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ACTIVITIES IMPLEMENTED JOINTLY (AIJ)

List of Programmes

Annex II

PROPOSED UNIFORM REPORTING FORMAT:

NATIONAL PROGRAMME

1. Designated national authority for activities implemented jointly

A) Please fill in if not already communicated or if changes have occurred.
Item Please fill in if applicable
Name of organization(a): Närings- och Teknikutvecklingsverket
Name of organization (English): Swedish National Board for Industrial and Technical Development
Department: Environmentally Adapted Energy System in the Baltic Region and Eastern Europe.
Acronym: NUTEK
Acronym (English): NUTEK
Function within activity: Assigned by the Swedish Government for Implementation including financing arrangements.
Street: Liljeholmsvägen 32
Post code: S-117 86
City: Stockholm
Country: Sweden
Telephone: +46-8-681 96 07
Fax: +46-8-681 96 67
E-mail: gudrun.knutsson@nutek.se
WWW-URL: http://www.nutek.se
Contact person (for this activity): -------------------------------------
Surname: Westermark
First name, middle name: Sune
Job title:
Direct tel: +46-8-681 95 39
Direct fax: +46-8-681 96 67
Direct E-mail: sune.westermark@nutek.se
B) Describe the structure of the programme:

The Swedish Parliament decided already in 1993 to establish a program for what was later to be known as AIJ projects.

The decision stemmed from the perception that Swedish mitigation costs were relativeliy high when compared to most countries especially some of our neighbouring countries Accordingly, Swedish policy against climate change should include promotion of activities in these countries.

The relatively high mitigation costs in Sweden are caused by a high share of non-fossil energy in the energy balance, efficient use of energy due to high carbon dioxide taxes and programmes for the introduction of renewables as well as for increased energy efficiency. (The background is more fully described in the Swedish national report to the FCCC)

In the bill leading to the establishment of the programme now reported the minister of energy in 1993 declared that Sweden immediatelly should take action to assist the Baltic countries to make their energy system more efficient. Such actions were seen to be in accordance with the notion of JI as conveyed in the FCCC. They should also contribute to the cost-effectiveness of Swedish measures against climate change . The minister also underlined in his message to the Parliament that Sweden should have a pragmatic approach in her climate change policy

The fact that the criteria for JI were not yet determined when the programme was launched was not considered as any obstacle for the promotion and introduction of Swedish climate change policy initiatives in the Baltic countries, Poland and other East European countries. Such measures should be seen as an initial step towards an efficient, sustainable and equitable international climate strategy.

In the Swedish energy agreement of 1997 it was concluded that îSweden shall, as a member of the European Union, work towards a common climate policy and should actively promote international cooperation in the climatic field. In particular, Sweden shall engage in the development of efficient policy means within the framework of the climate policy of EU and the Framework Convention on Climatic Change. Sweden should also cooperate with other countries in the way envisaged by the Climate Comvention, through so called joint implementation.î

The programme is financed through special allowances from the Government Budget. Up to 1997 altogether a sum of MSEK 290,5 (around 40 MUSD) has been allocated to the programme. NUTEK, the Swedish National Board for Industrial and Technical Development, is assigned by the Government to implement the programme, which is mostly known as the EAES Programme, the Swedish Programme for an Environmentally Adapted Energy System in the Baltic region and Eastern Europe. According to the Swedish Energy Bill 1997, adopted by Parliament in June 1997, further resources of around 50 MSEK for investment projects are to be allocated annually to the Programme during the coming seven years. Furthermore, around 10 MSEK are to be allocated annually during the same period for R&D cooperation with and technology tranfer to the countries in the Baltic Sea region and Eastern Europe to support a sustainable development of the energy systems in these countries as supplement to the investment activities within the EAES Programme. The EAES Programme is adapted in line with the criteria for the pilot phase of Activities Implemented Jointly as agreed upon at the first conference of the Parties in Berlin in April 1995.

