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Introduction How to read this guide
What this guide demonstrates
Energy is measured in different ways. Most sources of energy are measured in physical terms: coal in tons and gas in cubic meters. Energy itself has additional units of measurement: heat – J, electricity – kWh.
This guide reflects three things: the state of the energy market, the potential of the sector, and the areas that need reform. In this guide, we focus on each energy sector while looking at overall potential and the next steps.
In this guide, each source and type of energy is represented in traditional units of measurement. However, to ensure comparability, we have indicated tons of oil equivalent as the reference fuel on pages featuring energy balance and energy history.
We explain the third energy package — these are the laws regulating the energy market of Europe. The Ukrainian energy industry needs to reform in line with this framework. This is crucial for Ukraine’s energy sector development.
It is important to distinguish sources of energy (coal, oil, gas and solar) and types of energy (thermal, electric, fuel). Each source and type is represented by a corresponding color, for example, gas is blue and thermal energy is orange. It is worth remembering that volumes of energy production differ from volumes of consumption, as part of the energy is lost in the process of its transformation on the way from manufacturer to end user.
Energy sources
Initial transformation
uranium
Nuclear energy
Energy production�
(secondary transformation)
Sources Wholesale delivery
Retail delivery
Trunk Lines
Regional transmission lines
Electricity
coal
water
City thermal pipelines thermal energy
wind
The purpose of the handbook is to demonstrate not only production figures, but also to highlight economic efficiency. This is vital for Ukraine’s energy independence.
The task of this guide is to reflect the economic side of production and consumption. We wanted to make the guide as easy and understandable as possible, so in some cases we have departed from generally accepted professional terms and definitions. Special thanks to Lilia Zubareva, Marina Polyakova, Tetyana Temnyuk, Alyona Osmolovska, Yulia Chervonooka, Inna Surzhok and Alexander Karpenko.
2
ENERGY: FROM SOURCE TO CONSUMER
Gas trunk line
sun
Regional gas pipelines
gas
oil
Oil refining
Association of Gas Producers of Ukraine Ukrainian Wind Energy Association State Inspection on Energy Supervision of Ukraine State Treasury Service of Ukraine State Service of Geology and Subsoil of Ukraine State Statistics Service of Ukraine State Fiscal Service of Ukraine State Enterprise “Energoatom National Nuclear Energy Generating Company” SE “Ukrenergo National Power Company” DTEK Renewable Energy Institute of the National Academy of Sciences of Ukraine Ministry of Energy and Coal Industry of Ukraine Naftogaz of Ukraine Gazprom Ukrhydroenerho Ukrtransgaz National Energy Security Fund Razumkov Centre Aequo British Petroleum Eurostat International Energy Agency Nuclear Energy Agency REN21 The Guardian The World Economic Forum U.S. Energy Information Administration World Bank Group World Nuclear Association
Why did we create this report? Ukraine’s energy independence depends on a healthy industry governed by market forces at every stage from extraction to energy supply to consumer delivery. To achieve this, the energy sector requires reform. The nature of reform is already clear - the energy sector will develop to fit the rules established elsewhere in Europe.
When calculating the role of energy in GDP we took into account data in the following areas: - extraction of stone and brown coal, crude oil and natural gas - production of coke and coke products, oil refining products - supply of electricity, gas, steam and conditioned air
Ukraine and World Energy
UKRAINE AND WORLD ENERGY
ENERGY INDUSTRY — A HUGE PART OF THE ECONOMY OF THE COUNTRY Energy industry data for 2016.
bln UAH
133
8%
25%
162
Energy sector No1 in terms of taxes paid.**
bln UAH
3%
of paid taxes**
Share in GDP*
450
thsd people
of employed population
In 2015, the energy industry ranked fourth in terms of GDP share.
What energy sources Ukraine imports % of total usage
4
19%
27%
33%
77%
100%
Oil and gas condensate
coal
gas
Oil products
Nuclear fuel
*for 2015 year
**Calculation based on rating of the largest taxpayers according to figures from the State Fiscal Service of Ukraine
Sources: State Fiscal Service of Ukraine, Naftogaz of Ukraine, calculations based on statistics from the State Statistics Service of Ukraine
UKRAINE AND WORLD ENERGY
UKRAINE RANKED 28TH FOR ENERGY CONSUMPTION The largest consumers of energy in the world and their structure of energy consumption in 2016 (%)
6
4 28
canada
Russian Federation
ukraine
5%
0,7%
2%
52% 22%
31% 27% 27%
13%
30%
7%
21%
6%
11%
7%
2%
6%
1%
3%
2
36%
usa
9
17%
7
germany
brazil
8
36%
Republic of Korea 2%
2%
32%
43% 29%
16%
2%
8% 4%
14%
35%
13%
23%
3%
2%
23%
47%
12%
29%
6%
11%
1%
6% 6% 1%
world
10
5% 3% 7%
33%
iran
3
india
2%
Oil
1
china
5
japan
23%
5%
3%
Natural Gas Coal
13 276
Nuclear Energy
mln tons o. e.
Renewable energy
24%
Hydropower 1
china
Position of country for energy consumption
23%
Share in world energy consumption
28%
Source: British Petroleum
Despite high consumption of energy, Ukraine takes 60th place in terms of economic volume. This suggests low energy efficiency (see slide No. 10).
67% 31% 1% 1% 1%
57% 29% 6% 4% 2% 1%
62% 19% 9% 6% 3% 2%
41% 27% 22% 4% 4% 1%
5
UKRAINE AND WORLD ENERGY
UKRAINE HAS SUFFICIENT ENERGY RESOURCES Top five countries by volume of energy reserves at the end of 2016
Ukraine ranks No. 7 in the world in terms of coal reserves, No. 12 for uranium, and No. 29 for natural gas.
Russian federation
27.6
3
509
10%
105
1
33.5
165
36
4
21.8
94
9%
Oil, bln tons
5
Natural gas, trln cubic m.
251.6
381
22%
8.7 5%
12
Coal, bln tons
7
18%
3%
115.8
29
0.6
9%
Kazakhstan
56
3
160.4
417
4
508
17%
2%
0,3%
115
745 13%
14%
iraq 5
4
20.6 9%
94
17.5 9%
262
30
2
china 244.0
5
india 94.8
5
33 Saudi Arabia 2
36.6 16%
169
9%
Turkmenistan
834
Reserves Share of world reserves
Number of years for which there will be enough reserves at current production 1
ukraine 34.4
12
Uranium, thsd tons 47.0
18%
2
usa 1
32.3
IRAN
canada 3
2
21%
8%
72
137
59 Qatar
Place in the world ranking by volume of confirmed reserves
1
Venezuela 47.0 18%
24.3
3
341
134
13%
Australia
Share of TOP-5 countries of world reserves
62% of 241 bln tons
6
62% of 187 trillion m3
66% of 5 718 thsd tons
79% of 1 139 bln tons
1
1 664
4
144.8
29%
13%
264 294
Republic of South Africa 5
322 6%
658
Source: British Petroleum, World Nuclear Association
UKRAINE AND WORLD ENERGY
UKRAINE CAN BECOME ENERGY INDEPENDENT Confirmed amount of energy resources in Ukraine at the end of 2016 and their location
volume gas
591 000 mln m3
CHERNIHIV LUTSK RIVNE
33
ZHYTOMYR KYIV
LVIV
coal
34 000 mln tons
POLTAVA
834
TERNOPIL IVANO-FRANKIVSK
uranium
0.1
mln tons
KHARKIV
LUHANSK
CHERKASY
VINNYTSIA
DNIPRO
KROPYVNYTSKYI
115
DONETSK
ZAPORIZHIA
oil
55
mln tons
25 ODESSA
KHERSON
Oil and gas fields Lack of investment in exploration, processing and energy efficiency, as well as complicated bureaucratic procedures, impede the development of Ukraine’s energy sector.
