Рубрика | Oilreview

Ukrainian Energy Phenomena

Why are energy conservation and efficiency in Ukraine considered separately, despite the fact that they are mutually complementary? The topic of energy saving and efficiency has been gaining popularity in Ukrainian society in recent years, especially when gas issues with Russia raise their heads. This is a topic for discussion not only for experts — interest is also shown by government officials and the Ukrainian media. What has the state done to address it? What innovations have been drawn up by the officials who are responsible for this? How do Ukrainian top managers assess the prospects for lowering energy costs at their enterprises?

Back to history

The issue of energy saving was in the focus of the Ukrainian authorities at the birth of Ukraine as a state. Back in 1994, the Law of Ukraine «On Energy Saving» was drawn up in a form more akin to a declaration. However, the law did stipulate the energy saving notion and its essence.

Pursuant to the provisions of the law, the government issued a decision in February 1997 to enforce a «Comprehensive State Energy Saving Program of Ukraine.» The paper noted that state energy saving policy guidelines should be developed on the basis of an analysis of existing conditions and forecasts for economic development, which would foresee the creation of a regulatory framework for energy saving, the formation of a favorable economic environment, and the development of an integrated and effective system of state management for energy saving. It was noted that the largest shares in the structure of the energy saving potential belong to:

  •  industry — 58-59%;
  •  the fuel and energy sector- 19-20%;
  •  the utilities sector — 11-12%;
  •  transport — 7-7.7%;
  •  agriculture — 3-3.5%.

In order to implement the program by 2010, it was planned to allocate public funds or attract investment of about $6 billion. This could have laid a good foundation for the future, given that the expected economic benefits by the end of the program were expected to amount to $4.7 billion, and the inefficient consumption of fuel and energy resources could reduce by 108 million tonnes of equivalent fuel.

The stages of its implementation were set in keeping with the best traditions of that period:

1997-1998 was to be the first stage. The main emphasis was made on curbing unnecessary fuel and energy consumption with the utilization of non-capital-intensive energy saving technologies. This would help reduce the cost of fuel and energy resources by 10-15% and save more than $200 million. This was the period for laying the foundations of public policy, which were based on fiscal and administrative management practices.

The second stage in 1998-2000 envisaged activities to improve the energy efficiency of existing technical and technological facilities, thereby saving 15-25% more inefficiently consumed energy and saving $300 million. But by the end of the second phase it became apparent that the program was not going well: a mere 12 million tonnes of equivalent fuel (30% of the target) had been saved by 2000 (the target was set at 36 million tonnes as of 2000).

The third phase, which ended in 2010, intended to restructure the Ukrainian economy, which would reduce demand for energy resources by 30%, stabilize their consumption and achieve an optimal level of energy supplies.

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