Heat Tariff Reform and Social Impact Mitigation : Recommendations for a Sustainable District Heating Sector in Belarus

The Government of the Republic of Belarus (GoB) plans to increase district heating (DH) tariffs to cost-recovery levels and gradually phase out subsidies, replacing them with social assistance programs. Residential DH tariffs in Belarus are current...

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Main Author:	World Bank
Format:	Energy Study
Language:	English en_US
Published:	Washington, DC 2014
Subjects:	ADMINISTRATIVE ASSISTANCE ADVERSE IMPACT ADVERSE IMPACTS AFFORDABILITY ALTERNATIVE FUELS APPROACH ARREARS BENCHMARKS BENEFIT PAYMENTS BIOMASS BOILER BOILERS BORDER PRICES BORROWING CAPACITY BOILERS CAPACITY FACTORS CAPITAL EXPENDITURE CAPITAL INVESTMENT CASH TRANSFERS CC COAL COMMERCIAL ELECTRICITY COMPETITIVENESS CONSUMER GOODS CONSUMER GROUPS CONSUMPTION LEVELS COST OF HEAT COST OF SERVICE COST RECOVERY COSTS OF HEAT PRODUCTION CROSS-SUBSIDIES CS CUSTOMER BASE DEVELOPMENT BANKS DISTRIBUTION LOSSES DISTRICT HEATING ECONOMIC ANALYSIS ECONOMIC PERFORMANCE ECONOMIES OF SCALE EFFICIENCY IMPROVEMENT EFFICIENCY INVESTMENTS ELECTRICITY ELECTRICITY CONSUMERS ELECTRICITY PRICES ELECTRICITY SALES ELECTRICITY SERVICES ELECTRICITY TARIFF ELECTRICITY TARIFFS ELIGIBILITY CRITERIA EMPLOYMENT EMPLOYMENT OPPORTUNITIES ENERGY BALANCE ENERGY BILLS ENERGY CONSUMPTION ENERGY COSTS ENERGY EFFICIENCY ENERGY MIX ENERGY RESOURCES ENERGY SAVINGS ENERGY SOURCES ENERGY USAGE EXCLUSION EXPENDITURE EXPENDITURES EXPORTS FAMILIES FINANCIAL BURDEN FINANCIAL SUPPORT FINANCING ARRANGEMENTS FOREIGN TRADE FUEL FUEL USE FUELS GAS BOILERS GAS PRICE GAS PRICES GDP GENDER GENDER DIFFERENCES HEAT HEAT ENERGY HEAT ENERGY CONSUMPTION HEAT GENERATION HEAT METERING HEAT PRODUCTION HEAT SALES HEAT SUPPLY HEAT TARIFF HEAT TARIFFS HEATING SYSTEMS HOT WATER HOT WATER BOILERS HOUSEHOLD CONSUMPTION HOUSEHOLD INCOME HOUSEHOLDS IMPLICIT TAX IMPROVEMENTS IN ENERGY EFFICIENCY INCENTIVES FOR ENERGY EFFICIENCY INCOME GROUP INCOME GROUPS INCOME LEVELS INCOMES INDIVIDUAL ENTREPRENEURS INEFFICIENCY INVESTMENT IN ENERGY EFFICIENCY INVESTMENTS IN ENERGY LACK OF INFORMATION LACK OF KNOWLEDGE
Online Access:	http://documents.worldbank.org/curated/en/2014/06/19890076/heat-tariff-reform-social-impact-mitigation-recommendations-sustainable-district-heating-sector-belarus http://hdl.handle.net/10986/20021

id	okr-10986-20021
recordtype	oai_dc
spelling	okr-10986-200212021-04-23T14:03:53Z Heat Tariff Reform and Social Impact Mitigation : Recommendations for a Sustainable District Heating Sector in Belarus World Bank ADMINISTRATIVE ASSISTANCE ADVERSE IMPACT ADVERSE IMPACTS AFFORDABILITY ALTERNATIVE FUELS APPROACH ARREARS BENCHMARKS BENEFIT PAYMENTS BIOMASS BOILER BOILERS BORDER PRICES BORROWING CAPACITY BOILERS CAPACITY FACTORS CAPITAL EXPENDITURE CAPITAL INVESTMENT CASH TRANSFERS CC COAL COMMERCIAL ELECTRICITY COMPETITIVENESS CONSUMER GOODS CONSUMER GROUPS CONSUMPTION LEVELS COST OF HEAT COST OF SERVICE COST RECOVERY COSTS OF HEAT PRODUCTION CROSS-SUBSIDIES CS CUSTOMER BASE DEVELOPMENT BANKS DISTRIBUTION LOSSES DISTRICT HEATING ECONOMIC ANALYSIS ECONOMIC PERFORMANCE ECONOMIES OF SCALE EFFICIENCY IMPROVEMENT EFFICIENCY INVESTMENTS ELECTRICITY ELECTRICITY CONSUMERS ELECTRICITY PRICES ELECTRICITY SALES ELECTRICITY