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Development of Climate Change Policy Portfolios for Ukraine

This study assesses mitigation and adaptation scenarios for Ukraine's climate change policy, including a business-as-usual scenario, an optimistic scenario, and a pessimistic scenario. The objectives of the policy include reducing energy consumption, increasing the use of renewable energy sources, and achieving emissions reductions. The study evaluates the potential impacts of these scenarios using the AMS method.

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Development of Climate Change Policy Portfolios for Ukraine

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  1. PROMITHEAS – 4 Development and Assessment of Mitigation / Adaptation Climate Change policy portfolios for UkrainePolicy mixtures and Assessments Evgenij Inshekov, Mariia KokorinaInstitute for Energy Saving and Energy Management National Technical University of Ukraine “KPI”Athens, 9 October 2013

  2. Outline • Introduction • Business-as-usual scenario • Optimistic scenario • Pessimistic scenario • Assessment of scenarios using AMS method • Conclusion • Needs and gaps

  3. Introduction • Objectives of the Ukrainian climate change policy • Spectrum of climate change mitigation options for Ukraine • Spectrum of adaptation needs in Ukraine

  4. Objectives National objectives: • Ensure reduction of annual energy consumption by 318 mtce until year 2030 • Increase the percentage of coal in the energy balance from 22% in 2005 to 33% by 2030 • Decrease the share of the imported fuels in the energy balance from 54,8% of the total primary energy supply to 11,7% • Reduce natural gas consumption by 18,8% of primary energy needsin 2030 • Increase the share of renewables by 9,5 Mtoe during the period 2004-2020 and for the period 2020-2030 by 26,1 Mtoe ( 12% of Ukraine’s primary energy needs) • Achieve a contribution of biomass to the total primary energy consumption by 5% in 2020 and 10% in 2030, including 10% target for the share of biofuels in transport by 2020 • Reduction of energy consumption by 30,95 million tons of equivalent fuel in 2015. Documents: • Energy Strategy of Ukraine until 2030 • Updated Energy Strategy until 2030 • Biomass Action Plan for Ukraine • State Target Economic Program on energy efficiency and the development of energy production from renewable energy sources and alternative fuels for 2010-2015

  5. Mitigation options • Exploitation of RES • Energy efficiency • Mitigation through JI and GIS

  6. Adaptation needs • Energy sector • Agricultural sector • Forestry sector • Water resources

  7. Scenarios • Business-As-Usual • Optimistic • Pessimistic

  8. Business-As-Usual Scenario Mitigation and adaptation policy instruments were implemented before 31.12.2010; The Ukrainian BAU scenario is mainly a mitigation policy portfolio: • penetration of RES in the gross final energy consumption, • support to increase energy efficiency; • GHG emission reductions through JI and GIS

  9. BAU - Key Assumptions • Demographics: “medium variant” of the population projections are used for all 3 scenarios (BAU, OPT, PES); • Economy: GDP growth rate is assumed to be 3,5% based on IMF projections for all 3 scenarios; • Climate statistics: • the annual precipitation change was considered to follow its historical growth; • the average air temperature change following historical trends by 2020; • T&D losses is assumed to reach level of 0,6%. For natural gas, oil and heat 0,5% and for coal 1%; • Feed-in-tariffs follow their historical trends; • Projections for the global trends prices are provided by KEPA.

  10. BAU – Energy Demand Figure 1: Final Energy Demand per sector

  11. BAU – Energy Demand Figure 2: Final Energy Demand per fuel

  12. BAU – Transformation Figure 3: Transformation: Electricity Generation

  13. BAU – Transformation Figure 4: Share of Heat Production by fuel type

  14. Optimistic Scenario • Mitigation/adaptation policy instruments Estonia has set into force after 01.01.2011; • Maximum exploitation of the potential of the country in energy efficiency and renewable energy sources; • Wider range of policy instruments: • performance standards; • financial policy instruments (subsidies and grants); • Additional instruments in accordance with EU climate change policy, which can be adapted to the needs and priorities of the country • Additional legislation regarding energy efficiency in residential and public buildings

  15. OPT - Key Assumptions • OPT policy portfolio sets stringent mitigation targets in all sectors; • Climate statistics: • the annual precipitation growth rate amounts 1,5%; • the average air temperature is assumed to be 11,5 ˚Cby 2020 • T&D losses is assumed to decrease by 0,4% annually; • RES target capacity by 2030 will count at least 10% of installed capacity • Households: reduction of natural gas consumption from 52% in 2015 to 40% in 2030, increase of biomass use up to 6% by year 2020, as a result increase of coal share in the total energy consumption; • Technological improvements in the road branch are foreseen, resulting to 20% energy savings by 2015 and to 40% by 2030.

