Country profile of Ukraine
Evaluation of energy and climate policies
compared to the EU
By: Erika de Visser, Luis Janeiro,...
© ECOFYS | |
Table of content
> Chapter 1 Introduction Slide 3
> Chapter 2 Methodology Slides 4-5
> Chapter 3 Results Slid...
© ECOFYS | |03/05/2013 Name3
Chapter 1: Introduction
Goal of the project:
> to evaluate climate and energy policies in cou...
© ECOFYS | |
Chapter 2: Methodology
Segments
The analysis is categorized in key economic sectors (rows), and policy
areas ...
© ECOFYS | |
Chapter 2: Methodology
Indicators and scores
> For each segment we analyse indicators for incentives and barr...
© ECOFYS | |
Chapter 3: Results
Overview of policies
03/05/20136
Energy efficiency Renewables Low Carbon
ENERGYSUPPLY
• Ta...
© ECOFYS | |
Chapter 3: Results
General energy and climate strategy
03/05/2013 Name7
EFFICIENCY/RENEWABLES/LOW-CARBON
Asse...
© ECOFYS | |
Chapter 3: Results
Energy efficiency in energy supply
03/05/2013 Name8
ENERGY EFFICIENCY
Assessment
Score
Ukr...
© ECOFYS | |
Chapter 3: Results
Renewable energy in energy supply
03/05/20139
RENEWABLE ENERGY
Assessment
Score
Ukraine
Sc...
© ECOFYS | |
Chapter 3: Results
Low carbon technologies in energy supply
03/05/2013 Name10
LOW CARBON
Assessment
Score
Ukr...
© ECOFYS | |
Chapter 3: Results
Energy efficiency in industry
03/05/2013 Name11
ENERGY EFFICIENCY
Assessment
Score
Ukraine...
© ECOFYS | |
Chapter 3: Results
Renewable energy in industry
03/05/2013 Name12
RENEWABLE ENERGIES
Assessment
Score
Ukraine...
© ECOFYS | |
Chapter 3: Results
Low carbon technologies in industry
03/05/2013 Name13
LOW CARBON
Assessment
Score
Ukraine
...
© ECOFYS | |
Chapter 3: Results
Energy efficiency in buildings
03/05/2013 Name14
ENERGY EFFICIENCY
Assessment
Score
Ukrain...
© ECOFYS | |
Chapter 3: Results
Renewable energy in buildings
03/05/2013 Name15
RENEWABLE ENERGY
Assessment
Score
Ukraine
...
© ECOFYS | |
Chapter 3: Results
Low carbon technologies in buildings
03/05/2013 Name16
LOW CARBON
Assessment
Score
Ukraine...
© ECOFYS | |
Chapter 3: Results
Energy efficiency in transport
03/05/2013 Name17
ENERGY EFFICIENCY
Assessment
Score
Ukrain...
© ECOFYS | |
Chapter 3: Results
Renewable energy in transport
03/05/2013 Name18
RENEWABLE ENERGY
Assessment
Score
Ukraine
...
© ECOFYS | |
Chapter 3: Results
Low carbon technologies in transport
03/05/2013 Name19
LOW CARBON
Assessment
Score
Ukraine...
© ECOFYS | |
Chapter 4: Conclusions
Electricity and heat supply
Sector assessment ‘electricity and heat supply’
> Current ...
© ECOFYS | |
Chapter 4: Conclusions
Electricity and heat supply
Policy Recommendations ‘electricity and heat supply’
> All...
© ECOFYS | |
Chapter 4: Conclusions
Sector industry
Sector assessment ‘industry’
> Very little incentives for energy effic...
© ECOFYS | |
Chapter 4 Conclusions
Sector buildings
Sector assessment ‘buildings’
> Current (subsidized) electricity and h...
© ECOFYS | |
Chapter 4 Conclusions
Sector transport
Sector Assessment ‘transport’
> Ukraine has neither energy efficiency ...
© ECOFYS | |
Chapter 4 Conclusions
Overall conclusions
> Ukraine has significant GHG mitigation potential, mainly in the e...
© ECOFYS | |
References
03/05/2013 Name26
• Ecofys, 2011. EU Climate Policy Tracker. Published in November 2011 by WWF.
• ...
© ECOFYS | |
Annexes
> Annex I: Assessment of EU policies
03/05/2013 Name27
© ECOFYS | |
Annex I – Overview of EU policies
03/05/201328
Energy Efficiency Renewables Low carbon
General Climate
Strate...
