This publication was prepared with the support of the European Union. The contents of this publication are the sole responsibility of NGO “DIXI GROUP”, as well as Civil Network “OPORA”, All-Ukrainian NGO “Energy Association of Ukraine”, Resource & Analysis Center “Society and Environment”, Association “European-Ukrainian Energy Agency”, and can under no circumstances be regarded as reflecting the position of the European Union.
The project “Enhancing impact of civil society in monitoring and policy dialogue on energy and related sectors’ reforms in line with the Association Agreement implementation” aims at strengthening the role of civil society in advocating reforms in the energy and related sectors. The key objectives of the project are: • monitoring of the implementation of the energy provisions of the Association Agreement, including relevant environmental and trade-related commitments; • strengthening the civic experts’ and local actors’ capacity to track actual implementation of the reforms; • facilitation of public dialog to lead in proper implementation of the European energy and environmental reforms; • informing stakeholders and the Ukrainian society about the meaning and potential benefits of European reforms in energy and related sectors in order to empower them to keep the government accountable for pursuing these reforms. www.enref.org
Executive Summary In March, the dynamics of reforms in the gas sector did not change its vector. Moreover, a number of steps were assessed negatively in the media. In addition to this, the Energy Community Secretariat drew attention to deficiencies of the reform implementation in its official documents. In the electricity sector, the lack of MPs decision on the draft Electricity Market Law remained still crucial. Suspention of the transfer of coal from the uncontrolled areas to the controlled ones and explosion at the SE Lvivvugillia mine are also among the main events of the month. These events shifted the emphasis of public attention and discussion to the issue of coal supply and its role in overall consumption. The progress in lawmaking and changes in discussions on a number of issues allow talking about the revival in the energy efficiency sector. The adoption in the first reading of the draft law “On the Energy Efficiency Fund”, the progress in agreeing energy labeling regulations, as well as the plans of MPs on important draft laws of the sector add optimism for continuing the trend next month. Against this background, the progress in the social issues was not significant. In the area of environment, the issues of environmental impact assessment and strategic environmental assessment remain open. The legislative initiative on the latter issue is registered in the parliament. Experts point out that the progress in advancing implementation of the commitments of this bloc is not entirely such that will change the real situation in the sector. In the field of renewable energy sources, in the context of foreign investors’ concerns, activity is being held to facilitate business conditions in this area and to stimulate the interest of population. In the sector of oil and oil products, experts note that, against the background of reporting on future plans, there has been no analysis of the reasons for the failure to implement the overdue plans and commitments, in particular regarding the formation of minimum oil and oil products’ reserves. Experts note positive trends in the area of business climate. In particular, optimistic forecasts accompany intentions on fiscal agencies reform, and improvements in public procurement. Against this backdrop, the issue of the draft law on transparency in extractive industries, which was registered in the Verkhovna Rada, remains problematic.
Most Used Abbreviations: AA - Association Agreement CcSUP - Complex (Consolidated) Safety Upgrade Program of Power Units of Nuclear Power Plants CMU – Cabinet of Ministers of Ukraine DHC – district heating company EC – European Commission FEC – fuel and energy complex GDS – gas distribution systems GTS – gas transmission system LNG – liquefied natural gas MECI – Ministry of Energy and Coal Industry NAK – National Joint Stock Company Naftogaz of Ukraine NBU – National Bank of Ukraine
NSDC – National Security and Defense Council NEURC – National Energy and Public Utilities Regulatory Commission SNRI – State Nuclear Regulatory Inspectorate SUNPP – South-Ukraine NPP TCNS - Tools of Cooperation in the Field of Nuclear Safety in Ukraine TPP – thermal power plant TSO - transmission system operator UES – United Energy System of Ukraine VRU – Verkhovna Rada of Ukraine WANO – World Association of Nuclear Operations WEM – wholesale electricity market
Gas In March, the slowdown in the pace of gas sector reform, which has been observed since the beginning of 2017, still remains. At the plenary sessions of this month, MPs considered a number of related draft laws, but did not adopt any, instead, a number of new draft laws were registered. The government has focused on solving current problems. In order to prevent the gas market destabilization and the additional increase in gas prices for households, the CMU reserved for Naftogaz the obligation to supply natural gas to a number of vulnerable categories of consumers at the price and conditions established by the CMU for another year (until April 2018). After dismissal of Ukrtransgaz president I. Prokopiv by the board of Naftogaz, the Government has decided to increase the composition of the acting Supervisory Board of NAK to seven persons, which, according to experts 1, will limit the powers of the CEO A. Kobolyev to make decisions. From 1 April 2017, the NEURC introduced the entry/exit tariff system and established new tariffs for entry to the GTS for importers/gas producers operating in Ukraine, and for exit - for consumer companies. The regulator also made a decision to separate the payment for transportation and distribution of natural gas from its value as a commodity in the structure of tariffs. These decisions draw a significant media and political response. On March 27, the Energy Community Secretariat issued the report 2 that provides a comprehensive assessment of the two-year results of Ukraine’s introduction of the Gas Sector Reform Action Plan. Recognizing Ukraine’s progress in the reform of the legislative framework, the Secretariat points out the significant deficiencies associated with implementation of the measures regulated by laws and regulations. Directive 2009/73/EC concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC (Art. 338, 341 Annex XXVII AA) in accordance with Art. 278 of the AA: MPs have considered the draft law No. 3096 3, which proposed to amend the Land Code of Ukraine in order to regulate the issue of gas production at the early stages of organization of the process (drilling, exploration, etc.), and voted for its transfer to the VRU relevant committee for further finalization. It is about cancellation of obsolete mechanisms and creation of new ones, which will allow the use of land for these processes on the basis of the contract, without changing the intended purpose for the period of registration of documents for land, as well as the regulation of the legal status of extraction facilities. The Governmental draft law No. 5558 4 was also sent to the VRU to be finalized, which stipulates determining the legal principles for lease of state GDS (in parallel, MPs removed the consideration of the alternative draft law No. 5558-1). The draft law No. 5289 5 on amendments to certain legislative acts of Ukraine on bringing them into accordance with the law “On the Natural Gas Market", included in the agenda of the current session 6, is waiting for consideration. On March 29, the round-table discussion on the topic “Own Gas for Independence: How to Achieve the Objective” 7 was held in the VRU relevant committee on FEC. The participants of the discussion agreed that in order to fulfill the strategic task of the Concept for Development of Ukraine’s Gas Industry by 2020 - its own gas production of 27 bcm - first of all, the “rules of the game” in the gas production market should be
1
http://www.epravda.com.ua/news/2017/03/29/623197/ https://www.energy-community.org/portal/page/portal/ENC_HOME/NEWS/News_Details?p_new_id=14263 3 http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_2?id=&pf3516=3096&skl=9 4 http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=60757 5 http://zakon0.rada.gov.ua/laws/show/1852-viii#n11 6 http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_2?pf3516=5289&skl=9 7 http://iportal.rada.gov.ua/news/Novyny/142315.html 2
Gas changed. The Deputy Chairman of the Committee O. Bielkova presented the new draft law on ensuring transparency in the extractive industries (No. 6229 8) registered on March 23. At the same time, on March 31, the VRU registered the draft law on amendments to the law "On the Natural Gas Market" prepared by the Ministry of Energy and Coal Industry concerning the separation of activities of natural monopoly entities from activities in adjacent markets (No. 6265 9). In addition to the separate special accounts, on which the payment for gas as a commodity and payment for services for its distribution are accrued, the draft law provides for mechanisms for introduction of tariffs for “entry/exit”, in particular, payment methods to TSO of the reserved capacity at the points of exit, as well as other mechanisms of state regulation of payment and settlement relations between market participants. In March, the draft laws on banning the termination of supply of natural gas by the supplier of “the last hope” during the heating period (No. 6247 10) and on the conditions for the prohibition of installation of building-level meters for consumers of natural gas (No. 6277 11) were introduced to the parliament. The first document proposes a direct ban to stop gas supply during the heating period, the second - the minimum level of failure of the co-owners of a multi-apartment building at 10% for taking the decision to ban the installation of a building-level gas meter, as well as the delay in the installation of individual meters by 1 January 2021. Responding to the dissatisfaction of the European Commission with regard to delaying implementation of the adopted energy regulator law, expressed in the letter from the Vice-President of the European Commission, M. Šefčovič 12, the President P. Poroshenko by the special decree (No. 78/2017 13) approved the plan for rotation of the entire NEURC, according to which the first 2 members of the commission will be discharged in 6 months after the entry into force of this law, that is, by 26 May 2017, and the entire composition of the NEURC - in 18 months, that is, by 26 May 2018. In the area of the Naftogaz corporate governance reform, the CMU delayed the entry into force of the provisions of the company’s articles of association, the provisions on the supervisory board and the regulations on the management of NAK, which, according to the decision No. 1044 14, had to come into force from 1 April 2017 (Decree No. 216 of 22.03.2017 15). Changes will take place after entry into force of the Law “On Amendments to Certain Legislative Acts of Ukraine on Improving Corporate Governance of Legal Entities, the Shareholder (Founder, Participant) of which is the State”. At the same time, at the meeting on March 29, the CMU decided to expand the composition of the Supervisory Board of the NJSC Naftogaz of Ukraine 16 from the current 5 to 7 members, four of which must meet the criteria of independence, and the remaining three - to represent the interests of the state. At the same time, a competition for the post of an additional independent member of the Naftogaz Supervisory Board was announced 17.
8 9
http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=61409 http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=61472
10 11 12
http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=61432 http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=61486
http://www.epravda.com.ua/news/2017/03/17/622793/ http://www.president.gov.ua/documents/782017-21530 14 http://zakon3.rada.gov.ua/laws/show/1044-2016-%D0%BF#n9 15 http://www.kmu.gov.ua/control/uk/cardnpd?docid=249869929 16 http://www.kmu.gov.ua/control/uk/publish/article?art_id=249857779&cat_id=244276429; http://me.gov.ua/News/Detail?lang=uk-UA&id=71806e10-5f37-4baf-8a5dcf2ced053591&title=UriadUkhvalivRishenniaProRozshirenniaNagliadovoiRadiNaknaftogazUkraini 17 http://www.kmu.gov.ua/control/uk/cardnpd?docid=249891621 13
Gas The Government has extended the special duties assigned to natural gas market players, in particular Naftogaz, until 1 April 2018 to ensure public interests (Decree No. 187 of 22.03.2017 18). Under the terms of the approved provision, the NAK will form a gas resource for household consumers, religious organizations and heat supply companies (for provision of heating and hot water supply) and will sell gas for these purposes at the current price of UAH 4,942/tcm, excluding VAT and tariffs for transportation and distribution (the price may be changed from 01.10.2017, if the estimated import parity price exceeds its value by more than 10%). The trade margin of the NAK will be 1.917%, of retail gas suppliers – 2.5%. At the same time, the Ministry of Economic Development and Trade and the Ministry of Energy and Coal Industry are instructed to finalize the document, taking into account the proposals and comments of the Energy Community 19. The decision according to which VAT paid by the company for gas customs clearance was identified as an additional source of financing of the state budget expenditures for the payment of privileges and housing subsidies to the population (Decree No. 128 of 10.03.2017) was also made in favor of Naftogaz. As stated in the justification, due to cancellation of the privilege for VAT payment, the amount of Naftogaz tax liabilities due to the state budget, which is one of the sources of subsidies, has decreased. The issue of paying VAT when clearing gas is separately regulated by the joint order of the Ministry of Energy and Coal Industry and the Ministry of Finance No. 236/380 of 24.03.2017 20. Continuing preparation for the transition to the paid use of state GDSs, the CMU improved the Model Agreement on the operation of gas distribution systems or their components (Decree No. 188 21). The issue of acceptance-transfer of the GDS property has been resolved, the term of payment for operation of GDS and the grounds for its termination have been determined, the term of payment for operation of GDS has been postponed from the 10th to the 25th of the following month. The amendments made prevent the possibility of interference of the Ministry of Energy and Coal Industry with the economic activities of gas distribution network operators. In turn, the Ministry of Energy and Coal Industry ordered DSOs to submit, by 10 April 2017, the results of the annual inventory of the state property registered on their balance sheets, and by 1 June 2017, to submit legal documents for state property used for gas distribution (Order No. 183 22). According to the results of the inventory, the relevant structural units should provide the SPFU with materials for conducting an independent assessment of GDS according to the prescribed procedure. According to the decision of the NEURC (Decree No. 348 of 28.03.2017 23), from April 1, the payment for entering the GTS of Ukraine for gas importers or mining companies will be UAH 296.8 per 1 tcm/day (excluding VAT). At the same time, the tariff for the exit from UGS and the virtual points, in which the gas transfer takes place, will be UAH 0. According to extraction industry experts 24, this innovation will increase the pressure on domestic gas extractors, depriving them of significant financial resources 25, and will also put them at a disadvantage compared to importers who do not incur additional costs for the construction of commercial metering units and compressor stations for gas supply to GTS, and use the already ready cross-border capacities of Ukrtransgaz. The consumer companies will pay a tariff for the exit from the GTS in the amount of UAH 322.1 UAH per 1 tcm/day (excluding VAT), in case of direct connection to the main 18
http://www.kmu.gov.ua/control/uk/cardnpd?docid=249865173 http://ua.interfax.com.ua/news/general/410738.html 20 http://mpe.kmu.gov.ua/minugol/doccatalog/document?id=245199574 21 http://www.kmu.gov.ua/control/uk/cardnpd?docid=249865129 22 http://mpe.kmu.gov.ua/minugol/doccatalog/document?id=245191550 23 http://www.nerc.gov.ua/?id=24355 24 https://economics.unian.ua/energetics/1846369-natskomisiya-vstanovila-novi-tarifi-na-transportuvannya-gazu-po-gts-vvelaabonplatu-dlya-postachalnikiv-i-pokuptsiv.html 19
25
With VAT, the tariff for entry will be app. 13 USD/tcm, while the average tariff value in the EU – app 3 USD/tcm.
