A waste of energy
February 15, 2011
Gregor Postl works in Ukraine for the Austrian chamber of commerce as trade commissioner. His office is either too hot or too cold.
"It's not very easy to regulate the room temperature because the heating system doesn't have a thermostat," he says. "You just have to keep opening and shutting the window."
His office is housed in a brand new building complex in Kiev, the Ukrainian capital. "Even though it's new, it has bad insulation and a heating system that can only be controlled centrally – the same problems all the buildings here have."
Most of the buildings in Kiev rely on heat from a district heating network. Gas heating systems in the cellars control heating in individual apartments and only run from October to April. During summer, the network is switched off - a practice left over from Soviet days.
Dilapidated buildings, low enery prices
Not surprisingly, Ukraine wastes more energy than most other countries in Europe. According to 'Germany Trade & Invest', the foreign trade and inward investment agency, its energy waste is three to four times higher than in EU countries. And the building sector alone is responsible for 30 percent of the country's energy consumption – another record high for Europe.
The waste can be attributed to widespread lack of non-permeable roofs, double-glazing and adequate insulation. Moreover, supply systems for heat, electricity and warm water are often rundown.
"If we don't act now, we risk ending up with a complete breakdown in infrastructure within the next five to ten years," emphasized Elena Rybak, CEO of the European-Ukrainian Energy Agency in an interview with news website EurActiv.
"There is no incentive to save energy," stresses Postl. "Gas prices are low and remain subsidized. That positively invites waste."
The Russian factor
But those subsidies won't last for ever: Reduced subsidies were a condition imposed by the International Monetary Fund, when it approved Ukrainian credit during the global financial crisis.
The government subsequently hiked gas prices by 50 percent in 2010, but faced with public outrage, Kiev is shying away from a further hike scheduled for April. As Postl points out, rising gas prices don't go down well with voters.
Among the worst energy-guzzlers are dilapidated factories in energy-intensive sectors such as iron, steel and mineral fertilizer industries. Ukraine has barely any energy reserves to call its own, instead importing 80 percent of its natural gas from Russia.
Needless to say, this can lead to potentially devastating conflicts – when Moscow raised gas prices in 2005, the result was a stand-off between the two countries. Russia turned the taps off and supplies in western Europe were also threatened. After all, the bulk of Russia's natural gas exports to Europe are transported through Ukraine.
"There are political reasons why Ukraine needs to adopt a new energy policy," stresses Gregor Postl. "The will is there, but not when it comes to energy efficiency."
Renewable energy is more of a focus, he points out. "A wind turbine has political clout, whereas a well-insulated home doesn't," he says. And significantly, wind and solar energy have been profitable since 2009, when Ukraine became the first of the former Soviet states to introduce compensation for clean electricity fed into the grid.
But Postl maintains that what's more urgently needed are laws on energy efficiency. He cites the absence of any kind of programms offering the public financial support to renovate old buildings.
Untapped potential
Picking up the slack are a number of western development aid agencies, as well as the European Bank for Reconstruction and Development (EBRD), which organizes trade fairs for European investors and also awards subsidies to local districts. The EBRD has earmarked 73 million euros for 40 new energy efficient projects by 2015.
According to the European-Ukrainian Energy Agency, Ukraine boasts an "unbelievable potential for energy-efficient projects."
But initiatives tend to be justified on the grounds that they represent cost-cutting – climate protection doesn't cut much ice among politicians and the business community. Not for nothing did Ukraine rank last on the climate protection index compiled by the Climate Action Network Europe.
The core of the problem is that all too often, climate protection is seen as a luxury rather than a necessity. Like Russia, Ukraine has seen a greater reduction in CO2 emissions since 1990 than laid out in the Kyoto Protocol - the reason being the collapse of national industry in the 1990s. The result was such a dramatic drop in emissions that in recent years, the country saw a welcome boost to state funds received from the trade of carbon emission quotas.
Both Moscow and Kiev have pledged to plough these funds into a new climate protection agreement. This will be decided on at the end of the year – at the next climate change summit in Durban, South Africa.
Author: Torsten Schäfer (jp)
Editor: Sonia Phalnikar