© ECOFYS | |03/05/2013 Name29
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Country profile Ukraine – Energy and climate policies

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This country profile of Ukraine contains a comprehensive overview, description and assessment of the energy and climate policies in place. The presentation shows that Ukraine has significant GHG mitigation potential, but before this can be tapped, existing regulatory, economic, technical and infrastructural barriers should be removed.
The European Copper Institute (ECI) had asked Ecofys to identify and assess climate and energy policies in countries outside the EU and provide recommendations for policy opportunities for the transition to a sustainable energy supply.

Such a country profile is equally available for Morocco.

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Country profile Ukraine – Energy and climate policies

  1. 1. Country profile of Ukraine Evaluation of energy and climate policies compared to the EU By: Erika de Visser, Luis Janeiro, Yvonne de Bie, Niklas Höhne April 2013
  2. 2. © ECOFYS | | Table of content > Chapter 1 Introduction Slide 3 > Chapter 2 Methodology Slides 4-5 > Chapter 3 Results Slides 6 - 19 > Chapter 4 Conclusions Slides 20 - 25 > References Slide 26 > Annex I Overview of EU policies Slides 27 - 28 03/05/2013 Name2
  3. 3. © ECOFYS | |03/05/2013 Name3 Chapter 1: Introduction Goal of the project: > to evaluate climate and energy policies in countries outside of the EU and to provide recommendations for policy opportunities for the transition to a sustainable energy supply in the respective country. Deliverables: > to develop a methodology to evaluate energy and climate policies in non EU countries. > to apply the methodology to two non-European countries: Morocco and Ukraine.
  4. 4. © ECOFYS | | Chapter 2: Methodology Segments The analysis is categorized in key economic sectors (rows), and policy areas (columns), which together determine the individual segments (dotted lines) of the analysis: 03/05/2013 Name4 General energy and climate strategy Energy supply Industry Buildings Transport EnergyEfficiency Renewableenergy Lowcarbonstrategies
  5. 5. © ECOFYS | | Chapter 2: Methodology Indicators and scores > For each segment we analyse indicators for incentives and barriers, which together form a coherent and consistent strategy to achieve a long- term low-carbon future > Each segment is scored for incentives and barriers: – Incentives: ● 0: No incentives ● 4: Capturing the full technical mitigation potential in that segment – Barriers: ● 0: no barriers ● - 4: prevents policies from achieving reductions for this segment as much as positive incentives could support them 03/05/2013 Name5 Barriers -4 -3 -2 -1 0 Incentives 0 1 2 3 4
  6. 6. © ECOFYS | | Chapter 3: Results Overview of policies 03/05/20136 Energy efficiency Renewables Low Carbon ENERGYSUPPLY • Tax exemptions and reductions on energy efficient technologies and appliances and CO2 taxation • Low electricity tariffs do not allow for a return on investment; subsidies on fuels I B • Feed-in tariff scheme with high rates for solar, wind, small hydro, and some forms of biomass • Administrative barriers for purchase of electricity and for licensing I B • No relevant policy support in place • Ukraine is considering a domestic GHG emissions trading scheme. I INDUSTRY • Tax exemptions and reductions on energy efficient technologies and appliances and CO2 taxation • No barriers found I B • Fiscal incentives for import to Ukraine, sales and use of renewable energy equipment in Ukraine • Administrative barriers for licensing I B • No relevant policy support in place • Ukraine is considering a domestic GHG emissions trading scheme. I BUILDINGS • Mandatory building energy code for new buildings and standards for energy using equipment in households • Low electricity and heat prices I B • Fiscal incentives for import to Ukraine, sales and use of renewable energy equipment in Ukraine • Low heat prices I B • No relevant policy support in place TRANSPORT • Excise tax on oil products • Fuel subsidies I B • Fiscal measures for biofuels in place, including exemption from corporate profit tax on income from sale of biofuels and excise tax exemption for motor biofuels • Fuel subsidies I B • No relevant policy support in place I
  7. 7. © ECOFYS | | Chapter 3: Results General energy and climate strategy 03/05/2013 Name7 EFFICIENCY/RENEWABLES/LOW-CARBON Assessment Score Ukraine Score EU GENERAL CLIMATE STRATEGY • Ukraine has declared a long-term goal of a 50% greenhouse-gas emissions reduction by 2050 from 1990 levels in the context of the UNFCCC, however a comprehensive climate strategy to achieve this goal is missing. The draft Updated Energy Strategy of Ukraine to 2030 provides general guidelines, but does not provide a strong foundation to drive action.