Gas gas pipelines, or within the limits of UAH 76.9 ÷ 192.25 per 1 tcm/day (excluding VAT) - for points of exit from the GTS to the regional GDSs. At the same time, according to the press service of the regulator 26, the NEURC has allocated and approved the amount of the fee for connecting to the gas supply system, which, besides the charge for gas as a commodity, will be paid by consumers on a monthly basis, starting from April, regardless of the actual volume of consumption. The fee is calculated on the basis of the consumer’s maximum connected capacity (according to the type of a gas meter). In addition, the regulator decided to allocate the funds received by them on separate elements of the structure of tariffs for the repayment of the arrears (Resolution No. 393 of 28.03.2017 27) for natural gas distribution license holders in debt to Naftogaz for gas. The NEURC has also approved the plans for development of gas distribution systems of the sector enterprises for 2017-2026 (Resolution No. 403 - 424 of 28.03.2017 28). It should be noted that the basis of the tariff is the principle of payment for the maximum connected capacity (capacity charge), whereas in the European practice, the structure of most tariffs - at least for households - is based on actual energy consumption (energy charge) and fixed charge for capacity (fixed charge) 29. According to calculations of experts and mass media 30, new distribution tariffs will lead to an increase in the total fee (for gas + monthly fee), especially for consumers in multistory buildings, which use gas only for cooking (some consumers who use gas for heating will win a little). Consumers without meters will also suffer. In view of the significant negative media resonance, the Prime Minister V. Groysman 31 and President P. Poroshenko 32, as well as a number of political forces, spoke in favor of reviewing the decision of the NEURC. From 1 April 2017, Naftogaz lowered its gas price by 10% compared with March 2017 prices 33. According to the new price list of the company 34, the price of gas has been reduced from UAH 9,439.2 to 8,516.4 per tcm. For industrial and other consumers who are not subject to the provisions on assignment of special duties, but have no debts to Naftogaz and purchase from 50 tcm of gas under the prepayment terms 35 - the price UAH 7,675.2 (instead of 8,553.6) per tcm is proposed. Meanwhile, the Government has adopted the new Provision on the Ministry of Energy and Coal Industry of Ukraine (Resolution No. 208 36) to fulfill the plan of developing acts necessary for implementation of the Law “On Amendments to the Law of Ukraine “On Central Executive Bodies”. Formation of the state policy in the field of supervision (control) in the electricity and heat supply sectors, implementation of state management in the field of nuclear energy use and radiation safety are among new areas of responsibility. At the same time, the tasks of the Ministry of Energy and Coal Industry do not include anymore: • approval of regulatory losses and production and technological costs of oil, natural gas and gas condensate during their extraction, preparation for transportation and transportation, the procedure for determining their size and keeping records; 26
http://www.nerc.gov.ua/data/filearch/Materialy_zasidan/2017/berezen/28.03.2017/p14_28-03-17.pdf http://www.nerc.gov.ua/?id=24369 28 http://www.nerc.gov.ua/?id=23170 29 https://ec.europa.eu/energy/sites/ener/files/documents/20150313%20Tariff%20report%20fina_revREF-E.PDF, p. 128-134. 30 http://biz.liga.net/all/tek/stati/3636455-dvoynoy-schet-kak-vyrastet-tsena-gaza-dlya-40-ukraintsev.htm, http://biz.censor.net.ua/resonance/3023502/sklki_ukrants_budut_platiti_za_utrimannya_gazovih_merej 31 https://www.ukrinform.ua/rubric-society/2204058-grojsman-vimagae-pereglanuti-abonplatu-za-gaz-tarif-zroste-cenepripustimo.html 32 http://www.president.gov.ua/news/rishennya-shodo-abonplati-na-gaz-maye-buti-prizupineno-prezi-40762 33 http://www.naftogaz.com/www/3/nakweb.nsf/0/97D41FF99CA5914EC22580EB002D1297?OpenDocument&year=2017&month =03&nt=%D0%9D%D0%BE%D0%B2%D0%B8%D0%BD%D0%B8 34 http://www.naftogaz.com/files/Information/Naftogaz-gas-prices-Apr-2017.pdf 27
35 36
Payment during the calendar month preceding the gas supply month
http://www.kmu.gov.ua/control/uk/cardnpd?docid=249869350
Gas • • • •
monitoring of the market of gas, oil, non-traditional sources and types of energy raw materials and products of their processing; setting standards for the use and distribution of natural gas to heat-energy enterprises; formation of projected balances of oil and petroleum products; approval of sectoral development programs for the fuel and energy complex and control over their implementation.
Regulation (EC) No. 715/2009 on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No. 1775/2005 (Art. 338, 341 Annex XXVII AA) in accordance with Art. 278 AA, trade issues (Art. 269-274 AA): On March 17, the Board of Naftogaz, in agreement with the supervisory board of the company, dismissed Igor Prokopiv, the president of Ukrtransgaz 37. Preventing any negative influence of the change of the management on the stability of the work of the Ukrainian TSO, the duties of the president of the PJSC Ukrtransgaz were temporarily transferred to the first vice president of the company - a high-level specialist with many years of experience in Ukrtransgaz - Myroslav Khymko. According to the results of the meeting of the Presidents of Ukraine and Romania in Kyiv 38, the parties plan to expand the possibilities of gas transmission between the countries, including the possibilities of reverse supplies. As stated by the President P. Poroshenko during his visit to Romania last year 39, Ukraine considers Romania as an importer of gas. On March 16, the first issue of “Energy Community News" was published on the Energy Community site 40. This review will cover interesting and significant events within the space of creation of the single energy market 41 and will become periodical. The first edition gives an overview of the latest events in Ukraine’s energy sector reform, development of cross-border infrastructure projects, and other initiatives related to integration of markets in the Southeastern Europe and beyond. The March Report of the Energy Community Secretariat 42 on fulfillment by Ukraine of its commitments, in addition to analyzing legislative and regulatory changes, covers the assessment of virtually all areas of the gas sector reform: price and social aid transformation, separation of activities, measures in the sector of equity production and gas distribution, as well as transparency and independence of market regulation. Pointing to the achievements in the field of adoption of fundamental reform laws, the authors point out the lack of development of secondary legislation, and most importantly - incompleteness and delay in implementing the measures taken in practice. The main questions posed by the analysis are: is irreversibility of reforms achieved and how to strengthen the international community’s trust in alterability of the path chosen by Ukraine? Despite the lack of an unequivocal answer to both questions, the authors of the report note that 2017 will be decisive in search of 37
http://www.naftogaz.com/www/3/nakweb.nsf/0/F55B6F3E1E2EE627C22580E600662497?OpenDocument&year=2017&month= 03&nt=%D0%9D%D0%BE%D0%B2%D0%B8%D0%BD%D0%B8& 38 http://www.president.gov.ua/news/prezident-ukrayini-zustrivsya-z-prezidentom-rumuniyi-40654 39 https://www.rbc.ua/ukr/news/ukraina-rassmatrivaet-rumyniyu-kachestve-1461234209.html 40 https://www.energy-community.org/portal/page/portal/ENC_HOME/NEWS/News_Details?p_new_id=14163
Covers 8 members of the Energy Community – Albania, Bosnia and Herzegovina, Kosovo, the former Yugoslav Republic Macedonia, Moldova, Montenegro, Serbia and Ukraine - and eight neighboring EU member states - Bulgaria, Croatia, Greece, Hungary, Italy, Poland, Romania and Slovakia.
41
42
https://www.energycommunity.org/portal/page/portal/ENC_HOME/DOCS/4612393/4BB88EA5B81A2A78E053C92FA8C0593F.pdf
Gas it. It is time to finally implement all planned and legally defined transformations of the gas market, and if the current plan is insufficient and new tools which will motivate Ukraine to fully fulfill its obligations to the Community are needed, ensuring the irreversibility of market transformations, the Secretariat is ready to support their development. On March 28, the Energy Community Gas Group approved the draft strategy for formation of functioning gas markets of the Energy Community and strengthening pan-European integration of the gas market by 2020 43. The relevant document (Energy Community Gas Action 2020 44) prepared by the Secretariat contains a set of legal, market and infrastructural measures aimed at overcoming deficiencies of the existing system of interaction of gas infrastructures and market structures to achieve greater liquidity, competition, diversification and security of supply in the region of countries of the Energy Community. The gas group agreed to create working groups to manage implementation of the proposed measures.
Directive 2004/67/EC concerning measures to safeguard security of natural gas supply (AA: Articles 338, 341, Annex XXVII AA), Early Warning Mechanism (AA: Annex XXVI), reactions to an emergency situation (Articles 275-276, 309, 314 of the AA) In March, the Government approved the plan of measures for 2017 on implementation of the Cybersecurity Strategy of Ukraine (Order No. 155-p45). Among other things, the Ministry of Internal Affairs, the Ministry of Energy and Coal Industry and other bodies have been entrusted with implementation of the Directive 2008/114/EC concerning the protection of critical infrastructure, in particular on cybersecurity and cyber defense of critical infrastructure facilities (within the framework of the work of the interdepartmental working group). In its turn, the State Service of Special Communication and Information Protection should create protected data centers for the needs of state bodies, including the energy sector. Naftogaz appealed to the General Court of the European Court of Justice with its own lawsuit against the European Commission46, in which it demands to cancel its decision of 28 October 2016 on permit for PJSC Gazprom to increase the utilization of the capacity of the OPAL gas pipeline and the volume of pumping through North Channel-1 pipeline, arguing its claims that the decision was taken outside the powers of the Commission. The NAK’s press release states that adoption of this decision without consulting Ukraine violates the Article 274 of the Association Agreement between Ukraine and the EU, as well as the EU obligations under the Energy Charter Treaty and the Treaty establishing the Energy Community. Ukraine continues to ensure a stable transit of gas to European consumers: during March, 6.6 bcm 47 were transported to Europe, which corresponds to the volume of March 2016. Instead, Gazprom continues to violate contractual terms: for example, as of morning of 03.04.2017, pressure on the Russian GMS Sudzha was 57.7 bar, instead of 60.0 bar, as stipulated by the contract. According to the results of the I quarter of 2017, not only the volume of transit, but also the volume of gas imports from the territory of Europe for the needs of domestic consumers of Ukraine were greater than last 43
https://www.energy-community.org/portal/page/portal/ENC_HOME/NEWS/News_Details?p_new_id=14283 https://www.energycommunity.org/portal/page/portal/ENC_HOME/DOCS/4614434/4BDC122A576257E5E053C92FA8C0B437.pdf 45 http://www.kmu.gov.ua/control/uk/cardnpd?docid=249807504 44
46
http://www.naftogaz.com/www/3/nakweb.nsf/0/A9AD359C022AA90BC22580F2002233D4?OpenDocument&year=2017&month=0 3&nt=%D0%9D%D0%BE%D0%B2%D0%B8%D0%BD%D0%B8& 47 http://utg.ua/utg/media/news/2017/04/transit-march-2017.html
Gas year: transit to Europe increased by 3.8 bcm (to 23.2) 48, and imports to Ukraine - by 1.6 bcm (to 4.2), although the total volume of gas consumption by Ukrainian consumers for the I quarter of 2017 decreased, compared with 2016, by almost 1 bcm (or by 7%) - to 12,2 bcm 49. According to the operational data of Ukrtransgaz 50, the heating season 2016-2017 was competed by Ukraine with natural gas reserves in the amount of 8.22 bcm. Ukrainian gas consumers set the minimum daily gas withdrawal from the UGS in 2017 on March 8: according to Ukrtransgaz, the volume of withdrawal was 7.71 mcm. Starting from March 9, Ukrtransgaz periodically stopped gas withdrawal from gas storage facilities, and, balancing depending on the weather, switched over to pumping of gas. The lowest gas reserves in the UGS in the heating season 2016-2017 were recorded on March 22 - 8.10 bcm. In general, in the I quarter of this year, 3.9 bcm 51 of gas were withdrawn from the underground gas storage, which is 1.6 bcm less than last year. This volume was compensated by imports of gas from Europe. Totally, during the heating season 2016-2017, 6.7 bcm of gas from the UGS were used, which is 21% less than in the heating season 2015-2016 52. At the end of the heating season (March 28), the total overdue debts to Naftogaz of district heating enterprises amounted to UAH 24.6 billion, of which for 2017 - UAH 7.7 billion 53. The largest total overdue debt for the gas used in this category was accumulated by DHC and CHPP enterprises of the Donetsk region (UAH 5.4 billion). The debt of DHC and CHPP enterprises for the natural gas used in heat production is still about 81% of the total amount of debt. The average current level of settlements with Naftogaz in 2017 for gas for thermal energy production was 39% 54. The lowest level of settlements was observed among enterprises of the Ternopil (14%) and Volyn (26%) regions. In order to implement practical mechanisms for repayment of gas debts to Naftogaz, provided for by the Law No. 1730-VIII of 03.11.2016, the Government approved the Model Agreement on the Restructuring of the Debt for the Consumed Natural Gas for DHC Enterprises (Decree No. 222 55). The document clearly regulates the procedure for restructuring and repayment of credit indebtedness of thermal power companies for the volume of gas used as of 1 July 2016, and not repaid as of 31 December 2016, the repayment periods and monthly payments are determined. Commenting on adoption of the resolution, the Deputy Prime Minister G. Zubko informed 56 that from 1 April 2017, the register of enterprises, which will be able to pay off the debt to Naftogaz for the energy sources consumed will start working. In the process of restructuring, fines and penalties will be deducted and subventions from the state will be granted to reduce debt obligations of enterprises.
48 49
Ibid.
http://utg.ua/utg/media/news/2017/04/ugs-march-2017.html http://utg.ua/utg/business-info/live.html 51 http://utg.ua/utg/media/news/2017/04/ugs-march-2017.html 50 52 53
Ibid.
http://www.naftogaz.com/www/3/nakweb.nsf/0/AF368B52C7F1CE04C22580F200371B94?OpenDocument&year=2017&month= 03&nt=%D0%9D%D0%BE%D0%B2%D0%B8%D0%BD%D0%B8& 54 55
Ibid.
http://www.kmu.gov.ua/control/uk/cardnpd?docid=249874736 56 http://www.kmu.gov.ua/control/uk/publish/article?art_id=249855437&cat_id=244276429
Electricity and Nuclear Security On March 23, the FEC Committee of the VRU held a discussion on the draft Electricity Market Law (No. 4493) and recommended that the parliament adopt it in the second reading and as a whole. Consideration in the session hall is expected in April. Due to the loss of control over enterprises in the territory temporarily uncontrolled by Ukraine, on March 15, the NSDC decided to stop movement of goods through the touchline in the anti-terrorist operation area, including coal, and on March 16, the President signed the Decree No. 62 “On the Decision of the NSDC of Ukraine of 15 March 2017 “On Urgent Additional Measures to Counter Hybrid Threats to the National Security of Ukraine”. The CMU created a state commission to check compliance with safety norms of production at all coal mining enterprises of the country after the accident at the Stepova mine (SE Lvivvugillia). In fulfillment of the obligations to harmonize the laws of Ukraine with the acquis, the draft joint order of the SNRIU and the Ministry of Health “On Approval of the Radiation Safety Rules for the Use of Ionizing Radiation in Brachytherapy” was published for public discussion. The draft resolution "On Returning for Finalization of the draft Law of Ukraine “On Amendments to Certain Laws of Ukraine in the Field of Nuclear Energy Use” was registered in the VRU under No. 5703/П of 21.03.2017. Directive 2009/72/EC of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC (Article 269, Chapter 11, Section IV of the EU-Ukraine Association Agreement) On March 23, the FEC Committee of the VRU held a discussion on the readiness of the draft Electricity Market Law No. 4493 and recommended the Parliament to adopt it in the second reading as a whole 57. Consideration in the session hall is expected in April. At the Government meeting on March 16, the draft resolution “On the Use of Temporary Emergency Measures in the Electricity Market" was approved, envisaging their continuation. According to the Government, this will ensure a reliable, uninterrupted operation of the united power system of Ukraine, as well as contribute to the prevention of emergency situations and damage to electricity generating units, their elements and structures in connection with blocking the movement of trains, including those intended for the transport of coal to the controlled territory of Ukraine 58. On 30 March 2017, a decision was taken to approve the Report on the Results of the Activities of the National Commission, which carries out government regulation in the fields of energy and public utilities, in 2016 (decree No. 460 of 30.03.2017) and its promulgation on the NEURC official web-site 59. Regulation 714/2009/EC of 13 July 2009 on conditions for access to the network for cross-border exchanges in electricity and repealing Regulation 1228/2003 (Art. 270, Chapter 11, Section IV of the EU Ukraine Association Agreement) On March 1, the Government approved amendments to the Cabinet of Ministers Regulation No. 648 of 8 September 2004 (as amended by the CMU Regulation No. 133-p of 01.03.2017), which set plans for the reconstruction and modernization CHPPs and TPPs in order to comply with environmental norms and the plan of synchronization of the UES with ENTSO-E 60. The draft CMU resolution “On Approval of the Construction Project” 750 kV Transmission Lines for capacity output of the Rivnenska and Khmelnytska 57
http://iportal.rada.gov.ua/news/Novyny/141987.html http://www.kmu.gov.ua/control/uk/publish/article?art_id=249821413&cat_id=244274160 59 http://www.nerc.gov.ua/?news=5895 60 http://www.kmu.gov.ua/control/uk/cardnpd?docid=249792648 58
Electricity and Nuclear Security NPPs: OPL 750 kV Rivnenska NPP - Kyivska with extension Substation 750 kV Kyivska and Measures of OPL 750 kV” (Adjustment)" 61 was also adopted. Financing of project works is carried out at the expense of EBRD and EIB lending funds, tariffs for electricity transmission by trunk and inter-state electric networks of the SE NPC Ukrenergo and state budget funds. On March 9, the NPC Ukrenergo issued a notice on the use of restrictions on the use of rights of access to the throughput capacity of interstate electricity networks in February 2017, referring to the specifics of the work of the Burshtyn Energy Island. Thus, restrictions were applied to ERU Trading, Donbasenergo, Ukrinterenergo and DTEK Pavlogradvugillia to the value determined by the Agreement on Parallel Work and Accounting of the Polish Regulation Unit, including the Burshtyn Energy Island connected to the network of the Regional Group “Continental Europe”, concluded between NPC Ukrenergo and PSE S.A. Settlement as to refund for the limitations was sent by it 62. On March 15, the NEURC approved the Investment Program of the National Energy Company Ukrenergo for 2017 in the amount of UAH 3,241,030 thousand. Commenting on the investment program, the acting CEO Vsevolod Kovalchuk noted that it was formed taking into account the new technical and investment policy of the company, as well as a strategic 10-year plan for the development of the UES of Ukraine, which is being prepared for approval 63.
