6.3 Energy balance
Energy balance is a model designed to support the regulation of the development of individual industries to maintain their level of contribution to the overall economic growth of the territory.
Based on the results of the joint (Digital Twin LLC and city administration) development of an energy and utility intra-industrial balance model for St. Petersburg in 2017, we developed Concepts Method for the preparation and application the model to support management decisions in the sphere of tariff and industry regulation.
6.3.1 Concept behind the energy balance model
The concept of preparation and application of the intra-industry balance of the energy and utility systems of the region consists of a combination of goals, objectives, principles, and methods that ensure accurate forecasting and planning. This encourages optimal decision-making in the process of public administration related to heat supply, electricity supply, gas supply, water supply, and sanitation.
The development of the energy balance concept was driven by the need for the creation of a cross-industry approach to the development of heat supply, electricity, gas supply, water supply, sanitation industries, and tariff regulation in these areas.
6.3.2 Energy balance goals
Energy balance goals are:
- increase the socio-economic growth rate by enhancing the effectiveness and efficiency of the use of the region’s resources based on the parameters of the model and long-term price (tariffs) regulation
- determine the priorities and tasks for public administration, as well as the methods
for their effective achievement in utility infrastructure and energy systems
and the sphere of public administration of the region and its municipalities
- develop managerial decisions that improve the efficiency of enterprises involved in heat supply, electricity supply, gas supply, water supply, and sanitation.
6.3.3 Energy balance objectives
Objectives behind creating an energy balance for the municipal infrastructure and energy systems of the region:
- create a unified automated mechanism that combines the collection, analysis, processing, forecasting, and planning of technical and economic indicators involved in heat supply, electricity supply, gas supply, water supply, and sewerage
- provide unified technical and economic parameters when creating (adjusting) schemes for heat supply, electricity supply, gas supply, water supply, and sewerage and the formation of tariffs subject to state regulation.
6.3.4 General principles
General principles of forming an energy balance for the resources of the municipal infrastructure and the energy systems of the region:
- achieving an optimal combination of the economic interests of consumers, regulated organizations, and the regional economy
- the development of stable and non-discriminatory conditions for enterprises operating in heat supply, electricity supply, gas supply, water supply, and sewerage
- improving the accuracy of forecasting the volumes of consumption and losses of utility, energy, and financial resources determining the optimal volumes of costs for reliable and safe production and the transmission and distribution of utility and energy resources in the region
- ensuring the assessment of the effectiveness and efficiency of investment projects
and production programs in heat supply, electricity supply, gas supply, water supply, and sewerage
- provision of tariff solutions which take into account the reasonable profitability and efficiency of regulated organizations operating the region’s municipal infrastructure and energy systems
6.3.5 Method
The central method of forming a balance between the utility and energy sectors is the intra-industry method of Nobel laureate Vasily Leontiev.
For the implementation of an integrated management system in the areas of heat supply, electricity supply, gas supply, water supply, and sewerage, the main method of forming the energy balance is the method of economic and mathematical modeling based on the Methodology for the intra-industrial balance of Resources of Municipal Infrastructure and Energy Systems.