  8. 8. © ECOFYS | | Chapter 3: Results Energy efficiency in energy supply 03/05/2013 Name8 ENERGY EFFICIENCY Assessment Score Ukraine Score EU ENERGY SUPPLY Incentives • The tax code (effective January 2011) includes a number of instruments to energy efficiency: tax exemptions and reductions to stimulate the use of energy efficient technologies and appliances and CO2 taxation to stimulate GHG emissions reduction from the supply side. • No policy support/incentive to reduce grid distribution losses. Barriers • Electricity tariffs do not allow for a return on investment and subsidies on fuels.
  9. 9. © ECOFYS | | Chapter 3: Results Renewable energy in energy supply 03/05/20139 RENEWABLE ENERGY Assessment Score Ukraine Score EU ENERGY SUPPLY Incentives • Ukraine has a feed-in tariff system in place providing differentiated and relatively high support for solar, wind, small hydro and some forms of biomass. Electricity production from animal waste, biogas and landfill gas is not eligible for feed-in tariffs. • In addition, some fiscal incentives apply to renewables, such as tax exemptions on import and sales of equipment for generating renewable energy and production and sales of electricity or heat from renewables. Barriers • The system operator has no obligation to provide priority dispatch for generation from renewable sources. Besides there is no strategy for integration of renewables in the grid. • Moreover procedures for getting licenses and permits to build and operate renewable energy facilities are complex and time consuming. • Investors face significant risks, because they can only obtain the feed in tariffs after the plant is constructed.
  10. 10. © ECOFYS | | Chapter 3: Results Low carbon technologies in energy supply 03/05/2013 Name10 LOW CARBON Assessment Score Ukraine Score EU ELECTRICITY AND HEAT SUPPLY Incentives • No policy instruments to support fuel switch to low- carbon fuels have been found. In contrary, some district heating facilities have recently switched from gas to coal. • There are no policy instruments to support CCS. • Ukraine is considering a domestic GHG emissions trading scheme. A draft law is to be presented to parliament by the end of 2013.
  11. 11. © ECOFYS | | Chapter 3: Results Energy efficiency in industry 03/05/2013 Name11 ENERGY EFFICIENCY Assessment Score Ukraine Score EU INDUSTRY Incentives • The tax code (effective January 2011) includes a number of instruments to energy efficiency: tax exemptions and reductions to stimulate the use of energy efficient technologies and appliances and CO2 taxation to stimulate GHG emissions reduction from the supply side. Barriers • There are no barriers identified, such as subsidies or tax exemptions for fuels (e.g. coal, gas), in contrary to the supply sector and transport.
  12. 12. © ECOFYS | | Chapter 3: Results Renewable energy in industry 03/05/2013 Name12 RENEWABLE ENERGIES Assessment Score Ukraine Score EU INDUSTRY Incentives • Some fiscal incentives apply to renewables, such as tax exemptions on import and sales of equipment for generating renewable energy and production and sales of electricity or heat from renewables. Barriers • Procedures for getting licenses and permits to build and operate renewable energy facilities are complex and time consuming.
  13. 13. © ECOFYS | | Chapter 3: Results Low carbon technologies in industry 03/05/2013 Name13 LOW CARBON Assessment Score Ukraine Score EU INDUSTRY Incentives • There are no policy instruments to support CCS. • Ukraine is considering a domestic GHG emissions trading scheme. A draft law is to be presented to parliament by the end of 2013.
  14. 14. © ECOFYS | | Chapter 3: Results Energy efficiency in buildings 03/05/2013 Name14 ENERGY EFFICIENCY Assessment Score Ukraine Score EU BUILDINGS Incentives • Ukraine has a mandatory building energy code for new buildings since 2007. Compliance with the requirements from the building code could be improved. • Furthermore Ukraine has a number of national standards and requirements for energy-using products in place. In 2011, actions were initiated to align with EU legislation on labeling and technical regulations for household refrigerators, freezers and washing machines. Transposition of the EU labeling directive is expected at the end of 2012. Barriers • Current (subsidized) electricity and heating tariffs do not provide residential homeowners with incentives to invest in energy efficiency measures. • Furthermore the lack of end-user control over energy consumption and the absence of knowledge about the benefits of residential energy efficiency and technical expertise needed to develop bankable energy efficiency projects are key barriers.
