12:45 12.10.2020

Author OLEG KOZACHUK

Energy "puzzle": how to lay down for the benefit of all?

5 min read
Energy "puzzle": how to lay down for the benefit of all?

Oleg Kozachuk, founder of the Association for Energy Efficiency and Energy Saving, Head of Khmelnitskoblenergo JSC

 

It does not often happen when two important state bodies at once make decisions that will definitely have a positive effect on the energy industry. Support by the National Council for Reforms under the President of Ukraine and the Ministry of Energy of our Association's proposals on RAB tariffs and transferring costs to the substation component precisely from such fateful decisions. However, the increase in the rate of return of RAB-tariffs will "play" on consumers only together with the facilitation of connections to power grids.

Securing at the legislative level an increase in the rate of return of RAB-tariffs on the old base to 6% with the simultaneous transfer of expenses for the substation component to the distribution system operators (DSO) has become an unconditional positive "doublet". After all, it will lead to positive consequences pits immediately for consumers and energy.

However, as often happens, decisions, even very positive ones, may not "play" if they are not taken in conjunction with other important steps. In our case, we are talking about the adoption of a whole series of amendments to the legislation that will speed up the process of connecting business and population to the power grids ( Getting Electricity ) and help make a breakthrough in the World Bank's annual ranking of ease of doing business ( World Bank Ease of Doing Business report ).

It is no secret that in today's conditions in Ukraine there is no queue of domestic and foreign investors who burn out from the desire to invest in the energy sector. And the implementation of our proposals at the regulatory level will allow energy distribution companies, through stimulating tariff setting, not only to invest their own funds in the modernization of power grids, but also to attract investors and borrowed capital. Such a " bait " for investment capital.

And what are the benefits of consumers, whose interests are "alpha" and "omega" for companies such as distribution system operators? The answer  is simple. For a potential consumer, an obvious plus is a reduction in connection times, a reduction in the time spent on researching these issues in the preparation of business plans and applications, and a significant reduction in the cost of connecting to power grids. That is, a noticeable saving of two very important resources for any person - time and money.

It is nice that decisions that are very important for the industry and consumers at the state level were unanimously supported. This is evidenced by the unified position of the National Council of Reforms, which was voiced by its chairman Mikhail Saakashvili, acting Minister of Energy Olga Buslavets , and was also supported by the head of government Denis Shmygal . This unity testifies to the presence of political will, which should be transformed into concrete bills and draft regulations. We hope that the profile commission  - NEURC -  will join the very correct position of the government, the National Council of Reforms and the Ministry of Energy.

However, the joy of the unanimity of government agencies should not instill in us unjustified optimism. After all, the supported decisions can give the most positive effect only in combination. That is, we are talking about a kind of energy " puzzle " - we will "put it together" and both  energy operators and consumers will significantly benefit .

To add other necessary " puzzles " it is necessary at the legislative and regulatory level to include a number of additional steps to facilitate connection to the power grids, which have recently been expressed by public organizations. We are talking about an integrated, results - oriented approach - achieving significant progress in the parameter of ease of connection to the electricity grid ( Getting Electricity in the World Bank's ranking ). It is worth recalling that it was a problem (break in the ranking of the Doing Business ) became president in November last year. And it was on improving the situation with Getting Electricity that the Prime Minister emphasized in May.

Of course, first of all, we are talking about improving the legal framework governing the energy sector. Yes, we desperately need to improve the quality of connection to power grids, resolve controversial issues of the power of electrical installations that must be connected to the grids, resolve disagreements between legislative and by-laws on technical conditions for connecting to power grids and their timing, etc.

As you can see, the problem goes far beyond just regulatory changes in the energy sector. An important synergy effect can be achieved if amendments to land legislation are adopted, and the period for the development of design and estimate documentation is reduced. That is, it should be remembered that the task of improving the situation with Getting Electricity is complex and requires an interdepartmental approach and the involvement of specialists who, it would seem, have no direct relationship to the energy sector. And the attention that top officials of the state pay to this issue shows that they understand the full importance of the energy " puzzle ". And this is the case when we can only welcome and support high state attention.

A detailed algorithm is set out in the World Bank Doing Business Report Roadmap - "10 Steps to Improve the Ease of Connecting to Power Grids ", which is available, in particular , at the link ( http://energy-efficiency.in.ua/doing-business -10-steps /).

 

 

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