Yesterday, July 28, as a symbol of Statehood Day, the European-Ukrainian Energy Agency held an expert discussion on energy efficiency on the topic “Post-war challenges in the energy efficiency sector.”
Recording of the discussion: https://cutt.ly/UZj9z8l
Moderator: Olena Baida, senior expert of the STARTER project.
Welcome speech: Dmytro Prinus, Acting Director of EUEA;
Among the speakers were:
- Denys Shemyakin, Director of the Reform Support Team at the Ministry of Economic Development and Trade of Ukraine;
- Serhiy Porovskyy, Principal Energy Efficiency Financing and Policy Expert, UNIDO/GEF UKR IEE Project;
- Vadym Matkovsky, Energy Efficiency Coordinator of Reform Support Team at the Ministry of Regional Development;
- Rostyslav Maraikin Regional Coordinator, Eastern Europe & Central Asia, PFAN.
We would like to thank all the speakers for their insightful speech and to Olena Baida for her professional moderation, as well as all the participants!
🟢 Dmytro Prinus, Acting Director of EUEA, opened the discussion with a welcome speech and noted: «Today Ukraine faces many challenges and problems that were brought up on us by our neighbours who decided we needed freedom by bringing war, destruction, and loss of life. But we are in Ukraine and Ukrainians even today have an optimistic view of the future because we believe in our soldiers, we believe in our communities, but most of all we believe in ourselves.
EUEA has been here since 2009. We mainly focus on 4 sectors: Renewable energy, energy efficiency, green finance, and green hydrogen. For 13 years we have been advising decision-makers, NGOs, our government, and partners in making coherent decisions. For 13 years, we were helping our country build, modernize and develop bridges of friendship, investment, and worldwide recognition.
We call on governments, development banks, financial institutions, and aid agencies to join efforts for ensuring Post-war reconstruction follows; laws respects ecology, is long-term sustainable and that every newly reconstructed Ukrainian city or village is not just rebuilt for a group of inhabitants, but rather for a community that is actively involved in determining the vectors of its future development.»
🟢 Denys Shemyakin, Director of the Reform Support Team at the Ministry of Economic Development and Trade of Ukraine
«Regarding the impact of the war on the economy of Ukraine, the following figures can be recorded: according to the survey: 18.7% – enterprises stopped; 28.1% – almost stopped; forecast drop in GDP is in the range of 30-35%; at least USD 9.6 billion – losses of state and private sector enterprises; business activity is reduced; export restrictions due to port blockades.
✔️ The key challenges currently expected are: a wave of bankruptcies and the possibility of enterprises shutdown, disrupted supply chains, problems with customers, low diversification of energy supply, and big problems with port blocking.
✔️The main objective of the recovery and development plan is economic recovery and rapid economic growth to jump from a transition economy to a developing economy in 10 years. The key tasks of the economic block of the recovery and development plan can be divided into:
➖ short term: expansion of business support programs, focus on SMEs, grant programs (for recycling enterprises (up to UAH 8 million), for gardens, for agrarian sphere; there are also grants from UAH 50,000 to 250,000);
➖medium term: focus on implementing guarantee instruments from partner governments to attract investment, reducing the regulatory and tax burden on business, reduction of labor taxes, privatization of all state non-strategic assets;
➖strategic: in addition to the focus on the export of recycled products with a higher share of added value, we add a trend towards innovation, and adaptation of Ukraine’s economy to the criteria necessary for EU integration.
❓ The issue of relocation of enterprises: how many enterprises were successfully relocated, and where are they moving?
➖«According to the program of relocation of enterprises, which has been in operation since the beginning of the war, as of July 29, 2022 – 1,766 applications were received, of which 39.4% (692) were successfully relocated, mostly micro and small enterprises. The main part of applications from Kharkiv, Donetsk, Luhansk regions and from Kyiv, mostly relocated to Lviv region. If you are near the battle line, it is better to relocate and not delay. The program is still working now, you need to submit an application on the portal, which will allow you to receive compensation for transportation or free transportation through Ukrposhta / Ukrzaliznytsia.
➖ As for the “Your Own Business” program, these are grants from UAH 50,000 to UAH 250,000. The program works through the Diya portal, the funds can be used for purchasing or leasing equipment, renting premises, and purchasing raw materials.
Grant applications: https://diia.gov.ua/ ; https://diia.gov.ua/services/grant-na-pererobne-pidpriyemstvo
🖇More details in the video recording of the discussion: https://cutt.ly/bZgD9YR [07:00-24:00]
🟢 Serhiy Porovskyy, Principal Energy Efficiency Financing and Policy Expert, UNIDO/GEF UKR IEE Project
💬 «If we ask what relation energy efficiency has to our economy, then it applies to all sectors of the economy; energy efficiency is not (only) about thermal modernization of buildings, but primarily about increasing energy efficiency in industry and Fuel and Energy Complex! That is why it is so important to develop tools to encourage businesses to energy efficiency. Moreover, for our economy, not SMEs have a special influence, but the top 10% of large industries. Their impact on energy consumption, pricing and availability are the most significant, and in terms of economic effect, the implementation of energy efficiency measures will have a more significant result than in housing and communal services.