Regulation 714/2009/EC of 13 July 2009 on conditions for access to the network for cross-border exchanges in electricity and repealing Regulation 1228/2003 (Art. 271, Chapter 11, Section IV of the EU Ukraine Association Agreement) On March 9, the NEURC calculated unit costs of maintaining electrical grids in the volume of one standard unit that existed by the results of economic activities of licensees to transfer electrical energy by local, main and interstate power grids, for use from 01.03.2017 (the NEURC letter No. 2168/20.2/7-17 of 02.03.2017 64). Unit costs are used to calculate the cost of reasonable expenses for the maintenance of public technological electric grids 65. On March 15, a conciliation meeting was held at the NEURC to discuss proposals and comments received on the results of the publication of the draft resolution of the NEURC “On Approval of Amendments to the Rules for Connection of Electrical Plants to Electrical Grids”. Key innovations to the amendments to the Rules envisaged by the Draft Resolution: establishment of clear timeframes for the provision of services for connection of electrical plants of customers to electrical grids; establishment of responsibility of electricity transmission organizations in case of exceeding the terms of providing services for connection of electrical plants of customers to electrical grids; simplification of the standard forms and implementation of the customer’s accounts for monitoring of the connection status. Based on the results of the discussion, it is offered under the auspices of the Ministry of Energy and Mine Industry to create a corresponding working group to analyze the regulatory framework in the fields of urban planning and land developments with a view of developing the current laws for reducing the terms for design and construction of electrical grids 66.
61
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Electricity and Nuclear Security Directive 2009/72/EC of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC (Article 273, Chapter 11, Section IV of the EU-Ukraine Association Agreement) On March 15, the meeting of the Coordination Group for the introduction of a new electricity market model, chaired by Volodymyr Yevdokimov, a member of the NEURC, took place. Representatives of the NEURC, the Ministry of Energy and Coal Industry, Energorynok, NPC Ukrenergo, and other stakeholders discussed the state of implementation of the Schedule for Implementation of the New Electricity Market Model; status of drafting basic regulations (Transmission System Code, Commercial Metering Code, Distribution System Code, Market Rules, Day-Ahead Market Rules, Supply Rules (Retail Market), Intraday Market Rules, Security of Supply Regulations; TSO corporatization; report on the use by TSOs of revenues from capacity allocation; the rules of interaction between the structural units of the transmission system operator; contracts for the purchase of electricity in the WEM (costs of main power lines); tender and procurement of consultation services and software of the WEM; modeling the functioning of the new electricity market model and analysis of its introduction (including for consumers); support services; glossary of definitions and acronyms based on ENTSO-E 67. Status of implementation of the schedule is such that major draft laws and regulations for the new market are developed about 50% 68. The experts of the Project Office of the Energy Community Secretariat have prepared proposals on the mechanisms for the functioning of the new electricity market model 69, which were elaborated in detail by the NEURC specialists, the Ministry of Energy and Coal Industry, NPC Ukrenergo, Energorynok, considered by the Coordination Group on the Implementation of the Plan- Schedule. The document is not a draft regulatory act. This is a descriptive document that contains a more detailed explanation of the options for building a new model of the electricity market in accordance with the provisions of the draft Electricity Market Law of Ukraine 70. On March 17, the NEURC published a draft resolution of the NEURC “On Amendments to the Procedure for Application of Electricity Tariffs”. The amendments provide for exclusion from it of the category of consumers “equivalent to the population”, definition of which is provided in clause 3 of the Procedure, definition of dividing population in urban and rural by residence, as well as rules of delivery to agricultural workers, penal institutions, medical-labor dispensaries, investigative insulators 71. On March 28, the NEPUCR adopted the resolution No. 402, by which it approved the compensation to cover losses from electricity supply at regulated tariffs (subsidized certificates) for April 2017 of the amount UAH 2.59 billion, which is by 24% less than in March 72. The decrease in the amount of subsidy certificates was due to the increase of electricity tariffs for the population from April 1. On March 28, the NPC Ukrenergo reported that the UES of Ukraine has a negative tendency towards significant unevenness of the daily schedule of electricity consumption, especially in the autumn-winter period. The configuration of the daily schedule of electricity consumption in Ukraine as a whole is characterized by peak of load in the evening peak, load failure in the hour of the night zone of the day, and almost uniform electricity consumption during the hours of the morning maximum and half-peak zone. At the same time, the unevenness of the daily load schedule of the UES of Ukraine ranges from 4,500 MW in summer to 6,500 MW in winter. NPC Ukrenergo believes that regulating the daily schedule of electricity consumption in the market conditions is most effective while applying economic management methods, one of which is a system of tariffs differentiated by periods of time.
67
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Electricity and Nuclear Security In pursuance of Resolution of the NERC No. 1241 of 20.12.2001 (as amended), the SE NPC Ukrenergo in agreement with the NEURC sets limits of periods by hours of a day (night, half-peak, and peak) per each season for settlements of consumers for electricity at the tariffs differentiated by periods of time. The limits of tariff zones for 2017 are set by the fax message of NPC Ukrenergo No. 03/03/13844 of 08.12.2016. In order to harmonize the tariff period in December to reduce peak of load of the UES Ukraine, for threezone tariffs, differentiated by time periods, limits of the evening peak area from 17 to 21 hours should be transferred to from 16 to 20 hours during the period from November till February 73.
Directive 2009/72/EC of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC (Article 274, Chapter 11, Section IV of the EU-Ukraine Association Agreement) The MECI adjusted the Forecast Balance of Electricity of the UES of Ukraine for April 2017 74. The Ministry included the restoration of electricity exports to Moldova in the amount of 90 million kWh in the forecast the balance of electricity for April. Art. 338, Chapter 1, Section V of the EU-Ukraine Association Agreement. Agreements on cooperation with IMF On March 10, the Memorandum of Understanding was signed between Ukraine and Iran, providing for cooperation in the energy sector 75. On March 17, the Deputy Minister for European Integration discussed the integration of the energy sector of Ukraine into the EU energy market with the representatives of European diplomatic missions and organizations. During the meeting, N. Boyko acquainted with the process of implementing the acquis in the energy sector of Ukraine and the formation of market conditions that will improve the investment climate and development of the industry, the electricity market reform and stages of adopting the Electricity Market Law of Ukraine, the work on the Energy Strategy by 2035 76. On the same day, the meeting of N. Boyko with energy experts from the Ministry of Foreign Affairs of the Great Britain, at which they discussed the issues of reforming the Ukrainian energy sector and the initiatives aimed at developing RES and cooperation opportunities for strengthening energy security, took place. The issue of blockade of supply of coal from a temporarily uncontrolled territory and MECI measures to balance the work of the power system of Ukraine were also discussed 77. On March 22-24, a working meeting was held at SUNPP on the interim results of the next stage of the project for modernization of the physical protection system of the enterprise facilities. It was attended by representatives of the U.S. Department of Energy, the U.S. Embassy in Ukraine, management of NNEGC Energoatom, specialists of SUNPP and Ukrainian firm TSM Group (general contractor performing purchase, installation and adjustment of the equipment). This project is implemented within the framework of international aid. According to Energoatom, in the process of familiarization with the implemented measures, international experts have noted a good pace of implementation and high quality of work. This situation will allow US partners to decide on the allocation of additional funds for the further implementation of the project of modernization of the physical protection system of the SUNPP 78. On March 24, within the framework of EU technical assistance Twinning “Support to the National Commission for State Regulation in the field of energy and public utilities, in the process of reforming the electricity market”, in the NEURC premises, the seminar “Charge for Connection to Electrical Grids: 73
http://www.ukrenergo.energy.gov.ua/Pages/ua/DetailsNew.aspx?nID=3707 http://mpe.kmu.gov.ua/minugol/doccatalog/document?id=245194796 75 http://mpe.kmu.gov.ua/minugol/control/uk/publish/article?art_id=245190682&cat_id=35109 76 http://mpe.kmu.gov.ua/minugol/control/uk/publish/article?art_id=245192730&cat_id=35109 77 http://mpe.kmu.gov.ua/minugol/control/uk/publish/article?art_id=245192751&cat_id=35109 78 http://www.energoatom.kiev.ua/ua/press/nngc/46540predstavniki_yuuaes__mnsterstva_energetiki_ssha_obgovorili_hd_modernzatc_fzichnogo_zahistu_obktv_pdprimstva/ 74
Electricity and Nuclear Security Improvement Measures” took place. The seminar was attended by the NEURC representatives, Slovak regulator (RONI) and Slovak distribution system operator (SSE), MPs, EU Delegation to Ukraine, EBRD, Ukrainian Association of Renewable Energy, electricity DSOs and civil society organizations, associations 79. On March 30, the Seventh Meeting of the Parties to the Convention on Nuclear Safety, attended by the Ukrainian delegation presenting a national report on the implementation of the Convention, was held in Vienna. After the report, the Ukrainian delegation responded to questions of representatives of other countries and international atomic organizations, including Switzerland, Ireland, India, the Netherlands, Germany, the U.S., Canada, Belarus, Sri Lanka. Questions concerned the activities of the State Nuclear Regulatory Inspectorate of Ukraine, implementation of CcSUP of Ukraine’s NPPs, the process of building nuclear facilities in Ukraine and the continued operation of power units of existing NPP, emergency preparedness and operational disorder of domestic NPPs, the results of audits and missions, safety analysis report and prospects of construction of a solar power plant in the ChNPP exclusion zone 80. In March, the delegation of NPC Ukrenergo visited Finland to learn about the work of the Finnish TSO Fingrid and negotiate with officials of the Finland’s energy sector as to future accession to the ENTSO-E, as well as opportunities to attract Finnish experts (operation of systems, dispatching control, market, IT ) to the future Group of Strategic Advisers of Ukrenergo 81. In March, the Consortium of leading Western European organizations specializing in radioactive waste management (ANDRA, France; COVRA, the Netherlands; ENRESA, Spain; and DBE TECHNOLOGY GmbH and SKB International AB - subsidiaries of the German and Swedish waste management organizations DBE and SKB), in close cooperation with specialists of the NAS of Ukraine completed the project initiated by the European Commission as part of its program “Instrument for Nuclear Safety Cooperation” (INSC) and aimed at developing concepts of radioactive waste disposal in Ukraine. This project is a major part of the European aid program for the Ukrainian radioactive waste management sector. The project budget was EUR 2 million 82.
Art. 339, Chapter 1, Section V of the EU-Ukraine Association Agreement, Coal Market On March 1, the CMU adopted the Resolution “On Approval of the Procedure for the Movement of Goods to the District or from the District of the Anti-Terrorist Operation” 83, introduced by the Security Service of Ukraine, in particular, this procedure was related to coal products. On March 14, the President P. Poroshenko said that a number of Ukrainian enterprises in the antiterrorist operation area had been illegally confiscated by the so-called DPR and LPR authorities, and therefore, accordingly, Ukraine could not have any economic ties with these assets till the restoration of control over them 84. On March 15, DTEK also officially announced the loss of control over coal mines and energy supply companies on the territory of Donbass, temporarily uncontrolled by Ukraine 85. Donbasenergo also reported that since March 21, 2017, it had not been controlling the work of the Starobeshivska TPP, and a part of the structural units located in the anti-terrorist operation area 86. 79
http://www.nerc.gov.ua/index.php?news=5873 http://www.energoatom.kiev.ua/ua/press/46553ukranska_delegatcya_uspshno_vdzvtuvala_na_zustrch_storn_konventc_pro_yadernu_bezpeku/ 81 http://www.ukrenergo.energy.gov.ua/Pages/ua/DetailsNew.aspx?nID=3720 82 http://dazv.gov.ua/novini-ta-media/vsi-novyny/evropejski-eksperti-zavershuyut-mizhnarodnij-proekt-z-rozrobki-kontseptsijzakhoronennya-radioaktivnikh-vidkhodiv-dlya-ukrajini.html 83 http://www.kmu.gov.ua/control/uk/cardnpd?docid=249790429 84 http://www.president.gov.ua/news/zhodnoyi-torgovelnoyi-diyalnosti-z-zahoplenimi-pidpriyemstva-40358 85 https://economics.unian.ua/industry/1824536-dpek-ahmetova-zayaviv-pro-vtratu-kontrolyu-nad-shahtami-i-kompaniyami-vzoni-ato.html 86 https://economics.unian.ua/energetics/1834881-donbasenergo-zayavilo-pro-vtratu-kontrolyu-nad-starobeshivskoyu-tes-tainshimi-aktivami-v-zoni-ato.html 80
Electricity and Nuclear Security Taking into account the critical situation surrounding the Ukrainian enterprises in the anti-terrorist operation area, on March 15, the NSDC decided to stop the movement of goods through the touchline, including coal 87. On March 16, the President P. Poroshenko signed the Decree No. 62 “On the decision of the NSDC of 15 March 2017 “On urgent additional measures to counteract hybrid threats to national security of Ukraine”, by which, according to Article 107 of the Constitution, he brought into force the NSDC decision 88. In turn, on March 16, the Government, to ensure reliable and smooth operation of UES of Ukraine, approved the decree “On Taking Temporary Emergency Measures in the Electricity Market” 89, by which it extended action of the emergency measures taken in mid-February in the electricity market 90. According to the acting CEO of Ukrenergo V. Kovalchuk 91, on March 17, fuel balances at power plants operating on anthracite ranged from 28 to 60 days. V. Kovalchuk said that the generating companies – TPP operators should immediately proceed to the process of conclusion of contracts for the import of anthracite into Ukraine 92. In turn, on March 21, the Prime Minister V. Groysman said that the Government is already exploring the possibility of purchasing coal in the United States, Australia and the South African Republic 93. According to the media, the First Deputy Minister of Energy and Coal Industry of Ukraine G. Karp informed that the MECI expects the first deliveries of imported coal of the anthracite group by May. According to her, this term is critical for ensuring reliable operation of the UES of Ukraine 94. It has become known that, according to tender documents to provision of freight forwarding services, promulgated in the public procurement ProZorro system, the PJSC Tsentrenergo plans to import through sea ports 2.5 million tons of coal from May 2017 to May 2018. The tender is divided into three lots, depending on the port of unloading of coal. The deadline for applications is April 14. The expected cost of transport services is UAH 646 million 95. The Prozorro system also showed that the PJSC Tsentrenergo announced a tender for the supply of 700 thousand tons of coal with an expected value of UAH 1.52 billion (at a price of UAH 2,176 per ton, excluding VAT, or $ 80.14 per ton at the NBU rate), which must be delivered to the Black Sea ports (under the CIF conditions). Tender conditions provide for the supply of coal with a base caloric value of 6,000 Kcal/kg, minimum 5,000 Kcal/kg from May 1 to December 31 96. Firma TekhNova LLC also agreed to supply anthracite coal to its CHPs on 2 vessels with a cargo of 75 thousand tons at a price of $ 96-97 per ton, taking into account the costs of its delivery, and plans to buy another 225 thousand tons 97. On March 2, an accident (explosion of a methane-air mixture) took place at a separate subdivision of the Stepova mine (SE Lvivvugillia). As a result of the accident, 8 employees died and 20 others were injured with varying degrees of severity. By the order of the CMU, a commission for the special investigation of the I category accident under the chairmanship of the Vice Prime Minister of Ukraine G. Zubko was formed. The expert commission was also formed to establish the causes of the accident and to develop a plan of measures to prevent such accidents 98. On March 27, G. Zubko informed on the results of the government commission’s work and reported the main reasons for the tragedy: the UTAS security system’s non-conformance; non-compliance with the rules of ventilation in the mine; absence of permissive documentation for performance of dangerous works, the term of which was terminated on 14.11.2016. There were also other reasons of the tragedy announced: increased levels of methane in the 87
