Management of energy efficient processes in residential and …ieomsociety.org/ieom_2016/pdfs/359.pdf · 2016-10-18 · management system of energy efficient processes in residential

Management of energy efficient processes in residential and public buildings at regional level: a Case Study of Latvia

Sanda Geipele Institute of Civil Engineering and Real Estate Economics

Riga Technical University Riga, Latvia

[email protected]

Gita Actina Institute of Physical Energetics

Energy Efficiency Center Riga, Latvia

[email protected]

Abstract — Increasing of energy efficiency in residential and public buildings are the key factors of reaching the EU targets of energy efficiency by 2020 in Latvia. Energy efficiency measure planning in Latvian regions is based on the European Union guidelines. To reach the goal of energy efficiency at national level, management of energy efficient processes has to be organized at regional level. This research highlights the management issues of energy efficient processes in residential and public buildings at regional level in Latvia that are not dealt with a proper level till now. Therefore this study is devoted to find out and to determine the influence level of management methods focusing on energy efficient processes in residential and public buildings on energy efficiency planning at regional level in Latvia. The research includes analysis of indicators that affects the Decision-Making of regional competent authorities of energy sector and energy end-users. In the research have been used statistical, logical, data processing and analysis methods. In order to improve existing management system of energy efficiency increasing in residential and public buildings at regional level in Latvia, authors are recommending to assess the regional process management system and management methods of energy efficient processes in residential and public buildings in all regions of Latvia. Necessary changes should be applied in accordance with the situation.

Keywords — Regional energy efficiency management, energy consumption reducing in residential and public buildings, energy efficiency measures, management methods of energy efficient processes, energy efficient solutions in residential and public buildings according sustainable development.

I. INTRODUCTION

Under the EU directive 2012/27/EU of the European Parliament and the Council “On energy efficiency, which amends earlier directives 2009/125/EC and 2010/30/EU and repeals the directives 2004/8/EC and 2006/32/EC” established Latvia's national energy and energy efficiency policies, reflect the global targets and common interests of the community.

The target of the national energy efficiency for 2020 corresponds to the energy savings quantification: 0.670 Mtoe (28 PJ), which is the primary energy savings. Latvia, in connection with implementation of the Directive 2012/27/EU, should reach the national indicative energy efficiency target, which should provide two binding targets - savings of energy delivered to the end consumers of the State should reach 1.5% annually (total 0.261 Mtoe (10.9 PJ) up to 2020); each year, 3% of state-owned building areas should be renovated (maximum estimate – total 678,460 m2, with the corresponding amount of energy savings throughout the period from 2014 until 2020 being 0.0044 Mtoe (0.18 PJ)) [1].

Requirements of Article 5, Paragraph 7, of “Energy Efficiency Directive” determine the encouraging of energy efficiency management system in the Member States, taking into account the respective competencies of public bodies and the administrative organizations, encouraging them, including the regional and local structures and social housing bodies governed by public law, to adopt national energy efficiency action plans and to consider the implementation of the energy management system [1].

Section on energy production and energy efficiency is included in “National Reform Program of Latvia for the Implementation of the “EU 2020” Strategy”, “National Development Plan of Latvia for 2014-2020” as well as “Latvia’s Sustainable Development Strategy until 2030”.

In pursuit to reach the energy saving targets, interests and needs of local governments, businesses and households should be taken into account. To reach the set targets the end-users should be able to influence the National Development Plan of

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Latvia by offering to the community and regional energy planning agency their individual plans and visions of the future development [1].

More than a half of all the energy resources in Latvia, situated in the north of Europe, are used for the supply of hot water and heating. Besides that, the thermal parameters of buildings are poor, what is the reason for a great potential of energy economy. The database of energy certification of buildings so far is not complete. Collection of data on energy consumption in buildings and structures is difficult. The last territorial reform in Latvia complicates obtaining of information in local governments. Unclear distribution of responsibilities in control and accounting of energy resources affects information gathering and processing.

Within the frame of this research, management methods of energy efficient processes have been defined and classified. Identification of factors affecting the energy efficient processes in residential and public buildings and the analysis of management methods of energy efficient processes have been performed. Authors of this research created a breakdown table of factors affecting the management system of energy efficient processes in public and residential buildings according to the impact area:

• socioeconomic content of the factors, legal nature and origin. • impact on energy end-users, • impact on energy market.

