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Konstiantyn Hura:
Ukraine will benefit from participating in the European «green» course
What are the country's advantages from the energy transition?

Ukraine's transition to the use of renewable energy sources and alternative fuels will address a number of policy issues. In particular, it will ensure energy independence and stability, development of the domestic energy market through the use of local fuels, growth of economic indicators, improvement of the environmental situation, reduction of greenhouse gas emissions, creation of additional jobs, growth of budget revenues at all levels, reduction of heating costs, national, ecological, economic and energy security of Ukraine, as well as reducing risks to health and life of people and natural ecosystems.

All this will contribute to increasing Ukraine's rating on the world stage and
strengthening the economy of our country!


What can accelerate the movement to the energy transition? Will encouragement or punishment help?


The first condition should be a clear definition of goals and strategic directions for ensuring the energy transition, as well as strengthening the existing and creating new tools for its implementation.

Ukraine has great potential for energy efficiency and renewable energy and plans to launch a number of tools for sustainable development. On the way to achieving the set goals, it is important to develop an appropriate legislative basis, as well as the effective implementation of the existing mechanisms. I will enumerate the most important results of our activity. A law has been passed to introduce «green» bonds in Ukraine and a sub legislative law has already been prepared for the development of this market, amounting to 36 billion euros by 2030. A basic draft law on energy efficiency in Ukraine has been developed and is expected to be adopted. A draft law on the establishment of the Decarbonization Fund has been developed and is expected to be adopted, which is a guaranteed source of funding for energy efficiency and CO2 reduction measures with an annual volume of UAH 1.35 billion, and the potential for attracting investments to the market is UAH 4.7 billion. Bills have been developed to restore and improve the mechanism of energy service in the budget, utilities and energy, the potential of this market is approximately 8 billion euros. A whole package of bills has been developed to intensify bioenergy. Its
potential is about 37 billion m3 of gas per year. Thanks to bioenergy, we can completely abandon gas imports. The Concept of a new state target program for 2022-2026 has been prepared, which provides state support for the implementation of energy efficiency measures and the use of renewable energy sources in various sectors (households, enterprises, ESCOs, electricity charging infrastructure, biogas
and others; volume of financing – UAH 10 billion). Together with the Ministry of Energy and UNECE, a concept and roadmap for the development of hydrogen energy is being developed. An Interactive map of «green» projects in Ukraine –
UAMAP has been introduced, where 220 potential projects worth a total of 5 billion euros and 160 implemented projects have been placed. International cooperation
has been established with UNIDO, GIZ, UNECE, IFC, DENA, DBDH, etc.


Any changes occur in the triangle of government – business – civil society.
Ideally, what should the interaction between the government, business
and society be like, so that the energy transition takes place as quickly as possible?

We completely agree with this thesis. Without the mobilization of these three components, it is simply impossible to achieve results in the fight against climate change, in particular through the development of renewable energy and energy
efficiency.
An example of successful cooperation is the implementation of the Energy Service Mechanism (ESCO) in Ukraine – it is the attraction of private investment for the implementation of energy efficiency measures in state-funded institutions
– schools, kindergartens, hospitals. As of today, local and central authorities have concluded about 550 ESCO agreements in the total amount of more than
UAH 1.25 billion. The mechanism is to attract private ESCOs to insulate social facilities, and the return on investment is solely due to energy savings resulting from
the implemented energy efficiency measures. Such a mechanism cannot be implemented without a partnership between the state and business, thanks to which
both parties will benefit in the most effective way.
This example of , in fact, public- private partnership, is an important signal of the readiness to engage more business, in particular to achieve the goals of the energy
transition. Equally important is the consolidation of efforts and dialogue between the government, business and the public in the development and adoption of new legislative initiatives. After all, it is the analysis of different views and the search for common solutions that allow us to form an effective, transparent legal framework with clear rules in which energy efficiency and clean energy projects will develop for the benefit of the country, the economy and consumers. Therefore, in our work
we adhere to this principle and are open to partnership.


