Ukraine in the Energy Community: independent assessment

Implementation of the Energy Community acquis as the way to enhance Ukrainian and European energy security

Vienna, 24.11.2014

This document has been produced with the financial assistance of the European Union, in the framework of the project "Improving implementation of Ukraine’s commitments within the Energy Community through enhancing impact of civil society", implemented by the DiXi Group think tank jointly with the Resource & Analysis Center "Society and Environment".The contents of this document are the sole responsibility of NGO "DiXi Group" and can under no circumstances be regarded as reflecting the position of the European Union.

Report findingsEnergy security

policyGas marketOther acquis

Report findings

Clear commitment (Association Agreement, Third Energy Package by 2015)

Political will is not sufficient (low competition, less transparency)

Framework laws to be improved, specific actions plans developed

Implementation in priority areas should include internal and external control from the stakeholders

Support of those responsible (mid level officials)

Energy security policy

pressure of gas and coal supply crises (Crisis Energy Office)short-time solutions (early warning mechanism, "winter package", imports from other sources)substitution creates stress for energy systems, forces restrictions in gas and electricity tradelong-term solutions (diversification, demand management) on early stages and require investmentadministrative "management" vs market instruments

Gas market

recommendations of the EU stress tests ignoredinstead – temporary return to administrative-based monopoly (CoM Resolutions No. 596 and 599)

unbundling of Naftogaz and distribution companies to be formal actual liberalization seen as post-crisis target

entry/exit system for TSO, gas exchange - positive stepspossible options for restart - new Gas Law, single wholesale price

Other acquis

Oil/petroleum stocks: mid 2015 as deadline for framework law; smaller fuel stocks (20-days consumption) could be an option, subject to appropriate funding mechanismStatistics: prices/tariffs reporting in process (new forms), as depends on data transfer from regulatory authority; no public reports on the ESAP availableCompetition: Law on State Aid to take effect in 2017, the AMC capacity should be increased; gas supply companies to be inspected

Thank you for attention!

Roman Nitsovychromnits@dixigroup.orgenref.org