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Dear reader, We are happy to present you the fourth issue of the Newsletter of the Energy Sector Budget Support Project (hereinafter ‘the ESBS Project’). Fol- lowing our good tradition, our team pre- pared many interesting news for you. To begin with, the ESBS Project has scheduled a series of workshops, consulta- tions and two study tours to the Czech Republic and Greece to be held in the near- est future. The main objective of these events is the study of certain current is- sues, namely the development of laws and regulations on the improvement of procedure of building power genera- tion capacities; discussion of the Energy Community Regional Strategy, review of legislation on natural gas under- ground storage, study of experience in unbundling and regulation of unbundled energy industries, especially in electric- ity sector; study of experience of unbun- dling of natural gas sector and function- ing of liquefied natural gas (LNG) ter- minals, etc. We believe that these activi- ties will make a significant contribution to reforming Ukraine’s energy sector. We can proudly report that the new working plan allowed significant expan- sion of the scope of the ESBS Project activities. In particular, five new compo- nents have been developed by the Proj- ect. This was achieved mainly due to the numerous proposals presented by the Beneficiary, which proves the increase of need in support provided by our Proj- ect. Therefore, we hope to accomplish a lot of other important and useful tasks with- in the outlined scope by the end of the Project. And now we would like to pres- ent our report on the progress of comple- tion of various tasks. One of the most significant components of the Project, in our opinion, is Support to the Imple- mentation of the Protocol on Accession of Ukraine to the Energy Community. This is the largest component in terms of the scope of the planned activities. “The Ukrainian membership in the En- ergy Community undoubtedly will help strengthening energy security in the re- gion of South East Europe and, due to well-developed energy infrastructure and system of gas storage, will make a major contribution to the development of the single energy market,” Natalia Boytsun, Director of the European In- tegration and International Cooperation Department, Ministry of Energy and Coal Industry, said at the First Day of Ukraine in the Energy Community held on 18 April 2012. Due to the need in proper fulfilment by Ukraine of its obligations under in- ternational treaties, namely regarding the harmonization of Ukrainian legisla- tion in energy sector with the so-called acquis of the Energy Community, the Beneficiary set a high level of priority to the activities related to the accession of Ukraine to the Energy Community. Thus, mutual activities of the ESBS experts and MoECI resulted in the de- This publication has been produced with the assistance of the European Union. The contents of this publication are the sole responsibility of the Consortium led by KANTOR Management Consultants S.A. and can in no way be taken to reflect the views of the European Union. This project is funded by the European Union This project is implemented by the Consortium led by KANTOR Management Consultants S.A. SECTOR BUDGET SUPPORT PROGRAMME ENERGY ENERGY CONTENT: B UkraINe PLaNs Its eNer- GY EFFICIENT FUTURE B INTEGRATION OF UPS OF UKRAINE INTO ENTSO-E B MODERNISATION OF THE UKRAINIAN GTS – PRIORI- TIZED B UKRAINE: ONE YEAR IN THE ENERGY COMMUNITY June 2012 As for the new Work Plan the scope of activity of the ESBS Proj- ect was considerably expanded, namely: taking into consideration proposals of the Beneficiary, five new components were developed in addition to the initial five ones specified by the Project. velopment of draft Declaration on Se- curity of Energy Supply and Position Document “Development of Process of Adaptation of Generally Accepted EU Standards in Ukraine”, etc. Another extremely important news is that the preparation of tasks within the framework of the Second Energy Sector Budget Support Programme was started. Thus, the provision of technical assistance will continue. We are pleased to inform you that we will continue cooperation with our partners and provide them with all the necessary support for reforming the energy sector. The ESBS Project will continue in- forming the public about its activities and the scheduled events. We invite you to participate in these events. Keep up on our latest announcements on the Web site of the ESBS Project: www.esbs.kiev.ua. ESBS Project Team
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Page 1: Newsletter No 4 - ENG

1Newsletter No4

Dear reader,We are happy to present you the

fourth issue of the Newsletter of the Energy Sector Budget Support Project (hereinafter ‘the ESBS Project’). Fol-lowing our good tradition, our team pre-pared many interesting news for you.

