Projects of Heating Sector

Cost Allocation for Co-Generation Facilities in Ukraine

Organization: DHInfrastructure

Description

The United States Agency for International Development hired Tetra Tech to implement its Energy Security Project in Ukraine to transform the sector into a modern, market-oriented sector ready for integration with the European Union. Tetra Tech wanted to hire a consultant to assist the National Energy and Utilities Regulatory Commission (NEURC) to revise their current practices for cost allocation between thermal energy generation and power generation in cogenerating facilities.

Service Provided

DHInfrastructure analyzed international practice and developed case studies describing cost allocation for all major cost categories (depreciation, maintenance, staffing, administrative, fuel, etc.) in seven countries with gas-fired cogeneration, one country with coal-fired cogeneration, and four countries with renewable-fueled cogeneration. For each case study, we assessed the legal and regulatory framework related to cogeneration, including cost allocation, rules, regulations, and formulas. Finally, we developed recommendations for cost allocation for cogeneration in Ukraine based on the case studies and the challenges facing Ukraine.