The Russian gas boiler market could grow at a record

Sep 09, 2020

Vladimir Putin's orders (as part of the development of gas supply and gasification of regions), which he gave to the government, can contribute to the growth of the gas boiler market by at least 40% by 2030. Heating industry experts consider the free connection of gas-using equipment, solution to the “last mile” problem and completing gasification within the next 10 years as the main potential drivers of the market.

“If all the president’s orders are fulfilled, then we can definitely predict the growth of the market. I think, the growth rate for the premium segment will be about 45-50%, ”says Armen Kalinin, export director at FRISQUET, the leading French manufacturer of heating equipment.

Leonid Bylinin, deputy director of Haustek LLC in the Moscow region, agrees with the forecast of his colleague, but extrapolates it to the entire market, believing that all segments can grow proportionally by 40-50%, since the distribution curve will not change: 7-10% the market will be occupied by gas boilers of the premium segment, 70% - by the reasonably priced and the remaining 20-23% - by the medium.

Andrey Sazonov, general director of the Climate-Control company from the Tver region, gives an even more optimistic forecast. His region is now gasified by 64.4%, this figure reaches around 85% in towns, 35% - in villages. Sazonov believes that the market for gas heating boilers can increase up to 100%, on condition that the presidents’ orders will be implemented.  “Another question is when and how exactly these orders will be executed, where the money will come from, how long it will take to create a legal framework for everything to work correctly,” says Andrey Sazonov.

According to experts, today the main problem hindering the growth of the gas boiler market is the lack of distribution networks within rural districts and villages. Formally, the district or village is gasified, there is a mainline, but in reality you have to pay hundreds of thousands rubles to connect your house to gas. There are often cases when consumers do not want to connect to the network because of the huge sums to spend on gasification and many administrative problems that will need to be solved.

The problem is relevant for everyone: both for Siberia and the Far East, the gasification level of which is 6.8 and 13%, respectively, and for regions like the Moscow Region, which, according to Gazprom's reports, is 99% gasified.

“I think the level of real gasification in the region, judging by the number of gas consumers and the presence of distribution networks in the villages and rural districts, can be estimated at 60%, not 99%,” says Leonid Bylinin, Haustek. The fact is that the percentages quoted by Gazprom do not take into account the presence of distribution networks in villages, the construction of such networks is the responsibility of the regional authorities. Only main gas pipelines are taken into account. In the same Moscow region, there are villages where the percentage of gasification is 0.6 (this is Voskhod), and urban districts in which it is 100.9 percentage points, like in Serpukhov. At the same time, the cost of laying a pipe from the gas distribution network to a private section starts from 65,000 rubles.

“Free connection to gas distribution networks will push those who are currently heated with pellets, diesel fuel, liquefied gas or electricity to change their boilers. Completion of gasification of the country within 10 years will provide the market with new consumers. Simplification of the procedure for applying for connection through the multifunctional centers will also play a role - reducing bureaucratic barriers always has a beneficial effect on the market, ”comments Armen Kalinin, FRISQUET.

In the segment of premium equipment, the expert names another potential growth point: changing the procedure for forming fuel and energy balances (FEB), taking into account the real need of the population for gas, is also one of the orders of the President. Kalinin explains that the owners of large houses often have a problem with obtaining technical conditions for connecting their boiler house - they do not have the necessary capacities. If the fuel and energy balances are drawn up according to the principle of real need, and ideally, the reconstruction of those sections of the network where more capacity is required, the owners of large houses will be able to safely receive technical conditions and connection to the highway.

All experts agree: the implementation of the president's orders will open the way to total gasification of the regions and a record growth of the gas boiler market - a new class of consumers will appear in the country. But the forecasts will turn out to be correct only if the mechanisms for the implementation of orders and sources of financing are developed and found within the specified time frame.

Source (Russian)