Serhiy Porovskyy, Principal Energy Efficiency Financing and Policy Expert, UNIDO/GEF UKR IEE Project during the EUEA discussion on energy efficiency noted:
💥 «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. Of course, the main tasks that need to be solved now are the support of operational business processes, provision of energy resources and stabilization of the financial sector/capital costs reduction. However, it is important to have a correct “perception” of energy efficiency and the economic effect of the implementation of energy efficiency measures, which primarily concerns industry and Fuel and energy complex, and not thermal modernization of buildings.
📍In the UNIDO project («Introduction of Energy Management System Standard in Ukrainian Industry»), we work in 3 main directions:
- development of the legal framework for energy efficiency: where we provide technical support to central executive bodies for the nationalization of international standards and the development of relevant laws and by-laws;
- creation of an expert database: we had a powerful training program for experts, improving the qualifications of specialists and certification institutions;
- creation of a financial mechanism and other support tools: together with Ukrgasbank, we launched the Loan Guarantee Fund – this Fund is working; together with EUEA, we launched the All-Ukrainian Award: Pacesetters for Energy Management – сurrently, due to martial law, the selection and awarding of participants is suspended, but we will definitely resume the process after our victory! I also hope that it will be possible to develop and implement a scheme of “Voluntary Agreements” on energy efficiency.
📊We conducted a survey of enterprises regarding the impact of the war on their activities and the possibility of implementing energy efficiency measures. At the moment, the following things are happening with enterprises: 1 – transfer of production from active combat zones; 2 – the problem of energy resources provision; 3 – financial problems and lack of desire/ability to invest – business is focused on survival and covering basic operational needs, since recently, the high capital cost, caused by the increase of the NBU discount rate to 25%, only significantly complicates the situation.
❗️Therefore, it is extremely important to create special (guarantee) financial instruments to support business, and directly to increase energy efficiency in the industrial and energy sectors of the economy. It is also important to properly structure the work of such financial instruments/Funds in order to create opportunities not only for attracting donor international aid, but also private foreign capital (which, by volume, is the largest). In the pre-war period, state guarantees were sufficient, but now this may not be enough.
❗️However, investment in improving energy efficiency in industrial sectors should be a priority, because it is a constant reduction of operating costs and reduction of energy resource shortages. Implementation of the energy management system will not only allow to correctly forecast and evaluate the results of energy efficiency measures, but will also provide an opportunity to implement so-called «zero-cost» measures: changing the behavior of workers and optimizing operational processes, defect control, forecasting energy consumption, increasing the value of the brand – the financial result of which is estimated at (additional) 40% of capital investments in energy efficiency measures.
✅ «In addition to the Loan Guarantee Fund, which is currently operating, and under which enterprises can obtain preferential loans for the implementation of the energy management system and energy efficiency measures, we can help with the involvement of highly professional national and international experts. There was information that state-owned enterprises were instructed to implement an energy management system, however, they do not know how to do it (correctly). Contact us, we can help!” – said Mr. Porovskyy.
✔️In addition, Mr. Serhiy commented on the energy intensity of GDP, which is often considered to be 2-3 times higher in Ukraine than in neighboring EU countries:
💬 «I consider this to be a false statement because we have two indicators of the energy intensity of GDP: 1) energy intensity of GDP in purchasing power parity and 2) just the energy intensity of GDP. If we take into account the energy intensity of GDP without purchasing power parity, then our indicators are 8-10 times higher than in the EU countries. Our low purchasing power evens out this figure. However, this points to another social problem and the issue of energy poverty.
In my opinion, it is the Ministry of Economy of Ukraine should be engaged in the activities of the energy efficiency sector, because this is what affects the energy efficiency of our GDP. If measures are not implemented in all sectors of the economy, the energy intensity of GDP will not change.”
✔️Regarding the question mentioned in the chat before Mr. Sergey’s speech: «What is the importance of energy efficiency for the economy of Ukraine?” – he commented:
💬«If we ask how energy efficiency is related to our economy, 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, it is not SMEs that have a special influence on our economy, but the top 10 % of large industry. 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.”
✅ More details in the video recording of the discussion: https://cutt.ly/bZgD9YR [27:00-47:00]