert estimates, we now have a deficit of highly skilled specialists in the field of energy conservation.
- Development of energy service. It is a special mechanism that has been used abroad for a long time to save the energy consumer’s money.
- Creation of innovations in energy conservation to solve the import substitution problem.
OBJECTIVE REALITY
Natalia Vladimirovna Kireyeva, Professor of the Department of Economics of the Ural Social and Economic Institute of the Academy of Labor and Social Relations, Chairman of the Chelyabinsk Regional Organization of the FES of Russia, Doctor of Economics
On the wholesale electricity market, any gap between the plan and the fact can lead to a 20% rise in the price of the kilowatt-hour, and for gas, the price increase factor can be as high as 50%. We analyzed the status of planning in the Chelyabinsk region for the past 5 years and found that for electricity such gaps exceeded 9% and it cost our enterprises nearly 6.8 billion rubles. For gas, such gaps exceeded 11%, another 25 billion added to the cost of industrial output.
Speaking at the environmental summit in Paris, the president set the task of reducing the energy intensity of the economy 13.5% by 2020.
A new methodology for planning and operational management of production was developed in the Chelyabinsk region, which, at first experimental checks, showed fairly good results in terms of its accuracy. We proposed to evaluate the quality of this methodology on the example of a particular enterprise. Three basic enterprises were selected, whose owners agreed to implement these pilot projects. During the year, we carried out the necessary studies and obtained the following results.
We checked the quality of planning at these enterprises, and for all of them the accuracy was off by 10%, which is quite a lot. We recalculated the enterprises’ routine requisitions using the new methodology, and the gap immediately shrank from 10% to 0.8%. This means that if the enterprises switched to the sixth price category, they would save 3.7 to 36 million rubles over a year. The savings result from the fact that the enterprise simply changes the way of planning without making any other efforts. And by transferring part of the production from daytime to nighttime to relieve peak hours (and these enterprises already have round the clock production), the amount of savings can be increased from 3.7 to 36 million rubles.
The situation is similar in gas. All three enterprises are serviced by the Chelyabinsk supplier, Novotek, whose gas is quite expensive and is delivered subject to strict conditions. For the duration of one month the enterprise is forbidden to change its routine requisition. That is, it is forced to adjust its fact to the plan, but real life keeps changing, the situation keeps changing. However, Novotek provides them with a so-called deviation corridor ranging between -20 and +10, within which these sanctions do not apply. But the enterprises do not fit in this corridor by far with the current method of planning, they all are subjected to penalties connected with increases in gas prices, under-consumption or over-consumption of gas.
We offered them an alternative – armed with the new planning methodology they could purchase gas at the St. Petersburg Commodity Exchange. Gas is much cheaper there, but there is no corridor; such luxury, -20 to +10, is impossible at a stock exchange. True, the exchange has an advantage – it allows you to adjust routine requisitions and even enter into one-day contracts, which let you take into account all changes in the production program. And when we recalculated the routine requisition, the gap also shrank to nearly 0.9%, which means that the enterprises could save 2.4 to 8.3 million on gas.
A curious fact. Improving the accuracy of planning has produced economic effect not only in the energy sector. In fact, the enterprises work with buyers while negotiating contracts and have only an estimated cost of production to go by. Simply because there is no actual cost. Until the month is over and the accountant has finalized the actual data, there is no actual cost. If your estimated cost is too high due to incorrect calculation, and the price offered by the customer is below your estimated cost, you turn him down – and end up with lost profit. Using such a factor as the improvement of the quality of planning, the enterprises could increase their profits from sales by 8%, 51%, and even 74 times in 2015, but this was due to the fact that the last enterprise’s profit was meager that year.
