Doesn’t Ukraine need energy conservation?
Conserving fuel and energy resources in 2005-06 accounted for mere 8.3 percent of targeted figure
In 2004-06 the central executive bodies failed to effectively manage Ukrainian budget funds earmarked for increasing the efficiency of energy resources utilization and applying energy-saving technologies, the Auditing Chamber concluded after a comprehensive audit of the way those funds were used.
As a result of inconsistent, uncoordinated, and belated decisions on reorganizing the central executive body in charge of the effective utilization of energy resources, for more than a year there was no control at all over the implementation of the governmental energy-saving policy.
In 2005-06 the Comprehensive State Energy-Saving Program was being implemented without the government clearly defining targets and issuing relevant instructions to specific economic sectors, ministries, and other central executive bodies.
The auditors noted that the existing energy-saving standard- setting instruments could not ensure effective utilization of energy resources or encourage businesses to apply energy-conservation technologies. There are no laws and bylaws that would define energy effectiveness criteria, the procedure of energy audit and energy-saving incentives. No increased depreciation rates for energy-saving fixed assets have been set and applied.
The auditors claim that the current Comprehensive State Energy- Saving Program, adopted 10 years ago, does not concretize measures, deadlines, and those who are responsible for them. Since certain items of this program have not been implemented in the past few years, it has in fact ceased to be in line with current economic realities and needs to be revised and modified.
The State Committee of Ukraine for Energy Conservation practically did not implement any control over the activity of ministries and other national executive bodies to ensure that they adopt relevant documents and appoint concrete individuals and entities to fulfill the Comprehensive Program’s provisions.
As a result, the total conservation of fuel and energy resources in 2005-06 was a mere 8.3 percent of the program’s target figure. At the same time, recommendations made to the State Energy Conservation Committee after the Auditing Chamber’s previous audit in 2003 were only partially taken into account.
The fulfillment of the Comprehensive Program was insufficiently monitored on the basis of data from just a few central and local executive authorities. There was no sectoral and intersectoral distribution of this information, which made it impossible to get prompt access to required materials, analyze the energy-saving situation, and make sound managerial decisions in the field of energy conservation.
No sectoral or local alternative energy sources programs were submitted to or coordinated with the national executive body in charge of energy saving. There is still no economic mechanism for attracting investments to the energy-saving field, nor are there any draft legislative acts on this issue.
The State Energy Conservation Committee, as well as the Ministry of Fuel and Energy and the National Agency for Effective Utilization of Energy Resources, failed to establish standard-setting groundwork for executive bodies to coordinate energy-saving activities, develop respective sectoral and regional programs, and introduce a single set of methods for drawing up and implementing sectoral and intersectoral programs in this field.
The fact that the high number of infractions in the field of energy conservation has not diminished even after the imposition of administrative sanctions shows that they are not harsh enough. The fines imposed on officials who have committed infractions in this field are so negligible that one-third of these infractions re-occur.
The audit also revealed that the nearly eight million hryvnias, the state budget funds earmarked for governmental management in the field of energy conservation, implementation of energy-saving projects, and conducting energy-serving research, were not utilized effectively.
In particular, lack of coordination between the central executive bodies brought about a situation in which the budgetary programs “Guidance and Management in the Field of Energy Conservation” (second half of 2005) and “Overall Guidance and Management in the Fuel and Energy Complex” (first half of 2006) were in fact used to finance the State Energy Conservation Committee’s liquidation commission rather than to fund energy-saving management projects. As a result, almost UAH 2.25 million of budgetary funds went down the drain in the second half of 2005 and the first half of 2006.
Equipment that was purchased in 2001-04 with budget funds under six contracts, worth 3.5 million hryvnias, to implement energy- saving projects was still not installed or in use by the beginning of this year. In 2001-04 the State Energy Conservation Committee channeled more than UAH 1.7 million (including 1.4 million in 2004- 05) into energy conservation research, but the latter was found to be unpromising and therefore discontinued in 2006.
