Although much poorer than the average European Union family, Ukraine's households consume more than twice as much energy. Such inefficiency is unaffordable and unsustainable, according to industry analysts who spoke on the issue at the Kyiv School of Economics on Aug. 11.
Local households devour as much as 260 kilowatts per square meters a year, while the
28-nation bloc keeps the average between 90 and 120 kilowatts. One reason for the inefficiency is cost: Ukrainians pay Hr 0.31 per unit of electricity in today’s government-subsidized market, while the EU’s figure stands at
Hr 3.2 in Ukrainian currency terms. Still, Ukrainians can ill afford to keep up their energy-wasting lifestyles, since EU per-capita incomes are $34,344, nearly five times more than Ukraine’s $7,423.
The urgent need to bid farewell to Russian gas
dependence, Ukraine’s main supplier, also heats up the debate around energy.
“Our
primary concern now is to take complete stock of all energy resources in
Ukraine. The only countries that do not have such assessments are Ukraine and Turkmenistan,
where gas costs only $4 per 1,000 cubic meters,” says Svyatoslav Pavlyuk, expert for
Energy Cities, a Europe-wide energy association of municipalities.
A civic movement called the Reanimation
Package of Reforms suggests revising the basis for the provision of governmental
subsidies in energy. The government currently covers the difference in energy
prices that all households pay at below-market rates.
Meanwhile, the reform package — in line with
the International Monetary Fund’s stance — emphasizes that direct subsidies for
those in need would be more efficient. However, these subsidies should be accompanied
by measures that reduce electricity and gas consumption. Moreover, the group
believes Ukraine’s energy market is highly monopolized. State-run Naftogaz
controls the gas and oil market, while another state enterprise, Energorynok, dominates
electricity trading. The reformers argue that more competition will lead to market
development.
“Why did nobody talk about
reducing energy consumption? Because when we start to save on energy
consumption, public and private monopolies will receive less revenue. Since owners
of power companies have a direct impact on authorities, real energy saving was
blocked at the highest level,” says Oleg Kozachuk, head of the Energy Saving and
Efficiency Association.
Nevertheless, there are bright,
yet rare, examples of smart energy usage in Ukraine. State-owned Pavlograd Chemical Plant in
Dnipropetrovsk Oblast is among them. The company launched its energy efficiency
program in 1999 and managed to reduce its annual energy consumption by almost
four times – 20,700 tons of initially consumed coal dropped to 5,700 tons in
2011. It saved Hr 2.5 billion, as a result.
Energy-saving lamps and pumps as well as general
modernization of production lines were the core of the company’s reform, according
to its chief executive officer Leonid Shyman. “All in all, the company’s profits
grew by 40 times, while energy expenditure was reduced by 17 times,” he
added.
Meanwhile, government regulation of the energy sector has other problems. As many as nine agencies focus
on energy
issues, thereby deadlocking initiatives and preserving the Soviet-style
bureaucratic approach, according to civic leaders. Instead, the group says, one agency
should oversee the government’s energy efficiency policy.
Another suggestion is
to introduce energy officer positions in regional public offices, especially in
cities with populations of more than 10,000 residents.
Kyiv Post staff
writer Iryna Savchuk can be reached at [email protected].