  15. 15. © ECOFYS | | Chapter 3: Results Renewable energy in buildings 03/05/2013 Name15 RENEWABLE ENERGY Assessment Score Ukraine Score EU BUILDINGS Incentives • Some fiscal incentives apply to renewables, such as tax exemptions on import and sales of equipment for generating renewable energy and production and sales of electricity or heat from renewables. Barriers • Current (subsidized) electricity and heating tariffs do not provide residential homeowners with incentives to invest in renewable energy • Because the privatization process for housing has not been fully completed, commercial banks are not willing to give loans for renewables to homeowner associations since they are set up as not-for-profit legal entities, lack balance sheets and have neither guarantees nor income streams. Revision of the homeowner association legislation is planned for late 2012.
  16. 16. © ECOFYS | | Chapter 3: Results Low carbon technologies in buildings 03/05/2013 Name16 LOW CARBON Assessment Score Ukraine Score EU BUILDINGS Incentives • There are no policy instruments to support a low-carbon energy supply. In contrary, the government has launched a program to replace natural gas by coal in district heating plants.
  17. 17. © ECOFYS | | Chapter 3: Results Energy efficiency in transport 03/05/2013 Name17 ENERGY EFFICIENCY Assessment Score Ukraine Score EU TRANSPORT Incentives • There are no fuel efficiency standards for light and/or heavy vehicles in place. Though excise tax on oil products exists. Barriers • Lower prices due to taxation policy, poor quality products and domestic oil production sold at prices below real market levels.
  18. 18. © ECOFYS | | Chapter 3: Results Renewable energy in transport 03/05/2013 Name18 RENEWABLE ENERGY Assessment Score Ukraine Score EU TRANSPORT Incentives • In 2009, a number of support measures for biofuels were introduced, including exemption from corporate profit tax on income from sale of biofuels, and excise tax exemption for motor biofuels production. • The draft Updated Energy Strategy of Ukraine to 2030 projects gradual growth in demand for biofuels. In its reference scenario, the mix of bioethanol in total gasoline consumption will reach 10% by 2020 and 15% by 2030. Barriers • Lower prices due to taxation policy, poor quality products and domestic oil production sold at prices below real market levels.
  19. 19. © ECOFYS | | Chapter 3: Results Low carbon technologies in transport 03/05/2013 Name19 LOW CARBON Assessment Score Ukraine Score EU TRANSPORT Incentives • No relevant policy incentives for electric mobility, promotion of modal shifts or strategies to increase the share of non-motorised transport have been found.
  20. 20. © ECOFYS | | Chapter 4: Conclusions Electricity and heat supply Sector assessment ‘electricity and heat supply’ > Current electricity tariffs do not allow for a return on investment and price distortions on fuels do not promote efforts to increase efficiency in energy the supply side. > Although a feed-in tariff system is in place, there is no strategy for integration and/or priority dispatch to the grid. Moreover, procedures for getting licenses and permits to build and operate renewable energy facilities are complex and time consuming. The risks for investors are substantial since feed in tariffs can only be obtained after plant construction. > There is much to be gained in improving energy efficiency in transmission and distribution networks. Though there is no policy instrument to incentivize such investments. 03/05/2013 Name20
  21. 21. © ECOFYS | | Chapter 4: Conclusions Electricity and heat supply Policy Recommendations ‘electricity and heat supply’ > Allow electricity producers to recover their full costs, e.g. increase the regulated tariff in a socially acceptable way. > Remove administrative barriers so that the feed in tariff can be more effective. > Expand the scope of the feed-in tariff scheme for renewables to include technologies such as biogas. > Introduce an incentive-based tariff for distribution and transmission networks to trigger the required investments in energy efficiency. 03/05/2013 Name21
  22. 22. © ECOFYS | | Chapter 4: Conclusions Sector industry Sector assessment ‘industry’ > Very little incentives for energy efficiency and renewable energy found > Energy subsidies are limited, in contrast to other sectors Policy recommendations ‘industry’ > Improve the administrative environment to make sure that the incentives have maximum impact. > Introduce an obligation for energy management systems and energy audits > Set up an emissions trading scheme 03/05/2013 Name22
