Sunday, February 08, 2009

Subsidizing Gas Price in Household Consumption - Not a Smart Solution!

Dear Energy Professional, Dear Colleagues,

Mr. Murat Karayalçın, CHP candidate for Great Ankara Municipality Mayor said that "Natural gas, which is distributed to 1,100,000 units for household consumption in Ankara, is to be subsidized, in order to stop coal pollution". (METU Alumni Association, on 7 January 2009).

This is an incorrect statement. Natural gas can not be subsidized. If we subsidize natural gas, overall consumption gets higher and higher.

We need to reduce gas consumption since we are tied up with single supplier, and they increase their gas prices as long as we need to buy, and afford to buy.

Instead of subsidizing natural gas, we must install more face and ceiling insulation of our houses; in order to reduce gas consumption.

In face insulation, we use rock wool or similar sytrophor material on outside surfaces then put coverings to support. We can finance, arrange credit facilities to those who wish to make outside insulation of household units.

So for a typical house –almost 150 m2 – a residential apartment, I was paying TL 150 per month for heating expenses in year 2008, if I would make the insulation, the heating expense would stay same in 2009, but for those who didn’t, they would be paying TL 250 per month in year 2009, due to increase in imported natural gas prices. With insulation material (sytrophor / panel / face dressing) covering facades are made within 2 months in summer time, and the cost share per unit could be between USD 4000-6000.

We should also close ceiling if open, the roof should be wrapped with the rock wool insulation material. All windows should be changed with double-glass facades to reduce heat escape.

Today, prevailing price of face insulation covering all necessary labor, Pier + Paste + Insulation+ Paint is approximately 40 USD per m2 plus VAT.

We can arrange cheap financing, since it is saving money in the long term. Payback period is between 40-60 months.

We should also enforce more central heating systems for housing complexes. In Ankara Eryaman housing region, for 1-2-3 phases there are 5500 apartment units, all heated by 3 each x40 ton / hour steam boilers with monthly heating cost of 100 TL as of year 2008.

Individual Kombi system is too expensive and dangerous and therefore they have to be taxed heavily to discourage.

We have an academic paper to have a feeling on subsidizing natural gas in Argentina versus subsidizing outside face insulation in Sweden with similar winter conditions, on north and south hemispheres. Residential energy use was studied in one-family houses in the city of Bariloche, in the Patagonian Andean region of Argentina.

A survey was conducted of households connected to the natural gas network to correlate use of gas, living area and number of inhabitants per house. The annual average consumption of gas was found to be 169 GJ, and consumption of electricity 8 GJ. This total energy use per household per year is almost double the average value reported for Stockholm, Sweden, although both locations have similar heating requirements.

The difference was mainly due to heating energy consumption per unit living space, which in Bariloche was 1530 MJ/m2 per year, while in Stockholm the average is around 570 MJ/m2 per year. The high energy consumption in Bariloche is explained primarily by the construction characteristics of the buildings, and secondarily by the efficiency of the heating devices used.

We were able to conclude that subsidies on natural gas tariffs given to the residential sector do not promote a rational use of the resource. Furthermore, almost 40% of the population (mostly households in poverty) is not connected to the subsidized gas resource, but pay prices for alternative fuels that are between 10- and 15 times higher.

Policies to improve buildings and appliances would reduce emissions and make access to energy more equitable. Insulation and saving energy is for sure better than subsidizing natural gas prices. Your comments are always welcome.

Haluk Direskeneli, Ankara based Energy Analyst.

Source. Residential energy use in one-family households with natural gas provision in a city of the Patagonian Andean region, by A.D. González, A. Carlsson-Kanyama, E.S. Crivelli and S. Gortari, 2006, Bariloche Argentina, Stockholm Sweden


Blogger BeyondGreen said...

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9:13 AM  

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