Elena Rybak

Energy Development – Compatibility with Social Expectations, Energy Reforms and Public Perceptions

BLACK SEA ECONOMIC FORUM Yalta, 4-5 October 2012

EUEA - a non-profit Association founded in Kyiv in 2009

Goals to establish :

• a solid platform for promoting EE &RE

• market mechanisms for sustainable development

About EUEA

EUEA Business

NGOsGovernment

Priority Sectors

1. Energy efficiency

buildings

district heating

heavy industry

waste-to-energy

2. Bioenergy

biogas

biomass

3. Wind energy

4. Solar energy

5. Hydropower

6. Grid Sustainability

7. Energy Community

8. Project Financing

Working groups

Members

Members

Consumers

• Reliable Service

• Security

One day… Comfort of living!!!

Business

• Long term stability

• transparency • attractive invest.

climate • Prosperity of

local communities

NGOs

• Sust. dev. of communities

• Reforms• Environment

Energy Development: Stakeholders

Media

• Scandal• Crisis• problems… But also: • Expertise • Information

Government

• Market transparency

• Social dialogue

• Fair rules of “the game”

• Functioning legal framework

Cooperation will achieve results

ConsumersBusinessNGOsMediaGovernment

COOPERATION

Meet Social Expectations

Achieve Energy Reforms

Increase Public Perceptions

Lets go on a short journey…

Germany

“Energy Turnaround” of Germany:

• 80% RE until 2050 (10% in primary energy consumption in 2011).

• First with Feed in tariff legislation

• Allocated budget amounts 1.3 bln. Euro for research

• Total investments: approx. 22.9 bln. EUR

• Employment in RE sector increase from 180 thous. in 2004 to 380 thous. In 2011.

 

Australia

• RE share in electricity 20% by 2020

• The early "romance with renewables“ vs. concerns about the costs (no more tolerance to subsidies)

• Average household retail energy bill of more than 1600 euro per annum

• Still, broad support of the population

• Lessons learnt: caution towards cumulative impact of policy interventions on retail energy prices!

Ukraine

• Third most energy intensive country (beaten by Turkmenistan and Russia)

• First EE talk appearing in 2006 and FiT 2009

• Country with an average salary of less than 300 EUR

• Smallest electricity tariffs in former Soviet Union of 3,69 dollar cents per kw\h (vs. Russia – 7,27 dollar cent, Moldova 12,6).

Solar FiT – close to euro 0,50 cents.

UAH 8 bln. Already invested in solar energy

Perovo plant 105 MW the largest PV plant in the world at the time of commissioning.

Wind can bring…

Data from just 4 international developers:

• Pipeline: 2,150 MW • Capital Requirement:  EURO 3,310,000,000• Tax Payments: EURO 3,501,480,000• Employment:   

Temporary: 1,800

Permanent:  395• Social Infrastructure:     EURO 23,420,000

Ukraine

Estimates:

In order to increase efficiency by 50% (up to 2030) – USD 1 bln. Investments needed yearly (World Bank estimate)

EE in Housing stock requires USD 15 bln. during 10-15 years. (IFC estimate)

Heat and power network modernization requires USD 12 bln. (experts estimate)

Reality is…

• Totally “questionable” draft of New Energy Strategy until 2030

• Local content requirement – key barrier for Wind and Solar

• Biomass potential (est. 15% in the Energy Balance) - subject to “semi-illegal” long term contracts

• Draft law on amendments to Tax Code – cancellation of tax benefits of RE

• EE projects subjects to enormous corruption and bureaucracy!

» Years to get permissions vs. months to implement

» Crucial laws take years for development

• Land, connection, changeable rules…

“Investors, please come!”

Risks are too big…2006 Alchevsk winter …

• 60,000 people left without heat (for 2 – 4 weeks)• At least 206 people dead… (- 35 C)

Government HAS to deliver:

• Stability • Legal framework• Market Transparency • Fair rules of the game for

everyone

REQUIRED constructive dialogue with civil society, business and consumers!

MEDIA is a tool for public perceptions and energy reform.

Thank You!

Elena Rybak Director, European-Ukrainian Energy Agency

elena.rybak@euea-energyagency.org

www.euea-energyagency.org