Ukraine

Ukraine remains heavily reliant on gas and oil product imports. It is a key transit country for Russian gas exports to Europe. Recent economic crises, the closure of Russia's market, and escalation of the conflict in eastern Ukraine put downward pressure on growth, but the country’s GDP has seen an increase over the past few years. While energy policy has incentivized investment in renewables, possible policy reform reversals could impede further development. Since 2015, Ukraine has prioritized the reduction of natural gas subsidies in addition to diversifying energy supply. Ukraine is a part of the EU4Energy Programme, which focuses on evidence-based policy making for the energy sector.

Ukraine

Key energy statistics

Key recommendations, 2015

  • Enhance domestic oil and gas production

    Boost upstream sector developments by elaborating clear, transparent and fair procedures for tendering existing and new blocks for upstream oil and gas development, including fiscal incentives for enhanced recovery and development of depleted fields. Remove dual pricing for domestically produced gas and ensure taxation, regulatory stability and clarity merit investor confidence. Rapidly prepare new tenders for new blocks.

  • Intensify measures for maximising energy efficiency gains

    Encourage the reduction of energy use in housing and transport sectors. Employ widespread information campaigns on energy efficiency benefits and existing opportunities on energy efficiency technology deployment. Empower home-owner associations, strengthen energy management, application of energy consumption labelling and appliance standards, and implementation of building codes; impose mandatory energy audits for the public and industrial sectors which are conducive to investments.

  • Enhance energy efficiency in the building sector

    Enhance demand-side data collection and develop energy efficiency indicators to measure consumption, as well as aid in policy design and tracking progress. Develop mechanisms that can rapidly ensure the deployment of building-level metering and regulation stations.

  • Boost the development of Ukraine’s renewable potential

    Adapt green tariffs to reduce deployment costs. Streamline licensing procedures and ensure local content requirement compliance with the Energy Community Treaty undertakings. Revise the fiscal incentives scheme for various solar technologies, to encourage their wider deployment for household energy and water heating needs. Revise the regulatory regime for biomass use and develop green tariffs or fiscal incentive schemes. Develop the country’s biogas potential and utilise agricultural waste potential for energy transformation/use. Accelerate the development of small hydro potential and the instalment of additional large hydro accumulation projects on the Dnestr river.

  • Foster energy security

    Develop emergency response mechanisms for energy supply shortages with a clear indication of the priorities for demand restraint management and authorities in charge of overseeing the process.

Policies

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