The Civic Synergy Project aims at strengthening public participation in the implementation of European integration reforms in Ukraine through enhancing activities of two pro-European Platforms:

Project is funded by the European Union and the International Renaissance Foundation (IRF) and implemented by the IRF’s European Program Initiative

08-02-2019
iconPolicy Analysis, Advocacy and Stakeholder Dialogue
Energy sector

How to overcome energy poverty in Ukraine: 7 key propositions by experts (video)

On 7 Feb, the next day after the Government of Ukraine approved monetization of utility subsidies, the Civic Synergy project, the Ukrainian Side of the EU-Ukraine Civil Society Platform, the project ‘Enhancing impact of civil society in monitoring and policy dialogue on energy and related sectors’ reforms in line with the Association Agreement implementation’, and the Trade Unions’ Federation of Ukraine held a round table for stakeholder. The event was organised for the participants to present their vision of how Ukraine could continue its transition to market-type relations in the energy sector while taking into account the situation of people for whom market prices of utilities were unaffordable. Summarised below are key propositions voiced during the discussion followed by a video:

  1. Monetization of subsidies is a positive step that will motivate people to economise

The possibility to use the saved money at their discretion will change the consumption behaviour of subsidy recipients and encourage them to take energy efficiency measures and prudently use resources.

  1. Subsidies are better than low prices for all since taxpayers’ money will support only those who really need the assistance

Low prices might seem to be a protection mechanism but they equally ‘protect’ both the haves and the have-nots. The mechanism of subsidies is simple in administration and understandable to people.

  1. Vulnerable consumers should be clearly identified, and a reliable verification mechanism set up

Any measures aimed at overcoming energy poverty take public money that could have been spent on other things. The more effectively this money is used, given to people who really need assistance, the more efficiently the whole system works.

  1. There should be more incentives for energy efficiency

As a consequence of losses in networks, lack of metering and obsolete housing stock, natural gas consumption in Ukraine is sometimes twice that in the EU, and heat consumption, 60% higher than the EU average. At the same time, Ukraine channels UAH 70 billion directly to recipients of utility subsidies, whereas it spends only a bit more than UAH 1 billion on energy efficiency measures that would allow saving in next years. Energy efficiency is a sustainable solution that will result in energy poverty reduction in the long run.

  1. The consumer should pay only for actually consumed utilities. So far, it is not possible for all

About 3.5 million Ukrainian consumers of natural gas in apartment houses do not have gas meters, which must be installed by their service provider in accordance with the law. The latter do not comply because it is easier to write off losses when the consumption is not metered.

  1. Racking tariffs are not an exclusively Ukrainian problem

Presently, about 57 million people in the EU cannot afford to heat their homes during the wintertime up to a comfortable temperature; 52 million fail to pay in time for energy services; and 87 million reside in inadequate housing. The elderly and families with only one breadwinner are the most vulnerable categories.

  1. Sharing information and experience among stakeholders is useful

On an initiative of the European Commission, an EU Energy Poverty Observatory was established as a platform for all stakeholders to share information and best practices. It would be worthwhile for Ukraine to use this data and tell people about successful cases in energy efficiency. A communication campaign could also have a great role, just showing people examples of houses where residents took right energy efficiency measures and now pay half of what they paid earlier.

Source: Ukraine Crisis Media Center.

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