To begin with, the ESBS Project has scheduled a series of workshops, consulta-tions and two study tours to the Czech Republic and Greece to be held in the near-est future. The main objective of these events is the study of certain current is-sues, namely the development of laws and regulations on the improvement of procedure of building power genera-tion capacities; discussion of the Energy Community Regional Strategy, review of legislation on natural gas under-ground storage, study of experience in unbundling and regulation of unbundled energy industries, especially in electric-ity sector; study of experience of unbun-dling of natural gas sector and function-ing of liquefied natural gas (LNG) ter-minals, etc. We believe that these activi-ties will make a significant contribution to reforming Ukraine’s energy sector.

We can proudly report that the new working plan allowed significant expan-sion of the scope of the ESBS Project

activities. In particular, five new compo-nents have been developed by the Proj-ect. This was achieved mainly due to the numerous proposals presented by the Beneficiary, which proves the increase of need in support provided by our Proj-ect. Therefore, we hope to accomplish a

lot of other important and useful tasks with-in the outlined scope by the end of the Project. And now we would like to pres-ent our report on the progress of comple-tion of various tasks.

One of the most significant components of the Project, in our opinion, is Support to the Imple-mentation of the Protocol on Accession of Ukraine to the Energy Community. This is the largest component in terms of the scope of the planned activities. “The Ukrainian membership in the En-ergy Community undoubtedly will help strengthening energy security in the re-gion of South East Europe and, due to well-developed energy infrastructure and system of gas storage, will make a major contribution to the development of the single energy market,” Natalia Boytsun, Director of the European In-tegration and International Cooperation Department, Ministry of Energy and Coal Industry, said at the First Day of Ukraine in the Energy Community held on 18 April 2012.

Due to the need in proper fulfilment by Ukraine of its obligations under in-ternational treaties, namely regarding the harmonization of Ukrainian legisla-tion in energy sector with the so-called acquis of the Energy Community, the Beneficiary set a high level of priority to the activities related to the accession of Ukraine to the Energy Community. Thus, mutual activities of the ESBS experts and MoECI resulted in the de-

This publication has been produced with the assistance of the European Union. The contents of this publication are the sole responsibility of the Consortium led by KANTOR Management Consultants S.A. and can in no way be taken to reflect the views of the European Union.

This project is funded by the European Union

This project is implemented by the Consortium led by KANTOR Management Consultants S.A.

SECTOR BUDGET SUPPORT PROGRAMME

ENERGYENERGYCONTENT:

B UkraINe PLaNs Its eNer-Gy EFFICIENT FUTURE

B INTEGRATION OF UPS OF UkRAINE INTO ENTSO-E

B MODERNISATION OF ThE UkRAINIAN GTS – PRIORI-TIzED

B UkRAINE: ONE yEAR IN ThE ENERGy COMMUNITy

June 2012

As for the new Work Plan the scope of activity of the ESBS Proj-ect was considerably expanded, namely: taking into consideration proposals of the Beneficiary, five new components were developed in addition to the initial five ones specified by the Project.

velopment of draft Declaration on Se-curity of Energy Supply and Position Document “Development of Process of Adaptation of Generally Accepted EU Standards in Ukraine”, etc.

Another extremely important news is that the preparation of tasks within the framework of the Second Energy Sector Budget Support Programme was started. Thus, the provision of technical assistance will continue. We are pleased to inform you that we will continue cooperation with our partners and provide them with all the necessary support for reforming the energy sector.

The ESBS Project will continue in-forming the public about its activities and the scheduled events. We invite you to participate in these events. keep up on our latest announcements on the Web site of the ESBS Project: www.esbs.kiev.ua.

ESBS Project Team

Page 2: Newsletter No 4 - ENG

2 Sector budget support programme

GrEEN PaPEr Of UkraiNE: MOdErN diSCOUrSE aBOUT fUTUrE

One of the main targets declared in the Energy Strat-egy of Ukraine up to 2030 is an increase in effectiveness of energy policy and “creating favourable conditions for future development of national economy and im-provement of living standards”. Ukraine has no detailed policy paper which would allow synchronizing current

status of the national en-ergy sector with existing possibilities taking into account the latest trends in the global energy sector

development.

Thus, in re-sponse to the request by the

main Beneficiary, the esBs Project experts prepared the draft Green Paper “Energy Policy of Sustainable development” and jointly with officials from the Min-istry of Energy and Coal Industry conducted a round table meeting to discuss it.

As the European Union is promoting the dissemina-tion of information on the best practice cases in energy sector, the Project’s expert Mr. Goumas opened the round table with the presentation of international expe-rience in drafting the White Paper on Energy Policy for Sustainable Development.

