Kyiv
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Adoption of the package of laws on energy efficiency is of utmost importance – experts, monopolists, international partners

Kyiv, June 21, 2017.

Stakeholders of the energy market explain how the households will feel the change if the package of “energy efficient” laws is adopted.

Adoption of the package of laws regulating energy efficiency is a crucial step towards increased energy efficiency in housing as well as towards bigger transparency of tariffs. Ukrainian experts, representatives of the respective parliamentary committee, of Ukraine’s State Agency on Energy Efficiency and Energy Saving, of the Associations of Apartment Building Co-Owners (OSBB), of monopolists as well as international partners emphasized the need for this step at a press-briefing at Ukraine Crisis Media Center calling upon the Verkhovna Rada (Ukraine’s Parliament) to adopt the package of laws on Thursday.

Tomorrow the Verkhovna Rada will vote in the second reading the draft law on commercial metering of communal services, the energy efficiency of housing as well as possibly on housing and public utility services. Yevhen Mahliovannyi, Director of the Department of Technical Regulation of Energy Efficiency of the State Agency for Energy Efficiency and Energy Conservation of Ukraine, said that the draft laws in question went through several rounds of detailed discussion, they were designed to take into account all stakeholders’ interests as much as possible.

“It’s a very good moment now to consolidate three years of very hard work and progress done in energy efficiency in Ukraine. We now have the law on Energy Efficiency Fund. It’s a very good starting point, but without all the other elements [three other draft laws] the Fund will be inefficient, it won’t be able to run properly and generate the concrete impact and results that we all want to have. And for us with our experience, it’s important to have the coherent overall package. […] Of course, some elements of laws, for instance, on energy efficiency, are not 100% reflecting the EU acquis, the current state of legislation. But we are convinced it is enough for Ukraine to start with. And it is much more important to start now and in current years to improve and align with the elements of the European legislation,” said Peter Wagner, Head of the Support Group for Ukraine in the European Commission. He added that the package of the laws needs to be adopted as soon as possible so that the donors have time to make up their mind by the end of the month as to the amount of the financing they are ready to grant to the State Energy Efficiency Fund on the first stage.

“I am hopeful that tomorrow we will be able to concentrate our political will to support these draft laws. […] It’s a key step that the Ukrainian society needs to make. As long as Ukrainian economy is spending twice as many units of energy per one unit of GDP compared to the average figure across the globe, and five-eight times more than the EU countries, we will never be able to be competitive [in external markets], neither we will succeed in providing a quality and competitive service to the Ukrainian consumer,” emphasized Oleksandr Dombrovskyi, MP, Petro Poroshenko Bloc faction, acting head of the parliamentary Committee on Fuel and Energy, Nuclear Policy and Nuclear Safety. He also added that one dollar of investment into energy efficiency results in four dollars of income, while the pay-off period is less than four years.

Andrii Sauk, head of the Association of Apartment Building Co-Owners “V.Symonenka, 2-A” (Brovary) noted that the draft laws in question are crucially important for the success of such associations, with their success or failure being a signal for all the owners who are hesitating. “These three laws need to be adopted in the nearest time, as we need to move forward and catch up with the civilized world. What is happening now as a result of our inaction, is us taking the money from the state budget, from our pockets and putting it into the pockets of oligarchs, and we are thus lacking the money for the things we really need,” Andrii Sauk added.

Olha Babii, board member of the Association of Ukraine’s water utilities “Ukrvodokanalekolohiia”, said that monopolists – suppliers of services also support the package of the laws. “We realize that energy efficiency, as well as decreased expenses for production of heat energy, water and for draining of water, is the only way to decrease the tariff. We have to start talking honestly to the consumer now, because only populists may say that the tariff can be decreased in another way. In the last two years the cost of electric power has rapidly increased, so did other tariffs. Our task is to decrease the consumption of electric energy and gas for the production of these services by all means. There is no other way to get there,” Babii emphasized. Ukraine currently spends three times more energy than the developed European countries do, to produce heat, water and to drain water. In the EU these expenses amount to 18 per cent within the tariff’s structure, in Ukraine – up to 40-50 per cent.

Another way to decrease the tariff is commercial metering, as up to 50 per cent of the expenses and losses of all monopolists comes from the failure to sell the produced services. “We have calculated that by introducing the commercial metering the amount of commercialized services provided will grow by 15 per cent. Commercial metering of heat will allow calculating Gigacalories as commercial units. We are currently losing [heat] not only while transporting it to the consumers in apartment blocks but also at the production stage without even knowing how much the losses amount to,” the board member of the water utilities association added.

“This reform is a marathon. Politicians often want to have the result immediately, while first results may often be even shocking. However one needs to honestly explain the situation as it is: first positive fruit may come three-five years after […], while the qualitative changes – in 15 years. The majority of governments that had started these reforms did not win the next round of elections, however, it led to the results in future. We cannot abstain from doing it if we truly want to build a qualitatively new, independent state,” emphasized Tetiana Boiko, coordinator of the housing, communal and energy programs of Opora Civil Network.

Denys Nazarenko, DiXiGroup analyst added that adoption of the package of the laws is just the beginning of the process. “What we are discussing now is just three per cent of the entire work that needs to be done in order to get economic effect into the bills, not to mention smart metering and so on. It is what we should have started doing by now if we had learned our lessons earlier,” he said.

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