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Being the principal heat producer in Kaunas, Kaunas Heat and Power Plant (KHPP) plans no increase in heat prices in the nearest half a year and prices remain as one of the lowest throughout Lithuania, namely 14.76 cents per kilowatt-hour.

Antanas Pranculis, the Director General of KHPP, asserted that the company was ready to continue heat production at attractive prices. “These are not mere words, proved by the fact that over five years Kaunas city inhabitants have saved roughly 200 million LTL due to our stable heat prices. To my mind, this is appreciated also by the heat purchaser KAUNO ENERGIJA and municipality, its administrator, and, moreover, consumers of heat, supplied to the city”, he said.

 

 

Heat distributors in other Lithuanian towns and districts speak up of further increase in heat prices for gas becomes more expensive.

One of the first initiatives of such talks appeared among Klaipėda residents. Being the heat provider to the consumers of the city, KLAIPĖDOS ENERGIJA has already submitted all the estimates to the National Control Commission for Prices and Energy (NCCPE) and pursues an increase in the heat price next year, namely from 20.57 cents up to 25.8 cents per kilowatt-hour.

Heat is likely to get yet more expensive in Vilnius. The new heat rate to the residents of the capital may be still established during this heating season, i.e. after two months. Witnessing the augmentation of the price for gas, Vilnius residents uneasily await the rise in the heat price.

Pursuant to the information of the Lithuanian District Heating Association, the average heat cost price in the Baltic States has arrived at 23 cents per kilowatt-hour for this heating season.

 

 

Energy sector expert Rimantas Zabarauskas said that Kaunas residents obtain benefit for the city power plant generating heat and electricity at the same time. Vilnius and Kaunas have modern and high power combined heat and power plants. Combined heat and power technology allows generating more electric power and, once sold, permits cheapening heating to consumers.

“Mere heat production in boilers does not have such an advantage. For instance, ŠIAULIŲ ENERGIJA produces heat from natural gas only and, actually, has no combined heat and power facilities. Heat price in Šiauliai is by about 10 % higher than that in Kaunas and Vilnius”, stated Mr Zabarauskas.

Both in Vilnius and Kaunas, the major type of fuel seems to be natural gas. A minor proportion, namely 12 % of fuel, of Vilnius system includes fuel oil and wood in chips. Heat production prices, at which heat is supplied to the network, seems to vary at a relatively close rate in both cities, namely 14.69 cents per kilowatt-hour in Vilnius and 14.76 cents per kilowatt-hour in Kaunas (excluding VAT).

According to the expert, these prices are already lower than the natural gas component of heat production cost price, which presently amounts to around 19 cents per kilowatt-hour. The given is feasible due to the fact that electric power, produced alongside with heat, is sold at a pretty higher price than that of heat only. The established price for the combined power, produced in Vilnius and Kaunas, for 2009 equals 31-32 cents per kilowatt-hour.

 

Vykintas Šuksteris, Member of Presidium of the Lithuanian Energy Consultants Association, stated that individual boiler houses are not able to produce cheaper heat to inhabitants as compared to thermal power plants. “The people should not rush to disconnect from the central heating system and equip smaller heating resources, because after the estimate of overall expenses the price would be likely to grow simply”, asserted the expert Mr Šuksteris.

Lithuania faces delays in pushing up tariffs, as a result of which, all the companies suffer losses. Should the gas prices start demonstrating decrease, it would allow the companies recovering debts.

“Kaunas and Vilnius receive the cheapest heat due to their biggest power plants. Their technology is analogous; production prices are the lowest. Gas distribution at smaller power plants is more expensive than at bigger ones, consequently, production price would remain bigger at all times”, Mr Šuksteris named the advantages of larger power plants.

 

 

Chances for the reduction of the heat price to the consumers of Kaunas are available already at this stage. Though the administrative component of the heat price is lower than that of the fuel, some reserves for the reduction of price are still available.

“Great advantage remains for the fact that heat production and distribution is in the hands of a strong and powerful enterprise. Presently, a detailed financial and economic internal analysis must be performed and reserves must be search for at KAUNO ENERGIJA. Passing heat production and distribution into the hands of one enterprise, it is possible to perform restructuring and, thus, reduce administrative expenditure”, alleges the energy sector expert Mr Šuksteris.

 

 

According to the design for the development of KHPP, one of the most modern thermal power stations in the eastern and central Europe is planned to be constructed in Kaunas. Its capacity would amount to megawatts of several hundreds. Power plant would produce heat to the consumers of Kaunas city, whereas electricity would be supplied for the satisfaction of the needs of whole Lithuania. The new power plant would become a reliable electricity supplier next year after the termination of the performance at Ignalina Nuclear Power Plant.

As compared to the current power plant, the new modern power station, which meets up-to-date requirements, would require significantly less natural gas for the production of heat. The given would be also directly felt among the inhabitants of Kaunas city, as they would receive smaller heating bills.

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