The participants noted an important shift in public opinion on the most efficient energy sources that could be used to meet the needs of society. It was emphasized that the task of energy experts is to find an optimal con-figuration of possibilities under the existing economic, environmental and social limitations. It becomes a com-plicated task during the development of energy policy.

Participants of the discussion identified three energy policy pivots, namely: competitiveness, sustainable de-velopment and security of supply which should form the basis for future planning. The Green Paper mainly fo-cused on sustainable development of energy sector of

On photo (from right to left)the authors of the Green Paper: Senior Consultant dr.Theodor Goumas (Greece) and ESBS Project Expert Victor Lir

Ukraine, which is undoubtedly linked to development of renewable energy sources and their availability on the market, strengthening the policy of energy efficiency and energy saving, combating climate change, and the respective area of scientific research.

Whether Ukraine will share the European system of values related to support of competition, sustainable development and security of supply will also depend on constructive discussions with all important partners on the energy market as well as on finding the optimal configuration of public-private partnership. the priorities should become the traditional energy sector, alternative energy sources and energy sav-ing policy.

The pro-posed Green Paper is a plat-form for key market players to discuss and elaborate com-ments to be con-sidered in the preparation of White Paper and the National Action Plan for energy efficiency and renewable energy sources which will be approved by Ukrainian authorities as a main ref-erence point for policy and actions on sustainable devel-opment of energy sector in the short and medium term. Moreover, there are reasons to believe that this document will make a useful input in the updating of the Energy Strategy of Ukraine up to 2030.

The event was attended by representatives of vari-ous departments of the Ministry of Energy and Coal In-dustry as well as the state agency of energy efficiency and Energy Saving of Ukraine.

To view the presentation materials prepared for this round table, please visit the Project ’s Web site: www.esbs.kiev.ua.

Green Papers are documents published by the

European Commission (EC) to stimulate discussion on given topics at European level and may give rise to legislative developments that are

then outlined in White Papers.

White Papersare documents containing propos-als of the European Union (EU)

action in a specific area. Once ap-proved by Parliament, the respec-

tive action programme for the EU in the said area is being developed.

Page 3: Newsletter No 4 - ENG

3Newsletter No4

We are pleased to inform that Business and Ener-gy English / Professional Skills Train ing Programme recommenced this February. After a several-months break, we welcome again the participants of the pro-gramme on their way toward fluent english and hence personal and professional growth.

This programme is based on successful experience of implementation and results of the first Business and Energy English / Professional Skills Train ing Pro-gramme. It turned out to be an effective instrument to build capacity for employees and managers of the rele-vant Ukrainian ministries and agencies. The programme facilitates the establishment of contacts between the specialists of various agencies who are involved in the implementation of sectoral budget support programmes and hence contributes to building up the potential for successful implementation of such programmes.

Business and Energy English / Professional Skills Train ing Programme is ex-tended!

About 30 of our good friends who took part in the programme since autumn 2010 decided to continue improving their language and professional skills to-gether with us. We also sincerely welcome 30 new participants who joined our educational programme and thus proved their aspiration for mastering English – language of international communication – that will undoubtedly contribute to cooperation of their institu-tions with international partners both within sectoral budget support and in the context of Ukraine’s further integration into the European community.

Traditionally, the new participants took a test to de-termine their English knowledge. Based on the results, one new elementary English group was formed. The remaining representatives of Ukrainian ministries and agencies who took part in the testing joined their col-leagues with higher English level who continue their education under the programmes arranged by the ESBS Project.

This time we decided to focus on beginners and those whose English is lower than intermediate. We be-lieve that the task of the programme is to give impetus to Ukrainian civil servants to learn a foreign language. knowledge gained during our classes will surely be-come the basis for further individual development and improvement.

We are confident that the second Business and En-ergy English / Professional Skills Train ing Programme will be as successful as the first one. We wish its par-ticipants inspiration and success in gaining knowledge, establishing contacts, professional development and career advancement. We believe that it makes a signifi-cant contribution to the capacity building of Ukrainian ministries and agencies for achieving the national tar-gets in the context of European integration and interna-tional cooperation.

On photo: BEEPS’ Participants study hard!

