Belarus: Belarus Energy Profile

Energy sources

Installed power generation capacity (2008): 8,247МW.

Its total primary energy supply in 2007 amounted to 28,048ktoe. Most of the demand for primary energy is satisfied by imports from the Russian Federation. Domestic energy sources - crude oil, biomass (mainly wood), peat, coal, natural gas, and hydropower – satisfy only 13% of demand. Crude oil and natural gas are the main energy sources. Fossil fuels, including their use for petroleum derivatives, account for 95% of country’s primary energy. Renewable energy sources (RES) do not constitute a significant part of the energy supply.

Belarus produces less than 10% of the crude oil it imports. About 90% of the refined petroleum products are exported. Belarus appears to be an important component of the Russian oil supply chain. Almost all natural gas is imported (99%).

Total electricity generation amounts to 29.92 billion kWh. The power generation plants are predominantly gas-fired and satisfy about 90% of domestic demand for electricity; the remainder is imported from Russia, Ukraine and Lithuania. Hydro energy accounts for only 0.1% of total electricity generation. Combustible renewables and waste account for 3% of the total energy supply.

Reliance

Belarus imports more than 85% of its energy needs, main in the forms of crude oil and natural gas. Total electricity imports (mainly from Russia) amounted to 9.406 billion kWh (2007 est.) and total electricity exports amounted to 5.062 billion kWh (2007 est.). The state-owned electricity monopoly, Belenergo, engages in electricity trading with Russia and the Ukraine.

Extend network

NA
 

Capacity concerns

Belarus imports more than 85% of its energy needs, mainly in the forms of crude oil and natural gas. Electricity is produced entirely from fossil fuels, particularly natural gas imports from the Russian Federation. In 2008, total electrical losses on the Belarusian transmission and distribution systems were 11% of the electricity supply, thereby representing a slight improvement from 2006 (11.25%). These losses can be localized within the equipment and metering apparatus.

Renewable energy

Development of the renewable energy (RE) sector is of particular importance as Belarus aims to become energy independent. The development of the RE sector is expected to provide economic and environmental benefits. The RE potential is immense.

Hydropower
Hydro power resources in are scarce but there is potential for small hydro power plants (HPPs) in the Northern and Central parts of the Republic.

Wind
The country’s wind potential is not yet known; currently the wind power production amounts to 1million kWh. The majority of the country has wind velocities of about 5m/s at a height of 80m.

Solar
At present the use of solar power is minimal. Up until 2007, solar power did not contributed to the electricity generation mix. There are only a few applications of solar water-heating plants using flat-plate solar collectors.

Biomass
The most significant RES is wood. Approximately 13 million m3 of wood is harvested annually and 6.5 million m3 are used in biomass applications. A large range of wood-burning water-heating boilers with capacity from 60 to 5,000kW exist. In 2007, 20 million kWh of electricity was produced from biomass and waste.

Geothermal
Belarus is characterized mainly by low to moderate values of geothermal gradient. Despite a large number of non productive prospecting oil wells, thermal water is not used for electricity generation.

Energy efficiency

There is significant potential for energy efficiency improvements in the industrial, residential and agricultural sectors. The domestic heating sector offers substantial energy efficiency potential: it accounts for 8 bcm of gas or 40% of the annual gas consumption. It is thought gas consumption can be reduced by about 30% by retrofitting buildings, replacing group heat substations with individual heat substations, rehabilitating the district heating network, modernising heat generation and replacing district heating with decentralized heating options.

Ownership

Electricity market
The electricity sector is dominated by the state-owned generation, transmission and distribution holding Belenergo. The holding includes the six regional power system enterprises (Oblenergo), the central dispatch unit (ODU) as well as a multiplicity of electricity-related businesses (construction, R&D, repair and maintenance etc.). Belarus has no specially appointed Transmission System Operator (TSO) but the functions are shared by Belenergo, ODU and the Oblenergos. The transmission assets are in state ownership and the regional power companies are assigned the right of economic management. There are no independent power plants and Belenergo serves as the single buyer of all (including imported) electricity.

Petroleum and Gas
The Belarusian gas sector consists of two companies:

• Beltransgaz was transformed from a state concern into an almost entirely stated-owned joint stock company in 2003. Gazprom now owns about 50%. It owns the high-pressure transportation, transit and storage systems and is responsible for new construction and maintenance.
• Beltopgaz state-owned enterprise that managed by the Ministry of Energy (MEN) and overseen by the Ministry of Economy (ME). Its gas division consists of seven regional companies that operate about 35,000km of medium and low-pressure pipelines. It is responsible for gas distribution and domestic retail sales. Gazprom sells gas to Beltransgaz under contracts negotiated annually. Beltransgaz then resells gas to Beltopgaz which, through its subsidiaries (regional distribution companies), resells the gas to consumers.

Competition

The Belarusian electricity market consists of the vertically integrated monopoly run by the state-owned Belenergo. There is no regulated Third Party Access (TPA) to the electricity transmission and distribution networks and no market opening time frame has been announced.

Energy framework

The “Law On Energy Saving”, enacted in 1998 and last amended in 2006, sets out the obligations on the Government and other state bodies (including the State Committee for Standardisation) relating to the promotion of energy efficiency as a matter of national priority. The promotion of energy efficiency typically involves the provision of grants and soft loans to energy inefficient companies which intend to implement energy saving projects. Electricity production from RES is promoted through special purchase tariffs.

There is no national law relating to combined heat and power generation. The “Law On Environment Protection” requires that an environmental impact assessment has to be carried out and mitigation measures identified for any new economic activity that may have adverse effects on the environment.

Belarus ratified the Kyoto Protocol to the United Nations Framework Convention on the Climate Change in 2005. The Ministry of Natural Resources and Environmental Protection was designated as the authority responsible for implementation of the related obligations. The Decree of the Council of the Ministers (2006) set up a strategy for the reduction of greenhouse emissions for the period 2007 – 2012.

National Energy Saving Programme for 2011-2015
Reducing energy intensity by 29-32% of national GDP within five years is a goal of the newly adopted National Energy Saving Programme for 2011-2015. This target is based on the result of a previous programme implemented during the period 2006-2010 – 7.8 million toe were saved. This was achieved by implementation of annual regional and sectoral programmes for energy conservation.

The new National Programme on Energy Savings is based on the Strategy of Development of the Energy Potential of Belarus. The targets relating to the reduction in energy intensity (relative to 2005 levels) are:

• at least 26-30% by 2010,
• at least 50% by 2015, and
• at least 60% by 2020.

Energy debates

The “Law On Renewable Energy sources” was adopted in 2010. The secondary legislation, currently being developed, sets out:

• directions of state regulations concerning development and the use of non-traditional and renewable sources of energy (NTRSR) and
• directions for public support of NTRSR.

The draft Act has not been published but it is expected the provisions will include:

• guarantee of a power grid connection for all power systems using non-traditional and RES,
• obligatory purchase of energy from such systems by state enterprises dealing with provision of energy,
• preferential energy tariffs

Energy studies

• Economic Commission for Europe. 2010. Policy Reforms for Energy Efficiency Investments. http://www.unece.org/fileadmin/DAM/energy/se/pdfs/eneff/eneff_pub/EE21_FEEI_RegAnl_Final_Report.pdf

Role of government

The Government ministries with responsibility for the energy sector are the Ministry of Energy (MEN) and the Ministry of Economy (ME). The former is responsible for ensuring security of supply while the latter is responsible for economic regulation. Residential energy tariffs are regulated by the Government while those for other sectors are regulated by the ME.

Government agencies

There are three major institutions responsible for shaping and implementing the policy on RES: Energy Effectiveness Department of the State Standardization Committee of the Republic of Belarus, the Ministry of Energy and the Ministry of Natural Resources and Environment Protection. However, no single coordinating body exists. The duties of those institutions include planning, implementing and monitoring activities related to renewable and alternative energy sources. The Belarusian Academy of Sciences is responsible for development of the scientific and technical background for implementation of projects related to RES.

Energy procedure

National Programme of Development of Local, Renewable and Unconventional  Energy Sources for 2011-2015
This is aimed at the promotion of energy efficiency and the development of local energy sources. Additionally, it aims to ensure that domestic energy resources comprise at least 28% of the energy balance for heat and electrical energy generation by 2015 and at least 32% by 2020.