SERVICES ELECTRICITY TARIFF ELECTRICITY TARIFFS ELIGIBILITY CRITERIA EMPLOYMENT EMPLOYMENT OPPORTUNITIES ENERGY BALANCE ENERGY BILLS ENERGY CONSUMPTION ENERGY COSTS ENERGY EFFICIENCY ENERGY MIX ENERGY RESOURCES ENERGY SAVINGS ENERGY SOURCES ENERGY USAGE EXCLUSION EXPENDITURE EXPENDITURES EXPORTS FAMILIES FINANCIAL BURDEN FINANCIAL SUPPORT FINANCING ARRANGEMENTS FOREIGN TRADE FUEL FUEL USE FUELS GAS BOILERS GAS PRICE GAS PRICES GDP GENDER GENDER DIFFERENCES HEAT HEAT ENERGY HEAT ENERGY CONSUMPTION HEAT GENERATION HEAT METERING HEAT PRODUCTION HEAT SALES HEAT SUPPLY HEAT TARIFF HEAT TARIFFS HEATING SYSTEMS HOT WATER HOT WATER BOILERS HOUSEHOLD CONSUMPTION HOUSEHOLD INCOME HOUSEHOLDS IMPLICIT TAX IMPROVEMENTS IN ENERGY EFFICIENCY INCENTIVES FOR ENERGY EFFICIENCY INCOME GROUP INCOME GROUPS INCOME LEVELS INCOMES INDIVIDUAL ENTREPRENEURS INEFFICIENCY INVESTMENT IN ENERGY EFFICIENCY INVESTMENTS IN ENERGY LACK OF INFORMATION LACK OF KNOWLEDGE The Government of the Republic of Belarus (GoB) plans to increase district heating (DH) tariffs to cost-recovery levels and gradually phase out subsidies, replacing them with social assistance programs. Residential DH tariffs in Belarus are currently at roughly 10-21 percent of cost-recovery levels. DH subsidies are highly regressive, add costs to business, and create significant fiscal risks and macroeconomic vulnerabilities. The purpose of this report is to analyze the social, sectoral, and fiscal impacts of the proposed tariff reform, and to identify and recommend measures to mitigate adverse impacts of DH tariff increases on the households. The analysis shows that: 1) the burden of higher DH tariffs will fall most heavily on low-income groups; 2) the current system of subsidies is unfair, benefitting wealthy customers more than the poor; 3) cross-subsidies undermine the competitiveness of industries in Belarus; and underpriced residential heat places an increasing fiscal burden on the GoB and risks macroeconomic instability. The analysis shows that a negative social impact is manageable if a tariff increase is accompanied by countervailing measures to compensate for the loss of purchasing power, in particular of the poor, through targeted social assistance and energy efficiency programs. The rest of the report is organized as follows: Section 1 describes the GoB's plans for the sector. Section 2 analyzes the principal challenges in the sector that necessitate tariff reform. Section 3 discusses tariff reform options and the likely impact of pursuing each of these options. Section 4 concludes by recommending a reform action package that includes customer communication and engagement, social protection measures and investments in energy efficiency. The appendices contain material supporting the analysis in each section. 2014-09-09T21:41:55Z 2014-09-09T21:41:55Z 2014-06 http://documents.worldbank.org/curated/en/2014/06/19890076/heat-tariff-reform-social-impact-mitigation-recommendations-sustainable-district-heating-sector-belarus http://hdl.handle.net/10986/20021 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ Washington, DC Economic & Sector Work :: Energy Study Europe and Central Asia Belarus
