Energy Strategy 2035. Implementation progress Apr-Jul 2019

Executive Summary:

The most important development relevant to the implementation of the Energy Strategy in the last month was the election of a new President and a new Parliament. Correspondingly, we exceptionally dedicate two pages of this report on providing our view what we see as priorities for the new administration. Our five priorities are

  1. Make gas and electricity markets competitive;
  2. Increase the share of renewables,
  3. Facilitating structural change in the coal sector and coal regions,
  4. Raise investments in the energy infrastructure,
  5. Further increase energy efficiency in the residential sector.

The other big event was the opening of the new electricity wholesale market. This is an eventful process which we follow in more detail in our Monitor of Electricity Market Opening (MEMO) series. LCU’s general assessment is that the transparency of activities on the regulated segments is a good start, but that the current rules establish a complex series of segments with administratively fixed prices. As long as structural issues such as cross-subsidisation and market power are not resolved – the market will not function to the long-term benefit of Ukrainian consumers.

Finally, we argue that a quick and cheap way to enable the integration of higher shares of renewables and ensure system stability is to allow the transmission system operator to temporarily reduce the output of wind and solar plants (so called curtailment).

In this Quarterly Monitoring Report we exceptionally analyse the developments of the past four months (April-July 2019).

Dr. Georg Zachmann, Roman Nitsovych, Bohdan Serebrennikov, Dr. Frank Meißner, Clemens Stiewe

What is a Quarterly Monitoring Report?

The implementation of Ukraine's Energy Action Plan is analysed on a quarterly basis. The progress in different sectors and actions is rated and key developments are presented. Furthermore, the report dives deeper into two topics that have shown to be relevant in the considered period.