Uranium deposits Coalfields Number of years for which there will be enough reserves at current production levels
Source: British Petroleum, World Nuclear Association, U.S. Energy Information Administration, Naftogaz of Ukraine
7
UKRAINE AND WORLD ENERGY
ENERGY BALANCE OF UKRAINE 2015, million tons of oil equivalent
ENERGY SOURCES
GENERATION
22.9
CONSUMPTION 3.2
NUCLEAR
23.0 39.8
27.3
1.1
0.1
1.0
1.0
0.2
1.9
0.8
0.1
0.3 16.6
2.8 29.5
2.2
0.1
0.1
0.3
3.3
Non-energy consumption
8.8
Transport
1.4
2.3
10.3
0.7
HEAT 1.0
2.9
0.6
0.3
1.6 6.6
10.6 network losses
electricity — 74% heat — 27%
8
Other kinds of consumers
0,3 8.5
Oil and oil products
5.8
1.8
26.1
2.7
Industry
4.3
2.8
Renewables
16.4
3.2
5.6 1.9
gas
POPULATION
9.1
ELECTRICITY
19.8
coal
0.3
16.6
32.4
Coal, gas and atomic energy are traditionally the main sources of energy in Ukraine. The share of renewable sources is insignificant.
Source: State Statistics Service of Ukraine
UKRAINE AND WORLD ENERGY
DURING 19-20 CENTURIES UKRAINE WAS ONE OF THE LEADING ENERGY STATES OF THE WORLD History of the Ukrainian power industry
! Start of industrial oil production at Sloboda-Rungurska in today’s Ivano-Frankivsk region
1771
Launch of the first gas plant in Ukraine in Lviv
1858
Lviv hosted the first World Oil Congress!
1877
The opening of the Dashava gas field – the largest at that time in Europe
1921
The beginning of gas industry development in Ukraine – the development of the Dashava field
1924
Launch of the first hydroelectric unit at the powerful Dnipro hydroelectric power station
The first industrial wind farm (Crimea)
1931
1932
For the first time in the world gas is exported – from Ukraine to Poland
1945
1
Ukraine is the third in the world in terms of gas consumption – 118.8 bln m3 (76% provided by imports)
1990
Gas production at its peak: 68.7 bln m3
1975
Launch of the powerful Zaporizhzhia CHPP
Oil and gas condensate production at their peak: 14.5 mln tons
1973
1971
1972
Peak gas extraction in independent Ukraine: 24.4 bln m3
Peak gas transit through the territory of Ukraine: 141 bln m3
1998
1991
Ukraine’s first nuclear power plant begins work – the Chornobyl Nuclear Power Plant
250
0% 8%
200
92%
Construction of the powerful Dashawa-Kyiv gas pipeline (509 km)
The beginning of gas supply from Ukraine to Russia
1948
1951
Since 25 November, Ukraine has ceased importing gas from the Russian Federation
2015
2011
In Ukraine there is a clear tendency towards reduction of energy consumption and imports.
Economic turbulence, inflation reaches 10,000%
6.8 times decrease in metal production compared to 1990
150
Consequences of the global financial crisis and a sharp rise in the price of Russian gas
55%
1%
Domestic production share
2%
15% 84%
100
The beginning of uranium ore production
1946
Ukraine became a full member of the European Energy Community
2001
1991-2015, mln tons of o. e. 54%
1964
Launch of the first storage facility for spent nuclear fuel in independent Ukraine
Primary energy supply in UKRAINE 300
Ukraine’s first underground gas storage facility at Olishivske (Chernihiv region) becomes operational
18%
Crimean annexation and the beginning of the Anti-Terrorist Operation
3% 26%
80%
50
68%
71%
0
1991
1992 Fossil fuels
1993
1994 Nuclear fuel
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Renewable energy sources
Source: State Statistics Service of Ukraine, Naftogaz of Ukraine, International Energy Agency, The Guardian, SE “Energoatom National Nuclear Energy Generating Company”, Razumkov Centre, Ukrhydroenerho, Nuclear Energy Agency
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
9
UKRAINE AND WORLD ENERGY
UKRAINE IS AN ENERGY-INEFFICIENT COUNTRY Rates of energy efficiency in the Ukrainian economy
Losses of energy during transportation and distribution
Comparison of electricity costs
2015 (% of total produced)
3.3%
romania
52
Switzerland
98
poland
(World Economic Forum, March 2017)
4.8%
ukraine
kg of o. e./ thsd US dollars GDP per purchasing power parity
Increasing the efficiency of electricity consumption is more profitable than its additional generation
5.4%
moldova
Energy intensity of GDP
USA Cents/kWh
1.6%
poland germany
1.2%
Lithuania
1.2%
Ukraine is among the top 20 least energy-efficient countries in the world. For each $1,000 of GDP, Ukraine spends three times more on energy than Poland.
12
5
3
Nuclear generation
Wind generation
Increasing energy efficiency
canada
177
(decrease in consumption)
Energy intensity of GDP
kg of o. e./ thsd US dollars GDP per purchasing power parity
ukraine
282
700 600 500 400 300 200 100 0
1991
10
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Source: World Bank Group, Eurostat, The World Economic Forum
UKRAINE AND WORLD ENERGY
THE STATE IS THE MAIN PLAYER IN THE ENERGY SECTOR OF UKRAINE The largest companies in the energy markets of Ukraine in 2016 (%)
natural gas
Electricity (production)
Regional gas company*
Naftogaz of Ukraine Gas production
21%
79%
Gas distribution to the population
46%
energoatom 64%
26%
74%
Naftogaz of Ukraine 100%
Transit
Production of gas and condensate
9%
91%
Use of coal
mines
100%
Shakhtoupravlinnia
import
State
Storage
52%
48%
coal
oil Import
electricity production
Pokrovske
29%
27% 6% 9%
29%
Pavlogradvugillya
The slow pace of reforms complicates the development of the energy sector and reduces the investment attractiveness of the industry.
Gas wholesale
32%
68%
Main players
others
Source: Naftogaz of Ukraine, SE “Ukrenergo National Power Company�, Ministry of Energy and Coal Industry of Ukraine, censor.net.ua. * - calculations according to Ukrtransgas, site
11
Energy production
Electricity
Thermal energy
ENERGY PRODUCTION
ELECTRICITY BALANCE 2016, bln kWh
Zaporizhia NPP
consumption for production (needs of power plants) 13 Electricity
More than half of Ukraine’s total electricity is produced in the Zaporozhia, Donetsk and Mykolaiv regions
South-Ukraine NPP
Rivne NPP
Khmelnytskyi NPP
Zakhidenergo Dniproenergo Centrenergo Skhidenergo* Donbasenergo* Pumped storage and hydroelectric power plants Heat plants and isolated generating plants
Wind power station Solar power stations Biomass
costs for transportation in distribution networks and for the needs of suppliers at the regulated tariff 13 Electricity
31
17
29 Metallurgical industry
15
4
15
13
10
9
32
81
NPP
9
13
4
Food and processing
4
Fuel
0.5
Electricity production
50
Thermal power station
Electricity consumption (netto)
3
Chemical and petrochemical
4
Other
15 Municipal consumers 50
119
Building materials
36 Population
Expanses
155
0.9
7 Transport
Industry
6 consumers
Other non-industrial
36
Population
4 Farming 1 Construction
33
24
Other
Other
* Source: SE “Ukrenergo National Power Company”
Machine building
2
3
0.2
20% of Ukrainian electricity is spent on its own generation and transportation.
costs for transportation in trunk and interstate networks 4 Electricity consumption of PSP in pumping mode 2 Electricity
17
Without taking into account production volumes
4
Electricity export
13
ENERGY PRODUCTION
PLANS ENVISAGE A SIGNIFICANT SHARE OF NPP IN POWER PRODUCTION
There are plans to increase the share of renewable energy sources in Ukraine to 12% by 2020
Structure of electricity production
12%
2016, %
eu
ukraine 44%
It is difficult to determine the optimal structure of electricity generation. Energy issues in each country have their own characteristics and advantages In Malta more than
In France
90% 77%
41%
TPPs and CHPPs 27%
of electricity is produced from fossil fuels.
