The last six months were characterized by the Covid-19 pandemic. The Ukrainian electricity system has been put under stress in the first half of 2020. Quarantine measures caused a decline in electricity consumption as industry and businesses reduced operation. Moreover, renewable electricity generation has reached record levels, testing the technical limits of Ukraine’s power plant park. A decline in nuclear output could be observed in May 2020 that was not justified by technical or economic reasons, lower electricity demand or RES deployment. Instead, Energoatom’s decision to decrease nuclear electricity generation has been a result of market design inefficiencies.

In cooperation with the German government, MinEnergo is laying groundwork for reforming the coal sector. It is working on the pilot project of restructuring two mines and the respective municipalities with support from Germany. In the long-term, the announced restructuring aims at a social, economic and environmental transformation. However, the government tends to continue to support the highly subsidized coal sector.

Wage arrears in the coal sector and debt in the electricity and RES market owed by the Guaranteed Buyer further delay the implementation of the actions foreseen in the energy strategy since no long-term solution has been proposed. However, the Ukrainian government has proceeded with the development of interrelated policy documents – the National Energy and Climate Plan (NECP) and the Nationally Determined Contribution (NDC) which provide planning security. On July 22, the Low Carbon Ukraine project submitted a draft NECP to MinEnergo. The plan has been developed according to the Energy Community guidelines and considering the best European practices. The draft NECP has integrated primary energy and climate objectives as well as targets, policies and measures.