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New Developments in Ukrainian Energy Law: Insights from Wolfram Rehbock

Join Wolfram Rehbock for an in-depth discussion on the latest developments in Ukrainian Energy Law. Explore key topics including the implications of Ukraine’s participation in the Energy Community, the transition from a single player model to direct agreements and EEX, and the ongoing process of privatization. This session, held on August 24, 2012, offers crucial insights into the evolving energy landscape of Ukraine and its impact on the market, policy, and investment opportunities.

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New Developments in Ukrainian Energy Law: Insights from Wolfram Rehbock

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  1. The Ukrainian Energy Law. New developments. Speaker:Wolfram Rehbock24th of August, 2012 Колонтитул презентации
  2. Content 1. Energy Community and what this means for Ukraine 2. Change from single player model to direct agreements and EEX 3. Privatization 4. Conventional gas and unconventional gas exploration 5. Energy Strategy, new version, big points 6. Overview of green tariffs and latest developments 7. Biofuel- admixing 8. Chances given by RED for export of green energy/fuel to EU The Ukrainian Energy Law. New developments.
  3. Energy Community and what this means for Ukraine Колонтитул презентации
  4. Ukraine’s main obligations under the Energy Community Treaty (member since 01 February 2011) The Ukrainian Energy Law. New developments.
  5. Directive 2003/55/EC on the general principles of functioning of the internal market in natural gas Law of Ukraine “On the Principles of the Natural Gas Market Operation” No 2467-VI dd. 08.07.2010 Independent regulatory body (Decree „On the National Commission for Energy State Regulation“ No 1059/2011 dd. 23.11.2011) Equal access to the grids (Regulation of NERC “The Procedure of Access To Single Gas and Transport System of Ukraine” No 420 dd. 19.04.2012 ) Unbundling (reorganization of Naftogas): the Law of Ukraine “On Introducing Amendments to the Law of Ukraine “On Pipeline Transport” with Regard to Reform of the Oil and Gas Complex” No 4658-VI dd. 13.04.2012   Naftogas has approved Reorganization Plan of its two subsidiary companies (“Ukrtransgaz” and “Ukrgazdobycha”) No 198 dd. 03.07.12 The Ukrainian Energy Law. New developments.
  6. Directive 2003/54/EC on common rules for the functioning of the internal electricity market Law of Ukraine “ On the Principles of the Electricity Market Operation ” – drafted, under negotiation, to be adopted till the end of 2012; Change from single player model to direct agreements; Independent regulatory body (Decree „On NERC”No 1059/2011 dd. 23.11.2011); Effective unbundling (split the generation of electricity from the transmission system) The Ukrainian Energy Law. New developments.
  7. Plan for the implementation of Directive 2001/77/EEC on facilitating the use of electricity generated by renewable energy sources in the internal electricity market Plan for the implementation of Directive 2001/77/EEC was drafted in the first half-year of 2011, but was not approved in Ukraine; Update of the Energy Strategy until 2030 and setting a new target for renewable energies for Ukraine; Draft procedure on calculation of local content for the purpose of “green” tariff to be approved until September 2012. The Ukrainian Energy Law. New developments.
  8. Plan for the implementation of Directive 2003/30/EC on the promotion of biofuels and other renewable fuels for vehicles Plan for the implementation of Directive 2003/30/EC was drafted in the first half-year of 2011, but was not approved in Ukraine; Law “On Amendments to Certain Laws of Ukraine regarding Production and Use of Motor Fuels Containing Biocomponents” No 4970-VI dd. 19.06.2012; The Ukrainian Energy Law. New developments.
  9. Change from single player model to direct agreements and EEX Колонтитул презентации
  10. Change from single player model to direct agreements (1) Law of Ukraine “On the Principles of the Electricity Market Operation ” – drafted, under negotiation, to be adopted till the end of 2012; Currently: Ukraine has the so-called central pooling (Single Buyer) electricity purchase model State Enterprise Energorynok is the single buyer of electricity in Ukraine, which sells the electricity to electricity distribution companies (Oblenergos) and independent suppliers; Oblenergos function as both the seller and the distributor of power that is generated; The new market model: provides for introduction of the competitive bilateral contracts market - the transmission (high voltage) and distribution (low voltage) of electricity should be separated from its generation and sale. The Ukrainian Energy Law. New developments.
  11. Change from single player model to direct agreements (2) Draft Law of Ukraine “On the Principles of the Electricity Market Operation ” provides for: bilateral agreements; energy exchange; non-discriminatory access to electricity network. The Ukrainian Energy Law. New developments.
  12. Source: NERC of Ukraine. News in the Field of Regulation The Ukrainian Energy Law. New developments.
  13. Privatization Колонтитул презентации
  14. Privatization in the energy sector Oblenergos (25-50% of shares); Oblgas companies (0, 71% - 26, 04% of shares; while transferring “Naftogas” reserves 25% of the company where possible); Coal mines - under certain obligations for investors. The Ukrainian Energy Law. New developments.
  15. Conventional gas and unconventional gas exploration Колонтитул презентации
  16. Conventional gas exploration The potential resources of natural gas in Ukraine make up 5.4 trillion cubic meters; The enterprises of NJSC Naftogaz of Ukraine (Ukrgasproduction, Chornomornaftogaz and Ukrnafta) conduct the exploration of 91 % of gas fields in Ukraine; Gas production in Ukraine in 2011 – 20.139 million cubic meters, In particular, Naftogaz of Ukraine NJSC group – 18.112 million cubic meters. The Ukrainian Energy Law. New developments.