http://www.rnbo.gov.ua/documents/440.html http://www.president.gov.ua/news/prezident-uviv-u-diyu-rishennya-rnbo-shodo-nevidkladnih-zaho-40422 89 http://mpe.kmu.gov.ua/minugol/control/uk/publish/article?art_id=245192610&cat_id=35109 90 https://economics.unian.ua/energetics/1826347-kabmin-na-misyats-prodovjiv-diyu-nadzvichaynih-zahodiv-v-energetitsi.html 91 https://www.youtube.com/watch?v=NN6swxEV0i4 92 https://economics.unian.ua/energetics/1829719-v-ukrenergo-povidomili-na-skilki-vistachit-zapasiv-antratsitu-na-skladahtes.html 93 https://economics.unian.ua/energetics/1833664-groysman-rozpoviv-zvidki-planuyut-importuvati-vugillya.html 94 http://www.epravda.com.ua/news/2017/03/23/622986/ 95 http://elektrovesti.net/52239_tsentrenergo-planiruet-zavezti-morem-25-mln-tonn-uglya 96 http://biz.censor.net.ua/news/3023412/tsentrenergo_popytaetsya_kupit_700_tysyach_tonn_antratsita_po_80_za_tonnu 97 http://biz.censor.net.ua/news/3023174/tets_kompanii_tehnova_shkriblyaka_nachali_import_antratsita_morem_po_97_za_to nnu_ 98 http://mpe.kmu.gov.ua/minugol/control/uk/publish/article?art_id=245189125&cat_id=35109 88
Electricity and Nuclear Security mine, inconsistency of cable products with technical requirements, incomplete instructing and staff training, as well as issues of financing of the Stepova mine, in particular, blocking accounts. G. Zubko noted that there is the problem of lack of permit documentation at another mine of the SE Lvivvugillia Chervonogradska. These conclusions will be noted in the recommendations on the inspection of all mines of Ukraine and considered at the next meeting of the Government 99. After the accident at the Stepova mine, on March 3, the CMU set up a state commission to check compliance with the safety standards of production at all coal-mining enterprises of the country. According to V. Groysman, after carrying out the inspection, the Government plans to determine the list of necessary measures to increase the level of safety at mines 100. On the same day, the MECI also issued the Order No 172 of 03.03.2017 “On Strengthening the Control over Safe Mining in Coal Industry” 101, which instructs the heads of coal-mining enterprises within the scope of the ministry to establish a regime of enhanced control over the safety of mining operations 102. On March 3, the Prime Minister of Ukraine V. Groysman announced that it is necessary to build a transparent coal market and energy exchange, on which imported, and Ukrainian coal will be sold in market conditions 103. Therefore, on March 9, V. Groysman met with experts, where the issue of building a transparent coal market as the first stage on the way to reforming the energy sector was discussed. According to the results of the meeting, on March 20, on the instructions of the Prime Minister of Ukraine, a working group on issues of liberalization of the coal market, at the first meeting of which the participants discussed the draft Coal Products Market Law, the issue of concluding public bilateral contracts on coal purchase, opportunities for starting a coal exchange, was created 104. On March 24, during the Question Hour for the Government, the Prime Minister said that Ukraine should develop a coal mining development strategy and modernize and restructure Ukrainian mines, UAH 1.8 billion was allocated for the work of which this year. In his view, it is unacceptable to allow that all the funds allocated were directed at paying only arrears of wages to the workers of the coal industry, because under such conditions, coal is produced twice as expensive as it costs in the free market. In his opinion, first of all, it is necessary to change the working conditions of miners, to increase their safety, to open the opportunity to introduce new technologies, to obtain high-quality coal at normal cost, and to direct all the rest to the payment for miners’ labor 105. On the same day, during the round table “Actual Issues of Ukraine’s Coal Industry: Reform, Financing and Labor Safety”, the head of the MECI presented the vision of his department as regards further development of the coal industry. According to him, thermal generation will gradually reduce the use of the anthracite group coal by replacing and switching to combustion of the gas group coal. In the context of emergency measures in the energy sector, the MECI balanced the electric power system work, and initiated a draft resolution on the ban on the import of coal from the territory of the Russian Federation in order to avoid abusive practices in the coal market, while appealing to the embassies of countries producing anthracite coal to consider the possibility of coal supply to Ukraine. According to the minister, some of the generating companies have already concluded the relevant agreements. Informing about further plans for the development of the coal industry, I. Nasalyk emphasized that the first task is to solve the problem of loss-making of mines, in particular, the key task for the Ministry is to bring enterprises to a 99
http://www.kmu.gov.ua/control/uk/publish/article?art_id=249850514&cat_id=244276429 http://www.kmu.gov.ua/control/uk/publish/article?art_id=249789352&cat_id=244276429 101 http://mpe.kmu.gov.ua/minugol/doccatalog/document?id=245189077 102 https://economics.unian.ua/energetics/1813067-minenergovugillya-nakazav-posiliti-kontrol-zahodiv-bezpeki-naderjshahtah.html 103 http://www.kmu.gov.ua/control/uk/publish/article?art_id=249789320&cat_id=244276429 104 http://www.kmu.gov.ua/control/uk/publish/article?art_id=249831196&cat_id=244276429 105 http://www.kmu.gov.ua/control/uk/publish/article?art_id=249844467&cat_id=244276429 100
Electricity and Nuclear Security break-even level. The MECI plans to reduce the number of mines from 33 to 26, with the planned increase in coal production from 5.8 million tons to 8.7 million tons, which is planned to be achieved through modernization, technical re-equipment of mines and the introduction of new lavas. UAH 800 million has already been included in the budget of 2017 for this measures, and UAH 1 billion of loan funds are provided for under state guarantees. The Minister also emphasized that creation of proper and safe working conditions for miners, and providing them with personal protection means is still the priority. I. Nasalyk also noted that the MECI’s goal is to achieve maximum openness, including in the coal industry. For this purpose, the Working Group, which includes MPs, representatives of trade unions, Civil Network Opora, has been formed for the analysis of public procurement of equipment for mines. This has already made it possible to reveal numerous facts of overpricing and has allowed reducing the cost of purchasing the corresponding equipment. I. Nasalyk also announced plans to establish the National Coal Company. The draft resolution was submitted to the Government for consideration. It is proposed to create the company in order to optimize the work of mines and reduce costs, in particular, for allowance of workers not involved in the production process. These measures will, according to preliminary estimates, save UAH 1.5 billion 106. On March 23, the NEURC approved a new structure of tariffs for heat and electricity produced at CHPPs for 2017 107, while increasing the cost of the deficit anthracite group coal or gas coal necessary for work of mains to UAH 2,071-2,222 per ton. The decision of the NSDC of 15 March 2017, which suspended the movement of goods through the touchline in the anti-terrorist operation area, and, consequently, the supply of scarce anthracite 108, as well as the fact that for providing CHPPs with fuel, imports of coal at prices that have formed in the world market, namely - USD 70.48 per ton plus the cost of transportation of coal to the ports of Ukraine (USD 9.84 per ton) and handling at the port (USD 7.19 per ton) have become the reasons for the revision of tariffs. By the same decision in connection with the increase of purchasing prices for coal, the National Commission raised tariffs for supply of electricity produced at some CHPs, from 1 April 2017 - by 9.2-22.7%, as well as for heat energy for needs of the population from 1 July 2017 - by 9.6-71.4% 109. According to the State Statistics Service, in January-February 2017, Ukraine increased foreign exchange costs for imports of coal and anthracite by 50.3% compared to the same period in 2016 - to USD 357.6 million. Russia (USD 247.2 million, which made 69% of the costs for importing solid fuels), the USA (USD 65.4 million, which made 18.3%) and Kazakhstan (USD 20, 4 million, which made 5.7%) and other countries (USD 24.5 million) were the largest suppliers of coal for Ukraine in January. Exports of coal and anthracite in January-February amounted to USD 14.7 million 110. At the same time, the State Statistics Service reported that in February 2017, the consumption of coal decreased by 13.7% - to 3.869 million tons compared to the same period in 2016 and by 22.5% compared to January 2017 111.
106
http://mpe.kmu.gov.ua/minugol/control/uk/publish/article?art_id=245194237&cat_id=35109 http://www.nerc.gov.ua/index.php?news=5862 108 https://economics.unian.ua/energetics/1838234-natskomisiya-zbilshila-tsinu-importnogo-vugillya-v-tarifah-naelektroenergiyu-tets.html 109 https://economics.unian.ua/energetics/1838234-natskomisiya-zbilshila-tsinu-importnogo-vugillya-v-tarifah-naelektroenergiyu-tets.html 110 https://economics.unian.ua/energetics/1820081-ukrajina-znachno-zbilshila-import-vugillya-naybilshiy-postachalnikrosiya.html 111 https://economics.unian.ua/energetics/1843496-ukrajina-v-lyutomu-skorotila-spojivannya-vugillya-na-14.html 107
Electricity and Nuclear Security Art. 342, Chapter 1, Section V of the EU-Ukraine Association Agreement, Cooperation in the Nuclear Field, Council Directive 2014/87/Euratom, Council Directive 2013/59/Euratom, Council Directive 2006/117/Euratom Within the framework of the implementation of the Council Directive 2013/59/Euratom, on March 16, SNRIU published the draft joint order of the SNRIU and the MH “On Approval of the Radiation Safety Rules for the Use of Ionizing Radiation Sources in Brachytherapy” for public discussion. The laws of Ukraine on the use of nuclear energy as a whole complies with the requirements of the Directive, but there are differences in certain areas of state regulation in the field of nuclear energy use, in particular in regulating the safety of sources of ionizing radiation used for medical radiation in brachytherapy. Therefore, the purpose of the draft order is to ensure the radiation protection of medical personnel and patients and the safety of the use of sources of ionizing radiation during brachytherapy procedures 112. On March 21, the Resolution No. 5703/П “On Returning the Draft Law of Ukraine “On Amendments to Certain Laws of Ukraine in the Field of Nuclear Energy Utilization (Reg. No. 5703 of 23 January 2017)” for Revision” was registered in the VRU 113. In the framework of the process of implementing the domestic laws to the acquis in the field of occupational safety and health at the Khmelnytskyi NPP, a number of measures have been implemented to introduce the BS OHSAS 18001:2010 national standard “Hygiene and Safety Management System. Requirements” 114. On March 1, the Government approved the CMU decree “On Approval of the Project “Zaporizhzhia NPP. Training Center. Building G. Completion of construction and commissioning of the ZNPP in general. Industrial Construction. Adjustment” 115. The decree was developed by the MECI to provide training and professional advancement of NPP personnel in order to reduce the influence of the human factor on the safe operation of power units, the possibility of training the personnel in conditions that are close as much as possible to the operation of a power unit and simulation of emergency situations. In March, a mission to technical support of WANO, which was devoted to the implementation of a systematic approach to the analysis of the needs of training the NPP personnel, was held at ZNPP. The main purpose of the mission was to transfer positive experiences and materials to improve a particular area of activity in each particular sector. Thus, the progress of each NPP is summed up by areas for the creation of collective experience of nuclear power plants. At the final meeting of the technical support mission, the WANO experts provided their proposals, recommendations and action plan for implementing the procedure for applying a systematic approach to training personnel at the ZNPP 116. On March 2, Y. Nedashkovskyi said during the conference Ukrainian Energy Forum that Energoatom plans to begin to export electricity produced at the second unit of the Khmelnytskyi NPP to the electric power system of the EU countries, in particular, Poland and Hungary in 2019. According to him, export to the EU will enable Energoatom to use the export mechanism as collateral to obtain a loan from European banks to complete the construction of the third and fourth units of the KрNPP. He also noted that for the safe operation of KhNPP, the company plans to build new transformers at the site of the third power unit of the KhNPP at a faster pace. The cost of implementing the project for electricity exports is estimated at EUR 55 million 117. On March 17, the NNEGC Energoatom concluded contracts with Westinghouse Electric Sweden AB for the amount of UAH 169 million 607 thousand (including VAT) for the supply of equipment for purification of
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Electricity and Nuclear Security the steam and gas environment for power units No. 1 and 2 of the South-Ukraine NPP 118. On March 29, Westinghouse LLC, some subsidiaries and affiliates filed a voluntary bankruptcy petition under the U.S. laws. The company said that the filing was not related to Westinghouse operations in the region of Europe, the Middle East, Africa or Asia, therefore, despite the bankruptcy petitions being filed by Westinghouse LLC parent company, a Swedish subsidiary of the US-Japanese Westinghouse group will continue to produce and supply fuel to Ukrainian NPPs in accordance with the current contract with NNEGC Energoatom. It is also stated in the press release that Westinghouse’s cooperation with Ukraine is the highest priority and discussions are ongoing on expanding fuel supplies and providing services for our country, which will bring mutual benefits and further enhancement of energy security 119. On March 21, the NEURC decided to increase the tariff for electricity production (output) for NPPs by 2.92%, or 0.0136 UAH/kWh to 0.48 UAH/kWh compared to the current NPP tariff (0.4664 UAH/kWh). When calculating the tariff at the level of 0.48 UAH/kWh, the NEURC took into account the costs, including the costs for the construction of splash pools at the South Ukraine NPP, the purchase of a conveyor for the spent fuel storage at the ZNPP. The NEURC also reduced the investment program of the NNEGC Energoatom for 2017 by 20.4%, or by UAH 1,370.33 million, to UAH 5,349.567 million compared to the approved version in December 2016 (mainly due to a decrease in financing by credit funds) 120. On February 28, the State Service of Geology and Mineral Resources, by issuing orders No. 92-95 of 28.02.2017 121, granted licenses for geological exploration and development of four uranium ore deposits in Ukraine to Nuclear Energy Systems of Ukraine LLC. This is the first case in the history of Ukraine, when a private company receives permission to develop uranium deposits 122.
Art. 342, Chapter 1, Section V of the EU-Ukraine Association Agreement, Cooperation in the field of nuclear power, Cooperation is aimed at solving the problems caused by the Chernobyl accident and decommissioning of the Chernobyl Nuclear Power Plant From 27 February till 3 March, the seminar, which presented the results of the IAEA Project in Risk Management upon Decommissioning of the NPP (DRiMa project) was held within the framework of the IAEA project “Enhancing Capacities in the Member States for Management of Decommissioning Projects” at the SEE Chornobyl NPP (SEE ChNPP). The purpose of the seminar was to familiarize with the methodology of risk assessment in the implementation of activities for decommissioning nuclear power plants, as well as to obtain practical skills for its use. This methodology was developed by the IAEA due to the implementation of the DRiMa project. The methodology of risk assessment was tested on plans for decommissioning ChNPP Units 1, 2 and 3. The seminar was attended by representatives of the IAEA, ChNPP and other NPPs of Ukraine, NNEGC Energoatom, experts involved in the development of the DRiMa project and experts from Germany, UK, Ukraine, as well as representatives from Bulgaria, Croatia, Czech Republic, Hungary, Latvia, Lithuania, Moldova, Poland, Slovakia and Serbia 123.
