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. Last Updated: 07/27/2016

Foreign Insulation Giants Get a Warm Welcome

For MTThe use of modern insulation materials and techniques doubled the heat retention of this apartment block in St. Petersburg.
Unfortunately for just about everyone who lives in a building older than a decade, which is nearly everyone, Soviet architects were never into insulation.

The reason? Bountiful and cheap gas and electricity, which made insulation a costly and therefore unwanted expense. But that is changing: Although domestic energy prices are still way below the world norm, they are rising more than 10 percent a year and will continue to do so for years to come.

While consumers may not like it, insulation companies do, and they are determined to convince others that not only is their product needed, it pays for itself in the long term.

"You could say that older Russian buildings are not insulated at all," said Oleg Yermakov, general director of the Russian branch of Finland's Paroc, a company that specializes in rock wool, a fibrous insulation material made from stone.

"Even the modern buildings have shortcomings in terms of insulation," Yermakov said by telephone from St. Petersburg.

To understand the scale of the problem, the world's largest rock wool producer, Denmark's Rockwool Group, spent two months interviewing dozens of architects and designers and discovered that the only buildings that even come close to meeting modern standards are those that were built between 1925 and 1945 and have more than six stories -- thanks to their thick walls.

"Most people in Moscow and in the rest of Russia and the CIS live in panel houses," said Oleg Volkov, marketing manager at Rockwool Russia, which operates an upgraded former Soviet rock-wool factory in the Moscow region town of Zhelyoznodorozhny.

Despite new energy-saving building standards, not all new buildings meet international standards, and those that do make up only a small part of all residences, Volkov said. "People cut corners to save money."

Rockwool estimates that 34 percent of Russia's thermal energy production is used to heat houses, compared to just 20 percent to 22 percent in Europe, which has improved heat retention by some 3 1/2 times since the world oil crises of the 1970s.

The company found that as much as 800 kilowatt-hours per square meter per year are expended to heat multistory apartment blocks -- roughly 10 times what is spent in developed countries.

By comparison, the United States uses just 55 kwh per square meter per year. In Norway, Sweden and Finland, where, as in Russia, the thermometer drops below minus 35 degrees Celsius in winter, less than 80 kwh are expended per square meter per year.

An average apartment uses 74 kilograms of fuel oil each year to heat a single square meter, including water, which is four times the Scandinavian average.

One metric ton of fuel oil costs about $200.

"Installing effective insulation in buildings that leak heat would result in warmer houses, a cleaner environment and pay for itself in a couple of years," Volkov said. "Cost savings should be up to 30 percent.

"If it is a private house, fitting insulation could pay for itself in one or two years," he said. "If we are talking about big buildings then it could be two or three years."

Revamping a 60-flat Khrushchev-era apartment block would cost between $1,000 and $2,000 per apartment, he said, adding that in some regions, especially the Far North, waste is greater and the savings therefore could be greater.

In the Khrushchev era, when the government launched a program to provide everyone with their own homes, apartments were built with thin walls to trim expenses.

The type of apartment blocks built after that continued to have this flaw, Volkov said.

To demonstrate the advantages of insulation, Rockwool refitted a Khrushchev-era apartment block on St. Petersburg's Torzhovskaya Ulitsa in 2000. The building's facades were made more energy efficient, stairways, windows and doors were rebuilt and replaced, and the sewage system was upgraded. The project almost doubled the heat retention of the building, and residents were able to stay inside during the reconstruction.

A similar project is taking place on Moscow's Lipetskaya Ulitsa and another is planned in the Marino district.

Vladimir Batsarin, chief engineer of French-based Saint-Gobain Isover, another large player on the Russian market, said one of the ways of using energy more efficiently has been to build mansard roofs on top of Khrushchev-era buildings. This was done in the Moscow region town of Lytkarino, and resulted in heat savings of up to 9 percent.

Paroc's Yermakov said Russia's insulation market has grown about 25 percent per year since the financial collapse of 1998.

The boom has attracted international attention.

Volkov said many small Russian companies produce insulation products, but Rockwool's leading competitor is Madrid-based Uralita, which has a factory near Nizhny Novgorod and is building one near Moscow.

Saint-Gobain Isover is also building a factory in the Moscow region that it hopes to bring online next year.