52% npp
11%
6% hps
of electricity is generated by nuclear power plants.
18%
1%
Renewable energy power plants
Volume and structure of electricity generation in UKRAINE bln kWh 300 250 200 150 100 50 0
1992
1994
1996
1998
2000
2002
2004
2006 TPP and CHPP
14
2008
2010 NPP
2012 HPP and PSP
2014
2016
2018
2022
2026
Renewable energy power plants
Source: International Energy Agency, State Statistics Service of Ukraine, Eurostat, Plan of development of the United Energy System of Ukraine for 2017-2026 (project)
ENERGY PRODUCTION
UKRAINIAN ELECTRICAL GRIDS ARE OBSOLETE AND DETERIORATING United Energy System of Ukraine as of the end of 2016
State of transmission networks lines as of December 31, 2016, years in operation, %
CHERNIHIV LUTSK
8%
<25
SUMY RIVNE
KYIV ZHYTOMYR
6%
25-30
>40
KHARKIV
LVIV
22%
30-40
POLTAVA
64%
TERNOPIL IVANO-FRANKIVSK
CHERKASY
KHMELNYTSKYI VINNYTSIA
LUHANSK
UZHHOROD
The key problem of the electric power industry is the high level of wear and tear of electric power equipment, the bulk of which went into operation in the 1960s-1970s and was designed in accordance with the norms of the 1950s.
KROPYVNYTSKYI CHERNIVTSI
DNIPRO DONETSK ZAPORIZHIA
MYKOLAIV KHERSON ODESSA TYPES OF ELECTRIC POWER PLANTS
ELECTRIC POWER LINES AND SUBSTATIONS Current
NPP
Perspective ±400 kV
TPP, CHPP
±750 kV ±400-500 kV
HPP, PSP
±330 kV
SIMFEROPOL
±220 kV
HPP, PSP, under construction AR Crimea
ATO Zone
Source: Ministry of Energy and Coal Industry of Ukraine, SE “Ukrenergo National Power Company”
15
ENERGY PRODUCTION
THE NUCLEAR POWER INDUSTRY IN UKRAINE IS FULLY DEPENDENT ON IMPORTED FUEL Data of nuclear sector
Purchase of nuclear fuel
RIVNE NPP
mln of US dollars
"Westinghouse" (usa)
2012
"tvel" (rf)
45
555
2013
601
2014
39
589
2015
33
611
CHERNIHIV
2 835
Ukraine holds 2% of the world’s reserves of uranium, so it could independently meet its needs.
1
1980 2010 2030
2
1981 2011 2031
3
1986 2017
4
2004 2035
LUTSK
SUMY RIVNE
KHMELNYTSKYI NPP
TERNOPIL IVANO-FRANKIVSK
UZHHOROD
KHARKIV
2 000
KHMELNYTSKYI
LVIV
KYIV POLTAVA
1
1987 2018
2
2004 2035
CHERKASY
LUHANSK
KROPYVNYTSKYI
DNIPRO
DONETSK
CHERNIVTSI
2016
162
387
SOUTH-UKRAINE NPP Total capacity, MW
Termination of the design life of most power units
Problems
1
Dependence on the import of nuclear fuel
Dependence on the storage of spent nuclear fuel in other countries
2015
Coming into service
2025
Date of expiration of the lifespan according to the project
ZAPORIZHIA NPP
3 000
№ of power unit
1984
ZAPORIZHIA
Date of expiration of extended lifespan
1
1982 2013 2023
2
1985 2015 2025
3
6 000 1
1984 2015 2025
2
1985 2015 2025
3
1986 2017
4
1987 2018
5
1989 2020
6
1995 2026
ODESSA
1989 2020
Work on extending service life
SIMFEROPOL
energy production on npp bln of kWh 100
Share in total electricity production
48%
80
27%
52%
45%
36%
60
47%
53%
40
20
0
1991
16
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2017 as expected by the Ministry of Energy and Coal Industry of Ukraine
2010
2011
2012
2013
2014
2015
2016
2017
Source: International Energy Agency, SE “Ukrenergo National Power Company”, SE “Energoatom National Nuclear Energy Generating Company”, State Statistics Service of Ukraine
ENERGY PRODUCTION
THERMAL POWER PLANTS PROVIDE FLEXIBILITY OF ELECTRICITY PRODUCTION The main indicators of thermal power plants and combined heat and power plants
The ТPP of the Donetsk region produces 28% of the total electricity production at the ТPPs.
CHERNIHIV
The chart of electricity consumption in Ukraine on the example of two days LUTSK
SUMY RIVNE
DOBROTVIRS’KA
20000
2 275
ZHYTOMYR
KYIV
1960
KHARKIV TRYPIL’SKA
LVIV
17500
TERNOPIL
IVANO-FRANKIVSK
2 279
1960
8 499
1965
VINNYTSIA
2 991
4 049
CHERNIVTSI
2 670
1958
10000
15.01.2017
1972
1972
ZAPORIZHIA
STAROBESHIVS’KA
1963
ZAPORIZ’KA
TPP
MYKOLAIV
Generation in 2016, mln kWh
15.06.2017
1962
ZUIVS’KA
KURAHIVS’KA 5 986
4 879
DONETSK
DNIPRO
1970
5 019
3 338
VUHLEHIRS’KA
KRYVORIZ’KA
Electricity is a product which is both produced and consumed at the same time. ТPPs provide the required flexibility in production at peak hours.
LUHANSK
1957
PRYDNIPROVS’KA
KROPYVNYTSKYI
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23
LUHANS’KA
SLOVIANS’KA
CHERKASY
LADYZHINS’KA 12500
ZMIYIVS’KA 1969
POLTAVA
BURSHTYNS’KA
UZHHOROD
15000
2 700
KHMELNYTSKYI
5 217
1972
KHERSON
ODESSA
Year of commissioning of the
SIMFEROPOL
Production of electricity at ТPPs and СНPPs bln kWht 200
Share in total electricity production
69%
160
120
58% 46%
48%
80
46% 41%
38%
40
0
1991
1992
1993
1994
1995
1996
1997
Source: International Energy Agency, SE “Ukrenergo National Power Company”, State Statistics Service of Ukraine
1998
1999
2000
2001
2002
2003
2004
2017 as expected by the Ministry of Energy and Coal Industry of Ukraine
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
17
ENERGY PRODUCTION
HYDROENERGETICS ACCOUNTS FOR THE BIGGEST SHARE OF RENEWABLE ELECTRICITY IN UKRAINE The main rates of HPPs and PSPs in Ukraine
41%
The world’s largest hydroelectric power plant – The Three Gorges Dam – has a capacity equal to
9 out of 10
CHERNIHIV
of the power of all power plants in Ukraine.