2. Process for obtaining approval A) Brief description of procedure:

When the Programme was started in 1993 it was introduced to the Government of Latvia which assigned the ministry responsible for energy, Ministry of Economy, Energy Department, to act as counterparttogetheter with Latvian Energy Agency for the selection and endorsement from energy point of view as well as from environmental and climatic point of view. During the years thereafter, following the development of the FCCC criteria for Joint Implementation - Activities Implemented Jointly, direct contacts for approval and endorsement have been developed also with the Ministry for Environment and Regional Development in Latvia. Today both ministries are involved in the endorsement of the projects and reports and information on the projects are provided to and discussed with both ministries.

In the follow-up activities the climate data required in the uniform reporting format are to be included together with other operation and performance data.

B) Description criteria for acceptance of an activity implemented jointly:
a) Decision 5/CP.1 (Appropriate sections from 5/CP.1 in italics) :
Criteria applied nationally
Activities implemented jointly should be compatible with and supportive of national environment and development priorities and strategies; In the process of selection of projects, appropriate local and national authorities are informed about the planned project in order that they support it.
Activities implemented jointly should contribute to cost effectiveness in achieving global benefits; The projects are financed by loans. The economy of the project shall allow for repayment of the loan and also generate a profit. The implementation of the projects also aims at cost efficiency. As an example - procurement is made in open competition, where local and foreign companies participate.
Activities implemented jointly under this pilot phase require prior acceptance, approval or endorsement by the Govenments of the Parties participating in these activities;

The swedish government intends within shortly to reach an agreement with a central authority concerning the approval of projects for AIJ and concerning the joint reporting of AIJ-projects.

Activities implemented jointly should bring about real, measurable and long-term environmental benefits related to the mitigation of climate change that would not have occurred in the absence of such activities;

Restraining factors in the host country for the implementation of projects within the EAES-programme have been a. o.

- that local investment funds are not available allowing financing at reasonable costs

- a weak local tradition to apply the technologies focussed upon in the EAES-programme, using wood waste from industry or from forest operations as a fuel, or applying an up to date technology for energy saving. Consequently the local technology for the applications has largely been missing.

These factors still restrain a local development, notwithstanding the fact that the technology development and local tradition have progressed rapidly as a consequence of a o the EAES-programme.

The EAES-programme concentrates on investments in the municipal sector with a foreseeable and long-term energy consumption.

The financing of activities implemented jointly shall be additional to the financial obligations of Parties included in Annex II to the Convention within framework of the financial mechanism as well as to current official development assistance (ODA) flows;

The Swedish EAES-programme is financed from funds for climate issues allocated by Ministry for Industry and Trade. These funds are separate from development assistance funds.

b) Other criteria:
Criteria applied nationally
In accordance with the general approach in Swedens climate policy, underlining a pragmatic approach, the selection of AIJ-projects focusses on projects meeting the following requirements:
Projects shall be implemented quickly, meaning that priority is given to small and medium-sized project, which do not call for complicated coordination or require lengthy feasibility and design works.
Projects shall be affordable, meaning that the avoided costs of the formerly used fossil fuel pay for the new equipment and the new fuel within a reasonable time.
Projects shall be reliable, meaning that the technology used should have proved to function well in earlier projects and that there will be no experimenting on the behalf of the borrower.
3. Description of programme features:

With reference to the positive effects of measures undertaken in Sweden in the energy sector in order to improve the environment and the climate, the NUTEK activities in the Baltic States and Eastern Europe are considered as an important step and a contribution to the work of developing a system for joint implementation in line with the obligations in the UN Framework Convention on Climate Change.

The programme, so far, mainly consists of the following three types of project:

ï Conversion of heat production plants to the use of biofuels

ï Reduction of heat losses in district heating systems

ï Energy efficiency in buildings

The activities are directed towards the heating systems: heat production, heat distribution and the residental sector, as Sweden in these areas can offer the required well-developed technology. To that can be added that the preconditions, i.e. forest resources, in the countries concerned are favourable for a conversion to the use of domestic biofuels. Other important issues in the co-operation are the possibilities to supply with thoroughly tested, energy efficient technology at affordable prices together with the transfer of know-how and training which is also a prequesite to giving the measures a lasting result and an inspiration to initiate further improvements within the framework of domestic programmes in these countries.