Page 4: Newsletter No 4 - ENG

4 Sector budget support programme

iNTEGraTiON Of UkraiNiaN UPS iNTO ENTSO-E

Ukraine, as well as system operators (Moldelectrica, Transelectrica and Ukrenergo) discussed the progress of technical research on possibilities of the synchronous interconnection of the Ukrainian and Moldovan power systems with ENTSO-E and established the following:

B Ninety percent of all expenses to be incurred by the European Neighbourhood Policy and the Partner-ship Program by CBC Romania–Ukraine–Republic of Moldova for 2007–2013. The remaining 10% of the project cost should be split between the minis-tries of the Republic of Moldova, Ukraine and Ro-mania.

B The Republic of Moldova will submit an applica-tion for funding on behalf of two other beneficiaries. Proposals were presented on 31 March 2011 to the Joint Steering Committee of the Joint Operational Programme which is located in the Ministry of Re-gional Development in Romania.

B The Steering Committee will be established consist-ing of representatives from ministries of the Repub-lic of Moldova, Ukraine and Romania, three system operators (Moldelectrica, Transelectrica and Ukren-ergo), ENTSO-E and the European Commission. The Steering Committee will be responsible for the monitoring of the project’s progress.

In May 2011, the joint application (brief description of the project) was adopted. In October, preparation of all necessary documents to receive funding for “2007–2013 Joint Operational Programme Romania–Ukraine–Moldova” started.

Currently, both sides are holding the necessary con-sultations and preparing financial documents to sign the contracts between the Moldovan Ministry of Economy and interested companies.

It is expected that these documents will be signed in the nearest future.

One of the priorities of the Ukrainian Energy Strat-egy is integration of Ukrainian UPS into the European Power Grid (ENTSO-E, which is a new name for the former UCTE).

This process has start-ed 3 May, 2006 when Ukraine and the Republic of Moldova sent a joint ap-plication for integration of Ukrainian UPS and Mol-dovan IPS as a single reg-ulating block to the syn-chronous zone of UCTE.

The UCTE Steering Committee decided to set up a project group Ukraine – Republic of Moldova/UCTE headed by the Transelectrica (Romania), which is composed of

representatives of UCTE member companies: CEPS (Czech Republic), APG (Austria), PSE-Operator (Po-land), MA VIR (hungary), SEPS (Slovakia), as well as the representatives of the UE and Moldelectrica. The Steering Committee also approved the draft Terms of Reference to Interconnection of Ukrainian and Moldo-van power systems to UCTE power system.

Interconnection procedure consists of three stages:Stage A – Drafting a agreement which will be

signed by UE / Moldelectrica and UCTE (ENTSO-E). It will include technical specifications and operational aspects, including the agreement between the UE and Moldelectrica on maintaining the control unit; separa-tion conditions, congestion regime; legal/regulatory framework. At this stage, the research should be con-ducted and reports should be produced. Based on the results of research, the requirements for full accession of the Ukrainian and Moldovan power systems to the UCte power grid should be specified (maximum term is 32 months);

Stage В – Implementation of agreement between Ukraine and the Republic of Moldova. During this stage, all technical and organizational actions should be taken in order to meet the standards under the UCTE User Guide. The stage will result in a report produced for the UCTE Steering Committee and preparation of requests to switch to stage C (date to be specified);

Stage С – Preparation and testing in a separate work mode and in a mode of connected power systems. Evaluation of test results. The next step should be test-ing using the synchronous interconnection of the area (within 26 months).

A number of meetings have been conducted includ-ing General Meetings during which the central execu-tive bodies of the Republic of Moldova, Romania and

igor VovkProject Expert on ENTSO-E

Page 5: Newsletter No 4 - ENG

5Newsletter No4

MOdErNiSaTiON Of ThE UkraiNiaN GTS – PriOriTizEd

Modernisation of the Ukrainian GTS will Strengthen the Energy Security of Europe

One of the largest components of the ESBS Project in terms of the scope of the planned tasks is Support to Meeting the Provisions of Protocol on Accession of Ukraine to the Energy Community Treaty. The ESBS Project provides consultancy support to the Ministry of Energy and Coal Industry of Ukraine with regard to meeting the obligations in the context of membership of Ukraine in the Energy Community. The functions of experts of the ESBS Project include providing support to specialists of the ministry which is the main Benefi-ciary of the ESBS Project in preparation of recommen-dations, studies, and policy briefs concerning imple-mentation of European acquis in energy as well as participation in events organized by the Energy Community.