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	ADMINISTRATIVE ASSISTANCE ADVERSE IMPACT ADVERSE IMPACTS AFFORDABILITY ALTERNATIVE FUELS APPROACH ARREARS BENCHMARKS BENEFIT PAYMENTS BIOMASS BOILER BOILERS BORDER PRICES BORROWING CAPACITY BOILERS CAPACITY FACTORS CAPITAL EXPENDITURE CAPITAL INVESTMENT CASH TRANSFERS CC COAL COMMERCIAL ELECTRICITY COMPETITIVENESS CONSUMER GOODS CONSUMER GROUPS CONSUMPTION LEVELS COST OF HEAT COST OF SERVICE COST RECOVERY COSTS OF HEAT PRODUCTION CROSS-SUBSIDIES CS CUSTOMER BASE DEVELOPMENT BANKS DISTRIBUTION LOSSES DISTRICT HEATING ECONOMIC ANALYSIS ECONOMIC PERFORMANCE ECONOMIES OF SCALE EFFICIENCY IMPROVEMENT EFFICIENCY INVESTMENTS ELECTRICITY ELECTRICITY CONSUMERS ELECTRICITY PRICES ELECTRICITY SALES ELECTRICITY SERVICES ELECTRICITY TARIFF ELECTRICITY TARIFFS ELIGIBILITY CRITERIA EMPLOYMENT EMPLOYMENT OPPORTUNITIES ENERGY BALANCE ENERGY BILLS ENERGY CONSUMPTION ENERGY COSTS ENERGY EFFICIENCY ENERGY MIX ENERGY RESOURCES ENERGY SAVINGS ENERGY SOURCES ENERGY USAGE EXCLUSION EXPENDITURE EXPENDITURES EXPORTS FAMILIES FINANCIAL BURDEN FINANCIAL SUPPORT FINANCING ARRANGEMENTS FOREIGN TRADE FUEL FUEL USE FUELS GAS BOILERS GAS PRICE GAS PRICES GDP GENDER GENDER DIFFERENCES HEAT HEAT ENERGY HEAT ENERGY CONSUMPTION HEAT GENERATION HEAT METERING HEAT PRODUCTION HEAT SALES HEAT SUPPLY HEAT TARIFF HEAT TARIFFS HEATING SYSTEMS HOT WATER HOT WATER BOILERS HOUSEHOLD CONSUMPTION HOUSEHOLD INCOME HOUSEHOLDS IMPLICIT TAX IMPROVEMENTS IN ENERGY EFFICIENCY INCENTIVES FOR ENERGY EFFICIENCY INCOME GROUP INCOME GROUPS INCOME LEVELS INCOMES INDIVIDUAL ENTREPRENEURS INEFFICIENCY INVESTMENT IN ENERGY EFFICIENCY INVESTMENTS IN ENERGY LACK OF INFORMATION LACK OF KNOWLEDGE
spellingShingle	ADMINISTRATIVE ASSISTANCE ADVERSE IMPACT ADVERSE IMPACTS AFFORDABILITY ALTERNATIVE FUELS APPROACH ARREARS BENCHMARKS BENEFIT PAYMENTS BIOMASS BOILER BOILERS BORDER PRICES BORROWING CAPACITY BOILERS CAPACITY FACTORS CAPITAL EXPENDITURE CAPITAL INVESTMENT CASH TRANSFERS CC COAL COMMERCIAL ELECTRICITY COMPETITIVENESS CONSUMER GOODS CONSUMER GROUPS CONSUMPTION LEVELS COST OF HEAT COST OF SERVICE COST RECOVERY COSTS OF HEAT PRODUCTION CROSS-SUBSIDIES CS CUSTOMER BASE DEVELOPMENT BANKS DISTRIBUTION LOSSES DISTRICT HEATING ECONOMIC ANALYSIS ECONOMIC PERFORMANCE ECONOMIES OF SCALE EFFICIENCY IMPROVEMENT EFFICIENCY INVESTMENTS ELECTRICITY ELECTRICITY CONSUMERS ELECTRICITY PRICES ELECTRICITY SALES ELECTRICITY SERVICES ELECTRICITY TARIFF ELECTRICITY TARIFFS ELIGIBILITY CRITERIA EMPLOYMENT EMPLOYMENT OPPORTUNITIES ENERGY BALANCE ENERGY BILLS ENERGY CONSUMPTION ENERGY COSTS ENERGY EFFICIENCY ENERGY MIX ENERGY RESOURCES ENERGY SAVINGS ENERGY SOURCES ENERGY USAGE EXCLUSION EXPENDITURE EXPENDITURES EXPORTS FAMILIES FINANCIAL BURDEN FINANCIAL SUPPORT FINANCING ARRANGEMENTS FOREIGN TRADE FUEL FUEL USE FUELS GAS BOILERS GAS PRICE GAS PRICES GDP GENDER GENDER DIFFERENCES HEAT HEAT ENERGY HEAT ENERGY CONSUMPTION HEAT GENERATION HEAT METERING HEAT PRODUCTION HEAT SALES HEAT SUPPLY HEAT TARIFF HEAT TARIFFS HEATING SYSTEMS HOT WATER HOT WATER BOILERS HOUSEHOLD CONSUMPTION HOUSEHOLD INCOME HOUSEHOLDS IMPLICIT TAX IMPROVEMENTS IN ENERGY EFFICIENCY INCENTIVES FOR ENERGY EFFICIENCY INCOME GROUP INCOME GROUPS INCOME LEVELS INCOMES INDIVIDUAL ENTREPRENEURS INEFFICIENCY INVESTMENT IN ENERGY EFFICIENCY INVESTMENTS IN ENERGY LACK OF INFORMATION LACK OF KNOWLEDGE World Bank Heat Tariff Reform and Social Impact Mitigation : Recommendations for a Sustainable District Heating Sector in Belarus