Within this research, information of number and type of heated residential and public buildings, heat and electricity generation and energy consumption data in municipalities of Riga and Zemgale planning regions of Latvia have been collected. This information can be used to develop local energy efficiency plans for residential and public buildings and regional energy strategy and policy plans.

The survey results have demonstrated the drawbacks of energy efficient processes and the need for development of energy efficient process management system for residential and public buildings.

To achieve the goal of the research, the hierarchy of institutions involved in the energy efficient process management system in Latvia and their role in energy efficient process management in public and residential buildings have been analyzed. To explain the interaction between factors affecting the operation of implementation process of energy efficient solutions in public and residential buildings survey of involved subject have been carried out. It proved the relations between, energy efficient processes, and the need to define subject groups of the energy efficient process management system to rise the energy efficiency in public and residential buildings.

The research is based on collection of binding regulatory enactments and policy planning documents. To describe the analytical evaluation of interaction of management function at different hierarchical levels of energy efficient processes management system to ensure energy efficiency in public and residential buildings, a scheme of organizations involved in the management system of energy efficient processes have been developed.

Based on the conclusions, recommendations have been carried out to solve the existing problems to rise energy efficiency in residential and public buildings and to encourage development of the management methods of energy efficient processes in public and residential buildings in Latvia.

The management methods of energy efficient processes in residential and public buildings developed by the authors are focused on Directive 2012/27/EU for encouraging the attainment of energy efficiency targets at national level. Developed methods are focused on energy end-user decisions to build, influence and shape the energy efficient solutions in residential and public buildings through all types of energy - electricity and heat - efficiency. This justifies the need to deepen and further develop the research of management system of energy efficient processes in purpose to improvement the methodological solutions offered by authors. Conclusions and recommendations are intended for future scientific, factual and practical development of given subject in Latvia.

To set the potential of energy efficiency in residential and public buildings in association with achievement of national energy efficiency targets in accordance to Directive of the European Union 2012/27/EU and to identify issues of management system of energy efficiency at regional and municipal level, the authors carried out a survey of five local governments in Latvia.

II. IMPLEMENTATION OF MANAGEMENT SYSTEM ENERGY EFFICIENCY In 1973 and 1979 during the period of energy crisis the term “demand management method” was formulated and in 1980

this term was publicly introduced by the Electric Power Research Institute (EPRI). [1, 2] The differences and interpretation of management concept definitions are based on close connection between theory and

practice in the field of energy, as well as on its multi-layered nature. Management methods of increasing the energy efficiency in residential and public buildings consists of an entirety of a certain system, which should constantly be improved and supplemented depending on changes in the situation.[1, 3] Energy efficiency management methods are functional economical



activities, which include practical management and control techniques to provide a rational use of resources and time, as a skill to achieve the set targets, using planning, motivation, action and control processes.

Energy efficiency targets included in National Development Plan are developed on basis of conditions of regulatory documents and should include targets of regional planning and local government level. Development and implementation of management system of energy efficient processes in residential and public buildings indicate the interaction between different planning levels in energy sector. This system could provide better solutions for building operation, create common approach to encourage solutions of energy consumption and promote cooperation between energy and management sectors in a single field of research (see Fig.1).

Fig. 1. Implementation of interdisciplinary system of energy efficient process management to energy sector hierarchic levels [Figure made by the authors] [1]

Management of energy sector development includes management processes of energy efficiency in residential and public

buildings, since they represent a considerable share of energy and pollutant emissions savings, and it is the basis for national energy development to raise the competitiveness and economic growth of the state. Latvian national energy strategy and policy-making is done in four hierarchical levels. Scientific institutions and associations of professionals are included in this system as advisors to encourage sector development and implementation of process control of the energy efficiency management system in public and residential buildings.

The bodies competent to define national energy policy and responsible of implementation of the existing legislations are a state institution. Responsible for development of policies and strategies to establish energy efficiency process management at national level in Latvia are three ministries:

• Ministry of Economics - responsibility of development of energy sector policy within the national strategy, its implementation and monitoring;

• Ministry of Agriculture - liability related to identification of renewable energy potential and control of its use in forestry and agriculture, development of energy production from renewable energy sources - wood, biomass, forest products, straw, agricultural waste and recycling products;

• Ministry of Environmental Protection and Regional Development – scope includes renewable energy sources (RES), emissions trading and emissions quota issues.

Only at the end of 2014, the website of Latvian Ministry of Economics provides information on recommendations (developed by the Ministry) of municipal energy sector planning, taking into account national policy priorities set according to Directive 2012/27 / EU of energy efficiency and the exemplary role of energy efficiency management in public sector, even though this kind of guidance was to be developed at least since 2010.

According to Figure 1 process management in regions and municipalities is the second hierarchical level of energy efficient process management structure. Municipalities are the level at which the energy related issues of heat and power in context of everyday life affect each citizen interests. Local government is the level of decision-making and action level, which deals with specific energy efficiency tasks.



The Management system of energy efficient processes enunciate practical activities and their theoretical background at all levels of hierarchic system of energy sector (national, regional, municipal, business and households), creating a toolkit of principles, methods, infrastructure, forms and organization for rising the energy efficiency in the aspect of sustainable development.

While studying the energy market issues, the term “peak management” has been found, associated with affecting the investments required for energy generation to meet the maximum energy demand, such as use of energy storage units to store the excess power generated during the low energy demand period and applying it during the active hours. [4]

Management of energy efficient processes in residential and public buildings as level of energy end-users can be defined as aggregate of tasks and functions, with the aim to obtain maximum economic effect by reduction energy consumption which is the result of implementation of energy efficient solutions. [1]

Analysis of achievement of energy efficiency targets during improvement of energy efficient processes in residential and public buildings, has determined the barriers of structural units in overall energy management system. Achievement of national and regional energy efficiency targets involves several structural systems, therefore, the use of process approach to increase energy efficiency in public and residential buildings allows closer cooperation between hierarchic levels of management system in energy sector. One of the most important advantages of the process approach is that when making any changes to the system it is easier to figure out what other changes are needed in order the progress of the processes would not be hampered [5].

Implementation of management methods to reduce energy consumption in public and residential buildings indicate interaction between EU targets at 2020, national energy sector development, contained in the National Development Plan of Latvia, conditions of regulatory documents at regional and local level and the effect of end-users (like residential and public buildings) needs.

Energy producers and suppliers

Energy end-users

General meeting of municipal

gorenments

Deputy Chairman of Council

Regional planning and development

council

Administration of regional and

municipal planning

Department of project

developement

Department of finence and budget

planning

Spatial planning department

Public transportation coordination department

Information department of EU

funds

Chairman of council

Cooperation commission

Depertment of energy efficient

process management

Fig. 2. Groups of management method measures and solutions for management of energy efficient (EE) processes

[Figure made by the authors]

Figure 2 shows the current organizational structure of planning regions. As it can be seen, institutions of Latvian planning regions don’t have separate unit intended to develop regional/municipal energy sector and energy efficient process management. This factor affects the quality of energy efficient process management in regions and state in total. This research showed that it is advisable to supplement the creation of energy efficient process management department, which would allow the implementation of energy efficient process management and control functions at regional and municipal level. By studying



the tasks and functions of planning regions, authors concluded that there are considerable difficulties with accurate energy data acquisition in municipalities from end consumers. To promote energy efficiency issues on a proper level some municipalities have set up energy agencies.

III. MANAGEMENT METHODS OF ENERGY EFFICIENT PROCESSES Regions institutions for common development planning in Latvian municipalities have been formed since 1997.

According to the Law on Regional Development regional planning territories have been established, but planning regions as public authorities have been established only in June 2006, when the planning regions were granted legal status.

There are five planning regions active in Latvia- Kurzeme Planning Region (18 counties and 2 cities), Latgale Planning Region (19 counties and 2 cities), Riga Planning Region (28 counties and 2 cities), Vidzeme Planning Region (25 counties and 1 city) and Zemgale planning Region (20 counties and 2 cities).

To increase energy efficiency in residential and public buildings authors have systematized management methods appropriate for the particular facilities divided into groups by the types of management impact (see Fig. 3).

