Community Research and Development Information Service - CORDIS

Ukraine and Energy Community: On the Road of Reforms

Contributed by: DiXi Group

The Research carried out by the Energy Reforms coalition on the situation with Ukraine's progress in implementation of the European energy legislation in the framework of the Energy Community. The study was carried out with support of the European Union and the International Renaissance Foundation and first presented on November 11, 2015.
Ukraine and Energy Community: On the Road of Reforms
The closer cooperation between the “reform champions” among public authority branches is, the faster and better reforms are. Peculiarity of reforms implemented after 2014 is improved social mobility as well as arrival of new politicians and officials both in public authorities, i.e. the government, the parliament, and sectoral ministries. Many of them are motivated to carry out reforms and to demonstrate results. The key laws, namely on the natural gas market, on the promotion of renewable energy, on energy service contracts, were adopted first and foremost due to such “champions”. And vice versa, once such “champions” in different branches have political or other controversies, the issues remain unsettled and, as a rule, the results of decision making are poor.

External factor remains important for keeping reforms fast. The more international financial organisations set certain reforms as a requirement for granting a loan or aid, and the bigger the amount of such aid is, the higher chances to be implemented such a reform has. Adoption of the gas market law was one of the World Bank requirements for granting the next tranche to the government, this encouraged both the parliament and the government to accelerate its consideration and adoption. Reference between clear changes in the energy sector to financial assistance under the “more for more” principle shall continue.

Cooperation between stakeholders and experts, namely with the Secretariat of the Energy Community, increases the possibilities for better reforms. The reform process was faster and dialogue between the main political forces was more efficient in the sectors, where experts of the Energy Community Secretariat were involved. Introduction of world practices, transfer from discussions to clear mechanisms, and even development of draft laws and key regulations on the initiative of the Energy Community Secretariat mitigated political factors and allowed key stakeholders (MPs, as a rule) reaching agreement faster.

Despite strong political will, there is still the “second level” of barriers for successful reforms existing, i.e. the decision-making system, influence of financial and industrial groups, and the politicization of the process. Starting from 2014, all the public authority branches declared their commitment to make reforms to ensure real European integration of Ukraine. For this purpose, plans with clear objectives, schedules and relevant indicators have been developed. At the same time, despite numerous efforts to make the process automatic, namely through adoption of acquis implementation plans, it still requires continuous adjustment and control. Among the main reasons – the unreformed systems of state service, which allows delaying decision-making, the extremely high influence of business on political decisions and the use of unpopular reforms for the purposes of political struggle, which hampers consensus between political players.

Efforts for reform automatisation created lots of overlapping initiatives, which need harmonisation. Trying to keep a “single framework” in the reform process, different authorities initiated a range of initiatives for promotion and monitoring of reforms, including those in energy sector. However, although having common objectives, most of such mechanisms exist separately of each other and do not encourage communication among the main stakeholders. Harmonisation of such initiatives, promotion of better communications among involved authorities may improve not only monitoring and progress of the reforms, but also quality and pace of the decisions’ expertise.

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Ukraine, Energy, Legislation, Regulations, Gas, Electricity, Renewables, Energy Efficiency, Energy Community
Record Number: 135255 / Last updated on: 2016-09-12
Category: Policy making and guidelines
Provider: WIRE
Revision: 0