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Energy Efficiency and Social Issues In March, government agencies and institutions have shown extraordinary activity. In fact, March was the most successful month in the energy efficiency reform and energy saving since the beginning of the year. Adoption of the draft law “On the Energy Efficiency Fund” in the first reading, significant progress in harmonizing the regulations on energy labeling of products, as well as reformatting the process of further work in eco-design may be determined as the greatest achievements. The relevant committees’ recommendation to abolish outdated sanctions in the field of energy saving and the final resolution of the problem of inconsistency of the relevant laws on the provision of energy services with the rules of public procurement are also among the successes of this month. The Parliament also has an ambitious agenda for the beginning of April, when other very important laws can be voted on, in particular, regarding the energy performance of buildings and the introduction of the new electricity market model. At the same time, there was no significant progress registered in the social sphere. In anticipation of the adoption of a framework law for the launch of the electricity market as a whole, the decisions of the national energy regulator, aimed at implementing the Law “On the Natural Gas Market”, are being criticized by numerous stakeholders. Directive 2012/27/EC on energy efficiency Meetings of the Working Group under the State Agency on Energy Efficiency and Energy Saving on the elaboration of comments on the draft Law of Ukraine “On Energy Efficiency”, which was chaired by the Director of the Department of Strategic Development of the Agency V. Buchyk, were completed on March 10. The working group processed the entire text of the draft law. In general, it really does a qualitative implementation of those provisions of the Directive that are not covered by adjacent draft laws (in particular, “On Energy Performance of Buildings” and “On Commercial Metering of Public Utilities”). The results of the group’s work should be presented by Mr. Buchyk at the premises of the State Agency on Energy Efficiency and Energy Saving on April 7. At the same time, public members who participated in the working group noted significant corruption risks in Article 21 entitled “State Energy Efficiency Examination”. The provision of the article on the mandatory examination of every significant (costing UAH 200,000 or more) of the project on energy efficiency and energy saving seems doubtful, if it is carried out in relation to a budget institution and buildings owned by public authorities, or provides for the attraction of financial support within the framework of public programs. Notwithstanding the symbolic value of such an examination, the obligation of conducting of it for a significant number of the most obsolete budget buildings (in which, moreover, their own energy managers should appear thereafter) and most of the projects in a private housing stock, conducting an examination with the help of the State Agency on Energy Efficiency and Energy Saving alone and a significant term (up to 30 days) makes the agency’s innovation extremely undesirable. The specialists responsible for its development confirm that it has nothing to do with the requirements of the Directive, instead it is intended to eliminate inconsistencies between the various provisions of the current laws in the construction industry. Energy audits and energy management systems (Article 8) After approval by the responsible Governmental Committee of the draft Cabinet of Ministers Resolution “On Approval of the Action Plan for the Implementation of Energy Management Systems at Budgetary Institutions" in February, there were no appreciable changes in the process of its adoption. This is probably due to the fact that numerous comments and warnings from experts and specialists in the field of energy performance of buildings were made to the draft resolution. In particular, the head of the Energy Efficiency sub-group of the Reanimation Package of Reforms S. Pavliuk expressed deep criticism of the proposed project, noting that instead of accelerating the creation of a national energy management system, the act in its current version will postpone it for an indefinite period.
Energy Efficiency and Social Issues In addition, the expert considers organizing the work of energy managers within budgetary institutions, instead of introducing such a system at the level of cities and districts, as a significant disadvantage 124.
Metering (Article 9) During March, the issue of the top-priority adoption of the draft law “On Commercial Metering of Public Utilities” (Reg. No. 4901 of 06.07.2016) has been repeatedly considered at the level of the Verkhovna Rada Committees. In particular, on March 14, a joint interagency meeting of the Committees on FEC and public utilities was held to discuss the package of energy efficiency draft laws, which consists of four major draft laws: No. 4901 "On Commercial Metering for Public Utilities”, No. 1581-д “On Housing and Communal Services”, No. 4941-д “On Energy Performance of Buildings”, No. 5598 “On Energy Efficiency Fund” 125. T. Boyko, coordinator of the housing and communal and energy programs of the OPORA Civic Network, emphasized that the draft laws should be adopted one by one, but all the package at once: “It is package adoption of draft laws which is important. For example, draft laws on Energy Efficiency Fund and Energy Performance of Buildings are tools. In order for these tools to start working, there are should be consumers who are ready to use these tools. Draft laws on commercial metering and housing and communal services are aimed at ensuring demand” 126. Consideration of the draft law “On Commercial Metering of Public Utilities” in the second reading should take place during the first session week of April. Sanctions (Article 13) Despite the fact that even the framework laws which would implement EU energy efficiency laws have not yet been adopted, the Committee on FEC has supported the draft law initiated and developed by the State Agency on Energy Efficiency and Energy Saving, which provides for depriving this agency of controlling functions, as well as the exclusion of violations of current laws in the field of energy saving from the Code of Administrative Offenses 127. The decriminalization of violations, as currently indicated in the Code, as well as the abolition of inappropriately low financial sanctions for their commitment, will allow further introduction of a system for enforcing compliance with the requirements of the new set of energy efficiency laws as required by Article 13 of the Directive 2012/27/EC, namely, effective, proportionate and stimulating. At the same time, the State Agency on Energy Efficiency and Energy Saving, having got rid of monitoring functions not characteristic of it, will be able to focus on developing and introducing public policies in the field of energy saving and energy efficiency. National Energy Efficiency Fund, Financing and Technical Support (Article 20) Of all the draft laws that form the so-called “energy efficiency package”, the draft law “On the Energy Efficiency Fund” still evokes the least number of controversies among MPs. In particular, the acceleration of the adoption of the draft law was supported during public communicative measures, including at the joint interagency meeting of committees of the Verkhovna Rada on FEC and housing and public utilities. The next day, during the meeting of the relevant committee 128, it was decided to recommend to the Verkhovna Rada to adopt the draft law as a basis. The Verkhovna Rada, with a small majority in 227 votes, adopted this draft law 129 in its first reading on March 21. The feature of the draft law is its rather general character, which stipulates that a significant number of conditions and the procedure of work of the institution will be resolved at the level of internal 124
https://www.facebook.com/svyatoslav.pavlyuk/posts/1588880901141510?pnref=story https://www.facebook.com/zhytlo.in.ua/posts/1197324333722723 126 http://kompek.rada.gov.ua/news/main_news/73126.html 127 http://saee.gov.ua/uk/news/1625 128 http://kompek.rada.gov.ua/documents/zasid/73101.html 129 http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=60811 125
Energy Efficiency and Social Issues regulations on activities to be developed and adopted by the governing bodies of the Fund. Thus, for the actual start of functioning, additional time will be required for organizational and normative work. However, despite the fact that more than 3 months have passed from the submission of the project to this successful voting in the first reading, as of now it is provided for that the Fund should work until the next heating season. UAH 400 million is provided for its financing in the State Budget-2017. As some comments on certain provisions of the draft law were made by the experts, the Chief Scientific and Expert Department (CSED) of the VRU and the authorities, the Verkhovna Rada relevant committee agreed to set up a working group to finalize it. In particular, granting of loans for energy saving measures in the housing stock, and the inconsistency of this type of activity in accordance with the law was among the main comments of the CSED, provision of support to citizens only in the form of grant non-repayable aid was provided for 130. In parallel, in the office of the Reanimation Package of Reforms, the meeting of experts was held to consider the issue of monetization of subsidies for housing and communal services and to discuss certain provisions of the draft law “On the Energy Efficiency Fund”. During this meeting, the advisor to the relevant Deputy Prime Minister G. Zubko assured that a number of comments made to the draft law had already been taken into account, and that the revised draft law would be placed soon on the Verkhovna Rada’s website for the second reading. At the same time, the number of state funding programs for energy efficiency improvement at the local level is increasing – as of the end of March, there were 244 such programs in Ukraine, of which, however, only 87 were accepted for funding 131. In March, the targeted “warm loans” program also restored its work, and, according to the head of the State Agency on Energy Efficiency and Energy Saving, the demand for such support is growing at a higher pace than it was recorded in the previous year 132.
Directive 2010/31/EC on the energy performance of buildings The draft law “On Energy Performance of Buildings” (No. 4941-д of 14.12.2016), approved by all committees, including the relevant committee on housing and communal services, was put on the agenda on February 23, but MPs did not consider it. The expected “Energy Voting Day”, the adoption of this compromise draft law should have been the main ambition on which, has not happened. The draft law stipulates that for the new construction facilities, the obligation to produce an energy certificate of a building is laid upon a building owner prior to its acceptance into operation. It should be noted that the draft law provides for that the non-compliance of the data in the certificate with the actual indicators of energy performance provides for liability in accordance with the laws. However, there is no clear procedure for adjusting certain indicators of energy efficiency by a developer is not envisaged for new buildings. In other words, if a person buys an apartment in a new building, and the level of energy consumption does not meet the data in an energy performance certificate, then the law does not provide for that the developer should adjust such indicators as specified in the certificate. There are also no procedures for a developer as to returning a part of the funds spent on the purchase of higherclass housing, if, for example, it turns out that the indicators in a certificate are not true. According to the draft law, the technical and economically sound recommendations for increasing the economically reasonable level of energy performance of a building should be written in a certificate. An energy performance certificate should be an integral part of the building passport. The unified system of data on energy performance of buildings and control over compliance with the laws in the field of energy
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Energy Efficiency and Social Issues performance of buildings was also proposed, a database of energy certificates of buildings is being created. Access to it will be free, transparent and open. The cost of audit and certification services is likely to be too high for ordinary citizens. A high price for a certificate will not be able to motivate co-owners of multi-apartment buildings to conducting energy audits, but on the contrary will cause social tension. Therefore, certification should become an accessible service for all segments of the population. The relevant Vice Prime Minister predited that certification for a private home would cost about UAH 3-4 thousand, while energy audit and certification of multistoried buildings would cost UAH 10-15 thousand 133. According to the revised draft law, certification of energy performance of buildings is mandatory in the following cases: -construction facilities with medium and significant class of consequences, determined in accordance with the requirements of the laws; - buildings, in the premises of which the following authorities with a total heated area of more than 250 square meters are situated: public authorities financed from the state budget, which are frequently visited by citizens in order to exercise their right to apply for and receive administrative services in accordance with the laws; or local self-government authorities, enterprises, institutions and organizations of communal property of the respective territorial communities financed from the relevant local budgets in case of reconstruction and modernization of such buildings; - implementation of measures to ensure (increase) the energy performance of buildings under condition of obtaining state support (except for cases when such measures are carried out by individuals who are not business entities). According to the draft law, the technical and economically sound recommendations for increasing the economically reasonable level of energy performance of a building should be written in a certificate. An energy performance certificate should be an integral part of a building passport. The unified system of data on energy performance of buildings and control over compliance with the laws in the field of energy performance of buildings was also proposed, a database of energy certificates of buildings is being created. Access to it will be free, transparent and open.
Energy service contracts (Article 18 of the Directive) On March 23, the Verkhovna Rada adopted in the second reading the draft law amending the Law of Ukraine “On Introducing New Investment Opportunities, Guaranteeing the Rights and Legitimate Interests of Business Entities for Large-Scale Energy Modernization� (regarding the mechanism for purchasing the energy service) - regarding the continuation of the conclusion of energy service contracts for thermomodernization of buildings of budgetary institutions (Reg. No. 4549). 228 MPs voted for such a decision 134. The adopted law agrees the relevant laws with the provisions of the laws on procurement for state funds, which namely makes it possible to use electronic auctions through the PROZORRO system for procurement of energy services in the budget sphere. It took almost a year for the Verkhovna Rada to adopt this law relatively simple from the point of view of both the essence and form. On March 30, the act was signed by the Speaker of the Parliament, and the next day – it was sent to the President of Ukraine for signing. It is significant that, the news that the first private investor, which has gone this path within the framework of thermo-modernization of a number of budget facilities of the Savran district of the Odesa region, started to return the money invested in the project coincided with the adoption of amendments to the laws, which
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Energy Efficiency and Social Issues would simplify the procedure for the conclusion and implementation of energy service contracts in the budgetary sphere 135.
Directive 2010/30/EU on the indication by labeling and standard product information of consumption of energy and other resources by energy-related products During the public report “Energy Efficiency and Renewable Energy in Ukraine: Results of 2016 and Plans for 2017�, which was held on February 28, the head of the State Agency on Energy Efficiency and Energy Saving S. Savchuk informed that within the next two years, 15 technical regulations are planned for setting requirements for eco-design 136. In particular, in 2017, in addition to the development and approval of the framework Technical Regulation for defining the requirements for eco-design, the agency plans to introduce specific energy labeling for fans, directional radiation lamps, electric motors, water and circular pumps, power transformers. If such a work program is implemented, the relevant EU Directive will be practically implemented. At the same time, it is difficult to predict to what extent the claimed pace will be true given the very slow pace of work in this field during the previous periods.
Social issues Against the background of the last of the planned steps to increase the price of electricity from March 1 137, a complete reform of the electricity market remains only to be a plan. The draft Electricity Market Law, adopted in the first reading last year, should be considered as a whole in early April. At the end of March, the National Committee carrying out state regulation in the areas of energy and public utilities, by its decision, separated the price of gas as a product from services in transportation and distribution of gas to end users 138. Given the significant public response to this decision, the Cabinet of Ministers committed itself to reviewing this methodology, although it acknowledged that in the event of a discrepancy, it would only be able to recommend to an independent regulator to reconsider such a decision139. Such a step by the NEURC, which attracted significant attention and criticism from consumers and experts, is not isolated and has continued a series of widely deprecated decisions, by European partners as well. However, the process of rotation of the NEURC members, originated by the President, who signed the Decree indicating the procedure of the first full change of the members of the Committee, gives rise to certain grounds for optimism 140. Given the important role played by the national energy regulator in protecting energy services consumers, full rotation of the authority should lead to a qualitatively better approach to their interests. Less success has been recorded in the progress with monetization of housing and communal privileges and subsidies. The Memorandum on Economic and Financial Support between Ukraine and the International Monetary Fund in paragraph 23 of Section E. The policy in the energy sector provides for that by the end of July 2017, Ukraine will introduce measures to increase targeting in support of vulnerable categories of consumers and adjust social norms in non-peak months during the heating season 141. At the same time, the adoption of relevant decisions is scheduled for May 2017, and the upgraded social protection system has to start working during the next heating season. 135
http://saee.gov.ua/uk/news/1611 http://saee.gov.ua/sites/default/files/ZVIT_28_02_2017.pdf 137 http://www.nerc.gov.ua/?id=15013 138 http://www.kmu.gov.ua/control/publish/article?art_id=249854593 139 http://www.kmu.gov.ua/control/uk/publish/article?art_id=249866507&cat_id=244274130 140 http://www.president.gov.ua/documents/782017-21530 141 https://www.slideshare.net/TarasSidorzhevsky/2-2017-74420316?ref=http://fakty.ua/233406-obnarodovan-tekstmemoranduma-mezhdu-ukrainoj-i-mvf-dokument 136
Energy Efficiency and Social Issues Unfortunately, neither the relevant Ministry of Social Policy, nor the Ministry of Finance, nor the Cabinet of Ministers have not yet announced whether a decision has been made, at least on the model of planned monetization of subsidies. A certain positive signal came from Vice Prime Minister G. Zubko, who said that two consecutive stages of this reform are being considered - initially at the level of enterprises-service providers, and in the future - at the level of individual consumers 142. However, a significant level of uncertainty around this issue encourages other stakeholders to enter the information space with their recommendations, as it was made by the NJSC Naftogaz, which insists on monetization directly at the level of consumers, as on the only effective way to stimulate economy, recognizing, however, the complexity of developing an appropriate mechanism for calculating savings 143.