Fig. 3. Groups of management method measures and solutions for management of energy efficient (EE) processes

[Figure made by the authors] [1, 8]

Relatively less expensive but useful by increasing energy efficiency in public and residential buildings are information methods which are related with data processing, analysis and transfer to other participants of the project. Incentive methods used to increase energy efficiency in public and residential buildings can be divided into two groups [8]:

• administrative methods – project analysis, project selection, project control and project audit and regulatory measures: licensing, certification, legal supervision;

• economical (financial) methods – tax breaks, subsidies, quotes, credit guaranties, funding attraction.



Energy efficient process management methods shown in Figure 3 can be used to affect the developments of energy-efficient projects in public and residential buildings. Currently most commonly used are informative methods. Usages of economical and financial methods restrict the voluntary principles of energy efficiency processes and failures of regulatory documents.

By carrying out complex and long-term projects to improve energy efficiency (EE) indicators in residential and public buildings, with inherent high financial capacity, the following should be taken into account [6, 7]:

• openness and coherence of decision-making in the process of planning and implementation of cooperation between regions, municipalities and energy end-users (owners of residential or public buildings);

• interrelated and complex solutions of energy efficiency issues in public and residential buildings; • analysis of all measures related to the strategic and sustainable development of energy efficiency projects in

residential and public buildings. Structure of National energy development strategy include following management methods of energy efficient processes:

• tracking of the use of energy; • technical safety guarantees; • development of auditing and monitoring base; • reducing of the negative environmental impact of energy complex by legal supervision and counselling; • assessment of energy waste adverse effects on human health; • involvement of residents and institutions in energy policy.

Regional energy efficiency management methods are more specific processes and include working out a municipality energy efficient action plan. This plan should contain following section:

• energy supply in municipality – electricity and thermal energy; • awareness campaigns in municipality:

• seminars and trainings for raising the competence level; • energy efficiency demand stimulation;

• availability of energy resources in municipality - renewable and fossil energy sources; • development of energy efficient projects in the municipality:

• construction and reconstruction; • public street lighting; • fuel consumption in the transport sector.

Set of standard management methods include also forced and penalty methods but in focus of voluntary basis of decision making on energy efficiency measures they are not acceptable. [9]

Development of scientific and practical functioning of management of energy efficient process management gives Latvia the opportunity to reach the EU targets (to increase the energy efficiency by 20% what corresponds to 0.670 Mtoe (28 PJ) of primary energy savings). Should be taken in to account that the bases of energy efficiency process management system are energy end-user groups, in this case overs and users of residential and public buildings in collaboration with State and local government’s responsible authorities. [7, 8] Before creating the national energy sector development program, specification of situation in regions and municipalities should be recorded and evaluated, to identify shortcomings and find appropriate solutions for problematic issues.

Table 1 contains factors which have the high effect level on development of management system of energy efficient processes and achievement of energy efficiency targets in Latvia according to the results of the survey of specialists in the energy sector in 2014 and 2015.



Table. 1. Factors affecting the management methods of energy efficiency implementation [Figure made by the authors]

Man

agem

ent m

etho

ds o

f ene

rgy

effic

ient

pro

cess

es Social factors

Economic factors

Technically technological and ecological factors

Political and legislative factors

• Quantity of engineering professionals

• Attraction of investment • Renewable energy sources

• Energy diplomacy of Russia

• Dimension of urbanization

• Energy prices • Capture of CO2, innovative solutions of utilization and storage

• EU cohesion

• Decentralized systems, driven by social activities

• Trading barriers • Concepts of innovative technologies

• Dampening effect of corruption on the development of effective policy • Regional infrastructure

• Market Structure and Policy

• Sustainability of energy subsidies

The factors affecting management of energy effective processes are social, economic, ecological, political and legal

factors (see Table 1). Most significant factors included in social factor group driven by changes in social activities are [1,11]: • urbanization level of region; • decentralized systems in region; • amount of engineering specialists available in region.

The group of economic factors content [1,3, 12]: • energy prices; • barriers to trade; • energy market structures and policies; • regional infrastructure; • attracting investments for EE projects; • sustainability of energy subsidies.

Ecological factors that must be taken into account in the operation of the management system of energy efficient processes are [1, 9]:

• use of energy resources; • CO2 capture, utilization and opportunities innovative storage solutions; • implementation of innovative technologies.

Legislative and political factor group affecting energy efficiency process management includes [1, 15]: • energy diplomacy; • European Union’s cohesion; • dampening impact of corruption on sectorial development and development of efficient policy.

