Energy Reforms, Autumn 2018

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Kyiv, December 19, 2018. Ukrainian Crises Media Center

The experts summed up the results of the year on the issue of the effectiveness of energy and environment reforms. The conclusions were made as part of the regular monitoring of the implementation of the Ukrainian Association Agreement with the EU by the coalition “Energy reforms”.

Roman Nitsovych, project manager and program manager of DiXi Group, noted that positive tendencies in the gas sector include the fact that the heating season in Ukraine started well due to the sufficient reserves of its own gas. The expert also noted the Government's efforts to update the action plan in case of crisis situations. «We welcome the adoption of the law on ensuring transparency in the extractive industries, we welcome the government's decision regarding greater openness of geological information and launch of a pilot project for the issuance of special permits through electronic auctions», - Roman Nitsovich added. Simultaneously, he criticized the lack of key decisions and documents from "Naftogaz" and MGU, which will be able to launch the "abandoning" process. Also, Roman Nitsovich noted that the transition of the market to the regime of daily balancing of the GTS is constantly delayed, at the moment this process is postponed to March 1.

According to Svetlana Golikova, who spoke about the electricity sector, many improvements that are now being introduced into the law "On the Electricity Market" take place too late. «Everything happens at the last moment. In fact, the decisions that were taken were correct, but they were just too late […]. Today there is a certain threat of the loss of a normal idea of functioning of the electricity market», – the expert noted. Such problems, according to Svetlana Golikova, are related to delays in the election and appointment of a new member of the National Commission, which carries out state regulation in the sphere of energy and utilities.

Tetyana Boyko, OPORA Civic Network expert, member of the Reanimation Package of Reforms, said that the following positive changes took place in the sphere of energy efficiency: a number of technical regulations on product labeling were adopted, the market of energy auditors was launched, and the market for energy service contracts was developing. «From the positive news of the last quarter is the creation of the Supervisory Board of the Energy Efficiency Fund, we know that this Foundation has been created for four years and finally there is a quorum», – Tatiana Boyko noted. The biggest problem the expert called was the creation of a working group, which should solve all the details with the mechanism of monetization of subsidies for the population, in November, which makes it insufficiently effective.

As Natalia Andrusevich noted, expert of the Resource and Analytical Center "Society and Environment", all directives in the field of environmental policy are in a state of practical implementation. Although the expert noted that many issues were settled within the law, there are problems with certain provisions of the law "About strategic environmental assessment". «As we have already noted, there are some claims to the law itself, in particular regarding the definition of the public and its attachment to the territory where activities are carried out. This is a rather discriminatory provision and it contradicts the Aarhus Convention and also the directive itself, but we will see how it will be implemented in practice», - Natalia Andrusevich commented.

Gennady Ryabtsev, expert of the coalition "Energy Reforms", said that several important decisions were made this year, aimed at fulfilling international obligations in the oil sector. «First of all, it is the signing of a law that simplifies the implementation of work on the development of oil and gas deposits and approval of a new order on the order of geological information […] One of the advantages is also increased control over the circulation of aviation fuel, as well as the introduction of licensing activities for the production and storage of petroleum products», - said the expert. Gennady Ryabtsev also added that one of the most important steps was the development of legislation on strategic stocks of oil and petroleum products. However, he noted that the negative trends in the oil sector could include ignoring the directives on fuel quality and safety, as well as postponing the new subsoil code.

Oleksandra Gumeniuk - Director of European-Ukrainian Energy Agency, summarised important this year 4 bills , which has an impact on the business climate in the energy sector, registered in 2018 or they have made progress this year, which unfortunately have not changed their status. These bills are: # 6081, aimed at solving the issue of "reservation of capacities" of renewable electricity, #8125 On Concession, # 8557 regarding the tax on withdrawn capital, and one of the most loud - # 8449-d, concerning the introduction of a system of auctions in the sector of RES .

With regard to successful lawmaking, which ended with the adoption of laws, then from the autumn should be noted the following: the adoption of the Code of Bankruptcy, which solves three key issues: the bankruptcy procedure has been too long for almost three years; high cost; low efficiency of bankruptcy procedures; The Law of Ukraine "On Transparency in Mining Industries", which introduces the obligation for mining companies to report on the international standard of the Transparency Initiative of the Mining Industries; The Law of Ukraine on Investment Attractiveness of the Construction of Renewable Energy Projects. The law clarifies the projects of objects by class (CC1), that is, those belonging to objects with minor consequences, are subject to mandatory environment impact assessment only if there are grounds.

Full monitoring results can be found at the link: http://enref.org

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