KYIV PSP
LUTSK RIVNE
SUMY
144
KYIV HPP
ZHYTOMYR
KYIV
538
KHARKIV LVIV
of the most powerful power plants in the world are hydroelectric power plants.
UZHGOROD
KANIV HPP
KHMELNYTSKYI
TERNOPIL
DNISTER PSP
688
CHERKASY
VINNYTSIA
444
KREMENCHUK HPP
SEREDNYODNIPROVSKA HPP
DNISTER HPP
CHERNIVTSI
POLTAVA
DNIPRO
1 079 DONETSK
903
1 288
LUHANSK
ZAPORIZHIA
TASHLYK PSP 201
KAKHOVKA HPP
Most of the hydroelectric power plants in Ukraine were built in the second half of the 20th century. Their share is 11% of the total power generation in the country.
HPP, PSP
1 052
DNIPRO HPP ODESSA
Generation in 2016, mln of kWh
2 575
KHERSON
SIMFEROPOL
Production of electricity by HPPs and PSPs bln of kWh 20
Share in total electricity production
15
4%
5%
10
7%
7%
7%
6%
6%
5
0
1991
18
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2017 as expected by the Ministry of Energy and Coal Industry of Ukraine
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: International Energy Agency, SE “Ukrenergo National Power Company”, Ukrhydroenerho, State Statistics Service of Ukraine, U.S. Energy Information Administration
THE PACE OF DEVELOPMENT OF RENEWABLE ENERGY IN UKRAINE IS INSIGNIFICANT COMPARED WITH GLOBAL TRENDS
ENERGY PRODUCTION
Potential and key rates of renewable energy in Ukraine and the world
Potential of renewable energy in Ukraine
Increase in renewable energy capacity in the world 2006-2016, %
solar power
+4 950%
+558%
Available power
303 GW
wind power
49%
bioenergy
22%
Major hydropower
17%
Minor hydropower
7%
Solar power
5%
wind power
as of 2016
487 GW
Total
121
Renewable sources in Ukraine can potentially meet 78% of electricity generation needs.
Electricity generation in Ukraine in 2016
bln kWh/year
155
bln kWh/year
The relation of produced electricity from RES to consumed energy in some countries in Europe in 2015, %
Active development of renewable energy sources in Ukraine began in 2009 after the introduction of a green tariff.
106% norway
*
52%
43%
33%
15%
6%
latvia
romania
turkey
estonia
ukraine
Source: Eurostat, Renewable Energy Institute of the National Academy of Sciences of Ukraine, SE “Ukrenergo National Power Company”, Renewables 2017 Global Status Report
As of 2016
19
ENERGY PRODUCTION
SOLAR ENEGRY IS THE YOUNGEST AMONG RENEWABLES IN UKRAINE The main rates of solar energy in Ukraine
Installed capacity of SPSs
Distribution of specific solar radiation in Ukraine during the year
MW
530.1
Since the end of 2014, the capacity of solar power stations of private households in Ukraine has increased by 371 times (as of the end of the third quarter of 2017).
431.1
411.1
Inland Ukraine
748
CHERNIHIV LUTSK
SUMY RIVNE ZHYTOMYR
407.9
371
407.9
KHARKIV
188
POLTAVA
LVIV
total
TERNOPIL
crimea 2011
2012
2013
2014
2015
KYIV
407.9
UZHHOROD
IVANO-FRANKIVSK
KHMELNYTSKYI CHERKASY
VINNYTSIA
LUHANSK
2016 DNIPRO
KROPYVNYTSKYI
CHERNIVTSI
Generation of elegtricity at SPS
ZAPORIZHIA
bln of kWh
Solar Power Station
Share in total electricity production 600
0.4%
0.29%
400
0.3%
KHERSON
bln kWh/м²
0.24%
945
0.3%
1000 1055 1110
0.16%
300
1220
100
1335
1250
1390
0.02%
1445 more
2011 20
SIMFEROPOL
1170
200
0
MYKOLAIV
ODESSA
500 190
DONETSK
2012
2013
2014
2015
2016
The annexation of Crimea has slowed down the development of solar energy in Ukraine, as it is the most promising region for its development.
2017 2017 as expected by the Ministry of Energy and Coal Industry of Ukraine
Source: Renewable Energy Institute of the National Academy of Sciences of Ukraine, SE “Ukrenergo National Power Company”, State Statistics Service of Ukraine, Ministry of Energy and Coal Industry of Ukraine
ENERGY PRODUCTION
WIND POWER IS ONE OF THE CHEAPEST SOURCES OF RENEWABLE ENERGY IN THE WORLD The main rates of wind energy in Ukraine
Installed capacity of wind farms
Regions of Ukraine by intensity of wind flows
MW
437.8
426.2
409.5
CHERNIHIV LUTSK
SUMY RIVNE ZHYTOMYR
371
KHARKIV
LVIV
inland ukraine
275.5
KYIV POLTAVA
TERNOPIL 151.1 90
87.8
87.5
87.8
87.8
2010
2011
2012
2013
2014
2015
LUHANSK
KROPYVNYTSKYI
CHERNIVTSI
crimea 2009
CHERKASY
VINNYTSIA
IVANO-FRANKIVSK
DNIPRO
2016
DONETSK
ZAPORIZHIA
Average wind speed m/s (at an altitude of 30m)
Generation of elegtricity at wind farms mln kWh
KHERSON
V = 4.5 V = 5.0
share in total electricity production
1200
0.62%
0.66% 0.56%
190
0.57%
SIMFEROPOL
0.33%
600 400
The greatest potential for wind energy is concentrated in the Carpathians. The development of this region will increase the energy independence of the western region of the country.
0.14%
200 0
0.02%
2009
0.03%
2010
0.05%
2011
2012
Botievska wind farm Provided 66% of wind energy production in 2016
ODESSA
V > 5.5
1000 800
MYKOLAIV
INSTALLED WIND FARMS
V < 4.5
2013
2014
Source: Ukrainian Wind Energy Association, Renewable Energy Institute of the National Academy of Sciences of Ukraine, SE “Ukrenergo National Power Company”, State Statistics Service of Ukraine, Ministry of Energy and Coal Industry of Ukraine
2015
2016
2017 as expected by the Ministry of Energy and Coal Industry of Ukraine
2017 21
ENERGY PRODUCTION
SINCE 1991, THE POPULATION HAS SIGNIFICANTLY INCREASED THE EFFICIENCY OF HEAT CONSUMPTION Production and consumption of heat in Ukraine
Heat consumption by the population
The structure of heat production in Ukraine
MJ/person
2016, %
12 000
Heat plants (boilerhouses) 61%
10 000 8 000
tps 30%
190
6 000
disposal plants 5%
4 000
chpp 2%
2 000
Natural gas produces more than 70% of heat in Ukraine.
99
mln gCal
NPps 2%
0 1991
1995
2005
2010
Other plants 1%
2015
Heat production mln of MJ
Transportation losses
25%
1600 1200
25%
800
10%
400 0 1991
22
1995
2000
2005
2010
2012
2014
2016 Source: Eurostat, State Statistics Service of Ukraine
ENERGY PRODUCTION
DNIPROPETROVSK REGION IS THE COUNTRYâ&#x20AC;&#x2122;S BIGGEST ENERGY CONSUMER Consumption of electricity and thermal energy in 2016
Consumption of energy by the population
Energy consumption by regions
2015, kWh/per capita
8.8 times
7 187
820
1.7 times 470
2016
Norway has the highest electricity consumption per capita in Europe, but this is not due to low efficiency but rather to the structure of consumption. The volume of heat per person in Norway is one of the lowest.