On 23 March 2012, the 24th Permanent High Level Group Meeting of the Ener-gy Community Secretariat was held in Vienna, Aus-tria. Representatives of the Ministry of Energy and Coal Industry of Ukraine and the Energy Community expert of the ESBS Project participated in this event on behalf of Ukraine.

The issues discussed at the meeting includ-ed enhanced cooperation in the energy sec-tor between Ukraine and the European Union and implementation of infrastructure energy projects, in particular, modernization of the Ukrainian gas transportation system.

During the discussion of the draft Regional Energy Strategy of the Energy Community, the delegation of Ukraine made the presentation of func-tioning of the Ukrainian gas transportation system, its

significance for ensuring the energy security of the region and possibility of giving to its modernization the status of all-European prior-ity.

Based on the results of the meeting the European C o m m i s s i o n agreed with the conclusions of

the Ukrain-ian delega-tions that moderni-zation of the Ukrainian Gts and improving its efficiency will contribute to strengthening and support to

energy security of the region. Moreover, it was emphasized that modernization

of the Ukrainian GTS and uninter-rupted energy supply are impor-

tant factors for secure function-ing of the single gas market that can play a key role in the implementation of the Energy Community Gas Ring concept (Source: Item 18 of the Conclu-

sions of the 24th PHLG meeting of 23 March 2012).Participants also noted the sig-

nificance of the Ukrainian Gts that has to be taken into account while setting the

objectives of the Regional Energy Strategy in the con-text of energy security of the EU and Energy Com-munity countries.

Furthermore, the Euro-pean Commission, EBRD and the World Bank con-firmed their support to modernization of the Ukrainian GTS and the fact that the EC set an objective to rehabilitate such GTS by 2020 (Source: Items 19, 20 of the Conclusions of the 24th PHLG meeting of 23 March 2012).

“Gas Ring” definition also includes the resource base and

possibility to control the entire gas system and regulate it in case of a

crisis or a threat to security of supply.

The Energy Community Gas

Ring Concept is a joint development of the gas infrastructure both at

the national level of the contracting parties and at the level of connections to

gas pipelines.

Nataliya BoytsunDirector of the Department for European Integration and International Cooperation, MoECI

Page 6: Newsletter No 4 - ENG

6 Sector budget support programme

ThE firST YEar Of UkraiNE’S MEMBErShiP iN ThE ENErGY COMMUNiTY TrEaTY

On 1 February 2011, Ukraine ac-quired the official status of the full Con-tracting Party of the Energy Communi-ty. Thus, Ukraine undertook to follow the main directions for the development of all-European energy market and to meet the requirements of the respective laws and regulations in the energy sec-tor that also include environmental pro-

t e c t i o n , e n e r g y efficien-cy and re-newable e n e r g y sources.

T h e status of the full Contract-ing Party

of the En-ergy Com-m u n i t y

treaty for Ukraine is, first of all, the main instrument of the European inte-gration which facilitates considerable deepening of participation of Ukraine in the development of common single energy and foreign trade policy both within the Energy Community and with countries of the European Union in general.

After its accession to the Energy Community, Ukraine gradually be-comes one of the main players in the development of the single all-European energy environment due to its powerful and developed fuel and energy sector and favourable geographical location.

For the past year, Ukraine had been actively taking measures aimed at re-forming the domestic energy sector, and the country already achieved cer-tain results in this area. In particular, the following documents are developed:

Plan for implementation of the Di-rective 2001/77/EC on the promotion of electricity from renewable energy

sources in the internal electricity mar-ket;

Plan for implementation of the Di-rective 2003/30/EC on the promotion of the use of biofuels and other renew-able fuels for transport.

National Action Plan on energy ef-ficiency is being finalised.

Drafting of the Laws “On Prin-ciples of Functioning of Electricity Market in Ukraine” and “On efficient Usage of Energy Resources” is close to completion.

A number of by-laws and action plans for harmonization of energy leg-islation which comply with the main EU regulations were drafted and ad-opted.

The past year saw active measures concerning the preparation to transition from a “single buyer” market model to the model compliant with the target regional electricity market model that envisages direct contracts with gradual opening of this market to eligible cus-tomers. Moreover, the Government of Ukraine commenced the process of re-forming the National Joint-Stock Com-pany “Naftogaz of Ukraine” to attract investments in its subsidiaries.

All these measures are part of considerable work for implementation of provisions of the so-called Second EU Energy Package and obligations of Ukraine stipulated in the Protocol on Accession of Ukraine to the Energy Community Treaty.

