Page 71 - Azerbaijan State University of Economics

A.Rozhko, H.Wiesmeth: Framework conditions for using renewable energy sources:
Quo Vadis, Ukraine?

The energy industry of Ukraine is heavily subsidized. Currently this means that the
conventional areas of energy production, including nuclear power plants, rely on financial grants
from the government. Furthermore, the consumption of electricity and heat are also supported by

the price policy of the public administration. 25% of electricity consumers in Ukraine are
ordinary households.

Table 1 shows that the average price of natural gas for Ukraine has been increasing steadily in
the recent years. This primarily reflects the general trend in the energy markets’ development, but it

is also a result of the political «price correction» of the Russian Federation towards Ukraine.

Table 1: Import price for natural gas for Ukraine since 2008
(Sources: http://economics.unian.net/ukr/detail/132044; http://ukrstat.gov.ua)
2012*
Average price level for 2008 % 2009 % 2010 % 2011 % % % on 2008
natural gas, US-
3
Dollars/1000 m 179 238 316 328.4 440 +145
+33 +44.8 +21.5 +3.9 +33.9
* Forecast calculation of national Joint-Stock company “Naftogas Ukraine”

In 2011 Ukraine paid nearly 14.5 bln. US-Dollars for its natural gas imports, which is
49.5% more than in 2010. The gas share within total imports of primary energy comprised 57.9%

in 2010. Financially, this corresponds to nearly 17% of all imports of the country.

The issues of energy dependence are pressing not only for Ukraine but also for most
European countries (Italy – 83%, Spain – 76%, Germany – almost 60%). These countries,

however, restructure their energy policy through diversification of energy flows as well with
various measures to save energy or to increase energy efficiency. Without a doubt, these

objectives should also gain importance in Ukraine, particularly in order to reduce dependence on

energy suppliers and, therefore, to improve the security of energy supply.
In many ways the current structure of the primary energy consumption in Ukraine (see

Figure 2) as well as the import of primary energy in Ukraine (see Figure 3) is not «sustainable».
It is neither politically nor economically viable and can bring the country to possibly precarious

situations (as indicated by some distinct developments in recent years).

This statement is true even though the energy industry sector of Ukraine has been vastly
reformed since the country’s political independence. This reform process should continue for

Ukraine, a country with its own high energy potential. From the point of view of «sustainability»
of the energy supply, the structure of energy sources, as well as supply security, are considered to

be the most important. Ukraine has already taken an important step in this direction by joining to

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