VOLYN OBLAST
CHERNIHIV OBLAST RIVNE OBLAST
SUMY OBLAST
KYIV OBLAST ZHYTOMYR OBLAST KYIV
norway
ukraine
moldova
LVIV OBLAST
KHARKIV OBLAST TERNOPIL OBLAST
ZAKARPATTIA OBLAST
at consumption by population 2015, MJ/per capita
Similar situation in Ukraine: energy consumption by region does not reflect the level of energy efficiency since it does not take into account the return on this consumption.
1.6 TIMES
POLTAVA OBLAST
KHMELNYTSKYI OBLAST
IVANO-FRANKIVSK OBLAST
KIROVOHRAD OBLAST
CHERNIVTSI OBLAST
28 11
LUHANSK OBLAST
CHERKASY OBLAST
VINNYTSIA OBLAST
ODESSA OBLAST
DNIPROPETROVSK OBLAST
DONETSK OBLAST
ZAPORIZHIA OBLAST
MYKOLAIV OBLAST
9 7
4 278
2 665
5 3 2 1
3.7 TIMES
720
Electricity, bln kWh Thermal energy, mln gCal
POLAND
UKRAINE
KHERSON OBLAST
AR CRIMEA
NORWAY
Source: State Statistics Service of Ukraine, Eurostat, State Inspection on Energy Supervision of Ukraine
23
Oil and gas industry
NATURAL GAS
OIL
OIL AND GAS INDUSTRY
GAS BALANCE 2016, bln m³
11.9 More than 50% of gas is used in the domestic sector. Given the low efficiency of heating appliances, this indicates significant potential to reduce the volume of use.
Population directly
31.12.2015
14.0
5.7
UGS*
Gas thermal plants for the population
9.9
Industry
2.0
Other
17.6
11.1
2.0
Population
1.7 Ukrtransgas 1.0 Distribution networks
Import
33.2
2.0
UGS: offtake-injection spread
Gas inflow
8.2
20.1
Naftogaz
33.2 Gas use
0.5
Ukrgazvidobuvannya
0.3
Ukrnafta
0.1
Other
9.9
Industry
Production
2.9
Budgetary and religious organizations
2.0
Other
Private importers
3.6
OTN**
1.6
Oil and gas production
1.3
Ukrnafta
2.6
31.12.2016
Others
12,0 *UGS – underground gas storage **OTN – technical needs
Source: Naftogaz of Ukraine
14.6
UGS*
Ukrgazvydobuvannya
25
OIL AND GAS INDUSTRY
WORLD NATURAL GAS MARKET Leading countries in the natural gas market
Net importers
Net exporters
183 183
108
russia
japan 124
gas bln m3
80
quatar
germany
116 production
72
norway
china 91 (2
Norwa
di
Ara
.1%
Rus
sia
5 7 9 (1
6.3%
)
53 Algeria
202
.1%)
Qua
tar
a ad
(5.7%
1 8 1 (5
2
(21
world
Iran
15
3 (4.
749
3 552
ina .9%) Ch
%)
canada
bia
y
n Ca
60
US
a
) Sau
ria
44
lge
138 (3
turkey
)A
117 (3.3%)
1%
A
6%
ustrali
(2.
italy
(3.
)
.6%) A
91 109
65
)
Other countries 1 140 (32.1%)
26
Source: British Petroleum
OIL AND GAS INDUSTRY
UKRAINE REDUCES GAS IMPORT AND INCREASES PRODUCTION Production, import and use of natural gas, bln mÂł
QUANTITY OF PRIVATE IMPORTERS At the end of the relevant year, number
35
Ukraine has successfully lost its gas dependence on the Russian Federation and has the potential to fully meet its needs with its own resources.
The volume of gas consumption in Ukraine has significantly decreased over the years of independence. First of all, this is due to a decrease in the volume of industrial production.
18
5
2014
2015
2016
import 91.6
24.4
production
57.0
59.3
20.8
18.1
20.1
11.1
use
Source: Naftogaz of Ukraine
118.2
73.4
73.9
1991
2000
2006
Infographics do not reflect the volume of gas reserves
33.2
2016 27
OIL AND GAS INDUSTRY
UKRAINE PLANS TO END IMPORTS OF GAS AFTER 2020 Production of natural gas in Ukraine
Structure of special permits issued
38%
62%
other companies
Structure of confirmed natural gas reserves
45%
55%
other companies
Ukrgazvydobuvannya
Structure of natural gas production
Extraction of natural gas
Total
bln m3
73%
27%
other companies
Ukrgazvydobuvannya
including Ukrgazvydobuvannya
Ukrgazvydobuvannya provides 73% of gas production in Ukraine, although it holds only 45% of all licenses for gas extraction. In order for Ukraine to meet its natural gas needs via domestic gas production, the extraction sector needs further liberalization and additional investment .
Ukrgazvydobuvannya
forecast
30 25 20 15 10 5 0
1991
28
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Source: Naftogaz of Ukraine, Concept of development of the gas production industry of Ukraine, State Service of Geology and Subsoil of Ukraine, Association of Gas Producers of Ukraine
OIL AND GAS INDUSTRY
WORLD OIL MARKET Key countries of the global oil market
net importers
net exporters
380
375 saudi arabia
china
oil
369
273
mln tons
usa
russia
production
212
177 iraq
india
%)
(13.4
razil
3.5
Saud Arab i ia 5 8 6
.1%) B
3( Ku
%)
135
it
(4.2
wa
182
%)
137 (3
15
168
UAE
japan
canada
4 382
200 (4.6%) China
Russia
554 (12.6%)
world
da ana
.4% )
219 (5.0%) Iraq
)C 0%
12
(5.
122
3(
218
54
Republic of Korea
%
A
144
(4.9
US
216
n ) Ira
United Arab Emirates
Other countries 1 374 (31.4%)
Source: British Petroleum
29
OIL AND GAS INDUSTRY
VOLUME OF OIL EXTRACTION AND PROCESSING REACHED HISTORICAL MINIMUM Oil industry of Ukraine
Oil refining by Ukrainian refineries
Oil refineries of Ukraine
mln tons
CHERNIHIV
15
LUTSK RIVNE
12
ZHYTOMYR
KYIV
190
DROHOBYCH OIL REFINERY (HALYCHYNA)
9
8.7
2012
SHEBELINKA GAS PROCESSING PLANT (GPP)
KREMENCHUK OIL REFINERY
LYSYCHANSK OIL REFINERY (LYNYK)
1.0
18.6
TERNOPIL
6
7.0
LUHANSK
CHERKASY
2012
VINNYTSIA
NADVIRNA OIL REFINERY 3
DNIPRO
KROPYVNYTSKYI
2011
2.6
DONETSK
ZAPORIZHIA
0 1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
KHERSON OIL REFINERY
2016
Own oil production in Ukraine is not enough to meet the needs of the refineries for raw materials.
