The project Low Carbon Ukraine (LCU) is part of the International Climate Initiative (IKI) and supported by the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) on the basis of a decision adopted by the German Bundestag. It is implemented by BE Berlin Economics GmbH.

It started in September 2018 and is designed to last until August 2021.

Background

Ukraine’s energy sector is important for the country’s economy as it accounts for about 13 % of its GDP. Yet, Ukraine is among the least energy efficient countries in Europe, which drags down economic growth and causes high GHG emissions. Despite reform efforts in recent years, the government remains vulnerable to political pressure from energy suppliers. Moreover, Ukraine’s energy sector currently faces a number of other – often intertwined – challenges such as a longstanding investment backlog, lossmaking state-owned companies, and increasing energy cost for households.

Currently the focus is mainly on short-term crisis management – to guarantee the supply of the population and industries with gas, electricity and heat and to avoid further increase in energy prices.

By contrast, long-term decisions often stem from Ukraine’s international commitments, e.g. from Ukraine’s membership in the European Energy Community, a group of southeast and east European countries that agreed to adopt the EU’s internal energy market legislation. One of Ukraine’s commitments concerns the development of an Integrated National Energy and Climate Plan until 2030. Due to limited administrative resources and fragmented responsibilities, the country’s energy policies have been often not very well coordinated and only partly well described.

Goal

The purpose of the LCU project is to support the Ukrainian government to pursue an active, effective and above all sustainable energy and climate policy. The assistance aims to enhance policy processes along three dimensions: long-term-orientation, consistency and factbasis. The ultimate goal of the policy advice is to trigger policy decisions that imply a lower emission-pathway. A stable and sustainable energy policy is linked to sustainable economic growth, a resilient infrastructure and sustainable industrialisation.

How we work

The LCU project is designed to work in a demand-driven, results-oriented, and open manner. Instead of offering ready-made solutions, the idea of the LCU project is to identify the relevant questions together with Ukrainian decision-makers and to tackle these questions in co-creation with Ukrainian experts. In addition, we set the course for a modern climate policy by providing the government with demanddriven analytical support and policy proposals.

We work in close cooperation with Ukrainian decision-makers to ensures the political relevance of the treated topics, the optimal application of local knowledge, and to enhances political ownership. Moreover, co-creation helps to strengthen analytical capacities in Ukrainian authorities and civil society on a long-term and sustainable basis.

By developing a model of Ukraine’s electricity system, the LCU project team explores major trade-offs, interdependencies, drivers and uncertainties in the long-term planning of energy generation and transmission capacities. This is of crucial importance for the question of how to safely increase the share of renewables in energy generation. The rigidities of a modelling framework helps to ensure consistency of the arguments and hence allows a fruitful discussion. Regular bilateral meetings with the most important stakeholders do identify the relevant topics for policy making in Ukraine, thus ensuring that the project works in a results-oriented way. Moreover, all publications are made accessible to the public.

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