geographic_facet	Europe and Central Asia Belarus
description	The Government of the Republic of Belarus (GoB) plans to increase district heating (DH) tariffs to cost-recovery levels and gradually phase out subsidies, replacing them with social assistance programs. Residential DH tariffs in Belarus are currently at roughly 10-21 percent of cost-recovery levels. DH subsidies are highly regressive, add costs to business, and create significant fiscal risks and macroeconomic vulnerabilities. The purpose of this report is to analyze the social, sectoral, and fiscal impacts of the proposed tariff reform, and to identify and recommend measures to mitigate adverse impacts of DH tariff increases on the households. The analysis shows that: 1) the burden of higher DH tariffs will fall most heavily on low-income groups; 2) the current system of subsidies is unfair, benefitting wealthy customers more than the poor; 3) cross-subsidies undermine the competitiveness of industries in Belarus; and underpriced residential heat places an increasing fiscal burden on the GoB and risks macroeconomic instability. The analysis shows that a negative social impact is manageable if a tariff increase is accompanied by countervailing measures to compensate for the loss of purchasing power, in particular of the poor, through targeted social assistance and energy efficiency programs. The rest of the report is organized as follows: Section 1 describes the GoB's plans for the sector. Section 2 analyzes the principal challenges in the sector that necessitate tariff reform. Section 3 discusses tariff reform options and the likely impact of pursuing each of these options. Section 4 concludes by recommending a reform action package that includes customer communication and engagement, social protection measures and investments in energy efficiency. The appendices contain material supporting the analysis in each section.
format	Economic & Sector Work :: Energy Study
author	World Bank
author_facet	World Bank
author_sort	World Bank
title	Heat Tariff Reform and Social Impact Mitigation : Recommendations for a Sustainable District Heating Sector in Belarus
title_short	Heat Tariff Reform and Social Impact Mitigation : Recommendations for a Sustainable District Heating Sector in Belarus
title_full	Heat Tariff Reform and Social Impact Mitigation : Recommendations for a Sustainable District Heating Sector in Belarus
title_fullStr	Heat Tariff Reform and Social Impact Mitigation : Recommendations for a Sustainable District Heating Sector in Belarus
title_full_unstemmed	Heat Tariff Reform and Social Impact Mitigation : Recommendations for a Sustainable District Heating Sector in Belarus
title_sort	heat tariff reform and social impact mitigation : recommendations for a sustainable district heating sector in belarus
publisher	Washington, DC
publishDate	2014
url	http://documents.worldbank.org/curated/en/2014/06/19890076/heat-tariff-reform-social-impact-mitigation-recommendations-sustainable-district-heating-sector-belarus http://hdl.handle.net/10986/20021
_version_	1764444458571530240

Heat Tariff Reform and Social Impact Mitigation : Recommendations for a Sustainable District Heating Sector in Belarus

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