ODESA OIL REFINERY
Primary total power
2005
1.1
mln tons per year
2014
2.8
Closed/Active
Extraction of crude oil and gas condensate
Year of shutdown
mln tons 6 5 4 3 2 1 0
1991
30
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Source: Naftogaz of Ukraine, Ministry of Energy and Coal Industry of Ukraine, SE “Energoatom National Nuclear Energy Generating Company”
OIL AND GAS INDUSTRY
THE PRODUCTION OF OIL PRODUCTS OVER 25 YEARS HAS DECREASED BY A FACTOR OF 12 Production, import and consumption of oil products, mln tons
Capital investment in the oil refining sector mln US dollars, in accordance with purchasing power parity
This investment dynamic excludes the possibility of an increase in the volume of oil refining in Ukraine.
200
150
100
50
0
2010
33.7
15.3
8.1
4.8
39.1 use
1991 Source: calculations based on information from the State Statistics Service of Ukraine and Eurostat
2014
2016
In 2001-2006, Ukraine was a net exporter of fuel.
production
import
2012
Infographic does not display export
4.0
Ukraine produces only 25% of its demand for oil products.
14.1
8.5
9.3
11.6
11.0
2000
2006
2016
2.7
31
OIL AND GAS INDUSTRY
UKRAINIAN GTS IS THE MAIN TRANSIT ROUTE FOR THE RUSSIAN FEDERATION TO EUROPE Transportation of oil and natural gas through the territory of Ukraine
Share of Ukrainian GTS in the transportation of Russian gas to europe
Ukrainian GTS
GTS capacity at the entrance BRYANSK
bln m3/year
KOBRYN
287.7
MAZYR
1996
95% SUMY
KYIV
2002
81%
2006
70%
2012
At 90% of transit capacity in 2016, Ukraine could provide 72% of Russian gas supplies to Europe, but in fact provided only 45%.
56%
2016
UZHHOROD
45%
OLEKSIIVKA
The planned construction of surplus transit capacities by the Russian Federation will completely exclude the Ukrainian gas transportation system from the transit of Russian gas.
BEREHOVE
178.5 The capacity of the GTS at the outlet
bln m3/year
ORLIVKA
Transportation of natural gas
total
bln m3
100
200
80
150
60
100
40
50
20
0
0
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
total
mln tons
250
1991
32
Transportation of oil
including transit
2016
1991
1994
1996
1998
2000
2002
2004
2006
including transit
2008
2010
2012
2014
2016
Source: Naftogaz of Ukraine, Ukrtransgaz, Gazprom, National Energy Security Fund, Ministry of Energy and Coal Industry of Ukraine
Coal industry
COAL INDUSTRY
COAL BALANCE 2016, mln tons
1.6 Other 11.7 Final consumption
63
0.8 Reserves
Coal supply
17.3
63 Coal use
0.2
49.7
Import
0.6
Own energy sector consumption
Non-energy use
0.8
Transformation into other types of fuel and energy
Export
11.1
Industry
0.6
Population
44.9
Production
28.8
Power stations
13.4
46% of all coal is used in electricity production.
Coke production
4.5 2.5 0.5
Blast furnaces
TPS and heat plants
Other transformation
34
Source: own calculations based on information from the State Statistics Service
COAL INDUSTRY
WORLD COAL MARKET Key countries of the global coal market
net importers
net exporters
247
389
china australia
coal
199
* 367
mln tons
india indonesia production
189
147
japan
ola
stan
R
83
ia
donesia alia
7 460 world
76 692 (9.3%) India
)U .9%
1 (8 66
colombia
China 3411 (45.7%)
SA
Austr
any
SA
.6%)
)R uss
erm
%)
66
%) G
3.4
434 (5.8%) In
(6 493
Chinese Taipei
2%
.8%) P
(2.4
1(
republic of korea
(5.
102 (1.4%) Kazakh nd
131 (1
176 25
385
134
russia
sar Other countries 723 (10%)
Source: International Energy Agency, British Petroleum
*
preliminary data
35
COAL INDUSTRY
UKRAINE DOES NOT FULLY MEET ITS NEEDS WITH ITS OWN COAL Production, import and use of coal, mln tons
Domestic coal production meets 71% of Ukrainian needs.
production
137 * 13
80
import
80 *
*
11
7
45
17
use
135
1991
36
*
83 *
88 *
2000
2006
63
2016 Infographics do not show transitional balances and exports
Excluding coke and brick fuel
Source: calculations based on information from the Eurostat, Ministry of Energy and Coal Industry of Ukraine, British Petroleum
Reforms and perspectives
REFORMS AND PERSPECTIVES
INVESTMENTS IN THE ENERGY SECTOR Dynamics in Ukraine and the situation in the world
Capital investment in the sector of the extraction of fuel and energy minerals
In 2015, the world invested 45% of total energy investment in the oil and gas sector and only 4% in coal.
bln US dollars in accordance with purchasing power parity
Extraction of crude oil and natural gas
In 2015, every eighth dollar of global energy investment was aimed at improving energy efficiency.
4.1
0.9
1.7
2010
2012
1.5
2014
2016 0.7
1.1
1.8 2.3
Extraction of stone and brown coal
Expenditures from the Consolidated Budget of Ukraine on Research and Development in the Fuel and Energy Sector bln US dollars in accordance with purchasing power parity 40
21
20
7
13
12
25
20
18
9
9
13
15
9 1,6
0
2002
38
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
1 2015
0,8 2016
Source: State Statistics Service of Ukraine, State Treasury Service of Ukrain, International Energy Agency
3 REFORMS AND PERSPECTIVES
ENERGY STRATEGY
3
ua
3
Ukraine Energy Strategy 2035: “Safety, Energy Efficiency, Competitiveness”.
ua
Approved by the Government of Ukraine on 18 August, 2017.
STRATEGIC GOALS
300
SolvingНАСЕЛЕННЯ energy security issues
300
3
import
<33%
12
1.6
150
3
Промисловість
7
ua
100
STAGES OF IMPLEMENTATION
25
<0.13
150
13
60
e
!
63
63
64
e
3
ua
87.6
ua-2020 2017
3
85
87.6
Неенергетичне споживання
OPTIMIZATION AND INNOVATIONS
2020
Market reforms and stimulation of competitive relations. 1.6 150
7
12 12
9 10
Creation of attractive investment 67.5 60 environment.100
Транспорт
13
63 67.5
25
12
9 13
25
13
13
12
50 91 87.6
0 2025 NPP
Reconstruction of nuclear and thermal power units.
2015 2030 HPP and PSP
SUSTAINABILITY HPP and PSP
63 in the energy mix. Achievement 63of 25% of RES
64
60
50
87.6
HPP and PSP
150
94
91
91
85
2020 TPS and CHPP
NPP
12
7
9 10
12
67.5
60
64
87.6
85
91
2030 HPP and 18PSP
2035 25 Renewables
13
13
63
63
91
94
50
0 2015
Renewables
0 2015
2025
100
Development of the intellectual network.
Movement towards EU ecological standards. 2020 2035 2025 2030 2035 NPP
2020
12
Creation of mechanisms to100 attract investment 94 94 91 for 85new construction projects. 91
Efficient heat supply.
1.6
Renewables
Achievement 18of the planned 25 levels of SO2, emissions. 13 12NOx and dust13
Implementation of the National Plan for 10 1.6 Reducing Emissions from Large Combustion 63 63 63 9 150 7 64 60 10 Plants.
Renewables TPS and CHPP
2015
TPS and CHPP 2035
Creation of new generating capacities.
300 18
67.5
0
TPS and CHPP
7
18
100
91
NPP
Synchronization with ENTSO-E. 1.6
150
64
Implementation of the third 50 energy package.87.6 85 Implementation of the system of 2015 2020 stimulating tariff formation.