Defined groups of factors serve mainly as a basis for energy efficiency management at national and regional level, but can be taken in to account also by development of management methods of energy efficiency processes in residential and public buildings, what allows to keep better navigation through all phases of management of energy efficient processes.

IV. CONCLUSIONS Industrial development forces the growth of global energy consumption. Energy sector and national economic

development in interaction with demographic and environmental changes are significant factors choosing the management methods of energy efficient processes.

Based on EU directive 2012/27/EU the EU member states have to develop national and regional plans for energy sector development, which include corresponding energy efficiency targets. Energy efficiency increasing management methods in residential and public buildings are key factor of achieve national energy consumption reduction target. Energy efficiency



plans establish at regional level including implementation of energy saving measures was topical subject at conference “Rio+20” held in June 2012: the necessity of establishing institutional structures on global, national and regional institutional levels to encourage the national sustainable development.[12] Energy efficiency process management methods are an aggregate of functions and tasks with the aim to obtain maximum economic effect by reducing of energy consumption in residential and public buildings by implementation of appropriate energy efficient solutions. To find the right solutions and prevent conflicts between scientific and economic sector, management system of energy efficient processes in residential and public buildings should be developed.

Energy efficient process management in public and residential buildings is an entirety of practical solutions based on theoretical assessment. At all hierarchical levels of energy sector development and implementation of energy efficiency is necessary to create a complex of principles, methods, infrastructures, forms and means of organization of energy efficiency management system in aspect of a sustainable development.

Implementation of management methods of energy efficient processes in public and residential buildings are applicable both the procedure approach and the systematic approach. Practical and theoretical studies indicate that most suitable management methods of energy efficient processes to increase energy efficiency in public and residential buildings are informative and incentive methods.

Decisions of energy end-users like residential and public buildings are affected by several factors from different sectors like national economy and legislation so as social system and ecology. Entirety of those factors affect the choice of energy efficient professes and solutions.

Development of management system to encourage energy efficiency in public and residential buildings can influence the competitiveness of environment and improvement of living conditions of local residents, taking into account the nature of surrounding environment and its improvement requirements within the region. Energy efficiency process management system used to reduce energy consumption in residential and publics buildings can contribute to a sustainable development of energy sector both in the region and in the country as a whole.

V. SUGGESTIONS

To increase the effectiveness of energy efficient process management in residential and public buildings the authors of this research recommend to adapt the functions of real estate market [13] in focus of the close link between energy and energy efficiency to real estate sector determined by the “Law of energy performance of buildings” [14, 15]:

• education of owners and users of public and residential buildings in energy consumption by clarifying theimportance of energy efficiency, innovative technological opportunities;

• analytical evaluation of investment efficiency of each particular energy efficiency projects;• tutorials focused on specific residential or public building owners or users to determinate the urgency of energy

saving solutions and explaining the investment opportunities; • reconciliation between different hierarchical levels of energy efficiency management system (national, municipal,

corporate and household) to indicate their needs and targets; • encouraging the decision making process of energy end-user in public and residential buildings and influence the

achievement of higher energy efficiency outputs; • to achieve energy efficiency and sustainable development targets at regional level, to develop control and audit

system to navigate the energy efficiency projects in municipal buildings. To track the problems causing the risk of not achieving the national energy efficiency targets until 2020, further develop of

practical action and scientifically significant in the energy efficient process management sector is recommended. To ensure the cooperation with energy end-users who affect the demand of energy efficient solutions in resident and

public buildings, authors of this research are recommending to establish the basis of creation of an organized energy efficient process management system at municipal, regional and national level.

Management methods of energy efficient processes in residential and public buildings have to be modified and applied according to specific needs of each facility, taking in to account variety of factors affecting demand and implementation of energy efficient solutions.

Implementation of management methods and organization resources considering interests of all participants of energy sector is the key factor to achieve national and regional energy efficiency targets by 2020 considering. Establishment of theoretical and practical functions of management system of energy efficiency processes in residential and public buildings will improve the energy sector planning and development in all hierarchical levels (national, regional, municipal, producing and supplying, end-users).



Energy efficient solutions in public and residential buildings are part of encouragement of energy sector sustainable development. It can be affected by national tax policy, which leads to more productive business environment, investment efficiency which is the key factor of investor attraction. Changes in national tax strategy can also implement the use of innovative technologies and solutions. Regulatory enactments related to the tax policy can be a motivating factor also by decision making on implementation of energy efficient solutions in residential buildings.