  17. Unconventional gas exploration According to the U.S. Energy Information Administration, Ukraine has Europe's fourth-largest shale gas reserves at 1.2 trillion cubic meters; According to the data of Ministry of energy – 5 trillion cubic meters; On May 10, 2012 Ukraine determined the winners of a tender to sign an agreement on the development of the Oleske shale gas field in Lviv region (estimated reserves 2 trillion cubic meters) and the Yuzivske gas field in Donetsk region (estimated reserves 1.5 trillion cubic meters). The Ukrainian Energy Law. New developments.
  18. Energy Strategy, new version, big points Колонтитул презентации
  19. Energy Strategy until 2030 Nuclear energy development (The draft version of the Strategy, approved by the Ministry of energy and coal industry of Ukraine): Construction and commissioning of new nuclear power units* until 2030, minimal total capacity: 2 GW – worst case; 5 GW – basic case; 7 GW – best case. * - 04.07.12 CMU approved feasibility study of construction of power units 3 and 4 of the Khmelnitskaya nuclear power plant Renewable energy development: The installed capacity of renewable energy sources in 2030: 1.9 GW (0.1 GW in 2010) - The effective Energy Strategy of Ukraine until 2030; 6.0 GW - The Foundation for Effective Governance; 17.0 GW - The State Agency on Energy Efficiency and Energy Saving of Ukraine; 5.2 GW - worst case (6.7 GW – best case) - The draft version of the Strategy, approved by the Ministry of energy and coal industry of Ukraine. The Ukrainian Energy Law. New developments.
  20. Overview of green tariffs and latest developments Колонтитул презентации
  21. Current “green tariffs” The Ukrainian Energy Law. New developments.
  22. Influencing criteria “Local Content Requirement ” (appliesto objects construction of which began after  1.1.2012) “Green” coefficient decreases respectively for generation facilities that use alternative energy sources and are commissioned or substantially upgraded after: 2014 – 10 %; 2019 – 20%; 2024 – 30%. The Ukrainian Energy Law. New developments.
  23. Draft Law No. 10183 “On Amendments to the Law of Ukraine “On Electric Power Industry” (on promotion of electricity generation from biogas), 04.07.2012 2.7 coefficient - for the electricity produced from biogas derived from biomass of plant or animal origin; 3.0 coefficient – for the electricity produced from domestic waste. It also provides for decrease of the coefficients for the solar energy: surface power facilities - 3.5 (4.8 – as currently applied); power facilities fixed on roofs, rated capacity  ˃ 100 KW – 3.6 (4.6 – as currently applied); power facilities fixed on roofs, rated capacity  ˂ 100 KW, objects fixed on facades – 3.7 (4.4 – as currently applied). Differentiation of small hydro power stations and provides for the increase of the coefficients for the electricity produced by small hydro power plants (1.2 – as currently applied):  micro hydro power station (installed capacity < 200 kW) - 2.0; mini hydro power station (installed capacity > 200 kW, < 1MW) – 1.6; small hydro power station (installed capacity > 1MW) – 1.2. The Ukrainian Energy Law. New developments.
  24. Biofuel- admixing Колонтитул презентации
  25. Biofuel- admixing Law “On Amendments to Certain Laws of Ukraine regarding Production and Use of Motor Fuels Containing Biocomponents”, No 4970-VI, dd. 19.06.2012 Portion of bioethanol in motor fuels produced and/or sold in Ukraine, will amount to: in 2013 – recommended content at least 5%; in 2014-2015 – obligatory content at least 5%; as of 2016 – obligatory content at least 7%; Biodiesel – draft law is vetoed so far. The Ukrainian Energy Law. New developments.
  26. Chances given by RED for export of green energy/fuel to EU Колонтитул презентации
  27. Directive 2009/28/EC on the promotion of the use of energy from renewable sources. Third countries mechanism Electricity from renewable sources generated in a third country will be taken into account, if: the electricity is consumed within the EU; the electricity has been produced by either a newly constructed installation that became operational after 25 June 2009 or by the increased capacity of an existing installation that was refurbished after that date; the amount of electricity produced and exported has not received support from a support scheme in a third country other than with respect to investment aid granted to an installation. Biofuels sustainability criteria The Ukrainian Energy Law. New developments.
  28. Ukraine’s potential at a glance: member of the European Energy Community, 01.02.2011; European Union Association Agreement and creation of Free Trade Area with Ukraine (in process); EU neighboring country; access to the Black Sea; 1/3 of black soil of the world; the largest agriculture market in Europe with respective biomass potential (Ukraine - 33 million hectares of arable land, whereas Germany – 18 million hectares); quite good conditions for wind and solar energy. The Ukrainian Energy Law. New developments.
  29. Thank you for attention! Колонтитул презентации
  30. Our Contacts Head Office Eurasia Business Centre 75 Zhylyanska St., 5th Floor 01032 Kyiv, Ukraine Tel.: +38 (044) 390 55 33 Fax. +38 (044) 390 55 40 Email: mail@arzinger.ua URL: www.arzinger.ua Wolfram Rehbock, Senior Partner West Ukrainian Branch 6 GeneralaChuprynky St., Office 1 79013 Lviv, Ukraine Tel.: +38 (032) 242 96 96 Fax: +38 (032) 242 96 95 Wolfram.Rehbock@arzinger.ua South Ukrainian Branch Pokrovsky Business Centre 33 Zhukovskogo St., 6th Floor, Office 601 65045 Odesa, Ukraine  Tel./Fax: +38 (048) 711 74 74
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