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Environment and Renewable Energy Sources The issue of implementing European models of environmental impact assessment and strategic environmental assessment in Ukraine has not yet been resolved. The draft law “On Environmental Impact Assessment”, which was vetoed at the end of 2016, was returned by the parliament to the relevant committee for revision. The Verkhovna Rada registered a new draft law “On Strategic Environmental Assessment”. On 14 February 2017, the Government approved the Report on Progress and Results of the Program of the CMU Activities in 2016. Regarding the harmonization of environmental laws, the government reported on two targets – as to the basin water management principle and the preservation of the natural habitat and species of natural flora and fauna with regard to the protection of wild birds. It is impossible to agree regarding the last indicator, since the preparation of the “scheme for amending the national laws to approach the requirements of Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats, wild flora and fauna, as amended by Directives 97/62/EC, 2006/105/EC and Regulation 2003/1882/EC (Habitats Directive) and Directive 2009/147/EC of the European Parliament on the conservation of wild birds (Birds Directive)” does not in any way imply progress in preserving natural habitat and species of flora and fauna. With regard to renewable energy, the authorities and financial institutions are now simplifying the conditions for doing business in the industry, as well as are developing initiatives to incentivize citizens to more active use of green technologies. At the same time, attempts to attract foreign investors have not yet given significant results - at the moment, most potential investors only “examine with attention” the opportunities of the Ukrainian renewable energy market. Directive 2011/92/EC on the assessment of the effects of certain public and private projects on the environment (codification) (Article 363 of the AA): On 7 February 2017, the Verkhovna Rada of Ukraine sent the draft law “On Environmental Impact Assessment” 144, which was vetoed by the President at the end of 2016, to be finalized. Now, the Committee on Environmental Policy, Nature Use and Elimination of the Consequences of the Chernobyl Disaster must finalize the draft law and re-submit it for consideration by the Verkhovna Rada. Directive 2001/42/EC on the assessment of the effects of certain plans and programs on the environment (Article 363 of the Association Agreement): On 21 February 2017, a group of MPs registered the draft law “On Strategic Environmental Assessment” (No. 6106) in the Parliament 145. Compared to the previous one, which was rejected by the VRU after the President’s veto, there are both advantages and disadvantages of the proposed model of strategic environmental assessment (SEA). The proposed model as a whole complies with the EU Directive 2001/42/EC, which Ukraine is obliged to implement. At the same time, two key types of planning documents are virtually eliminated from the scope of the SEA: local programs of economic and social development (which are annually adopted for the use of budget funds) and urban planning documentation (planning of territories, including public discussion). In the EU, the overwhelming majority of SEAs at the local level are carried out precisely in terms of planning the territories. The fact that not all other sectoral plans and programs will require SEA, but only those that are subject to “approval” is important. In fact, a number of such documents are approved, but not passed. For example, the latest sectoral program, which causes a violent reaction among the environmental community, is the Hydropower Development Program for the Period up to 2026 - was approved rather than passed by the CMU. On the other hand, in comparison with the directive, the draft law extends the scope of applying SEA 144 145
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Environment and Renewable Energy Sources by reference to facilities of environmental impact assessment and the inclusion of state planning documents, the development of which is not mandatory in accordance with national laws. This means that various local strategies (in particular, in the field of energy, waste), which are voluntarily developed at the initiative of local communities, may face additional administrative barriers and additional financial resource requirements. From the point of view of the financial resources necessary for the implementation of the SEA, an explanatory note to the draft law again misleads MPs and the government, stating that no funds are needed. In fact, carrying out the SEA will require funds from the state and local budgets, since it is the state and local self-government authorities which are customers of plans, programs and strategies. In the EU countries, financial costs for the SEA account for about 7-10% of the estimate of developing a plan or program. Thus, in Estonia, carrying out one SEA costs from EUR 4 to 30 thousand, in Hungary - from EUR 20 to 40 thousand. This is the direct costs of customers. Directive 2009/147/EC on the conservation of wild birds (Article 4.2) (Article 363 of the Association Agreement): On February 7, the Verkhovna Rada of Ukraine adopted in the second reading and as a whole: - the draft Law on Amendments to Certain Legislative Acts of Ukraine (on the implementation of the 1979 Convention on the Conservation of European Wildlife and Natural Habitats (No. 2023) 146. The objectives of the draft law are to protect the habitats of rare species included in the Berne Convention, first of all habitats in the forests, as well as in the territories of state nature reserves; strengthening the measures for the protection of dolphin-aphallina, brown bear, bats, black stork, osprey; ban on the use of non-selective means of obtaining animals – traps; strengthening the fight against poaching. This draft law caused an ambiguous reaction from the environmental community and scientists 147. - Draft Law on Amendments to Certain Legislative Acts of Ukraine (regarding the implementation of European environmental norms on the protection of the environment of rare species of animals and plants) (No. 2604) 148. The purpose of the adoption of the Law is the implementation of European environmental norms on the protection of the environment of rare species of animals and plants. The tasks are protection against the destruction of the habitat (growth) of the species of animal and plant life included in the Red Data Book of Ukraine. The adopted laws, if properly implemented, may contribute to the conservation of wild birds, but this does not ensure that the laws approach the requirements of the Wild Birds Directive. On 9 February 2017, the group of MPs registered the draft law on amendments to certain legislative acts of Ukraine (regarding bringing in compliance with European norms and requirements of the laws on biodiversity protection) 149. Although in the explanatory note to the draft law, among other things, the authors refer to the Directive on the conservation of wild birds, the draft law will not fully or partially ensure implementation of the directive’s requirements by its provisions. Directive 2010/75/EC on industrial emissions (comprehensive pollution prevention and control) (Article 363 of the Association Agreement) On 7 February, the Verkhovna Rada of Ukraine adopted in the second reading and as a whole the draft Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine that Regulate Relations Related to 146
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Environment and Renewable Energy Sources Obtaining Permitting Documents (Regarding Special Water Use)” (No. 3323) 150. The draft law proposes to simplify the procedure for issuing permits for special water use, in particular, to provide the powers of issuing permits for special water use to the central executive authority, which implements state policy in the field of water sector development (the State Agency of Water Resources of Ukraine), depriving regional, Kyiv and Sevastopol city state administrations, as well as the Council of Ministers of the Autonomous Republic of Crimea of these powers; not to attribute water users who take and use less than 5 cubic meters of water per day, except that used for the production of beverages and packaged water to the special water use; to reduce and define an exhaustive list of documents submitted by a water user for registration of the right of special water use; to establish exhaustive grounds for termination of the right of special water use and determine the procedure for termination of such right. The issue of the implementation of integrated permitting in the field of water use is a part of the obligations under the Directive 2010/75/EC on industrial emissions. Directive 2009/28/EC on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC (Article 338 of the Association Agreement) This month, MPs adopted in the second reading and as a whole 151 the draft law "On Amendments to the Law “On Heat Supply” as regards Stimulating the Production of Thermal Energy from Alternative Energy Sources” (No. 4334). The main idea of the law is to set the tariff for heat from alternative sources at 90% of the current tariff for heat from gas for the needs of budget institutions and the population. It is planned that its realization will allow providing guarantees to investors to the return on investment in the production of heat from alternative sources, reducing the cost price of thermal energy and tariffs for end consumers, as well as reducing gas imports by more than 3 bcm. At present, Dnipropetrovsk region remains the leader in the replacement of gas with alternative energy sources in Ukraine: for the 2014-2016 period, the population, enterprises of the DHS and budget institutions of the region reduced and replaced gas consumption by almost 20%, namely from 2,239 to 1,803 mcm 152. In March, the MPs of the VRU Committee on FEC 153 and the Committee on Construction, Urban Development and Housing and Public Utilities 154 approved the draft law No. 6081, which will allow facilitating connection to the networks of renewable energy facilities and solving the problem of the socalled “reserve” of capacities. The draft law is developed to implement the Directive 2009/28/EC of the European Parliament and of the Council. At the meeting of the Committee on Construction, Urban Development and Housing and Public Utilities, an alternative draft law “On the Regulation of Urban Development” was considered regarding the promotion of investments in electricity generating facilities producing electricity from alternative energy sources (Reg. No. 6081-1 of 27.02.2017, introduced by the MP O. Riabchyn 155). This draft law proposes to introduce restrictions on the validity of technical conditions three years with the possibility of extension to five years. According to the results of the consideration, the Committee recommended to finalize the draft law No. 6081, taking into account the constructive provisions of the alternative draft law No. 6081-1: in particular taking into account the provisions on the possibility of extending the term of the technical conditions to 5 years and adopting it as a basis in the first reading in the Verkhovna Rada of Ukraine. The Committee on the FEC also recommended approving the draft law in the first reading. At the same time, financial institutions also create conditions for more active use of “green” technologies 150
http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=56820 http://w1.c1.rada.gov.ua/pls/radan_gs09/ns_golos?g_id=11242 152 http://www.kmu.gov.ua/control/uk/publish/article?art_id=249847297&cat_id=244277212 153 http://www.kmu.gov.ua/control/uk/publish/article?art_id=249817950&cat_id=244277212 154 https://www.facebook.com/zhytlo.in.ua/photos/a.561465287308634.1073741828.560972500691246/1207711452684011/?typ e=3&theater 155 http://search.ligazakon.ua/l_doc2.nsf/link1/JH4OX1AA.html 151
Environment and Renewable Energy Sources by the population: in particular, UKRGAZBANK began to provide loans for the installation of solar power plants for households at 0.001% per annum 156. With regard to investments in the industry, the government is currently actively negotiating with other countries, in particular Finland 157, Norway 158, China 159, and Turkey 160, but so far they have not yielded concrete results. It should be noted that in January 2017, the International Renewable Energy Agency (IRENA) carried out a project to explore the potential of use of RES in the South-Eastern Europe. Study of the technical potential of using RES in these countries was one of the steps of the project. According to an IRENA survey, it was found that Ukraine has the largest potential for the implementation of RES in the South-East Europe. The total capacity of electricity generation from RES is more than 1 million GWh per year. The total potential of the installed capacity in the country is estimated at 408.2 GW (excluding large HPPs): wind power - 321 GW (78%), solar power - 71 GW (17%), biomass - 15 GW (4%), small HPPs - 4 GW (1%) 161.
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Oil During the reporting period, public reports of executives of public authorities continued in Ukraine. A series of documents, in which the Government’s action plans for 2017 and the future perspective, including implementation of Ukraine’s international obligations in the oil sector, were published 162. However, there was no detailed analysis of the reasons for the failure to fulfill the tasks set earlier, in particular, the formation of minimum oil and oil product reserves, the adoption of the new Subsoil Code, etc 163. Directive 2009/119/EC concerning the imposition of an obligation on the Member States to maintain minimum reserves of crude oil and/or oil products (Article 338 of the AA) According to paragraph 1.1.2 of the Implementation Plan of Directive 2009/119/EC, the Ministry of Energy and Coal Industry had to develop the draft law on the maintenance of minimum oil and oil products reserves 164, while the Verkhovna Rada was to adopt the act as a whole in December 2016. However, as of 5 April 2017, it is only known about the draft law “On Strategic Reserves” prepared by the State Agency of Reserves and rejected by the Ministry of Economic Development and Trade in 2016 165. There is also no information on the implementation of paragraph 1.2.2 of the Implementation Plan, according to which the Ministry of Energy and Coal Industry undertook to submit to the Secretariat of the Energy Community the statistical data on oil and oil product reserves as provided for in Article 4 (a) and (b) of the Regulation (EC) 1099/2008 and paragraph 1.2.5, which provides for the beginning of full-scale operation of the system of minimum oil and oil products reserves and reporting to the European Commission and the Energy Community Secretariat from January 2017, on a monthly basis. As of 5 April 2017, the fulfillment of these requirements is not provided for by any normative document of the Ministry of Energy and Coal Industry. Instead, on 3 March 2017, a public report of the chairman of the State Agency of Reserves, during which it was announced that “the State Agency of Reserves, under the Concept of the State Material Reserve System Reform, initiated the implementation of the requirements of Directive 2009/119/EC, which obliges the Member States of the European Energy Community to create the minimum reserves of crude oil and oil products in the event of an emergency was made. During his official visits to the Republic of Croatia, the Slovak Republic, the Republic of Serbia, the Chairman of the State Agency of Reserves V. Mosiychuk learned the experience of the implementation of the main provisions of Directive 2009/119/EC on oil reserves, emergency response policies and procedures in the EU member states. A series of official meetings and events with European experts and consultants from the International Energy Agency, the European Energy Community was held to discuss the implementation of the Directive in Ukraine. In December 2016, the State Agency of Reserves was also gained support of the Kantor Consortium, which provides technical assistance in the implementation of reforms in the energy sector in accordance with the obligations to implement Directive 2009/119/EC in Ukraine 166. As noted, based on the results of this work, the State Agency of Reserves prepared the draft 167 new Implementation Plan for Directive 2009/119/EC on the replacement of the current one 168. According to it, the Cabinet of Ministers is proposed to define the State Agency of Reserves responsible for “organization of
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Oil work and implementation of measures plan” instead of the Ministry of Energy and Coal Industry and to postpone the terms of: - adoption of a normative legal act of the Cabinet of Ministers regarding the model of minimum oil and oil products reserves - from December 2015 to December 2017; - adoption of the Law “On Minimum Oil and Oil Reserves" - from December 2016 to December 2017; - implementation of all planned organizational measures - for the period after the entry into force of the law “On Minimum Oil and Oil Products”. In addition to that, by 1 July 2017, it is proposed to create a new interdepartmental working group under the State Agency of Reserves for the development of laws and regulations provided for by the implementation plan, instead of the already formed one under the Ministry of Energy and Coal in Industry in 2015. In addition to that: - attempts to transfer the powers to draft the draft law “On Minimum Oil and Oil Products Reserves” from the Ministry of Energy and Coal Industry to the State Agency of Reserves, although according to the Regulation 169, the said authority can only implement the state policy in the field of state material reserves. Therefore, establishing it as responsible for the formation of policy in this area is a violation of paragraph 2 of Article 1 of the Law of Ukraine “On Central Executive Bodies” 170; - the focus of the State Agency of Reserves only on “emergency reserves”, that is, crude oil reserves in accordance with Article 2 (j) of Directive 2009/119/EC, while this document provides for the storage of oil products. It is possible that we are dealing with another confusion as a result of unsettled Ukrainian terminology, domestic politics and civil servants do not always distinguish between the concept of state material reserve and minimum oil and/or oil products reserve, stabilization reserve and mobilization reserve, which leads to errors in the formation and implementation of the State policy in this area. Council Directive 98/70/EC relating to the quality of petrol and diesel fuels and amending Directive 93/12/EEC, as amended by Directive 2000/71/EC, 2003/17/EC and 2009/30/EC and Regulation (EC) 1882/2003 (Annex XXX, Art. 360-363, 365, 366 of the AA) According to the Implementation Plan for the Directive 98/70/EC (Articles 7 and 8; paragraph 1.3), the Ministry of Energy of Coal Industry undertook to report on the operation of the oil products quality and safety monitoring system in Ukraine from December 2015 171. As of 5 March 2017, no document was published. In addition, after the liquidation of the SE Research Institute of Oil Refining and Petrochemical Industry MASMA, the main contractor of all tasks stipulated by the plan, further works on the implementation of the Directive 98/70/EC in Ukraine were suspended. Directive 94/63/EC on the control of volatile organic compound emissions resulting from the storage of petrol and its distribution from terminals to service stations, as amended by Regulation (EC) 1882/2003 (Annex XXX, Art. 360-363, 365, 366 of the AA) The term for performing the tasks provided for in paragraphs 1.1.1, 1.1.2 and 1.2.1 of the Implementation Plan for the Directive 94/63/EC 172 expired in November 2016. Nevertheless, as of 5 March 2017, the Cabinet of Ministers has not adopted the resolution “On Approval of the Technical Regulation on the Requirements for Fuel Storage, Transportation and Handling, Relevant Equipment and Service Stations”
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Oil and the Ministry of Environment and Natural Resources has not approved recommendations for controlling operation of gas stations and no inventory of oil handling terminals was conducted. Directive 94/22/EC on conditions for granting and using authorization for the prospection, exploration and production of hydrocarbons (Annex XXVII, Art. 279, 280, 341 of the AA) According to the Implementation Plan for the Directive 94/22/EC, by the end of 2016, a new version of the Subsoil Code was to be approved173. It, in particular, provides for defining the concepts “the operator’s functions”, “contractual joint venture”, “special permits transmission mechanism”, "the concept of minimum work program and minimum work commitments”, “obligation of regulating specificity of extraction of unconventional hydrocarbons” and also resolving issues of publishing geological information on strategic resources, in particular, of oil and gas to the extent provided for by the laws. According to the Cabinet of Ministers, as of 20 March 2017, “the developed draft Subsoil Code is formulated by the authorities concerned” 174. As of 5 April 2017, the rules for the development of oil and gas fields were not approved and harmonized with the EU norms, although on 14 January 2017, the Minister of Ecology and Natural Resources signed the order No. 11 “On Approval of the Rules for the Development of Oil and Gas Fields”. According to the Ministry of Justice, the document was returned “for revision without state registration” for a period of 1 month at the request of the Ministry of Environment and Natural Resources (letter No. 5/1-6/907-1627 of 27 January 2016) 175. At present, it is known only about the unofficial text of the revised document, which was published on 28 March 2017 on the portal LigaZakon 176. On 15 February 2017, the draft resolution of the Cabinet of Ministers “On Amendments to the Procedure for Granting Special Permits for Subsoil Use” (approved by the Cabinet of Ministers of Ukraine of 30 May 2011 No. 615) prepared by the Ministry of Environment and Natural Resources and was published 177. The document provides for: - to return the paragraph of the Regulations, under which subsoil users are entitled to use the subsoil without an auction if under the laws they own the entire property complex built (reconstructed) for the extraction and processing of minerals from the subsoil, for the use of which a permit is granted, or such property complex is let on lease (concession) to subsoil users; - to establish the availability of the subsoil user’s debt to pay rent for use of subsoil (instead of availability of his “arrears in taxes and mandatory payments” or “national taxes and charges”) as a ground for refusal in providing or extension of, or termination of the permit for use of subsoil. As it is stated in the accompanying documents, such changes will allow “resolving some problematic aspects of granting, refusal to grant or extension of, or suspension of special permits for subsoil use, and resolving the issue of special permits for subsoil use in carrying out activities by integral property complexes" 178. As, as of March 27, 2017, the draft resolution was never filed for consideration by the Government according to the established procedure, the Prime Minister of Ukraine instructed the Ministry of Environment and Natural Resources and the Ministry of Economic Development and Trade to do so by 7 April 2017 179.
