Energy Policies Beyond IEA Countries: Ukraine 2012
Ukraine’s energy sector faces unprecedented challenges, from a heavy reliance on expensive
fossil-fuel imports to inefficient infrastructure and markets. Yet there is also potential
for Ukraine to experience an energy revolution, one that could boost employment, lift
economic growth and enhance energy security. Modernisation of Ukraine’s energy-supply
sectors has only begun and will require investment on a huge scale, complemented by
a fundamental reform of the business environment. A strong dependency on oil and gas
imports and often-inefficient energy production, transportation and supply sectors
means that reducing energy demand must be a greater priority. The potential for energy
efficiency gains in the residential, district heating and industrial sectors is large.
Endowed with large conventional energy reserves, alongside sizeable renewable potential,
Ukraine can build the capacity to significantly increase its resource production.
Releasing this potential will require deep regulatory reform and full implementation
of international treaty provisions. Effective competition, alongside a progressive
move towards market prices, will also help Ukraine attract investment to develop the
sector. A draft energy strategy, which sets out a series of supply-side measures,
was published in 2012. Broadening and implementing a comprehensive energy strategy,
one that takes greater account of demand-side policies, could significantly improve
progress in the medium term.
This review analyses the large energy-policy challenges facing Ukraine and provides
recommendations for further policy improvements. It is intended to help guide policy
makers in the country towards a more secure and sustainable energy future.
Published on October 19, 2012
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