Besides climatic and environmental effects and energy savings there is also a demand for cost-efficiency and participation by the plant owner during all the steps in the process of a project. The projects are financed by loans from NUTEK to the owners of the plants. The conditions for the loans from NUTEK are in conformity with those applied by international finance institutions. The repayment time is maximum ten years and usually two years grace period are applied. Normally the projects show good profitability with short pay-off periods, around 3-5 years for boiler conversion projects. All repayments, including interest, are made to a special income account and are then to be returned to the programmeís allowance account to finance future projects. In addition to loans NUTEK is providing consultancy assistance to the plant-owner. The consultancy costs are paid by NUTEK and is thus not included in the loan. The consultants acts as advisors to the plant-owners during the whole implementation phase, i.a. in connection with procurement of equipment and works which are undertaken in open competition, and during the commissioning of the plant.

The projects are followed and evaluated from technical and economic points of view by local experts. Such evaluations are proven to be most important for future projects. In February 1995 and in November 1996 special measurement programs and performance tests were carried out of boiler conversion projects implemented in Estonia, Latvia and Lithuania allowing also for comparisons between different projects. These tests were made by Swedish specialists with the assistance of local staff in the boiler houses.

4. Summary of activities:
Type of projecta) Title of activity GHGs
CO2 CH4 N2O Other
fuel switching

to renewable energy

Broceni, a smaller town

During the implementation of the project the heat exchangers were demounted in the old boilerhouse and two new boilers were erected, one with a prefurnace for biofuels firing (4,5 MW) for the base load and one natural gas fired boiler (5 MW) for peak load. The installations consist of combustion equipment, automatic fuel storage, fuel handling equipment, flue gas cleaning equipment and heat exchangers. Estimated annual energy production on biofuels about 22500 MWh, total production of the boilerplant 29 000 MWh.

8600
fuel switching

to renewable energy

Aluksne is a small town in Latvia. There are several coal or light-oil fired boiler plants and district heating networks in Aluksne. In one of these boilerhouses there were three old coalfired DKVR 4-13 boilers. Annual energy consumption for this net was 30000 MWh.

In one of the heating plants in the town a new boiler with a prefurnace for wood chips firing has been installed. Automatic fuel storage, wood chipper and flue gas cleaning are also included. The new plant has an output power of 5 MW and is estimated to produce around 28 000 MWh per year.

25400
fuel switching

to renewable energy

Balvi is a middle-size town situated in eastern Latvia. There were two boiler plants with two networks. In one of them there were two DKVR 4-13 coalfired boilers with annual energy production 15000 MWh.

Conversion of a coal-fired DKVR 4-13 boiler to the use of wood chips through installation of a pre-furnace. Automatic fuel storage and flue gas cleaning equipment are also included in the project. The boiler output power after conversion is 2.4 MW and the estimated annual heat production amounts to 15 000 MWh.

13200
fuel switching

to renewable energy

Daugavgriva, a part of Riga town,

The plant consists for four identical oilfired steam boilers DKVR-10/13 and two oilfired hotwater boilers KGVM-10. The annual production is about 80000 MWh.

One of the DKVR 10-13 boilers has been converted to the use of biofuels through the installation of a moving inclined grate in separate prefurnace. The project also comprises an automatic fuel storage, flue-gas cleaning and a wood chipper. After conversion the output power of the boiler is estimated at 6 MW and an annual heat production of 40 000 MWh.

13000
fuel switching

to renewable energy

Janmuiza agricultural school is situated in Cesis district. All buildings in this place get their heat from a small light oil fired boilerplant. The annual energy production is about 15000 MWh

In the heating plant a new boiler with a prefurnace has been installed. Automatic fuel storage, wood chipper and flue gas cleaning are also included in the project. The new boiler has an output power of 3 MW and is estimated to produce around 12 000 MWh annually.

3800
fuel switching

to renewable energy

Rauna is a small village in Cesis district in Latvia. There are several boiler plants and district heating networks in Rauna. In one of them there was one logfired boiler and oilfired boiler. The annual energy production for this network was 7000 MWh.

In this project, a conversion to bio fuel has been made by the installation of a complete new boiler (1.5 MW) to replace one of the old ones. The installation is made up of a fuel storage with an automatic fuel handling system, combustion equipment and flue gas cleaning system. Estimated energy production 7000 MWh/year

2400
fuel switching

to renewable energy

Slampe is a small society about 100 km. west of Riga, the annual energy production is about 12000 MWh

Conversion of an oilfired DKVR 4-13 boiler to the use of biofuels through installation of a prefurnace. Automatic fuel storage, wood chipper and flue gas cleaning are also included. The output power after conversion is 3 MW. The annual heat production in the converted boiler is estimated at 12 000 MWh.

3900
fuel switching

to renewable energy

Ugale is a small town in western part of Latvia. There are two separate network systems with two boiler plants. One of them , with annual energy production about 12000 MWh

Conversion of an oilfired DKVR 4-13 boiler to the use of biofuels through installation of a prefurnace. Automatic fuel storage, wood chipper and flue gas cleaning are also included. The output power after conversion is 3 MW. The annual heat production in the converted boiler is estimated at 12 000 MWh.

4400
fuel switching

to renewable energy

Valka is an old town in the north east of Latvia with about 8000 inhabitants.

In this project, a conversion to bio fuel has been made by the installation of a completely new boiler (1.5 MW) to replace one of the old ones. The installation is made up of a fuel storage with an automatic fuel handling system, combustion equipment and flue gas cleaning system. Estimated energy production 9000 MWh/year.

3000
fuel switching

to renewable energy

Jekabpils is a town in south-east of Latvia

In this project, a conversion to bio fuel has been made by the installation of a completely new boiler (1.5 MW) to replace one of the old ones. The installation is made up of a fuel storage with an automatic fuel handling system, combustion equipment and flue gas cleaning system. Estimated energy production 7000 MWh/year.

2400
fuel switching

to renewable energy

Jurmala town close to Riga. There are several gas/oilfired boiler plants and district heating networks in Jurmala. Dubulti boilerplant has three gas/oilfired KGVM boilers. Annual heat production is about 60 000 Mwh.

Conversion of an oilfired KGVM 10-14 boiler to wood chips firing by installing moving inclined aircooled grate. Estimated power output abt 7 MW. The conversion is estimated to result in an annual heat production of around 40 000 MWh.

9400
fuel switching

to renewable energy

Viesite is a small town in south-east of Latvia. There is one smaller network with an annual energy production is 7500 MWh.

In this project, a conversion to bio fuel has been made by the installation of a completely new boiler (1.5 MW) to replace one of the old ones. The installation is made up of a fuel storage with an automatic fuel handling system, combustion equipment and flue gas cleaning system. Estimated energy production 7000 MWh/year.

2400

Sum

fuel switching to renewable energy,

91900

energy efficiency Jelgava is a big city near Riga. There are several boiler plants and district heating networks in Jelgava.

Exchange of the corroded main feeder pipe from the Ganibu heating plant (160 MW), 613 m pipes of 500 mm diameter and 100 m pipes of 300 mm.

412
energy efficiency Balvi, Integration of two separate district heating networks, whereby an old coal-fired heating plant situated in the midst of a hospital area is closed down. In addition a newly installed timber drying plant at a saw-mill was connected to the district heating system, which provides the heating company a solid source of income and with demand for a large base load for the boiler. Installation of metering and control equipment in substations are also included in the project. 4000
energy efficiency Aluksne, The new pipe-line has been laid to make it possible to close down one oilfired boiler- plant. The existing 4-pipe system has been replaced with a 2-pipe-system. Substations with heat exhangers have been installed 3085
energy efficiency Saldus, new pipe-line has been laid for connecting four buildings and closing down coal-fired boilers. The existing 4-pipe system has been replaced with a 2-pipe system. Substations with heat exhangers have been installed 335

Sum

energy efficiency in district heating networks

7420

energy efficiency,

building

School in Jelgava,

Renovation and insulation of the roof, installation of a heat exchanger in a substation on the incoming water pipes and regulators on subgroups in the heating system

80
energy efficiency,

buildings

Hospital in Saldus, Renovation and insulation of the roof, installation of a heat exchanger in a substation on the incoming water pipes and regulators on subgroups in the heating system 210

Sum

Energy efficiency in buildnings

290

Total 99610

a) For example using IPCC classification: energy efficiency; renewable energy; fuel switching; forest preservation, restoration or reforestation; afforestation; fugitive gas capture; industrial processes; solvents; agriculture; waste disposal or bunker fuels.