Local examples of energy efficiency enhancement in Ukraine: from alternative energy to warm credits

High potential

Ukraine has one of the most energy intensive economies in Europe. Long out of date and in need of upgrading, the housing and utilities sector accounts for almost half of the country’s energy consumption.

The lack of energy-efficient conditions in housing at times results in losses of up to 47% of thermal energy.

According to the European-Ukrainian Energy Agency, thermal modernisation and major building rennovations can cut annual energy consumption and losses by 10–25%. Energy consumption throughout Ukraine has the potential to be reduced by 75%!

This calls for implementing a legislative framework and showcasing success stories of cities, towns and villages that have already upgraded their energy supply systems.

Take, for example, the city of Zhovkva in Lviv Oblast. Town authorities upgraded the local boiler house with EU funds, which enabled the town to save almost UAH 7 million within two years from the project’s start.

Zhovkva is now entirely independent of natural gas. Instead, the new boiler house uses sawdust and wood residue.

Donetsk Oblast offers another example where United Nations Development Programme (UNDP) provides support for the energy modernisation of social infrastructure. The newly installed boilers running on agricultural biomass enable hospitals, schools, and kindergartens in Cherkaske, Donetsk Oblast, to save significant budget funds and energy resources. A total of 12 biomass boilers have been commissioned in Zhytomyr, Kyiv, Cherkasy, and Donetsk Oblasts under this project.

Investing in good habits

The energy efficiency of Ukraine’s housing and utilities sector is lower by at least a factor of four compared to Western European countries.

However, Ukraine is showing progress in this area. Stories of Germans and Austrians turning off their heat for the night that used to seem bewildering to Ukrainians have now become a part of a number of household life hacks for an energy-efficient home.

Ukrainians are just now learning how to use energy smarter at all stages, from generation, to transportation and consumption.

The International Energy Agency (IEA) maintains that every dollar invested in energy efficiency triples the value of a building. This process is built on several elements: upgrading the residential heating system, installing devices for metering and controlling energy consumption, upgrading the heating, hot water supply, ventilation, air conditioning, and lighting systems, and using local renewable alternative energy sources.

Solar energy prospects

In 2017, renewable sources composed just 6.7% of total energy consumption in Ukraine. Better results are expected in 2018 thanks to the significant increase (by a factor of three compared to 2017) in a number of newly installed “green” facilities, although this is still a far cry from the member states of the European Union with similar climate conditions.

In fact, renewable energy sources including wind, sun and biomass totaled about 20.9% in the EU in 2017 and their share is expected to increase to 32% in 2030.

However, the 2020 National Action Plan for Renewable Energy requires renewable energy to provide 11% of the country’s total energy needs. In addition, green energy is planned to account for 25% of total primary energy consumption by 2035.

The advantages of renewable energy sources, especially solar energy, are becoming increasingly interesting to Ukrainians. Data of the State Agency for Energy Efficiency and Energy Saving of Ukraine show that today solar power plants (SPP) provide power to 7450 households, and half of them were installed in 2018. In comparison, only 20 Ukrainian families used their own solar power in 2014.

Having their own personal green power source is not the only motivation. Ukrainians can also sell power generated by their SPP with a capacity of 30 kW at attractive green tariffs.

The law providing for an increase in the ceiling for “household” SPP up to 50 kW was approved in the first reading in 2018.

Unite to save together

Co-owners of multi-family residential houses have the opportunity to significantly boost their energy savings. The European Union and UNDP are currently introducing a two-year project called “Home Owners of Ukraine for Sustainable Energy Solutions (HOUSES)”.

One of the project’s objectives is to support and motivate home owners in the creation of home owners associations (HOA) in all 24 Ukrainian oblasts. At least 2,000 new HOAs will be created, while a total of 4,000 HOAs will be trained on how to manage energy efficiency projects.

An Energy Efficiency Fund is also planned to be created in 2019 to finance the heat insulation of houses, and purchase of energy-efficient equipment, new boilers and other energy-saving measures. The Fund will have a budget of at least UAH 6–7 bln purposed for housing modernisation. The Joint European Union/United Nations Development Programme project is intended to support HOAs to mobilise their commitment to reduce energy power expenses and accept wider responsibility for energy saving in their buildings.

What the state is offering

The Warm Credits state programme also showed positive results in increasing domestic energy efficiency. This state energy saving programme implemented by the government has been in effect for citizens and HOAs in Ukraine since October 2014, providing the following compensations from the state budget:

  • 20% of the loan amount (but not more than UAH 12 ths) for the purchase of non-gas and non-electric boilers for individuals, 35% of the loan amount (but not more than UAH 14 ths) for the purchase of energy-saving equipment/materials for individuals who are private residence owners;
  • 40% of the loan amount (but not more than UAH 14 ths per one apartment) for HOAs/Housing Associations for communal purposes.

525 ths Ukrainian families have benefited from the Warm Credits programme in the four years of its operation. The implementation of energy-saving measures (in terms of HOAs) has resulted in the reduction of housing and utility service expenses by an average 20–50% and even more.

Boosting energy efficiency is beneficial for more than just cutting utility service expenses.

In fact, more than 70% of carbon dioxide emissions in Ukraine are generated by operations and inefficiency in the energy sector.

Reducing the consumption and improving the conservation of energy will help strengthen the national economy, reduce the environmental impact made by fossil fuel combustion for energy generation, and therefore also contribute to preventing climate change.

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UNDP Ukraine

UNDP Ukraine

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