Development Programme of System of Technical Rate Setting, Standardization and Compliance Assessment in the Energy Saving Field
The development of technical standards and norms is one of the priorities of the Belarusian energy efficiency and RES policy. This program also sets the requirement of the compliance of national standards with international and European standards and EU Directives.

Other special programmes relating to energy efficiency and renewable energy are:

• State Programme for the Construction of Power Sources Fired by Domestic Fuels in 2010-2015,
• Programme for the Construction of Power Sources Fired by Biogas in 2010–2012, and
• State Programme for the Construction of Hydro Power Plants in 2011-2015.

At present, the Republic of Belarus is in the process of implementing the “Target electricity and heat provision program for achieving at least 25% of industrial production with the use of local types of fuel and alternative sources of energy by the year 2012". In order to meet this target, it is necessary to boost the production of electricity and heat up to 5.93 million Mtoe per year, use secondary resources such as heat energy as well as primary resources from wind turbines and biogas amounting to 0.82 Mtoe per year. In light of the above, the plans assume that the use of local energy resources (including secondary heat resources, wind, solar and biomass energy) will be increased by 2.8 Mtoe by 2012. So far, emphasis has been placed on the use of wood and wood waste but other RES have not been exploited.

• Project “Biomass Energy for Heating and Hot Water Supply in Belarus” – 3.129 million USD (2003-2008).
• Project “Removing Barriers to Energy Efficiency Improvements in the State Sector in Belarus” – 1.4 million USD (2007-2011).
• Energy Efficiency Project in Belarus – 125 million USD (2009-2014).
• Preparation of a project “Improving Energy Efficiency in Residential Buildings” – 4.5 million USD (2011-2015).
• Preparation of a project “Wind Energy Development in Belarus” – 3.5 million USD (2011-2015).

Energy Service Companies (ESCOs) and other initiatives in energy efficiency
Several ESCOs operate in Belarus, such as BelinvestESCO, Vneshenergoservice and Gmmotory, which implement under Energy Performance Contracting Schemes. BelinvestESCO was established in 2005 as the first ESCO in Belarus by the Belinvestbank and the Department for Energy Efficiency of the State Committee for Standardization. During the past four years, it conducted over 20 feasibility studies for different energy companies and is currently constructing two small combined heat and power plants (2 MW each) in collaboration with the local municipalities of Lido and Birosa.

Energy regulator

An energy regulatory authority does not exist.

Degree of independence

NA

Regulatory framework

• Law of the Republic of Belarus on Energy Conservation (1998)
• Law of the Republic of Belarus on Renewable Energy Sources (2010)
• Directive of the President of the Republic of Belarus: “Saving and Thrift are the Main Factors of Economic Security of the State” (2007)
• Republican Programme on Energy Conservation for 2011-2015 (2010)
• Strategy of Energy Potential Development of the Republic of Belarus (2010)
• Programme of the Development of Domestic, Renewable and Non-Conventional Energy Sources for 2011-2015.

An electricity grid code has yet to be adopted. Technical relations between energy suppliers and consumers are governed by the Rules of Electricity and District Heating approved by the MEN.

Regulatory roles

NA

Energy regulation role

Electricity tariffs for the residential users are set by the Council of Ministers and for industrial users by the MEN; wholesale electricity prices are unregulated. The ME acts as a regulatory body while the Ministry of Justice provides legal expertise on regulation. Gas prices are regulated by the same state bodies.

Regulatory barriers

The existing complex, bureaucratic system constitutes an obstacle to growth of the RE sector. Numerous programmes but have been less effectiveness than anticipated. The existing scientific base is insufficient for the implementation of projects related to renewable and alternative energy sources and there are no relevant technical standards.

Other major factors hindering the development of the RE sector include:

• relatively low prices of traditional energy resources (natural gas) and the resulting low profitability of RE projects,
• insufficient amounts of economic stimuli,
• cross subsidy and discounts to the residential, municipal and agricultural sectors,
• insufficient domestic funding,
• fear of foreign investors caused by the negative image of Belarus and poor knowledge of the market,
• power sector employee resistance to the liberalisation of the power sector,
• insufficiently developed scientific and technical base,
• failure to educate energy users about energy saving measures,
• considerable capital losses, and
• insufficient experience in the implementation of such projects.