IEA for EU4Energy Policy Forum on energy subsidies taking place in Kyrgyzstan
27 June 2018
IEA for EU4Energy is holding a three-day Policy Forum in Issyk Kul, Kyrgyzstan from 26-28 June, focusing on energy security and energy subsidies. The forum will cover energy demand restraint programmes, fuel switching, response mechanisms, and energy access.
The forum is being attended by over 80 participants, including officials and experts from 10 IEA EU4Energy countries (Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Ukraine and Uzbekistan).
The aim is to promote policy discussion on energy subsidies and, in particular, to address government practices that set energy prices and subsidise different forms of energy, thereby discouraging investment in the sector and preventing energy system self-sufficiency.
This is a particular issue in the 11 EU4Energy countries, where energy subsidies often create pricing structures that are below cost-recovery levels. This hinders the energy sector’s ability to generate adequate financial resources and to maintain infrastructure at the necessary technical standards. As a consequence, aging infrastructure is in many cases in urgent need of upgrades.
Yet when upgrade programmes are carried out, they are often part of government-guaranteed long-term loans from international financial institutions. This puts even more pressure on the high levels of public finances.
Discussions during the forum will address these challenges and will consider pathways to reach fully cost-reflective tariffs that also allow for planned capital investment.
They will also consider best practice examples on the gradual phase-out of subsidies and exchange information on tariff methodologies for electricity and heat tariffs in EU4Energy countries.
The forum will also cover the development of emergency response mechanisms to address recurrent or other prolonged energy supply shortages. Particular focus will be placed on demand restraint management and the need for oversight by the authorities.
Statisticians from 10 different countries are playing a key role in the event, in line with the EU4Energy programme’s core objective of promoting evidence-based policy making. The IEA energy data team has put together an interactive programme of exercises to help non data specialists to increase the use the data in decision making.
The IEA is leading the implementation of the EU4Energy Programme funded by the European Union (EU) for the following Eastern Partnership (EaP) and Central Asian countries: Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Ukraine and Uzbekistan.
The programme’s aim is to work with these countries to improve energy data capabilities and enhance data collection and monitoring, and assist them in evidence-based energy policy design relevant to the country’s needs.