THE KEY ACTIVITIES OF UKRAINE'S ENERGY TRANSITION ARE:
Determining the share of energy produced from
renewable sources in final energy consumption
by 2030;
Approved Long-term Strategy of Thermal
Modernization of the National Fund of Buildings
for the period up to 2030;
Developing the concept of production and use
of «green» hydrogen by 2050;
Development and implementation of a new state target energy efficiency program for 2022- 2026, which will provide for the implementation of a number of traditional and new areas to promote energy efficiency measures in the residential sector, public buildings, industry and transport;
Adoption of a National Energy Efficiency Action Plan for the period up to 2030, setting appropriate ambitious national goals and intermediate objectives. According to preliminary estimates, the implementation of the draft National Action Plan on Energy Efficiency will require financial resources (from all sources) of about 56 billion euros;
Creation of a separate state decarbonization
fund, which will be replenished at the expense
of revenues from the tax on carbon dioxide
emissions and the funds of which will be directed
exclusively to energy-efficient measures and
measures to reduce greenhouse gas emissions;
Support for the development of the energy service mechanism, which allows to attract investments in energy efficiency with ensuring their return due to the achieved energy savings. Extension of the mechanism, in particular to heat supply, water supply and sewerage sectors, distribution of natural gas and electricity;
Large-scale thermal modernization of buildings
to achieve specific energy consumption per
square meter of the EU average. It is necessary
to continue the implementation of EU Directive
2010/31/EU and the practical implementation
of the Law of Ukraine «On Energy Efficiency
of Buildings» and the Law of Ukraine «On
Commercial Accounting for Heat and Water»,
which provides, inter alia:
- ensuring full commercial energy accounting;
- certification of energy efficiency of buildings;
- stimulating the introduction of energy monitoring
/ energy management systems, etc.;

Introduction of requirements for ecodesign and energy labeling (in particular for the development
of tools for the introduction of «green» criteria for evaluating public procurement);
Completion of the implementation of European
energy efficiency legislation (Directive 20212/27
/ EU).
Any major changes need the resources for implementation. Where can the country get the resources to ensure the energy transition?

We have great internal potential,
and we can count on joining global
initiatives and instruments for
financing the energy transition
in the future. Private capital, as
already mentioned, is a key partner
in achieving the goals of the energy
transition.
The strategic decision should be
to ensure a stable source of public
funding for energy efficiency.
The Ministry of Energy together
with the State Agency on Energy
Efficiency and Energy Saving
of Ukraine and the Ukrainian-
Danish Energy Center initiated the
creation of the Decarbonization
Fund – a mechanism for attracting
contributions from the CO2
emissions payment for the
targeted use of funds for measures
to reduce these emissions. An
example of the establishment of the
Fund is the experience of leading
countries: Finland, Denmark, Great
Britain, Sweden.

It illustrates that the mechanism of targeted use of these tax funds stimulates the
rational use of energy, helps to optimize production processes and implement energy efficiency measures. The fund will create a guaranteed source of funding of
UAH 1.35 billion per year from the state budget for energy efficiency purposes. The relevant draft law has already been registered in the parliament.

In addition, our initiative is to launch «green» bonds in Ukraine. Step by step, together with the National Securities and Stock Market Commission of Ukraine and
international partners, we are laying the legal foundation for «green» bonds. The law has already been adopted, the bylaws have been prepared, and at the same time pilot projects are being sought for their release. We concentrate on municipal «green» bonds, and the State Agency on Energy Efficiency and Energy Saving of Ukraine will be responsible for their verification. For example, each municipality
can develop a local energy efficiency program and issue green bonds to implement it. Thus, it is possible to invest in the insulation of kindergartens, hospitals, in
the modernization of district heating facilities, etc. In general, according to the International Finance Corporation (IFC), the potential of the Ukrainian market
of energy efficiency and «clean» energy by 2030 – $73 billion. Half of them – $36 billion – can be raised through the issuance of «green» bonds. After all, such an
issue will attract «green» funding at an affordable cost and stimulate the socio-economic development of the regions. Communities can benefit from a number of points, including reducing energy consumption and cost savings, reducing CO2
emissions and improving the environment, disseminating green technologies in both the short and long term, boosting economic processes, business operations,
including in related industries, and ensure revenues to the budgets of different levels, increase employment, improve investment attractiveness and competitiveness of local communities, positively affect the quality of citizens' lives in general.

Speaking of renewable energy sources – is there any reasonable hope that they will keep developing in Ukraine?

Of course, there is hope. Even more – goals, aspirations, plans and initiatives. After all, the whole world is no longer thinking about whether a «green» transition is
needed, but is working on the most efficient ways of this transition.

This is also clearly shown by statistics. A record $501.3 billion has been allocated worldwide for decarbonization in 2020. This is 9% more than the previous year,
despite all the economic difficulties caused by the pandemic. 10 years ago, in 2010, this amount was $235.4 billion. This is stated in the report by BloombergNEF «2021 Energy Transition Investment Trends». It is important that we are talking not only about investments in renewable energy, but also the development of energy efficiency, reduction of CO2 emissions and more.

The use of «clean» energy is the future we are creating today. And this process cannot be stopped. Despite the difficulties of different nature, the need of communities for projects on energy efficiency, renewable energy, ecology remains
and must be met.


What is the plan for this year – what should happen on the way to
our energy transition?

