Friday, January 20, 2017

Are natural gas tariff hikes in Ukraine excessive?

According to opinion of the economist at the Vienna Institute for International Economic Studies (WIIW),  published by Emerging Europe, yes, they are. The magnitude of gas tariff increases in Ukraine, and the short time period over which they have been implemented, are unprecedented. Within a period of less than two and a half years, tariff rose nearly ten times. Even radical Polish tariff reform in the early 1990-s, comparable by scale of tariff spikes, was carried out over four years and accompanied by growing household incomes.
Intentions to provide incentives for energy-saving and IMF's requirements for budget consolidation, as a condition for extending its loan programmes to Ukraine, were the major reasons behind very aggressive tariff increase. As a result of tariff reform, residential gas consumption in Ukraine declined by about one-third between 2013 and 2015, and following another tariff hike, which was carried out in the spring of 2016, residential energy consumption declined again by another nine per cent.
However, the reduction in energy consumption has happened not because of improvement of energy efficiency, which requires investments and takes time, but due to sacrifice of households’ living standards. WIIW analysis, based on dynamics of domestic gas production, residential consumption and gas import prices in the years to come, shows that gas tariff hikes in 2014-2015 should have been more than sufficient to restore the ‘financial health’ of the state-owned gas monopolist Naftogaz and to eliminate its need for government subsidies in the longer term. Read more at

Tuesday, January 10, 2017

Threat to energy security: recent blackout in Ukraine was caused by cyberattack

On December 23, Prykarpattya Oblenergo, a power distributor that serves 538,000 customers, says 27 of its substations went dead. Immediately, 103 cities were "completely blacked out," and another 186 cities were left partially in the dark. Ukrainian power customers were unable to report about the blackout because call centers at Prykarpattya Oblenergo and another energy provider, Kyivoblenergo, were blocked. Prykarpattya Oblenergo decided to switch to manual controls and within a few hours electricity supply was reestablished.
In a public statement three weeks after the incident, Prykarpattya Oblenergo claimed there had been "a hacker attack" on its computer network. Hackers had penetrated into the extremely sensitive controls that manage electricity.
Ukraine's national security agency, the SBU, has publicly claimed this was a cyberattack by Russia, part of its ongoing war over the Crimean peninsula. Read more at

Wednesday, January 4, 2017

Ukraine cuts natural gas consumption in 2016 by one-third

Data released by Ukraine's main natural gas transport company UKRTRANSGAZ showed gas use falling by 32.7 percent last year. Ukraine has not imported any gas from Russia in last 13 months because of tensions in relations between the two neighbors and disputes over prices.

Friday, December 16, 2016

EBRD opens second regional office in Ukraine and plans to open third one next year

EBRD Managing Director for Eastern Europe and the Caucasus Francis Malige has opened a regional office in Kharkiv, second-largest municipality in Ukraine. He considers Eastern Ukraine as "important for the economy and for our cooperation not only in terms of large-scale projects, but also in terms of the development of small and medium-sized businesses".

Monday, December 12, 2016

European Comission published Association Implementation Report on Ukraine

The report is released ahead of the third EU-Ukraine Association Council on 19 December 2016, which examines the state of Ukraine's implementation of the Association Agenda since 1 January 2015. The report states that Ukraine has introduced a number of reforms to fight corruption and to reform the banking system, and has launched ambitious energy reforms, as well as strengthened democracy and the rule of law.

Tuesday, December 6, 2016

New EU - Ukraine MoU on a Strategic Energy Partnership includes energy efficiency, renewables and decarbonisation

European Commission Vice-President for Energy Union Maroš Šefčovič and Energy Minister of Ukraine, Ihor Nasalyk, signed a new Memorandum of Understanding on a Strategic Energy Partnership between the EU and Ukraine. New Memorandum replaces the Memorandum which was signed back in 2005 between the EU and Ukraine on cooperation in the field of energy and was focused mainly on energy security, nuclear safety, infrastructure and market reforms.

Tuesday, November 29, 2016

Full-featured energy market is being formed in Ukraine?

Prime Minister Volodymyr Groysman has announced about signs of formation of competitive energy market in Ukraine - he posted this on his Facebook page.

Tuesday, November 22, 2016

Reform of the Ukrainian energy market is very slow...

Despite the adoption of the Law of Ukraine on the Natural Gas Market and a number of regulations, introduced to put into practice the opportunities afforded by the Law, there was no significant interest from European traders to join the market. Moreover, domestic market players continue working in the environment making their operations more complicated and forcing them to incur additional financial commitments.

Friday, November 18, 2016

COP22 in Marakech pledged to move ahead with implementation of Paris Agreement

In the Marrakech Action Proclamation Parties to UNFCCC confirmed heir “commitment” to the “full implementation” of the Paris Agreement and called for “the highest political commitment to combat climate change” and “strong solidarity with those countries most vulnerable to the impacts of climate change”. In the Proclamation, developed countries reaffirmed their $100 billion mobilization goal per year by 2020 to support climate action by developing countries.

Friday, November 11, 2016

New "green" tariffs in Ukraine

According to resolution of the National Energy Regulatory Commission, new "green" tariffs for solar and wind power generation by private households with capacities not exceeding 30 kW came into force in Ukraine last week. New tariffs are differentiated depending on year of the beginning of operations: