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The price of heating can be further reduced in Kaunas

The thermal power plant Fortum Klaipėda was launched in Klaipėda in 2013. Among all other things, it also uses waste in heat and electricity production. This method of production has helped to reduce heat production costs for residents of the city.

According to Kęstutis Jonkus, CFO of AB Klaipėdos Energija, investments made by Fortum Heat Lietuva in Klaipėda reduced the price of heat. Klaipėda consumers pay 5.62 ct / kWh (including VAT) for heat in November.

Five years ago, Kaunas was known for the highest heat price among the major cities of the country. This was due to the fact that the main heat producer - Kaunas CHP - produced heat by burning expensive Russian gas.

The situation changed a few years ago, when other heat producers entered the heat production market of the city, and AB Kauno Energija owned by Kaunas City Municipality started actively investing in its boiler houses. That way the price of heat has dropped by a half in the course of five years in Kaunas.

However, there still is room for reducing the price of heat in Kaunas, especially when the heat tariff has not decreased upon the emergence of many small independent producers. This means that there still are possibilities for reducing the price of heat for consumers.

One of such possibilities is the production of heat by burning municipal waste left after sorting. The plan is to use this technology in the cogeneration power plant to be built in the Kaunas Free Economic Zone.

Currently, only 10% of waste is processed in the Kaunas region, and landfilling of the remaining 90 % of waste is not environmentally safe. The use of waste in energy would be in line with the objectives of the National Energy Strategy and would meet some of the heat demand of Kaunas city.

According to R. Bakas, CEO of Kauno Energija, Kaunas had the highest heat price of 9.01 ct / kWh (including VAT) five years ago, and now it is 5.34 ct / kWh (including VAT). “The return of Kauno Energija to the heat production sector modernizing its boiler houses and starting to burn biofuel, also the production of heat by other heat producers were the key factors having led to positive changes in pricing” – the CEO of the company explained.

The CEO of Kauno Energija R. Bakas pointed out one important aspect of participation of independent heat producers in the heat production process: “There is one technical aspect. Independent heat producers built their own boiler houses in places where they had land plots, and now boiler houses are located in different parts of the city, which makes maintaining the required parameters of the heat network more difficult, and complicates the maintenance of the network.”

According to the CEO of Kauno Energija, Kaunas is currently one of the leaders among the major cities of the country in terms of the use of biofuel for heat production, but there still is room for improvement in terms of prospects of use of other fuels, such as waste, especially in light of the fact that biofuel prices have already increased by 20% in recent years, which may also affect the price of heat - it may start rising as well.

“Kaunas should develop cogeneration faster. Kaunas has an old gas-fired thermal power plant and two cogeneration biofuel boiler houses, but they are too small for Kaunas network, so we need a new larger cogeneration plant to meet a part of the city’s heat demand. Such a cogeneration power plant would ensure the stability of operation of the technical network and guarantee a lower heat price to consumers”, says R. Bakas.

The new Kaunas cogeneration power plant will produce about 40 % of heat necessary for the city and will allow saving up to 13 million euro per year through reduced waste management fees, which have increased in Kaunas by a fifth since 2018, and through a lower price of heat.

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