300
2030
94
91
0
94
91
91
2025
TPS and CHPP 300
63
e
91
85
2026-2035
2015
300
13
>25%
in generation 63
64
!
up to 2035, bln kWh
02021 - 2025
MARKET REFORMS Транспорт
60
FORECAST OF ELECTRICITY GENERATION 50
Інші види споживачів
Неенергетичне споживання
67.5
13
12
Increasing share of RES
100
50
3
9 10
Промисловість
Інші види споживачів
3
7
tons of o. e./thsd US dollars
13
12
9 10
67.5
!
Reducing energy 18 intensity of GDP
НАСЕЛЕННЯ
25
18
12
1.6
2025 NPP
2030 HPP and PSP
2035
2020 TPS and CHPP
2025 NPP
2030 HPP and PSP
2035 Renewables
Renewables
Gas self-sufficiency.
Source: DTEK
39
ЕННЯ
REFORMS AND PERSPECTIVES
FULFILLMENT OF UKRAINE’S OBLIGATIONS UNDER THE ENERGY COMMUNITY TREATY Being the Contracting Party to the Energy Community Treaty, Ukraine undertook to implement EU energy legislation
OBLIGATIONS CONCERNING GAS MARKET ARE PRESCRIBED BY: DIRECTIVE 2009/73/EC concerning common rules for the internal market of natural gas and repealing Directive 2003/55/EC
REGULATION (EC) No 715/2009 on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No 1775/2005
Directive 2004/67/EC concerning measures to safeguard security of natural gas supply
THIRD ENERGY PACKAGE
НАСЕЛЕННЯ
НАСЕЛЕННЯ
Unbundling
Промисловість
Obligation to create an independent regulator
Промисловість access Third-party
Неенергетичне споживання НАСЕЛЕННЯ
Security of supplies
Промисловість
e
!
НАСЕЛЕННЯ НАСЕЛЕННЯ
НАСЕЛЕННЯ
НАСЕЛЕННЯ
Customer Protection and Protection of Vulnerable Customers
Obligation to ensure the natural gas market !opening and market pricing
Інші види споживачів
Неенергетичне споживання
Неенергетичне споживання
НАСЕЛЕННЯ
GENERAL PROVISIONS OF THE INDICATED OBLIGATIONS IMPLEMENTED BY THE LAW OF UKRAINE “ON THE NATURAL GAS MARKET” Транспорт
Транспорт
ПромисловістьCMU
Resolution No. 496 of Промисловість Промисловість Промисловість July 1, 2016 “On Unbundling of Gas Transmission and Storage (Injection, Withdrawal)”
Інші види споживачів
CMU Resolution No. 801 of ІншіІнші види “On the Інші види November 9,види 2016 споживачів споживачів споживачів Establishment of Public JointStock Company “Main Gas Pipelines of Ukraine” etc.
Law of Ukraine No. 1540-VIII Промисловість of September 22, 2016 “On the National Commission for ! and State Regulation of Energy Utilities” Інші види споживачів
ргетичне вання
Неенергетичне споживання
Неенергетичне Неенергетичне споживання споживання
Неенергетичне споживання
Неенергетичне споживання
порт
Транспорт
Транспорт Транспорт
Транспорт
Транспорт
40
Obligation to introduce new balancing regime
Інші види споживачів
Інші види споживачів
иди вачів
Implementation of a new model of tariff formation
e
!
словість
НАСЕЛЕННЯ
NCSREU Resolution No. 2493 of September 30, 2015 “On the Approval of the Gas !Transmission System ! Code” NCSREU Resolution No. 2494 of September 30, 2015 “On the Approval of the Gas Distribution System Code” NCSREU Resolution No. 2495 of September 30, 2015 “On the Approval of the Code of Gas Storages and criteria according to which a contractual access regime or a regulated access regime applies to a certain gas storage”
Транспорт
!!
NCSREU Resolution No. 2517 Промисловість of September 30, 2015 “On the approval e of the !Methodology e for determination and calculation of ! tariffs for the service of natural gas transmission for entry and Інші види споживачів exit points based on long-term incentive-based regulation” NCSREU Resolution No. 3158 of December 29, 2015 and NCSREU Неенергетичне споживання Resolution No. 348 of March 28, 2017 on setting tariffs for the service of natural gas transmission for entry and exit points (by crossborder pipelines and for consumers Транспорт in Ukraine)
NCSREU Resolution No. 2493 of September 30, 2015 “On the eApproval of the Gas e eTransmission System Code”
e
Ministry of Energy and Coal Industry of Ukraine Order No. 686 of November e 2, 2015 “On the Approval of the Rules for Safe Natural Gas Supply”
CMU Resolution No. 187 of March 22, 2017 “On the Approval of the Regulation on special functions of subjects of! natural gas market to safeguard public interests in the operation of the natural gas market”
e Pending implementation
Benefit and subsidy schemes Implemented
Source: AEQUO
REFORMS AND PERSPECTIVES
KEY CHANGES IN THE UKRAINIAN ENERGY MARKET 3
3
3
3
ua
3
ELECTRICITY
ua
3
12 12
9 10
balancing market; 67.5
25
13
13
bilateral contract market;
retail market.
300
0 2015
2020
unbundling of electricity distribution and transmission 3 activities from other types of activity;
3
2025
new entering ua the electricity market - traders 3 parties 3 (business entities that purchase electric energy solely for the purpose of its resale, except for sales under contracts for the supply ua of electric energy to consumers);
2030
3
TPS and CHPP
1.6
NPP
HPP 150 and PSP 7
ua
3
64
10
67.5
60
2025
3
ua 3
1.6 7
100 150
91
2020 TPS and CHPP
67.5
12
2030 18
NPP
HPP and PSP 13
12
9 10
7
2025
150
25
Renewables
150
300
BASIC REGULATIONS AND DOCUMENTS
13
60
12
64
63
18
25
63
12
60
64 150
7
100
3
150
7
3 100
67.5
12
25
13
13
2015
ua
60
2020
85
TPS and CHPP
0
91
2025
2030
94
2020
2025
2030
25
13
13
63
63
300
91
TPS and CHPP
94
91
18
25
13
13
2025
64
85
2020
91
NPP
63
HPP and PSP
67.5
100
2030 HPP and PSP
2030
2035 Renewables
50
300 0
2035
2015
94
1.6
Renewables
150
91
91
NPP
HPP and PSP
100
94
Renewables
63
63
64
50 2020
91
2025
3
85
2030 HPP and PSP
2020
Renewables
TPS and CHPP
2030
3
94
TPS and CHPP
2015
NPP
HPP and PSP
ua
91
2035
91
2035
87.6
Renewables
0
94
2015
Law of Ukraine No. 1540-VIII of September 22, 2016 “On 2030 the2025 National Commission for 2035 State Regulation of Energy and Utilities” NPP HPP and PSP Renewables
2035 300
50
TPS and CHPP 87.6
NPP
HPP and PSP 91
91
85
Renewables 94
1.6
2015
150
300
0 2020
2025
2030
2035 1.6
300
Source: AEQUO
TPS and CHPP
1.6
150
12
7
9 10
12
67.5
60
64
NPP
HPP and PSP 18
25
13
13
63
63
Renewables
150
100
12
7
9 10
12
67.5
60
64
7
67.5
2035
13
13
TPS and CHPP
7
25
2025
12
1.6
150
87.6
2030
63
18
12
63
63 9 10
0 NPP
2025
0
2025
2035
85
60
87.6
2020
2020 25
94
91
13
50
2015
60
2015
91
85
TPS and CHPP Law of 63Ukraine No.63329-VIII of April 9, 2015 “On the NPP and PSP Renewables Natural Gas HPP Market”
91
64
18
2015
0
10
87.6
2015 87.6
13
2020
91
12
10
87.6
87.6
64
85
09
7
67.5
94
91
91 18
12
0 9
50
2015
ua
85
3
1.6
3
50
13
2015
12
50
100
63
63
64
18
18
12
60
87.6
13
100
60
18 12 Regulator’s decisions to be no requirement for the 50 13 13 12 9 2035 3 approved10 by bodies other than the Antimonopoly 91 87.6 85 Committee of Ukraine that is in charge of competitive 63 63 64 60 business environment; 0 25 ua 3
0
13
13
12
9 10
1.6 67.5
9 10
87.6
Law of Ukraine No. 2019-VIII of April 13, 2017 “On the Electricity Market”
67.5
100
12 300
7
12
9 10
increased salaries for the Regulator’s members and Chairman. 63 NPP TPS63 and CHPP
50
50
1.6
7
ua
12
1.6
2035
150
9 10
7
300
50 67.5
7
67.5
67.5
2015
100
150
Renewables
1.6
94
91
3
financing of the Regulator by means of regulatory fees 3 of the payable to a special fund State Budget 64of Ukraine 67.5 60 by entities operating in the energy sector and public 100 94 utilities;3 ua
300
3
63 introduction64 of new balancing rules;63
85
1.6
150
63
2030
300
150
63
3
300
appointment of the Regulator’s members following an open competitive selection process; 12 1.6
HPP and PSP300
NPP
0
300
13
100 87.6
consumer’s free choice of electricity supplier. ua
25
13
25
50
300
18
1.6
transition ua to market pricing model.
