EU4 Energy Sustainable Policy Forum in Astana, June 13, 2017

1. Energy Efficiency Priorities in Ukraine
Borys Dodonov
EU4Energy Sustainable Energy Policy Forum, June 13, 2017

2. © IEA 2016© OECD/IEA 2017
Energy Consumption Trends and Energy Saving Potential
• Energy consumption declined by 25.7 Mtoe over 4 years but only 25% is attributed to improvement in energy efficiency
• 77% of energy saving due to EE improvement stemmed from residential sector after sharp gas and heat tariffs hike in 2015
• Untapped energy saving potential remains substantial and is estimated at 19 Mtoe (w/o transport sector) or about 1/3 of TFC in 2015
-6,448
-534 -552 -572
-4,971
180
2,970
3,733
-762
-22,191
152
-11,917
-627 -1,178
-8,620
-25,668
-382
-8,737
-1,199
-6,911
-8,439
-30,000
-25,000
-20,000
-15,000
-10,000
-5,000
0
5,000
10,000
Ukraine Agriculture &
Construction
Industry Services Residential Transformation
at FFPP
KTOE
DECOMPOSITION OF ENERGY CONSUMPTION CHANGE IN 2012-2015
Intensity Effect Structure Effect Activity Effect Total change in consumption
Source: UNDP/NewSEP, Energy Efficiency Monitoring for Ukraine 2017
573
2,407
4,318
5,257
6,435
0 3,500 7,000
Agriculture & Construction
Services
Transformation at FFPP
Residential
Industry
Energy Saving Potential in 2015, ktoe

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Is Ukraine Ready for Investments in Energy Efficiency?
Source: World Bank, RISE database
*Note: Azerbaijan, Georgia, Moldova and Turkmenistan were not assessed in RISE 2016
• Ukraine managed to score only 37 points out
of 100 for national energy efficiency policy
and regulatory frameworks in the World
Bank/ESMAP RISE 2016
• EE policy was placed in the “green zone”
(scores between 67 and 100) in 4 out of 12
categories 1) national EE planning, 2) EE
entities, 3) EE incentives for electricity rate
structures, 4) financing mechanisms for EE
• In 7 categories scores appeared in the “red
zone” (scores 0-33): 1) information provided
to consumers about electricity usage,
2) incentives & mandates: large consumers,
3) incentives & mandates: public sector,
4) incentives & mandates: utilities, 5) MEEPS,
6) energy labeling systems and 7) carbon
pricing
72
58
37
38
42
45
51
58
62
0 15 30 45 60 75
OECD High Income
Europe & Central Asia
Ukraine
Kyrgyz Republic
Armenia
Tajikistan
Uzbekistan
Kazakhstan
Belarus
RISE EE Scores for EU4Energy Countries*

4. © IEA 2016© OECD/IEA 2017
Top 3 Energy Efficiency Priorities for Ukraine
1 Enhance capacity to collect and analyse energy data
• Data collection during the design, implementation and evaluation phases
is a necessary part of an effective energy efficiency policy
• Data analysis provide critical information for decision making, including
future scenarios, baselines and indicators, which are necessary for tracking
progress, monitoring and evaluation of the policy
2 Continue to progressively remove energy price subsidies
that are:
• The major barrier for EE improvement and renewables development
• Regressive since richer people benefit more from subsidized energy prices
• Negatively affect energy security by lowering investment in domestic
exploration and production and leading to an excessive energy import
• One of the major sources of budget and current deficits
3 Leverage private investment in energy efficiency
• NEEAP estimates total EE investment needs at EUR 35.07 bn in 2015-2020
• SME and households lack an access to an affordable long-term financing:
• establishing funding mechanisms to jump-start energy efficiency
financing to help them overcome the initial high set-up costs
• engaging with IFS to establish credit lines for local banks for lending to
the residential sector, SMEs and municipalities.
Source: NKREKP, World Bank/ESMAP estimates
Source: National Energy Efficiency Action Plan till 2020
0%
5%
10%
2014 2015 2016
Residential Energy Price Subsidies as %
of GDP
Electricity Gas & Heat
4,265
4,980
11,170
14,655
0 5,000 10,000 15,000
Industry
Services
Residential
Transport
EE Investment Plans for 2015-2020 in
NEEAP, EUR m

5. © IEA 2016© OECD/IEA 2017
Buildings Sector in Ukraine
Current Situation
• Improve the energy efficiency of
building components and energy-
using systems in existing buildings
- Install energy controls
- Set MEEPS for key buildings
components
- Aid building owners, occupants, and
manufacturers to improve energy
efficiency
• Modernize DH networks
Potential Steps Forward
• As of March 2017 43.6% of households obtained
HUS to pay their energy and utility bills
• Steep gas and heat tariff hikes w/o EE
improvement in building sector resulted in rising
the energy poverty level
• DH network losses are on average 18% but may
reach 40% for some DH companies
• The level of building heat meters installation
was 61% in November 2016
Capturing EE gains in buildings sector
Fiscal expenditures on HUS , disposable income
of HH , natural gas import and energy security
Energy Efficiency Priorities in Buildings Sector

6. © IEA 2016