Further development of management system of energy efficient process is recommended to avoid conflicts between interests and targets or different hierarchic levels of energy end economic sectors.

REFERENCES

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[2] Balijepalli V. S., Murthy K. , Pradhan V., Khaparde S. A., Shereef R. M.. Review of Demand Response under Smart Grid Paradigm.Innovative Smart Grid Technologies - India (ISGT India), IEEE PES, 2011. – pp. 236–243. ISBN: 978-1-4673-0316-3, DOI:10.1109/ISET-India.2011.6145388

[3] Baye M. R. (2013) Managerial economics and business strategy. 8th ed. London. McGraw Hill Education, 2013. – p. 636 ISBN:9780077154509

[4] Palensky, P. Demand Side Management: Demand Response, Intelligent Energy Systems, and Smart Loads. IEEE Transactions onindustrial informatics, vol. 7, no. 3, 2011. – pp. 381 – 388. ISSN: 1551-3203, DOI: 10.1109/TII.2011.2158841

[5] Koubarakis M., Dimitris Plexousakis D. A formal framework for business process modelling and design. Information Systems.Elsevier. 2002. – pp. 299.–319. DOI: 10.1016/S0306-4379(01)00055-2

[6] Michna J., Ekmanis J., Zeltins N., Zebergs V., Siemianowicz J. Management Of Energy And Environment Conservation: CurrentMethodical Problems // Latvian Journal of Physics and Technical Sciences, NR 1. 2011. – pp. 28-42

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[9] Chiu W.Y., Sun H., Poor H.V.. Energy Imbalance Management Using a Robust Pricing Scheme. IEEE Transactions on Smart Grid,vol.4, no.2, 2013. - pp. 896-904. ISSN: 1949-3053; DOI: 10.1109/TSG.2012.2216554

[10] Institutional framework for sustainable development. Rio Conference or Earth Summit. Rio+20. United Nations Conference onEnvironment and Development (UNCED). Retrieved from http://www.uncsd2012.org/isfd.html

[11] Максимов М. М., Игнатева А.В., Комаров А.М. идр. (1998) Менеджмент. – Москва. ЮНИТИ. – 325стр.[12] AGENDA 21. United Nations Conference on Environment & Development. Rio de Janerio, Brazil, 3 to 14 June 1992. -

http://sustainabledevelopment.un.org/content/documents/Agenda21.pdf[13] Vanags J. Real Estate Economics. – Riīga: RTU Print, 2010. – 297p.[14] Koubarakis M., Dimitris Plexousakis D. A formal framework for business process modelling and design. Information Systems.

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BIOGRAPHY

Sanda Geipele, Dr.oec, Assist. Prof., Researcher, Riga Technical University, Latvia. Within over 5 years she worked as a Chief Economist in Riga City Council`s Municipal Revenue Department and her work was related with real estate tax administration. Research interests: Sustainability Development Problems of Real Estate Market, Construction Industry, including Land Use Management and Institutional Economics. She is an author and co-author of 32 scientific publications. Since 2010 she has participated in more than 16 scientific conferences and 5 international scientific and practical projects. Sanda Geipele is an expert on Management and Economics Sciences of the Latvian Council of Science.

Gita Actina, Dr. oec, is Head of Latvian energy efficiency network in the Institute of Physical Energetics of Latvian Academy of Sciences since 2003, starting with 2005 also is a research assistant in the field of heat power industry and participated in international and state-funded research projects on planning of sustainable development of regional power sector. Since two years, she holds the position of Secretary General of Latvian Branch of International Association for Energy Economists. In 2000, she acquired a degree of Bachelor of Social Science in management science within the Program of foreign economic relations at the University of Latvia, and in 2002, a degree of Master of Social Science in management science was acquired within the Program of marketing research. Within over 10 years of professional experience, she is participating in solution of energy economics problems at Latvian National Committee of the World Energy Council. The findings of her studies are reflected in 32 publications, which were presented at 19 international conferences.


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Management of energy efficient processes in residential and …ieomsociety.org/ieom_2016/pdfs/359.pdf · 2016-10-18 · management system of energy efficient processes in residential