ENERGY SECTOR
SECTOR CARD
20+
33%
million consumers, including more than 500,000 representatives of small and medium business
of energy consumption for every $1 / Ukraine’s GDP (the relevant figure in the EU is 13%). A huge opportunity to optimize.
6 energy companies are included in the TOP 10 of taxpayers
One in 12 Ukrainians is employed in the energy sector
>25%
a share of energy in the country’s GDP in 2015 according to experts* energy component is present in every sector of the economy *
SECTOR STRUCTURE
Electrical Energy Industry
Oil and Gas industry
Coal industry
Communal heat power industry (production and supply of heat energy)
Water supply and sanitation
Waste management sector
Energy efficiency
Rolling Review: SECTOR’S REGULATORY ENVIRONMENT We estimated that there are tens of thousands of regulatory acts that contain hundreds of thousands of regulatory standards, including the ones adopted in the Soviet period, in force in Ukraine. Regulatory standards are the rules established for businesses by the state. The approval of a new rule as well as any other public policy decision requires analyzing the problem and choosing a way to solve it.
1433
We can say that the effective regulation is a situation, when a solution to problems was achieved with minimal costs for businesses and the state.
62 286 The Energy Sector is regulated by 1 433* regulatory acts:
1085
62 Laws 286 Resolutions of the CMU 1085 Acts of CEB 17 Acts of the USSR / Ukrainian SSR *
Considering the fact that some regulatory acts can approve two or more structural elements (regulations, procedures, typical form, etc.), the total number of acts may be different
17
ROLLING REVIEW: REVIEW OF REGULATORY ACTS The quality of regulatory acts is assessed using a special methodology each year. The process is conducted under the plan published in advance. According to its result, a regulatory act is recommended for keeping, revising or removing.
184 acts reviewed for their legality: 148 are legal/36 are illegal (or 20%) 184 acts reviewed for their importance: 160 are important/18 are non-important (or 11%)/6 are partly important
148/ 36
160/ 18/ 6
Acts reviewed for effectiveness: 45 are relatively effective (there are no ineffective found) Acts reviewed for corruption risks: More than 30% are with middle and high corruption risks
30% 45
Rolling Review: GOALS AND MAIN TASKS OF REGULATION Meeting the needs of the population and the economy in energy resources and goods in a timely and reliable manner
Optimization of Ukraine’s energy balance and the final price for consumers
Protecting the critical energy infrastructure and ensuring the safe operation of the united energy system
Attracting investments in the energy sector of Ukraine
Developing new competitive and transparent markets of electrical energy, heat, gas, oil, oil products, coal and energy efficiency service
Training of specialists and scientific and technical support for the energy sector
Ensuring the diversification of gas supplies, providing of incentives for local mining companies and creating an efficient and competitive natural gas market
Integration and synchronization of the Ukrainian energy system with world energy markets
Providing simple procedures for access to electrical grids
Improving the legislation through the implementation of acquis communautaire requirements
Launching a coal market and establishing competitive coal prices in Ukraine. Reducing coal consumption
Conducting quality audits of 100% of country’s energy resources
Reducing the energy intensity of GDP to $0.17 of costs for $1 by 2035
Improving the efficiency and profitability of natural monopolies (RAB regulation)
Rolling Review: FUNCTIONS OF REGULATION Ministry of Energy and Coal Mining of Ukraine 37
State Agency on Energy Efficiency and Energy Saving 20
Ministry of Regional Development 8
State Nuclear Regulatory Inspectorate 34
Ministry of Ecology and Natural Resources 29
State Water Resources Agency 41
NEURC 20
<$0.17
is energy consumption of each $1 / GDP
<2 MW per h/year
INDICATORS*, TO BE ACHIEVED
<30%
is a share of one supplier of fuel and services of each category (except for certain stages of nuclear fuel)
<4.4%
is a share of heating systems in disrepair
<9% <40% *
according to the Energy Strategy of Ukraine 2035
is average electricity consumption by households
is a share of losses in electricity grids
of СО2 emissions to indicators of 1990
LAWMAKING
ADOPTED The NEURC’s Resolution #1946 dated 7/11/2016 “On approval of Amendments to the methodology for calculating fees to connect the electricity-generating equipment to electrical grids” regarding simplifying the connection to electrical grids with 5 MW capacity of power ordered
DEVELOPED Draft Law of Ukraine “On amendments to certain Laws (regarding improving the connection to electricity grids)” Draft Law of Ukraine “On amendments to certain Laws (regarding the reliable (uninterrupted) supply of electricity to consumers and the introduction of quality indicators for electric energy)” Draft Law of Ukraine “On Electricity Market of Ukraine” (Article 21)
+38 (044) 332 49 12 | office@brdo.com.ua | www.brdo.com.ua Khoryva St., 55K | Kyiv, 04071, Ukraine SECTOR HEAD Oleksiy Orzhel | o.orzhel@brdo.com.ua