  23. 23. © ECOFYS | | Chapter 4 Conclusions Sector buildings Sector assessment ‘buildings’ > Current (subsidized) electricity and heating tariffs in the Ukraine and the lack end-user control over energy consumption, do not provide residential homeowners with incentives to invest in energy efficiency measures. Policy recommendations ‘buildings’ > Eliminate subsidies for electricity and heat end-use in a socially acceptable way. > Establish (more) strict building energy codes for new buildings as well as buildings undergoing renovation. Enforce and regularly strengthen the performance requirements for buildings. Establish timelines and renovation rates for energy efficiency retrofits in existing buildings. Provide all buildings with metering equipment. 03/05/2013 Name23
  24. 24. © ECOFYS | | Chapter 4 Conclusions Sector transport Sector Assessment ‘transport’ > Ukraine has neither energy efficiency nor renewable policy in place or strategies to stimulate electric mobility, modal shift and/or non-motorized transport. Policy recommendations ‘transport’ > Adopt the European energy efficiency standards for light vehicles and elaborate a standard for trucks > Introduce modal shift or strategies to increase the share of non- motorized transport. > Create policy incentives for electric mobility 03/05/2013 Name24
  25. 25. © ECOFYS | | Chapter 4 Conclusions Overall conclusions > Ukraine has significant GHG mitigation potential, mainly in the energy supply sector, and related to energy consumption in the residential and commercial sectors, primarily buildings and appliances, and in industry. > However, little of this potential has been tapped, owing to a number of regulatory, economic, technical and infrastructural barriers. > A priority could be to remove these barriers before putting in place incentives through policies. > In addition, the lack of systematic planning, monitoring and evaluation of the programs and measures at the national and sectorial levels, is a challenge that needs to be addressed in order to tap this mitigation potential. 03/05/2013 Name25
  26. 26. © ECOFYS | | References 03/05/2013 Name26 • Ecofys, 2011. EU Climate Policy Tracker. Published in November 2011 by WWF. • Government of Ukraine (2012), draft Updated Energy Strategy of Ukraine for the Period till 2030, June 2012, Kiev. • OECD/IEA, 2012. Energy Policies beyond IEA Countries: Ukraine 2012. • Ukrainian Programme of Economic Reform for the Period 2010-2014. Unofficial translation available from http://www.usubc.org/site/files/Ukraine_Program_of_Economic_Reforms_2010- 2014.pdf (last accessed December 2012) • Building code for Ukraine (2006). Thermal protection of buildings. DBN V.2.6- 31:2006. Available from: http://energycodesocean.org/sites/default/files/%20%C3%A9%202.6-31- 2006.pdf (last accessed December 2012)
  27. 27. © ECOFYS | | Annexes > Annex I: Assessment of EU policies 03/05/2013 Name27
  28. 28. © ECOFYS | | Annex I – Overview of EU policies 03/05/201328 Energy Efficiency Renewables Low carbon General Climate Strategy Energy supply • Energy Efficiency Directive (2012/27/EU) • Effort Sharing Decision (2009/406/EC) • European Emissions Trading System (ETS) (2009/29/EC) • Energy Taxation Directive (2003/96/EC) • Renewable Energy Directive (2009/28/EC) • Internal electricity market Directive (2009/72/EC) • Security of electricity supply and infrastructure investment Directive (2005/89/EC) • Effort Sharing Decision (2009/406/EC) • Carbon Capture and Storage (CCS) Directive (2011/92/EU) Industry • Eco-design Directive (2009/125/EC) • Energy Labelling Directive (2010/30/EU) • Energy Efficiency Directive (2012/27/EU) • European Emissions Trading System (ETS) (2009/29/EC) • Energy Taxation Directive (2003/96/EC) • Renewable Energy Directive (2009/28/EC) • Carbon Capture and Storage (CCS) Directive (2009/31/EC) • Industrial Emissions Directive (IED) (2010/75/EU) • Landfill Directive (1999/31/EC) Buildings • Energy Performance of Buildings Directive (EPBD) (2010/31/EU) • Energy Efficiency Directive (2012/27/EU) • Eco-design Directive (2009/125/EC) • Energy Labeling Directive (2010/30/EU) • Energy Taxation Directive (2003/96/EC) • Renewable Energy Directive (2009/28/EC) Transport • Regulation on Energy Efficiency for passenger cars (443/2009) • European Emissions Trading System (ETS) (2009/29/EC) • Energy Taxation Directive (2003/96/EC) • Renewable Energy Directive (2009/28/EC)
  29. 29. © ECOFYS | |03/05/2013 Name29
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