Economic analysis of the renovation of small-scale district heating systems - 4 Lithuanian case studies

This paper describes the renovation and replacement problems of small district heating systems (DHS), which are characteristic to small towns in Lithuania and other Central and East European (CEE) countries. These problems have been scarcely investigated till present and are still the subject of acute energy policy discussions. The focus of this paper is economic analysis of heat generation costs with the aim to get an answer to the question: whether existing small DHS should be renovated or replaced by individual heating systems. The paper gives an economic analysis of heat generating costs for various technological solutions and capacities suitable for the needs of heat consumers in small towns. The analysis includes long-run heat generating costs in natural gas and biofuel boiler houses and CHP installations, including individual buildings and small DHS. Four small towns in Lithuania with the population below 40,000 were selected for the economic analysis. The economic, financial and technical state of DHS operated in these towns is different and reflects the diversity of DHS in Lithuania. The least cost heat-generating solutions for individual and district heating were investigated. The barriers for market penetration of new technologies were disclosed under Lithuania's conditions. The findings can also be useful for other CEE countries with similar problems. (c) 2006 Elsevier Ltd. All rights reserved.