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Enhancing Ukraine’s Energy Security through Municipal Energy Efficiency

Municipal Energy Reform Project (MERP)

Ineffective legislation, low energy security, poor energy efficiency, outdated heating equipment and networks, low energy market competitiveness, among other issues, hampered Ukraine’s economic growth and contributed to global climate change.

In 2013, recognizing the need for a consistent and sustainable approach to address these critical issues and start effective reforms, USAID funded the five-year Municipal Energy Reform Project to help Ukraine’s government make major legislative strides toward energy reform, introduce international energy efficiency and energy management standards, attract investments into municipal energy efficiency (EE), develop a renewable energy market, and promote incentives to raise energy efficiency across the population. RTI International supported both the national and municipal levels of government to drive climate-smart policies and incentives.

Setting the Conditions for a Culture of Responsible Energy Consumption

At the national level, we assisted the Government of Ukraine with developing, advocating for, and adopting major strategic legislative documents to establish an energy efficiency framework and improve the efficiency and transparency of the tariff formation system. These efforts paid off in 2018 when the government adopted the Low-Carbon Development Strategy of Ukraine. Ukraine also moved to adopt and fully implement the Energy Community Treaty and Global Climate Change (GCC) Convention provisions.

Simultaneously, we worked with 36 municipalities to help them overcome barriers to developing and implementing clean energy and EE activities. RTI conducted hundreds of energy audits or assessments of the energy needs and efficiency in buildings. We also conducted energy audits for the municipal infrastructure systems and helped cities develop Sustainable Energy Action Plans (SEAPs) with recommendations for more climate-resilient infrastructure. These strategic documents included plans for more than 800 projects with an estimated investment demand of $2 billion for the implementation of energy efficiency measures and use of alternative energy sources in four key sectors: public and residential buildings, municipal transport, lighting, and solid waste management.

We also helped attract the necessary funds for the municipalities to implement their SEAPs. At the request of our partner cities, we prepared investment feasibility studies and developed business plans and other essential documents, elaborating some 60 investment-ready projects totaling approximately $560 million. By March 2018, 22 projects totaling approximately $200 million were already undergoing approval or implementation.

Understanding that municipalities will be able to implement their plans and projects only by using modern approaches to manage energy resources, we offered to improve existing systems of energy management or develop new ones according to standards established by the International Organization for Standardization. We trained more than 100 specialists and city council leaders who then developed and implemented effective energy policies and objectives. In just two years, the cities managed to finance activities valued at $150 million to boost energy efficiency.

If all the proposed projects, including in the SEAPs, are implemented in full, our partner cities will be able to reduce their annual energy consumption by 9.6 TWh, which amounts to about 1.6 percent of the country’s annual energy consumption, and cut annual carbon emissions in the atmosphere by seven million tons annually. This would be a notable contribution toward the global goal of achieving net-zero emissions by 2050.

To ensure understanding among and support from the Ukrainian population for all MERP activities, we managed a multifaceted national outreach campaign to put energy efficiency and energy savings at the center of Ukrainian culture. We organized more than 100 public events and communicated directly with consumers in our partner cities through a hotline and electronic resources. We developed and disseminated more than 400,000 posters, brochures, and booklets through public events and via our network of 18 homeowner associations and clean energy resource centers, created to promote energy efficiency in the residential sector and climate-smart communities.

We also produced a series of video public service announcements for social media and broadcasted them over 120 television channels with an audience of about two million people. And we educated journalists on how to explain the most pressing issues in the energy and utility sectors.  

Additionally, we supported the development of state and municipal mechanisms of the Warm Loans program, which reimburses between 30 and 70 percent of costs for EE measures and materials to individual households and homeowner’s associations. Through the nationwide outreach campaign, we promoted incentives and implemented household-level energy efficiency projects. Ukrainians received these messages well; after two years, more than five million small-scale EE projects in the residential sector received financing, representing a total disbursement value of $195 million.

These initiatives resulted in transformative, long-term development in cities across Ukraine and accelerated sustainable, climate-resilient economic growth while slowing the growth of greenhouse gas emissions. In September 2017, the results of the survey conducted by the Kyiv International Sociology Institute demonstrated that nearly 87 percent of adult Ukrainians supported completing or have already completed activities in their homes to increase energy efficiency. According to the same survey, the MERP information campaign—whose materials are familiar to more than 18 percent of the country’s adult population—played a major role in these successes. This increased awareness and demonstrated success will lead to a more secure energy future for Ukraine.