3
Legislative framework for measures to ensure the Regulator’s ua 3 independence:
91
91
0 introduction of a new system of third-party access to 3 ua market, in particular, 25introduction 2035 2015 thenatural gas of 2020 18 12 13 13 system; 12 Renewables 9 сapacity allocation TPS and CHPP
100
implementation of system of special functions to safeguard 3 public interests in the operation of the electricity market;
3
91
91
85
12
implementation of a new model of tariff setting (setting ua 3 tariffs for the service of natural gas transmission for 50 94 87.6 85 entry and3 exit points);
50 87.6
12
1.6
9 7 from unbundling of transmission of natural150gas 10 ua 3 production, distribution, supply of natural gas, activities 63 67.5 60 of wholesalers;3 100
63
64
60
18
100
market of auxiliary services;
REGULATOR
Creation of a new model for the natural 300 gas market, in 3 particular:
1.6 segmentation of the electricity market into 6 markets: 3 150 7
intra-day market;
ua
3
Plans are in place to create a new model for the electricity 300 market by the end of 2019, involving in particular:
day3 ahead market; ua
NATURAL GAS
18
25
13
13
63
63
7
67.5
100
4150 87.6
3
3 REFORMS AND PERSPECTIVES
3 ua
НАСЕЛЕННЯ
The new market model is set for introduction from July 1, 2019.
НАСЕЛЕННЯ
THE ESSENCE OF REFORM3 3
Промисловість
Unbundling
Промисловість
Промисловість
3
3
ua
Separation of oblenergos into supplier company 3 and ! distribution network operator 1.6
3
Інші види споживачів
Інші види споживачів
150
7
Інші види Інші види споживачів
споживачів uaFUNCTIONING SCHEME 3 WHOLESALE MARKET
67.5
ua! e 9 10
1.6
100
Неенергетичне споживання
existing model market Неенергетичне споживання
Until 1 July, 2019
Неенергетичне споживання Неенергетичне
споживання
regulator (ncsrepu) 3 Has the authority to set tariffs for all market 50
participants
3 Транспорт
Транспорт
ua
Electricity generation
Транспорт
Транспорт
12 12
60
64
7
67.5
60
2015
85 12 12
2025
50
se "energorynok" market operator
87.6
Trunk Networks
0 2015
13
94
3
18 13
25 91
ua
63
2030
NPP
HPP and PSP
HPP and PSP
2035
2035
91
internal market
2020
2025 NPP
2030
balancing marketRenewables HPP and PSP
67.5
60
NPP
64
60
0
12
202012
64
60
Distribution of electricity
100
13
63
63
300
91
25
18
2015 2030 management 91 of restrictions 85
1.6
150
13
13
91 2035 2020
67.5
64 The procedure for access to interstate crossings 0
HPP and PSP
Renewables
Code accounting 2015 of commercial 2020 2025
TPS and CHPP
NPP
2030 HPP and PSP
100
2025 13
Renewables
501.6 150
300
NPP
HPP and PSP
Testing 63 operations
2035
150
consumers of electricity household and commercial
87.6
consumers of electricity
Renewables
87.6
67.5
100
60
0 2015
50 94
87.6
85
Implementation of the new market
household and commercial 0 2015
2020 TPS and CHPP
42
91
85
9 10
50
UNBUNDLING
from 1 91 july 2019
2015
7
Supplier of last resort 50
87.6
1.6
63
Provider of universal services
7
067.5 100
2030 13
HPP
300
2035
25 The procedure for the purchase and sale by guaranteed buyer 18
from june 2018
7
2025
94
63
Rules of the retail market
9 10
67.5
25
13
94 join 91 The 91procedure for payment of the fee to
85
2015
7
18
50
63
TPS and CHPP
Electricity suppliers
64
harmonization of91secondary legislation 94 87.6 85
2025Rules 87.6
0 1.6
150
60
Code of distribution systems
87.6 Trunk Networks
300
2035
63
Rules of the day-ahead market 50
50 94
67.5
Code of transmission system TPS and CHPP NPP
day-ahead market
85
TPS and CHPP
12
100
12
Renewables
Renewables
91
67.5
Integration with ENTSO-E
12
Rules of the market
9 10
2020 100
91
9 10
7
12
7
2015
94
13
Electricity generation
2025 2030
150
9 10
12
1.6
150
1.6
13
MAIN STAGES OF REFORM
3
0
12
7
100
300
63
63
63
64
NPP
TPS and CHPP
Distribution and supply of electricity
91
2020
TPS and CHPP
TPS and CHPP
25
13
e
63
64
300 ua 85 regulator (ncsrepu) 3 87.6 3 retains the function of monitoring the implementation
0
2020 100
18 63
91
87.6 9 10
1.6
ua
60
of market rules by market participants
91
50
Creation of the e retail market
25
1.6
13150
12
9 10
50
From 1 July, 2019
0 2015
67.5
63 9 10
new market model 85
e
3
18
12
100
64
7
67.5
150
!
13
100
300
87.6
18
150 7 Changing the eof the structure 25 ! wholsale market 13
300
150
3
1.6
Consumer is in the ! 12 the middle, not regulator12
60
300
300
ua
3
deregulation
300
direct agreements market
Промисловість
CREATION OF ELECTRICITY MARKET
ua
Signed by the President of Ukraine on June 8, 2017.
The Law of Ukraine “On the Electricity Market” НАСЕЛЕННЯ of April 13, 2017 No 2019-VIII.
НАСЕЛЕННЯ
3
ua
3
2025 NPP
Transition period — NPPs and HPPs are finincing0 high tariffs for RES 2030 2035 2015
FREE MARKET
HPP and PSP
Renewables
2020
TPS and CHPP
Source: DTEK
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