Several
fields of politics where reforms would be desperately needed were
left aside. Particularly dangerous was the neglecting of energy
efficiency policies in order to reduce Ukraine’s dependency on
Russian gas. Despite being crucial for short- and long-term Ukrainian
national politics, courageous politics have been missing so far.
However, we can hope that foreign pressure through the recently
signed Association Agreement with the European Union might lead to
what Ukrainian politicians have not yet tackled.
By
signing the Association Agreement, Ukraine obliged itself to converge
with the higher European standards on energy efficiency and
competition in the energy market. Fulfilling this obligation,
Ukraine, currently the world’s least energy efficient economy,
could get closer to the EU’s performance, one of the best in the
world. In fact, this will mean the adoption of various European
regulations aimed at increasing energy efficiency.
They cover various
areas, from better management of residential heating to a more open
energy market, allowing for competition with new (European)
companies. This will in particular concern the large Ukrainian energy
groups such as Naftogaz which is still having a de facto monopoly
position in several fields. Opening up the energy market for smaller
and foreign competitors will eventually be beneficial for Ukrainian
consumers, business, the government and the environment: faced with
more competition, the companies will try everything to offer lower
prices to consumers and to decrease the huge energy losses that still
occur on production, transportation and distribution. As the current
energy losses are largely subsidized by the state, increased energy
efficiency will even benefit to the government’s budget.
So
far, Ukraine’s efforts in reforming the energy sector have been
rather limited, although some of these regulations should already
have been implemented when Ukraine joined the European Energy
Community in 2011. Probably several factors are responsible for this
lack of enthusiasm: lobbying from energy wasteful industries,
unwillingness of responsible politicians to undertake unpopular
measures and lack of understanding of the importance of these issues.
However, the situation has changed now: with the signing of the
Association Agreement, those in favor of energy efficient policies
and free competition in the energy market will have a strong ally
behind them: In future meetings between Ukraine and the European
Union, the EU negotiators will stress the importance of energy saving
measures for any further development.
Just,
will Ukraine do this? Already for Energy Community, Ukraine did not
fulfill all conditions on time. For instance, a law on improving the
energy performance of public and residential buildings was due to be
adopted by September 2012. Until today, Ukraine has not met this
requirement.
Residential buildings being one of the main sources of
energy waste, this example only shows the lack of attention this
subject has received so far. A lot of work will be needed, but now
environmental non-government organizations will have a much more powerful argument: if
Ukraine wants to become “more European”, it has to become more
energy efficient. The importance of energy efficient policies in
Ukraine is no longer limited to environmental and security reasons
but it will become crucial for Ukraine’s place in Europe.
David Bonson is policy director at the Institute for Energy Efficiency of Ukraine (IEE). He has also worked on political projects in several Eastern European countries.