It is necessary to emphasize that while Ukraine’s accession to the Ener-gy Community opened new prospects, it also caused considerable responsibil-ity for reforming the domestic energy sector. Adoption of laws alone is not a final point of activities of the Contract-ing Parties of the Energy Community. An example may be the work associat-ed with the implementation by Ukraine of Directive 2001/80/EC related to large combustion plants, a number of provisions of which are currently put

into effect by instructions, and from the legal point of view they are, in general, harmonized. however, technical imple-mentation of provisions of this Direc-tive requires a lot of funds and time.

Both electricity and gas sectors deal with similar problems. For exam-ple, the main part of the power system in Ukraine is not yet connected to ENT-SO-E synchronous zone that makes im-possible actual integration of the Ukrai-nian electricity market into the regional market of South-Eastern Europe (syn-chronization will require considerable financing).

The countries of the Energy Com-munity are closely linked with energy policy of the European Union, as they are members of its network, mainly through development and integration of regional market as well as infra-structure development. In this context, the energy Community is influenced by energy strategies and plans approved in the European Union, in particular, in terms of integration of electricity and gas infrastructures as well as develop-ment of renewable energy. One of the priorities of the single European en-ergy market is increased productivity of transmission between the countries of South East Europe, including those countries that are the Contracting Par-ties of the Energy Community Treaty in view of their further integration into en-ergy markets of Central European coun-tries. Two energy corridors considered as the priorities for development of the EU energy infrastructure (gas corridors “North–South” in Central Europe and “South–East”) are focused exactly on the integration of the Energy Commu-nity into the EU gas market.

Oleksii ShevchenkoProject expert on Energy Community

Page 7: Newsletter No 4 - ENG

7Newsletter No4

To achieve the main objectives of the European energy strategy and to develop the single all-European energy market by 2015, the European Union cannot leave without support the en-ergy infrastructure projects beyond its boundaries as development of energy market of EU countries is impossible without development of energy mar-kets of countries of South East Europe.

keeping in mind the experience in the implementation of the Second Energy Package, the proposals of the Contracting Parties regarding the for-mulation of general vision of Regional Action Plan related to integration of the Energy Community markets are being developed. In mutual opinion of the ESBS Project and the Ministry of Ener-gy and Coal Indusry of Ukaine, several key issues must be taken into account:

There is a need in the technical and financial support from the european Commission and european financial in-stitutions to reform the existing energy markets of all Contracting Parties.

Considering the potential of Ukrai-nian electricity, oil and gas sectors and their importance both for the Energy Community and functioning of a single all-European energy market, special attention should be paid to identifica-tion and selection of certain investment projects which could receive the status of “projects of all-european signifi-cance”.

Support to modernization of the Ukrainian gas transport system by Eu-ropean partners and european financial institutions will contribute to reliabil-ity and uninterruptible supply of natu-ral gas to European Union countries, strengthening of regional gas market and achieving the objectives of the all-European energy strategy.

Aiming at taking into consideration the social issues, first of all, affordabil-ity of energy resources, especially to vulnerable consumers categories dur-ing the transition period of setting up the single energy market, Ukraine, on 4 October 2011 in Chisinau, Moldova, during the 4th Social Forum of the En-ergy Community, joined the Memoran-dum of understanding related to social

issues in the context of the Energy Community. The said Memorandum specifies the political intentions of sig-natories to take into account the social aspect as well as outlines the main principles and highlights the key points for social dialogue in the energy sector both at national and local levels. Thus Ukraine confirmed its intention to take necessary measures to address the most serious social consequences related to meeting the requirements of the Energy Community Treaty.

It is envisaged that the first con-clusions regarding Ukraine’s member-ship in the Energy Community will be summarized in annual Implemen-tation Report of the Energy Commu-nity. But, in general, according to the Energy Community Secretariat, the first year of Ukraine’s membership in the Energy Community demonstrated positive changes toward reforming the Ukrainian energy sector and meeting the obligations assumed by Ukraine. Just within one year, Ukraine achieved considerable results in several areas compared to other Contracting Parties

(requirements of Articles 22 and 29 of the Energy Community Treaty were met; Action Plans for implementation of Directives 1999/32/ЕС, 2001/77/ЕЕС, 2003/30/ЕС were drafted; draft-ing of the National energy efficiency Action Plan is being completed; num-ber of by-laws for the implementation of acquis requirements on supply secu-rity in electricity and gas sectors were drafted).