This year it is important to bring to a logical conclusion the work on legislative initiatives, in particular, to come to agreement with interested bodies and submit to the Verkhovna Rada of Ukraine a number of bills on introduction of a transparent
market mechanism of solid biofuel trade, stimulation of energy crops, development of the biomethane market, establishment of a zero tax on CO2 emissions for biofuels.

We also expect a number of bills to be adopted by the Verkhovna Rada of Ukraine. «On Energy Efficiency» – should establish new framework conditions for the development of energy efficiency in Ukraine, implement the relevant EU Directive
and replace the outdated Law of Ukraine «On Energy Conservation» dated 1994. Draft Law on the Mandatory Use of Liquid Biofuels (Biocomponents) in the Transport
Industry (Reg. № 3356-d dated November 5, 2020) provides for the development of the production, circulation and use of liquid biofuels in transport. Its adoption will help reduce energy dependence, in particular on oil and petroleum products, whose imports in 2019 amounted to about $ 5.7 billion. And the bill on the development of highly efficient cogeneration (registered №4527 dated December 21, 2020). Its adoption will create conditions for the development of highly efficient cogeneration in Ukraine in compliance with the principles and provisions of European Union law.

Furthermore, we are planning to submit to the government a draft of a new National Energy Efficiency Action Plan until 2030, developed jointly with the Secretariat of the Energy Community. We will join the best practices of an integrated climate and energy plan.

From 2022 on, it is planned to launch a new 5-year targeted program on energy efficiency, which will cover not only the household sector. Currently, together with the Ministry of Energy, a draft Concept of a new state target program for energy efficiency and development of «green» energy for the next 5-year period (2022-2026) has been prepared. The adoption of a new target program this year is critical.

Apparently, in 2021 we continued the popular and requested among citizens program of state support «Warm Loans», in particular, for individual homes. The
«Energodim» program of the Energy Efficiency Fund works for housing
cooperatives.

How can ordinary people contribute to the country's energy transition?

In fact, the success of our energy transition will depend on the behavior of each citizen. I want to draw attention to the condition of our residential buildings. The
household sector remains one of the largest energy consumers. This, of course, is reflected in utility bills. The introduction of a set of energy efficient measures makes it possible to reduce consumer spending on energy resources by up to 50% and even more. This is evidenced by the experience of participants in the program «Warm Loans». More than 850,000 families invested UAH 8.5 billion in energy
efficiency measures, and the state returned UAH 3.3 billion. Thanks to participation in the program, they now save money on utility bills and have comfortable living conditions.

Therefore, every conscious citizen should pay attention to both the priority of low-cost and «behavioral» measures, and investment in improving the energy efficiency of their own homes. Since 2014, the state has been co-financing such measures and continues to do so. By the way, the program «Warm Loans» has already been launched this year. Residents of individual houses can apply to authorized banks and raise loans for energy efficient equipment, solid fuel boilers, as well as for the installation of electric storage systems, electric chargers for electric vehicles, smart electricity meters.
The number of families consciously switching to «clean» energy is growing rapidly. If at the end of 2015 there were about 240 families with solar panels, by the end of 2020 – almost 32 thousand of such families.

The total capacity of the installed SPPs is 835 MW. Ukrainian families have invested about 640 million euros in all power plants.

This popularity of SPPs among households is explained by the desirable opportunities to save on electricity bills, to be autonomous and not dependent on the energy supplier –provided the installation of battery equipment or a combination of different technologies. In addition, SPP is an additional incentive for families to change their behavior to energy-saving: analyze energy consumption, use energy-efficient electrical appliances and increase energy efficiency at home.

All these families make a significant contribution to their own energy independence and autonomy, as well as to the development of a large-scale Ukrainian market
for services and equipment in «green» energy.

What can and should businesses do on the way to energy transition?

In our country, models of attracting and stimulating business to implement projects in the field of energy efficiency and renewable energy have been created and
continue to be refined. The implementation of energy efficiency measures or the use of renewable energy sources can reduce energy consumption of enterprises and
reduce energy consumption of products. This is especially true for industrial enterprises, as they are one of the most energy-intensive sectors in Ukraine, consuming about a third of all energy in the country.

For example, for the industrial sector, the priority is the introduction of energy management systems, energy audits, modernization of production processes,
involvement of energy service companies, energy labeling and standard information on energy consumption and other resources in the production of energy intensive
products and more.

It is important to remember that the optimization of energy consumption by the business itself, for example, an industrial enterprise, is a matter of competitiveness both within the country and abroad. The use of the latest technologies in the
implementation of projects for the energy transition also contributes to innovative development.
In general, our priority is to create and ensure clear and transparent rules of the game, where business can be profitable without government intervention, as well as
providing effective public financial support where there is currently no economic profitability and rapid payback of projects.