Energy Law: Legal Questions & Answers
If you are facing energy law or policy issues, have a pressing legal question about an energy project that you are developing or concerned about an energy related regulation that was just passed, send us your question and we will get you an answer:
Question: What is the estimated yearly coal exports in Ukraine?
Alexander Paraschiy, Concorde Capital, comments: Coal export from Ukraine was 6.99 mmt in 2011, up 13% compared to 2010 (6.19 mmt). In 7M12 coal export from Ukraine was 3.57 mmt, down 14% compared to 7M11 (4.16 mmt). In 2012, we expect, export will amount to 6.0-6.2 mmt
Are there any national targets on energy efficiency improvements or share of renewable fuels for electricity or heat production in Ukraine? Is Ukraine supposed to adapt to the 20-20-20 targets for energy efficiency improvement, share of renewable fuels and mitigation of greenhouse gas emissions?
Liliya Surzhenko, Partner of Ukrainian Legal Partnership (law firm within IMEPOWER) answers: Currently the targets with regard to energy efficiency improvement and share of renewable energy sources are provided by the Cabinet of Ministers Resolution No. 243 dated 1 March 2010 “On Approval of the State Target Economic Program of Energy Efficiency and Development of Sphere of Production of Energy Carriers Produced from Renewable Energy Sources and Alternative Types of Fuel for Years 2010 - 2015” , in particular:
- creation of conditions for decreasing of level of energy intensity of GDP by 20% by 2015 as compared to 2008;
- optimization of structure of energy balance, in which share of energy carriers produced from renewable energy sources and alternative types of fuels will be not less than 10% by 2015.
Regarding the greenhouse emissions, Ukraine has already decreased them due to economic contraction after 1990.
On December 2009 Ukraine joined Energy Community Treaty and now is working on harmonization of its legislation to the legislation of European Community.
Are there any grants for companies that implement some sort of energy optimization system in Ukraine?
Alexander Paraschiy, Concorde Capital responds: Those who import energy-saving equipment are eligible to not to pay duties, no other preferences.
Do you have a list of the prices Ukrainian companies pays for electricity? (or just the Ukrainian price/kWh)
Alexander Paraschiy, Concorde Capital responds: Business consumers pay UAH 1122/MWh (USD 140/MWh) in May, business consumers that are connected to high-voltage grid pay UAH 881/MWh (USD 110/MWh). Residential consumers pay UAH 280/MWh (USD 35/MWh), those living in rural areas pay UAH 259/MWh (USD 32/MWh).
Is it affordable to install energy-optimization systems in Ukrainian companies?
Alexander Paraschiy, Concorde Capital responds: Taking into the account that tariffs for commercial power consumers in Ukraine are one of the highest in Europe, it is for sure efficient to install energy saving equipment. On the other side, we have one of the lowest power tariffs for households (the tariffs haven’t changed over the last six years) – there is no incentive for the households to save electricity.
To what extent are Ukraine's energy requirements met using natural gas (including LNG)?
Ukraine's total primary energy consumption is dominated by natural gas - 40%, followed by coal - 29% and oil products - 11%. Almost half of Ukraine's electricity production comes from nuclear. Gas constitutes 12% .
Is the relevant legislation base in place for shale gas projects in Ukraine?
Wolfram Rehbock, Senior Partner, Arzinger law firm in Ukraine answers: One of the options for shale gas projects are the product distribution agreements (PDA) under the Law of Ukraine “On product distribution agreements” No 1039-XIV dd. 14.09.1999. Pursuant to Article 4 of the Law of Ukraine “On product distribution agreements” under the product distribution agreement one party – Ukraine (hereinafter – the state) – for a certain period of time authorizes the other party – investor – to conduct exploration, survey and mining operations on a certain site (sites) of mineral resources and to perform works connected to the agreement, and the investor obliges to perform works at its own account and risk with further reimbursement of expenses and receipt of payment (compensation) in kind of remunerative production. The exact list of subsoil areas (mineral resources deposits), which may be available for development in terms of production sharing agreements is determined by the Resolution of the Cabinet of Ministers of Ukraine 308 dd. March 15, 2006. Additional parts of subsoil areas (mineral resources deposits) may be introduced to this list and the respective project could be performed under PDA. It was also announced that the tender on choosing the investor for signing of the PDAs for two areas (Lviv region and between Kharkiv and Donetsk region) should be held in summer 2011.