Energy Efficiency Fund to start operating not later than April 2017 – experts


Experts suggest establishing a state fund to help households become energy efficient, prior to that, respective practices should be introduced on grass root level while parliament should adopt systematic changes to legislation.

Ukraine is utilizing 18 billion cubic meters of gas for consumer needs and majority of this amount is imported. The situation is very unstable, as Ukraine remains dependent on the European market and may become hostage to the situation at any time. Thus Ukraine needs to cut gas consumption inside the country. Setup of the Energy Efficiency Fund may help achieve that. However, for that the parliament would need to adopt a number of laws to allow the Fund’s operation. The laws in question include the law on commercial metering of gas, energy efficiency of housing as well as the law on housing and utilities. The Fund’s organizational and managerial structure needs to be defined as soon as possible, so that the Fund may start operating at least in April 2017. This is the conclusion that the experts – participants of the discussion at Ukraine Crisis Media Center came to.

Possible saving
“If the Fund is launched, a total of 11 billion cubic meters of natural gas can be potentially saved. It is a very substantial amount. At its basis is saving of gas that we are just spending by heating inefficient houses,” said Dmytro Naumenko, analyst of the Ukrainian center for European politics. He said housing facilities are most vulnerable in that sense. Theoretically, nine billion cubic meters of gas can be saved in the housing sector. The Fund needs to become the state tool that will help households to make their houses more energy efficient, lift additional burden on the budget and improve business activity. “The Fund ‘opens’ a new market of services including energy audit and selling energy efficient construction materials. Such market may amount to UAH 60 billion and will create 75 thousand new working places,” said Naumenko. The Fund will also be able to partially decrease the burden on the budget created by subsidies.

According to Dmytro Naumenko, the concept of the Fund foresees that the bigger the saving is, the bigger the reimbursement amount from the state is.

Position of the EU
Krzysztof Gierulski, European Commission expert, Support Group for Ukraine, said that ultimate goal is to not just make things more comfortable but it is important for the EU to see impact on the energy balance of Ukraine and to see that the current huge heating losses decrease. To achieve this, we need to introduce a verification system and establish an office with wide responsibilities that will monitor the situation. The Fund needs to also provide technical support, hold awareness campaigns, to advise and to inform how to spend and invest this money. “The Fund is not just a bag with cash, there needs to be a support system for those who will get the money. The so-called ‘warm loans’ for example were mostly used to install windows, which is positive and makes lives of residents more comfortable. However, the impact on energy consumption is close to zero. The right way to do it would be to first diagnose the system, hold the energy audit in order to show the space for the most effective change with use of this money,” the European Commission expert explained. He also emphasized that the European Union would be ready to financially support the Fund only upon condition that the required legislation is adopted. Apart from the above-mentioned law on housing and utilities as well as reforming of the subsidies system, these are also the laws on commercial gas metering and energy efficiency of houses.

Role of the state
According to Serhiy Maslichenko, associate director of Energy Efficiency and Climate Change department, European Bank for Reconstruction and Development, main role that the state has in this process is not as much to create the Fund but rather to change the environment. “The key is basic changes on the level of interaction of citizens with utilities providers. Until the law on housing and utilities is adopted and the system of subsidies is reformed, no one will be dealing with it systematically. If there are many recipients of public subsidies in the apartment house, it will be impossible to convince them to set up a union of co-owners at high rise apartment buildings,” Maslichenko said. He emphasized that until there is no demand and actual changes in the sector, no one will be systematically financing the “warm” projects.