For the Ukrainian part, the ac-tivities within the Energy Community framework mean an actual start of im-plementation of concept of sectoral in-tegration of Ukraine into the EU which was incorporated in the Association Agreement.

Undoubtedly, introduction of pro-visions of the European energy legis-lation will facilitate creation of market conditions in fuel and energy sector of Ukraine that will positively influence upon attraction of investments to ex-pand capacities and improve the exist-ing energy infrastructure and further in-tegration of Ukrainian power networks into the European power system.

Protecting consumers, as the best practices of the EU will be implemented in the legal regulation of the energy sector

Improving reliability of energy supply at reasonable tariffs within a single market and on competitive basis

Creating conditions for attracting new investments into the Ukrainian energy sector

Establishing a framework for lowering the energy intensity of the national economy

Improving the ecological dimension of the energy sector and promotes introduction of energy-efficient production in industries.

Strengthening the geopolitical role of Ukraine as a key player in providing energy security in the single European market.

Promoting the creation of a single regulatory area for energy trade.

Ensuring the highest possible levels of social protection for vulnerable consumers compatible with a sustainable and competitive market and contributes to implementing safeguards that limit the impact of social and economic change on specific sections of society.

Stimulating technical assistance and expertise provided by the EU and other donors.

Providing better quality of services and possibility to choose suppliers of energy products for all domestic consumers.

Membership of UKRAINE in the Energy Community Treaty Is about:

Page 8: Newsletter No 4 - ENG

8 Sector budget support programme

‘COMPLEMENTarY TEChNiCaL aSSiSTaNCE TO ThE EU-fUNdEd BUdGET SUPPOrT

TO UkraiNE’S ENErGY STraTEGY iMPLEMENTaTiON’ PrOJECT

48a, Volodymyrska street, Office 23,01601, kyiv, Ukraine

Tel.: +38 (044) 234 90 68Fax.: +38 (044) 234 90 78E-mail: [email protected]

Web site: http://www.esbs.kiev.ua

UkraiNE PLaNS iTS ENErGY EffiCiENT fUTUrE

Methodological recommendations on draft-ing the National Energy Efficiency Action Plan for 2012–2020 were prepared in accordance with three EC Directives:

EC Directive on energy end-use effi-ciency and energy services;EC Directive on the energy perfor-mance of buildings; EC Directive on labelling of energy related products.

In the context of fulfillment of the Project Compo-nent Providing Support to the State Agency for Energy Efficiency and Energy Conservation, from August 2011 to February 2012 the Project experts had been provid-ing the methodological support to SAEE as regards drafting the 2012–2020 National Energy Efficiency action Plan (NEEaP).

In accordance with the definition set forth in Direc-tive on energy end-Use efficiency and energy servic-es, to calculate the planned energy efficiency targets, all states must use the data on the total energy consump-tion for the last five years prior to the implementation of the Directive. The member states should take eco-nomic, practical and substantiated measures to speed up achievement of this target.

The ESBS Project involved CRES professionals (Greece) as well as Ukrainian experts in providing sup-port to the SAEE. The activities related to preparation of recommendations were carried out in two stages.

the first stage focused on preparatory work related to drafting NEEaP recommendation document. It in-cluded the review and analysis of regulatory and legal framework that regulates the issues of energy efficien-cy, guidelines/technical characteristics to prepare the NEEAP in accordance with the Directive on energy ser-vices, guidelines to adapt the model of energy planning of Ukraine in order to use their results when assessing the energy efficient scenarios as well as determining

and collecting the aggregate and individual data which are necessary to set the national energy efficiency tar-get and to launch the national energy planning model.

The second stage included the very activities re-lated to drafting 2012–2020 NEEaP recommendation document in accordance with technical characteristics identified during the implementation of the first stage and was split into five sub-groups:

B Calculation of the 2020 National Energy Ef-ficiency target according to the Energy Saving Directive.

B Adaptation of the national energy planning model (TIMES) aimed at further use thereof for the assessment of energy efficiency scenarios.

B Analysis of scenarios and forecast of the final energy consumption.

B Measures and policies to achieve energy saving targets.

B Summary of NEEAP recommendation document.

At this moment, National Energy Efficiency Ac-tion Plan for 2012–2020 is being drafted.

EdiTOrS:

angel Minev, Project team Leader

Svitlana atamanenko,ESBS Project Information/Communication Expert