Cooperation in the energy sector

Nuclear safety

In the context of the events at the Fukushima-1 nuclear power plant in Japan on June 23, 2011, Ukraine joined the Joint Declaration of the European Commission and the EU's neighbors on a targeted assessment of the safety potential of nuclear power plants on its territory. The results of stress tests at nuclear power plants in the EU and neighboring countries were published on October 4, 2012 in the relevant communication of the European Commission.

According to the results of stress tests in Ukraine, additional measures have been developed to improve safety at NPPs, which are included in the "Comprehensive (consolidated) program to improve the safety of nuclear power plants", which was launched by NNEGC "Energoatom" and will last until 2017. NNEGC Energoatom estimates that the cost of improving the safety of nuclear power plants in Ukraine will be approximately 1.2 billion euros.

On March 12, 2013, the EBRD allocated EUR 300 million in financing to Ukraine for the implementation of this program. A loan and guarantee agreement with Euratom in the amount of EUR 300 million was signed on August 7, 2013.

Projects aimed at bringing the Chornobyl NPP site to an environmentally safe condition are being implemented, according to the revised estimate and schedule. The EU's contribution to the Chornobyl Shelter Fund and the Nuclear Safety Account is over € 400 million (about 20% of total expenditure, estimated at € 2 billion).

In early December 2014, the EBRD approved a € 350 million loan to finance the construction of the Shelter at the Chornobyl NPP.

Integration of electricity and gas markets

During 2014, Ukraine chaired the Energy Community, in which our country became a full member on February 1, 2011. In the context of membership in this organization, large-scale work is underway to bring the domestic legal framework in line with EU law. 

The procedure for Ukraine’s implementation of its obligations in the framework of membership in the Energy Community, including by making the necessary changes to the legislation of Ukraine, defined in the order of the Cabinet of Ministers of Ukraine 33733-r of 03.08.2011 on the Action Plan for Ukraine to fulfill its obligations under the Energy Community Treaty. In particular, one of the priority steps in this direction was the adoption of the Laws of Ukraine "On the Principles of the Gas Market" and "On the Principles of the Electricity Market" and the Cabinet of Ministers "On Urgent Measures to Reform the Management System of the Unified Gas Transmission System of Ukraine". which provides for the division of NJSC "Naftogaz of Ukraine" and the creation of public joint stock companies "Main Gas Pipelines of Ukraine" and "Underground Gas Storage of Ukraine".

In March 2015, the Cabinet of Ministers approved the Gas Sector Reform Plan agreed with the World Bank and the Energy Community Secretariat, which envisages the restructuring of Naftogaz Ukrainy.

Due to the need to carry out a large amount of work to prepare and adapt laws and regulations, Ukraine needs technical and financial assistance. In this regard, the EU is providing support to Ukraine, in particular through an additional technical assistance project attached to the Budget Support Program for Ukraine's energy sector reform launched in March 2010.

Preparations for the integration of the Unified Energy System of Ukraine with the ENTSO-E network (European Network of Transmission System Operators for Electricity) continue. Such synchronization will allow Ukrainian electricity generating companies to freely export electricity to the countries of Central and South-Eastern Europe in real time, working in a single technical and regulatory mode of electricity transmission based on EU standards. The Ukrainian side is working on the project.

 

Safety and energy efficiency

Improve security of hydropower supply and transit

As part of the implementation of the Joint Statement on the results of the International Investment Conference on Modernization of the Gas Transmission System of Ukraine of March 23, 2009, the Ukrainian side initiated the project "Modernization and Reconstruction of the Urengoy-Pomary-Uzhgorod Main Gas Pipeline" with funds from international financial institutions. The project envisages a complete replacement of pipes on 120 kilometers of gas pipeline and modernization of two compressor stations.

The intentions of the EBRD and the EIB regarding the possibility of further financing of the gas pipeline are set out in the memorandum on the preparation of this project between NJSC Naftogaz and the EBRD and the Letter of Intent between NJSC Naftogaz and the EIB.

According to the results of the Ukrainian side's fulfillment of the criteria (in particular, reorganization of Naftogaz of Ukraine and approximation of Ukrainian legislation to the requirements of the Energy Community Treaty) put forward by European financial institutions to further provide funding for the pipeline modernization, in December 2014 The Bank and the European Bank for Reconstruction and Development provided loans of EUR 150 million and USD 200 million. in accordance. In addition, Deutsche Bank AG agreed in principle to participate in financing the modernization of the entire GTS of Ukraine with an estimated cost of 3.5 to 5 billion euros. Simultaneously with the resolution of financing issues, the procedures for approval of design and estimate documentation for the reconstruction of the gas pipeline are underway.

Improving coal safety and environmental standards

The implementation of the project "Program to support the coal industry of Ukraine", funded by the EU, has been completed. The final stage of the implementation of the "Coal Sector Support Program" in Ukraine was the approval of the Master Plan for the development of the Ukrainian coal industry for 2012-2017.

Energy efficiency and the use of renewable energy sources

The implementation of the Roadmap for Energy Efficiency and Renewable Energy, signed in April 2008, is ongoing. The program of budget support within the framework of the European Neighborhood and Partnership Instrument is being implemented, in particular, for the implementation of energy efficient projects in Ukraine in the budget sphere and communal heat energy.

During the meeting of the Council of Ministers of the Energy Community on October 18, 2012 in Budva (Montenegro), the share of energy obtained from renewable sources in the energy balance of Ukraine in 2020 was set at 11%. In October 2014, the Cabinet of Ministers approved the National Renewable Energy Action Plan until 2020, as well as the Action Plan for its implementation.

A budget support program for the industry is being implemented under the European Neighborhood and Partnership Instrument. The Eastern Europe / Ukraine Energy Efficiency and Environmental Initiative (E5P, Swedish Initiative), launched on November 26, continues.