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Oil As of 5 April 2017, the State Regulatory Service also developed process draft orders of the Ministry of Environmental Protection, developed by the State Service of Geology and Mineral Resources: - “On Approval of the Instruction on the Content, Drawing up and Procedure for Submission to the State Commission of Ukraine on Mineral Resources of the Materials of Geological and Economic Assessment of Oil and Gas Fields” 180, received for approval on 28 March 2017, and aims at the regulation of the calculation of oil and gas reserves and their geological and economic assessment, which is the basis for the transfer of fields to industrial development, their state accounting, as well as the planning of use; - “On Approval of Forms of Documents in the Field of Implementation of State Geological Surveillance” 181, received for approval on 17 March 2017, and aims at unification of the corresponding forms.
Article 337 of the Association Agreement in terms of informing and protecting consumers from unfair pricing methods, as well as access to petroleum products, in particular liquefied petroleum gas, for consumers, in particular, the most vulnerable groups of the population. As of 5 April 2017, the State Regulatory Service developed the draft resolution of the Cabinet of Ministers “On Amendments to the Resolution of the Cabinet of Ministers of Ukraine No. 570 of 16 October 2014” 182, prepared by the Ministry of Energy and Coal Industry, aimed at eliminating the gaps and collisions found in the procedure of organization and holding of exchange auctions for the sale of crude oil, gas condensate of own extraction and liquefied petroleum gas, simplification of organizational and technical procedures of the organization of conducting auctions and creating opportunities to participate in auctions for the larger number of potential buyers. Article 338 of the Association Agreement in part of prolongation and intensification of cooperation in the energy sector In pursuance of paragraph a of Article 338 on the implementation of energy strategies and policies, the development/formulating relevant forecasts and scenarios in Ukraine, the discussion of the Ukraine’s Energy Strategy project by 2035, which is scheduled to be adopted by 1 May 2017, continued. In pursuance of paragraph c of Article 338 on the creation of a new energy infrastructure of common interest in order to diversify sources, suppliers of oil and ways and methods of its transportation, on 31 March 2017, the meeting of the Ukrainian-Azerbaijani working group on cooperation in the energy sector, on which, in particular, the current state of cooperation within the framework of the Sarmatia ICT LLC and the possible launch of the oil products supply program by SOCAR Energy Ukraine for Ukrainian state-owned companies, was discussed, was held183.
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Business Climate March was marked by positive trends in improving the business climate. The approval of the concept of the reform of the State Fiscal Service, implementation of which will start from the beginning of May this year, was the main event. The VRU has adopted a deregulation law on improving the investment climate, advocated by the public and supported by the Cabinet of Ministers. Meanwhile, the draft law was also registered on the stability of the tax system, which would also improve the investment climate. The Prime Minister V. Groysman spoke about the government’s intentions in the struggle against force pressure on business: in place of the tax police, the economic services of the Security Service and the Ministry of Internal Affairs, a new structure to execute their functions will be created. This will reduce the number of inspections and, as expected by the head of government, minimize misuse of office in the course of inspections. The Ministry of Economic Development and Trade has continued to work on draft laws on procurement monitoring, the draft order for the development of national classifiers, which will generally improve the system of public procurement. The Organization for Economic Cooperation and Development conducted an independent audit of the competition laws. Among the results, as well as according to the results of the review of 2013, the weak institutional capacity of the Antimonopoly Committee was noted for fulfillment of its functions and the progress in harmonizing laws with the acquis was positively assessed. However, not everything moves as quickly as it should - the draft law on disclosure of information in the extractive industries had to be re-introduced to the VRU. It is expected that the Parliament could vote for it in April. Articles 255-256 Anticompetitive actions and mergers The results of the competition review by the Organization for Economic Cooperation and Development (OECD) were presented 184. Based on the results of the preliminary survey in 2013, the OECD provided 16 recommendations for the AMCU. To date, none of the recommendations has been fully implemented, and most are at different stages of implementation. Nevertheless, the OECD positively assessed the progress of harmonization of the Ukrainian competition laws with the EU standards. The projects of international technical assistance organizations of the Committee have also been appreciated. The following deficiencies were noted once again: • lack of sufficient resources; • outdated information technologies; • inefficiency of regional units; • limited AMCU powers to gather evidence in investigations 185. Regarding concentration control, the OECD believes that the Committee should continue to work on harmonization of indicators for the submission of an application for consideration of concentration in accordance with international standards. Among other things, the OECD recommends: • when filing an application - information on the end-owners should become known; • to increase transparency in the analysis of AMCU documents when considering application as to concentration; • to increase the diligence of examination when receiving the documentation when filing applications. Unfortunately, the OECD’s previous recommendation regarding the separation of obligations between the Ministry of Economic Development and Trade and the AMCU within the public procurement controls has not been implemented. 184 185
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Business Climate According to the results of the investigations of the oil traders conspiracy, it was decided by the AMCU to impose a fine (almost UAH 1.4 billion total) to a number of oil companies for violating economic competition. Participants in the auction on the sale of crude oil and gas condensate carried out, according to the AMCU, unlawful concerted actions that had a negative impact on the results of the auction 186.
Articles 263-267 on state aid The AMCU has been discussing 8 draft legal acts on state aid, which, in particular, relate to the criteria for assessing its need for certain categories 187. According to the results of the discussion, the AMCU working group will make the necessary amendments, as well as provide the documents for consideration by the CMU 188.
Article 379 Due to the lack of votes in the VRU hall during the vote for adopting the draft law on disclosure of information in the extractive industries in the first reading in February, the draft Law No. 6229 on ensuring transparency in the extractive industries was registered in March189. Consideration in the first reading is expected already in early April. The Verkhovna Rada also registered the draft law No. 6252 on additional guarantees of the stability of the tax system 190. It is suggested in the Tax Code that taxes and fees cannot be changed more than once every 5 years. The Ministry of Economic Development and Trade initiated the draft law on amendments to some legislative acts of Ukraine on improving the investment climate in Ukraine, which, among other things, was supported by the government 191. On March 17, it was registered with the VRU, and on March 23, it was already adopted as a whole and sent for signing by the head of the VRU 192. This draft law covers changes in procedures of business registration, construction permits, property registration, obtaining credit, minority shareholders protection, simplification of bankruptcy procedures for insolvent enterprises 193. It is expected that these amendments will also help Ukraine to enter the TOP-40 Doing Business ranking already in 2018. In early March, the Ukrainian delegation launched an industrial dialogue with the EU on the creation of a single production space 194. In spite of other advantages, it will allow Ukraine to launch the COSME program, which was finally ratified by the VRU in February. The First Vice Prime Minister S. Kubiv signed the OECD Agreement on Ukraine’s accession to the Declaration on International Investments and Transnational Corporations 195. This will remove barriers for transnational companies by providing them with a national regime, which in turn will contribute to improving the investment climate in Ukraine as a whole. The Prime Minister V. Groysman announced the abolition of the tax police, the economic service of the SBU and the Ministry of Internal Affairs, which should be replaced by the new service of financial investigations. The decision is intended to reduce the pressure on the part of the security forces and, as a result, to 186
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Business Climate improve the business environment. According to the head of the government, the formation of the relevant legislation is at the final stage, and the Ministry of Finance is the main executor 196. Articles 148-156 on public procurement (Directive 2014/25/EC) The Ministry of Economic Development and Trade team is currently working on draft laws on procurement monitoring, draft order on the development of national classifiers. ProZorro also provides training for regional coordinators who, after completing their work, will continue to work in specially created regional ProZorro competence centers. Their main functions will be assistance in solving problem issues related to the procurement procedure, as well as feedback 197. The ProZorro project continues to win international contests - the project received the international award “Trust of the Future� 198. The Law on Public Procurement is still proposed to be finalized, and in March the draft law on amendments to the Law on Public Procurement and some other laws of Ukraine on monitoring procurement were submitted. The main objective of the draft law is to create a system state product for monitoring procurement, as well as a clear distribution of functions of the authorities - the Accounting Chamber, the State Audit Service, the AMCU and the Ministry of Economic Development and Trade 199. Articles 27-49 on access of goods to markets At the end of March, the CMU approved the concept of reforming the SFS, which will take place in two stages 200. The first one will begin on May 1 on the centralization of customs, that is, instead of the 27 regional customs, which will be liquidated as legal entities at the regional level, there will be one centralized customs. The start of the second stage is expected from 1 January 2018, when the interregional head office, which assumes the functions of existing state tax inspectorates (STI), will start. On the basis of liquidated STI, there will be Service Centers for Taxpayers which will provide service 201. The Prime Minister V. Groysman supports the reform and expects that the reformation of the SFS will stimulate economic growth and facilitate ease of doing business 202. In March, the GUAM (Organization for Democracy and Economic Development) state members, Ukraine, Azerbaijan, Moldova and Georgia signed a four-party protocol on improving coordination in the free trade area. It is planned to create a working body that will coordinate the work within the framework of the Free Trade Area. The work on the new Rules, which will determine the country of origin of the goods, also continues. This is important for Ukraine as a country, in which exports exceed imports 203. SFS also supported the initiatives of GUAM member states and signed a protocol on simplification of customs clearance of cargoes 204. Article 93 on access to energy markets The government intends to solve the problem of the supply of steam coal, in particular, of the deficient anthracite coal, by introducing the energy exchange and a transparent coal market. This position is supported by the Prime Minister V. Groysman, who agreed it with the experts and the public on a personal meeting 205.
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Methodology The Project is being implemented by five partners and two invited permanent experts. The Project is being implemented by the following five partners: NGO “DIXI GROUP”, Resource & Analysis Center “Society and Environment”, Civil Network “OPORA”, Association “European-Ukrainian Energy Agency”, and AllUkrainian NGO “Energy Association of Ukraine”. Among the project permanent members are L. Unigovskyi, General Director of Naftogazbudinformatyka LLC, and G. Riabtsev, Social Program Director of Psycheа Scientific and Technical Centre. For the purpose of monitoring the implementation of the Association Agreement, the project participants have been divided into six working groups. These are, in particular, Gas group: L. Unigovskyi and R. Nitsovych (DiXi Group); Electricity group: S. Golikova (Energy Association of Ukraine) and O. Shumilo; Energy Efficiency and Social Issues group: T. Boyko (OPORA) and D. Nazarenko (DiXi Group); Environment and Renewable Energy Sources group: N. Andrusevych (Society and Environment) and N. Yermakova (DiXi Group); Business Climate and Investments group: V. Beliakova (European-Ukrainian Energy Agency) and A. Bilous (DiXi Group), Oil group: G. Riabtsev (Psychea) and T. Tkachuk (DiXi Group). The Project participants identified the monitoring framework for each working group based on the results of their analysis of the Association Agreement. This framework is described in Annex 1. The main source of information for monitoring purposes is official information provided by public authorities. These include, in particular, adopted regulatory and legal acts, statements by top officials, information about meetings and events with the participation of representatives of public authorities. Also, monitoring could be based on messages by key energy market players, their decisions and initiatives. Other sources of information can include published articles, interviews, news, as well as results of bilateral meetings between experts and energy market players. The subject of monitoring is transposition and, if appropriate, implementation of Directives. The groups and experts monitor, first of all, transposition of acquis into the Ukrainian legislation and compliance therewith. If appropriate, but only as an option, the quality of implementation of acquis and the effect of their implementation on the market and/or consumers can be subject to monitoring.
Methodology ANNEX 1. List of Articles of the Association Agreement and Acquis Subject to Monitoring The group Electricity and Nuclear Security conducts monitoring and assessment of issues relating to electricity, nuclear energy, coal and elimination of consequences of the Chornobyl accident. Acquis concerned: Article 269, Chapter 11, Title IV, Directive 2009/72/EC (market-related provisions) Article 270, Chapter 11, Title IV, Regulation (EC) 714/2009 Article 271, Chapter 11, Title IV, Regulation (EC) 714/2009 Article 273, Chapter 11, Title IV, Regulation (EC) 714/2009, Directive 2009/72/EC Article 274, Chapter 11, Title IV, Regulation (EC) 714/2009, Directive 2009/72/EC Article 305, Chapter 14, Title IV, Directive 2009/72/EC, Directive 2005/89/EC Article 338, Chapter 1, Title V Article 338, Chapter 1, Title V, Cooperation Agreements with IFIs Article 339, Chapter 1, Title V, coal market Article 342, Chapter 1, Title V, cooperation in the nuclear safety sector, Council Directive 2014/87/Euratom, Council Directive 2013/59/Euratom, Council Directive 2006/117/Euratom Article 342, Chapter 1, Title V, cooperation in the nuclear safety sector The group Gas conducts monitoring and assessment of issues relating to gas, in particular, the implementation of the following acquis: Articles 338, 341, Directive 2009/73/EC (market-related provisions) Articles 338, 341, Regulation (EC) 715/2009 Articles 338, 341, Directive 2004/67/EC + Annex XXVI (Early Warning Mechanism), Articles 275 (Unauthorised taking of energy goods), 276 (Interruption), 309 and 314 (resolution of disputes) of the Association Agreement Chapter 11 Trade-related energy, in particular Articles 269 (Domestic regulated prices), 270 (Prohibition of dual pricing), 271 (Customs duties and quantitative restrictions), 272 (Transit) and 273–274 (Transport, cooperation on infrastructure) Annex XXVII to Chapter 1 Energy cooperation, including nuclear issues — Directive 94/22/EC + Articles 279– 280 (Access to and exercise of the activities of prospecting, exploring for and producing hydrocarbons, and licensing conditions) The group Energy Efficiency and Social Issues conducts monitoring and assessment of the implementation of the following acquis: Directive 2010/30/EU Directive 2010/31/EU Directive 2006/32/EU Directive 2012/27/EU Directive 2009/72/EC (social issues) Articles 338, 341 of the Association Agreement Directive 2009/73/EC (social issues) Articles 338, 341 of the Association Agreement
Methodology The group Environment and Renewable Energy Sources conducts monitoring and assessment of the implementation of the following acquis: Article 363, Directive 2011/92/EU Article 363, Directive 2001/42/EC Article 363, Directive 2003/42/EC Article 363, Directive 2003/35/EC Directives 85/337/EEC and 96/61/EC Article 363, Directive 2008/50/EC Article 363, Directive 1999/32/EC Article 363, Directive 94/63/EC Article 363, Directive 2009/147/EC Article 363, Directive 2010/75/EU Article 338, Directive 2009/28/EC The group Oil conducts monitoring and assessment of the implementation of the following acquis: Directive 2009/119/EC Directive 94/22/EC Directive 98/70/EC Articles 274, Chapter 11 of the Association Agreement (Trade-related energy) Articles 275, Chapter 11 of the Association Agreement (Trade-related energy) Articles 276, Chapter 11 of the Association Agreement (Trade-related energy) Articles 279, Chapter 11 of the Association Agreement (Trade-related energy) Articles 280, Chapter 11 of the Association Agreement (Trade-related energy) Article 337 of the Association Agreement Article 338 of the Association Agreement Article 339 of the Association Agreement The group Business Climate conducts monitoring and assessment of the implementation of the following acquis: Article 27, Chapter 11 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement Article 28, Chapter 11 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement Article 29, Chapter 11 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement Article 88, Chapter 6 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement Article 93, Chapter 6 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement Articles 97-102, Chapter 6 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement Article 104, Chapter 6 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement Article 105, Chapter 6 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement Article 107, Chapter 6 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement Articles 144-147, Chapter 7 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement Chapter 8 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement and the Directive 2014/25/EU Article 255, Chapter 10 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement Article 256, Chapter 10 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement Article 258, Chapter 10 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement
Methodology Article 263, Chapter 10 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement Article 267, Chapter 10 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement Article 277, Chapter 11 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement and Directives 2003/54/EC and 2003/55/EC (as regards the regulatory authority) Articles 355-359, Chapter 5, (Title V ECONOMIC AND SECTOR COOPERATION) of the Association Agreement and Directive 2008/92/EC Article 379, Chapter 10 (Title V ECONOMIC AND SECTOR COOPERATION) of the Association Agreement
Glossary ANNEX 2. Glossary (Short Description) of EU Acquis Subject to Implementation Monitoring
Gas
Directive 2009/73/EC concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC This Directive establishes common rules for the transmission, distribution, supply and storage of natural gas. The rules established by this Directive apply to natural gas, liquefied natural gas (LNG), biogas and gas from biomass. They aim to achieve a competitive, secure and environmentally sustainable market. This Directive provides for compulsory functional unbinding (supply) of transmission system operators (TSO) in vertically integrated undertakings. EU Member States must ensure that all customers are entitled to freely choose natural gas supplier and can easily change supplier within three weeks. At the same time, Member States may impose on suppliers selling gas to household customers obligations which may relate to security, including security of supply, regularity, quality and price of supplies, and environmental protection, including energy efficiency. Regulation (EU) No. 715/2009 on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No. 1775/2005 This Regulation sets common rules for access to gas transmission systems, LNG terminals and storage facilities taking into account the special characteristics of national and regional markets. The document establishes the procedures of certification of transmission system operators, as well as development, elaboration and implementation of network codes (with the participation of the European Network of Transmission System Operators — ENTSO — for Gas). The key objective of this Regulation is to ensure that all market participants have free and non-discriminatory access to relevant infrastructure and capacities. Directive 2004/67/EC concerning measures to safeguard security of natural gas supply This Directive establishes a common framework within which Member States must define general, transparent and non-discriminatory security of supply policies compatible with the requirements of a competitive market, and clarify the roles and responsibilities of market players (including in case of emergency). The government must specify minimum security of supply standards to be complied with by the market players, prepare and update national emergency measures, identify “vulnerable” customers and ensure adequate security for them, establish cooperation with the European Commission and other stakeholders.
