Ukraine’s district heating companies should be privatized, according to the chairman of alternative energy company UkrTeplo, which makes wood pellets.
In an interview with the Ukrinform media service, Ivan Nadeyin said the Ministry of Regional Development’s efforts on behalf of the companies keep gas prices artificially low and allow for corruption.
He said the ministry has ‘lobbied for a non-increase in prices for district heating companies and in fact the district heating companies are still upkept by the government, since the government compensates for the difference in the cost value.
‘The district heating companies in fact earn on inefficient use of gas and losses in heat supply networks. The higher losses are, the more they will insert into the tariff and the more the consumer will pay.’
And he added that Ukraine ‘should just give out this sector to private business.
‘The district heating companies resist introduction of alternative types of heating, saying that such competition kills them,’ he said. ‘Everything should be regulated by the market. The government should not make business, but rather should regulate the market preventing the creation of monopolies.’
While district heating companies together represent Ukraine’s third-largest gas consumer, the World Bank has noted that their efficiency in using gas is ‘well below modern standards’.
The Bank’s six-year, $382 million District Heating Energy Efficiency Project began in 2014 and aims to save over 37,000 m3 of gas among Ukraine’s 10 district heating companies.