✔️ Increasing energy efficiency should be at the core of the (post-war) recovery strategy of Ukraine’s economy! About this we (UNIDO) formally noted in working groups under the National Recovery Council. Currently, it is essential to create guarantee tools for such recovery, so that it would be possible to structure large donor aid and guarantee the attraction of (foreign) investments.
✔️ In our UNIDO project (Introduction of Energy Management System Standard in Ukrainian Industry) we have a Loan Guarantee Fund, which we launched together with JSC “Ukrgasbank”. This Fund is working. As part of the work of this Fund, enterprises can receive preferential loans for the implementation of the energy management system and energy efficiency measures. We can also help with the involvement of highly professional national and international energy management and energy efficiency experts.
❗️Understanding how difficult the challenges are, as a result of the war, for the economic development of Ukraine, I hope that UNIDO’s assistance in improving energy efficiency in the industrial sector will only be strengthened.”
🖇More details in the video recording of the discussion: https://cutt.ly/bZgD9YR [27:00-47:00]
🟢 Vadym Matkovsky, Energy Efficiency Coordinator of Reform Support Team at the Ministry of Regional Development
✔️ At the beginning of the speech, Mr. Vadym mentioned the measures proposed in Lugano regarding energy efficiency and decarbonization in communities:
“Three stages are considered:
➖ “Wartime Economy” (until the end of the war in 2022, 2023): as much as possible to carry out low-cost quick-accumulation measures in buildings: massive insulation of pipelines in basements, installation of autonomous gas boilers in public buildings, the establishment of individual heating points, for which EUR 500 million are calculated.
➖ «Post-war recovery” (until 2025): the initial step toward large-scale thermal modernization is being laid, rebuild completely destroyed schools and kindergartens according to the NZEB principle, thermal modernization of the most energy-intensive buildings and residential buildings, gradual outgo from natural gas consumption at the expense of RES.
➖«Structural modernization of the country»: large-scale thermal modernization of buildings, which, according to the committee’s estimates, is approximately EUR 60 billion, which will cover a third of the construction fund in the country, a complete outgo from the consumption of imported gas, a complete transition to the construction of NZEB.
✔️As to talk about financing tools, official representatives of the European Commission constantly monitor the activities of the Energy Efficiency Fund and evaluate it as a fairly successful, reliable, systemic tool. Therefore, it is quite likely that part of the funding from the EU budget for the restoration of buildings will be directed through the Energy Efficiency Fund.
✔️Regarding Law №6485, which concerns not only systems of energy management and energy certification, but is more directed to the issue of creating conditions for large-scale thermal modernization of buildings. The law stipulates three important things regarding financing by the Energy Efficiency Fund:
➖ The Fund can now legislatively shape its program in such a way as to give grants in advance, not just after the fact.
➖ The fund will be able to provide support for preparatory repairs, which will remove part of the financial burden from co-owners and have a positive effect on the quality of thermal modernization.
➖ The Fund will also be able to provide grants for the restoration of buildings with an increase of their energy efficiency (replacement of broken windows and doors with highly energy-efficient ones, restoration of damaged thermal insulation on the walls).
❗️In addition, a draft of the Thermal Modernization Strategy until 2050 is being prepared (requirement of EU directives), which aims to consolidate all policies and efforts of all stakeholders (Government, businesses, municipalities, citizens), to create a long-term systematic approach to the introduction of large-scale thermal modernization, including the localization of the production of energy-efficient materials and equipment, and the development of the competences of specialists in the construction industry.”
🖇 More details in the video recording of the discussion: https://cutt.ly/bZgD9YR [00:49:00-: 01:09:00]
🟢 Rostyslav Maraikin Regional Coordinator, Eastern Europe & Central Asia, PFAN
💬 «We know there are some wishes from the grantors for grants, but even when we are able to attract them, what are the guarantees that the business will be implemented and constructed? Therefore, it is necessary to follow the international practice. Our PFAN program can help with this professionally and for free. We work with project and business developers, financial organizations, experts, and government bodies. To get started, you need to submit an application, at the second stage, an assessment will be carried out, if the project is supported, we provide business consulting for the project regarding the preparation of documents for obtaining financing (grants, loans, investments). The ultimate goal is to close the project financially. Most of our projects are from renewable energy sources and climate adaptation. If we implement the international practice of project preparation and verification, most of the grants will be implemented.”
🖇 More details in the video recording of the discussion:: https://cutt.ly/bZgD9YR [01:10:00-: 01:26:00]