Electricity and Nuclear Security Council Directive 2014/87/Euratom of 8 July 2014 amending Directive 2009/71/Euratom establishing a Community framework for the nuclear safety of nuclear installations The Directive establishes a European framework for maintaining and promoting consistent improvement of nuclear safety and its regulation. It sets an ambitious safety goal across the EU in order to prevent accidents and avoid radioactive waste from nuclear installations. The directive applies to any nuclear installation subject to licensing. Council Directive 2013/59/Euratom laying down basic safety standards for protection against the dangers arising from exposure to ionising radiation The Directive establishes basic safety standards to protect the health of employees, the general public, patients and others from the dangers of exposure to ionising radiation. The Directive applies to any planned, existing or emergency situation which involves a risk to ionising radiation. In particular, it
Glossary applies to: the manufacture, production, processing, handling, disposal, use, storage, holding, transport, import to and export from the EU of radioactive material; the manufacture and operation of electrical equipment emitting ionising radiation; human activities withnatural radiation sources that could lead to a significant increase in the exposure of employees or the public, such as the exposure of space crew to cosmic radiation; domestic exposure to radon gas in indoor air and external exposure to gamma radiation from building materials; managing emergency exposure situations that require measures to protect the public and workers. Directive 2009/72/EC concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC This Directive establishes common rules for the generation, transmission, distribution and supply of electricity. It also lays down universal service obligations and the rights of electricity consumers and clarifies competition requirements. Open internal market enables all consumers freely to choose their suppliers and all suppliers freely to deliver to their customers (free movement of goods, the freedom of establishment and the freedom to provide services). At the same time, this Directive sets stricter requirements to unbundling of transmission system operators (TSO) in vertically integrated undertakings. It also contains consumer rights provisions, reinforces and clarifies the functions and powers of regulatory authorities. Regulation (EC) No. 714/2009 on conditions for access to the network for cross-border exchanges in electricity and repealing Regulation (EC) No. 1228/2003 This Regulation establishes the rules for cross-border exchanges of electricity with the view to enhancing competition and achieving harmonization within the internal market in electricity. Comparing to the previous Regulation No. 1228/2003, this Regulation contains additional provisions on certification of transmission system operators (TSO), introduction of network codes and publication of information by system operators. It also clarifies that the European Network of Transmission System Operators for Electricity (the ENTSO for Electricity) is responsible for the management of electricity transmission networks to allow trading and supplying electricity across borders within the EU. Directive 2005/89/EC concerning measures to safeguard security of electricity supply and infrastructure investment This Directive establishes measures aimed at safeguarding security of electricity supply so as to ensure the proper functioning of the internal market for electricity, an appropriate level of interconnection between Member States, an adequate level of generation capacity and an adequate balance between supply and demand. It establishes a framework within which Member States are to define general transparent and non-discriminatory policies on security of electricity supply compatible with the requirements of a competitive market for electricity. They must define and publish roles and responsibilities of competent authorities and all relevant market actors. In implementing these measures, Member States are supposed to guarantee continuity of electricity supplies, explore possibilities for cross-border cooperation in relation to security of electricity supply, reduce the longterm effects of the growth of electricity demand, ensure diversity in electricity generation, encourage energy efficiency and the adoption of new technologies, ensure regular renewal of networks. Council Directive 2006/117/Euratom on the supervision and control of shipments of radioactive waste and spent fuel This Directive authorizes transboundary shipments of spent fuel between Member States for processing, requires prior authorization for transboundary shipments of radioactive waste and spent fuel where such fuel is moved from, through the territory of or to a Member State. This Directive also requires return of radioactive waste to its country of origin.
Glossary Energy Efficiency and Social Issues
Directive 2010/30/EU on the indication by labelling and standard product information of the consumption of energy and other resources by energy-related products This Directive regulates labelling of energy-related products and provision of information to consumers relating to their consumption of electric energy. It applies to products which have a direct or indirect impact on the consumption of energy and on other resources during use. Suppliers placing products on the market must ensure that such products are labelled with the information about their consumption of energy and other resources. Suppliers must also produce technical documentation to include: a general description of the product; the results of design calculations carried out; test reports; the references allowing identification of similar models. The technical documentation must be available for inspection purposes for a period ending five years. Suppliers must provide the labels and productrelated information free of charge to dealers, and the latter must display labels properly, in a visible and legible manner. Directive 2010/31/EU on the energy performance of buildings This Directive promotes the improvement of the energy performance of buildings within the Union, taking into account outdoor climatic and local conditions. It lays down minimum requirements, common general framework for a methodology and covers energy used for heating, hot water, cooling, ventilation and lighting. National authorities must establish reasonable minimum requirements to energy efficiency to be reviewed every five years. They also establish a system of certification of the energy efficiency. Such certificates provide information to prospective buyers or tenants on the energy performance of buildings, and advice on enhancing it. Directive 2012/27/EU on energy efficiency, amending Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC and 2006/32/EC This Directive establishes a common framework of measures for the promotion of energy efficiency within the Union in order to ensure the achievement of the Union’s 2020 20% headline target on energy efficiency. Such measures include: • annual 1.5% energy savings resulting from implementing energy efficiency measures by distribution network operators and suppliers; • enhancing energy performance of heating systems, installation of double-glazed windows and roof insulation; • purchase of buildings, products and services with high energy-efficiency performance by public bodies; • annual energy modernization of at least 3% of the total floor area of buildings owned and occupied by public bodies; • expanding rights and possibilities of consumers in the area of energy management which includes easy and free access to the metering data on the actual consumption; • national incentives for small and medium-sized enterprises to conduct energy audit that should be mandatory for all large enterprises; • monitoring of the energy performance of new energy generating capacities.
Environment and Renewable Energy Sources
Directive 2011/92/EU on the assessment of the effects of certain public and private projects on the environment (codification) This Directive introduces an important instrument of the environmental policy — environmental impact assessment. Member States must ensure, first of all, that projects likely to have significant effects on the environment (by virtue, inter alia, of their nature, size or location) are made subject to a requirement for development consent and an assessment with regard to their effects. This Directive contains two lists of projects subject to environmental impact assessment (from nuclear power stations, gas pipelines,
Glossary etc., to large pig farms). An important element is stricter publicity requirements, including to the public participation in the environmental impact assessment. Directive 2001/42/EC on the assessment of the effects of certain plans and programmes on the environment This Directive introduces an important instrument of environmental policy — strategic environmental assessment. An environmental assessment must be carried out of certain plans and programmes during their preparation. Such assessment includes preparation of the environmental report (that must contain detail information on the likely significant environmental effects and reasonable alternatives) and consultations with the relevant authorities and the public. Where a transboundary effect is possible, an assessment and consultations in a transboundary context must be carried out. Directive 2003/4/EC on public access to environmental information and repealing Council Directive 90/313/EEC This Directive implements the provisions of the Aarhus Conventions relating to public access to environmental information. It aims to guarantee public access to environmental information owned by public authorities — both upon request and through active dissemination thereof. Environmental information must be made available to an applicant within one month after the receipt by the public authority of the applicant’s request. A request for environmental information may be refused if the request is manifestly unreasonable, or formulated in too general a manner, concerns an unfinished document or internal communications. Directive 2003/35/EC providing for public participation in respect of the drawing up of certain plans and programmes relating to the environment and amending with regard to public participation and access to justice Council Directives 85/337/EEC and 96/61/EC This Directive addresses the implementation of the Aarhus Convention in respect of public participation and access to justice. It sets the requirements to the introduction of mechanisms of informing the public, holding consultations with the public and taking account of comments and proposals of the public in decision-making. Member States must ensure that the public is given early and effective opportunities to participate in the preparation and modification or review of the plans or programmes required to be drawn up under the provisions listed in Annex I of the Directive. Directive 2008/50/EC on ambient air quality and cleaner air for Europe This Directive establishes ambient air quality and ambient air quality management standards. For this purpose, it establishes upper and lower assessment thresholds, target and threshold values, sets objectives for the reduction of the effect of particulate matters, defines and classifies zones and agglomerations, introduces the systems of informing the public and ambient air quality assessment with respect to various pollutants. Where, in a given zone or agglomeration, there is a risk that the levels of pollutants will exceed the alert thresholds, short-term action plans must be drawn up. Directive 1999/32/ЕС relating to a reduction in the sulphur content of certain liquid fuels and amending Directive 93/12/EEC, as amended by the Regulation (EC) No. 1882/2003 and Directive 2005/33/EC The purpose of this Directive is to reduce the emissions of sulphur dioxide resulting from the combustion of certain types of liquid fuels and thereby to reduce the harmful effects of such emissions on man and the environment. It sets the maximum sulphur content in heavy fuel oil, gas oil and marine gas oils. It also specifies methods of sampling and analysis of sulphur content in fuel to check compliance with the requirements.
Glossary Directive 2009/147/EC on the conservation of wild birds (Article 4.2) This Directive relates to the conservation of all species of naturally occurring birds in the wild state in the European territory of the Member States. The mechanism of conservation of wild birds provides for the protection of their habitats; protection and use of birds; prevention of harm that can be caused by invasive species; research and reporting. According to Article 4.2, special protection areas need to be established based on ornitological criteria. Special measures also need to be taken to protect migratory species naturally occurring in the territory of a particular state, especially in wetlands. Directive 2010/75/EU on industrial emissions (integrated pollution prevention and control) This Directive lays down rules on integrated prevention and control of pollution arising from industrial activities. It requires using the integrated approach to activities referred to in Annex I thereto. All installations covered by this Directive must prevent or reduce pollution due to using best available techniques, efficient energy use, prevention and control of emissions. Transparency of the integrated approach is ensured by the public participation. Directive 2009/28/EC on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC This Directive provides for setting mandatory national targets for the overall share of energy from renewable sources in the overall energy balance to take account of statistics and potential of each particular country. These targets include the achievement of a 20% share of energy from renewable sources in overall Energy Community energy consumption by 2020 and a 10% target to be achieved for the share of RES in the transport sector. This Directive, among other, establishes rules for joint green energy projects between Member States and third countries and access to the grid-system of electricity produced from renewable energy sources.
Oil
Directive 2009/119/EC imposing an obligation on Member States to maintain minimum stocks of crude oil and/or petroleum products This Directive lays down rules aimed at ensuring a high level of security of oil supply in the Community through reliable and transparent mechanisms based on solidarity amongst Member States. It provides for the adoption of such laws, regulations or administrative provisions as may be appropriate in order to ensure that the total oil stocks maintained at all times within the Community for their benefit correspond, at the very least, to 90 days of average daily net imports or 61 days of average daily inland consumption, whichever of the two quantities is greater. Directive 98/70/EC relating to the quality of petrol and diesel fuels The EU introduced rules prohibiting leaded petrol and limiting the permitted sulphur content in diesel fuel with the view to improving air quality and reducing greenhouse gas emissions. This Directive sets technical specifications applicable to petrol, diesel fuels and biofuels used in vehicles, as well as to gas oils used in non-road mobile machinery. Apart from the prohibition of marketing leaded petrol, Member States must conduct assessment of national consumption of fuel, adopt laws and identify the authorized body (bodies) to introduce the fuel quality monitoring system. Directive 94/63/EC on the control of volatile organic compound (VOC) emissions resulting from the storage of petrol and its distribution from terminals to service stations, as amended by Regulation No. 1882/2003 206 This Directive provides for the registration of all terminals used for storage, loading and unloading of oil products, installation of technical means allowing reduction of VOC emissions from mobile containers
206
The official translation has a lot of mistakes resulting from inaccurate translation
Glossary with oil products, bringing all stationary tanks, rail, marine and motor vehicle tanks and loading installations in compliance with the established requirements. Directive 94/22/EC on the conditions for granting and using authorizations for the prospection, exploration and production of hydrocarbons This Directive establishes common rules to ensure the non-discriminatory access to and pursuit of activities relating to the prospection, exploration and production of hydrocarbons. These objective and transparent rules reinforce integration of the internal energy market, encourage greater competition and improve security of supply. The document provides for the implementation of measures to ensure: • equal access to all organizations possessing necessary resources for prospecting, exploring for and producing hydrocarbons; • granting authorizations on the basis of objective, published criteria; • communication of all necessary information to all organizations participating in the established procedures.
Business Climate
Directive 2014/25/EU on procurement by entities operating in the water, energy, transport and postal services sectors and repealing Directive 2004/17/EC This Directive aims to ensure market openness, as well as fair procurements, in particular in the energy sector: extraction (production), transmission and distribution of gas, heat, electricity. Directive 2009/72/EC concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC This Directive provides for the implementation of laws on the electricity market which defines electricity as an energy-related product to be purchased/sold/produced/transmitted/stored. These operations may be carried out by all licensed companies on equal competitive conditions. The state also ensures non-discriminatory access to the existing infrastructure, creates favourable conditions for electricity producers to invest in new forms of energy (wind, solar, etc.). Directive 2009/73/EC concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC This Directive provides for the implementation of laws on the gas market which defines gas as an energy-related product to be purchased/sold/produced/transmitted/stored. These operations may be carried out by all licensed companies on equal competitive conditions. The state also ensures that companies have non-discriminatory access to distribution networks, gas storage facilities and crossborder gas pipelines. Directive 2008/92/EС concerning a Community procedure to improve the transparency of gas and electricity prices charged to industrial end-users Pursuant to that Directive, open, generally accessible mechanisms of providing information on the prices of energy resources for customers must be introduced. A particular methodology of collection of respective information about gas and electricity prices is to be drawn up and the respective mechanism to that effect is to be introduced.