  16. OPT – Energy Demand Figure 5: Final Energy Demand in Household Sector

  17. OPT – Energy Demand Figure 6: Final Energy Demand in Transport Sector

  18. OPT – Transformation Figure 7: Transformation: Electricity Generation

  19. Pessimistic Scenario • Mitigation/adaptation policy instruments Ukraine has set into force after 01.01.2011; • No other additional policy instruments apart from those already decided to be implemented and in line with the EU climate change policy; • The minimum exploitation of the potential of Ukraine in energy efficiency and RES by limiting the possible technological options only to the promotion of the most promising for Ukraine RES i.e. biomass and wind power.

  20. PES - Key Assumption • Climate statistics: • precipitation is increased by an annual growth rate of 0,75% • the average air temperature is assumed to be 13,5 ˚C • T&D losses for electricity is assumed to be 0,8% and for heat 0,6% • Increase of biomass use in households up to 3 % by year 2020 • Technological improvements in agriculture are assumed, resulting to 1,25% energy savings in 2020 compared to the amount of year 2009 • Technological improvements in the industry are assumed, resulting to 2,5% energy savings compared to the respective amount for each branch of year 2010 • Technological improvements in the road branch are foreseen, resulting to 10% energy savings by 2015 and to 20% by 2030.

  21. PES – Energy Demand Figure 8: Final Energy Demand in Household Sector

  22. Results of LEAP - Demand Figure 9: Comparison of energy demand for the 3 scenarios.

  23. Results of LEAP - Transformation Figure 10: Comparison of the electricity generation results for 3 scenarios

  24. Results of LEAP – Global Warming Figure 11: GHG emissions for Ukraine till 2050 for 3 scenarios

  25. Assessment of scenarios using AMS method – General comments • AMS - multi criteria method; • AMS method combines three multi-criteria methods: • Analytical Hierarchy Process (AHP) • Multi-Attribute Utility Theory (MAUT) • SimpleMulti-Attribute Ranking Technique (SMART) • AMS is developed for evaluating climate policy instruments, relevant policy mixes and their interactions; • Three criteria are applied in AMS: • environmental performance • political acceptability • feasibility of implementation

  26. Assessment of scenarios using AMS method – Required data • Total emissions for the country • Emissions per sector for the country • Other environmental effects for the country under each scenario • Water use for cooling (Energy sector) Table 1: Total emissions for Ukraine

  27. AMS method - Results Table 2: AMS results for each scenario

  28. Conclusions • BAU scenario: • GHG emissions will be increased compared to those of year 2005 by almost 65%. • The RES share in the transport sector for year 2020 is 5% (due to the absence of supportive mechanisms) • OPT scenario: • GHG emissions in Ukraine will increase by 51% in 2020 compared to those of year 2005 • The share of RES in the transport sector in 2020 will be 4,7% (biofuels), and 11,2% in electricity production. • The final energy consumption in 2020 will be reduced by 5% compared to that of BAU for the same year. • PES scenario: • GHG emissions in Ukraine will increase by 65% in 2020 compared to those of year 2005 • The share of RES in the transport sector in 2020 will be 2,4% and in the electricity generation it will be 7,35% • The final energy consumption in 2020 will reduced by 2% compared to that of BAU for the same year.

  29. Conclusions • AMS assessment: • the mitigation/adaptation policy portfolio in the Optimistic scenario is the best one in terms of overall performance; • but requires the encouragement of business investments in RES and energy efficiency projects, the continuation of the demonstrated effectiveness of the implementation network and more stringent frame for non-compliance. • Problems: • the lack of several reliable data: GDP distribution per sector, energy efficiency in sectors, energy balance of the EU standards, initial data in tourism and health service, transport sector, etc. • significant gaps and uncertainties in the available data; • the component of adaptation in climate change policy is not fully developed, it requires data related to the frequency of extreme events, water resources and use, low-income groups, biodiversity, etc. • Future work: • the report should include more scenarios with the combinations of population and GDP growth.

  30. Needs and gaps Information gaps concerningHistorical data for Key assumptions: • No data is available in climate statistics for frequency of extreme events (more specifically - heat waves per year, frost days per year) for any year in the studied period. As far as territory of Ukraine can be divided into four different climatic regions: cool snow forest climate, steppe climate, Mediterranean climate and mountain tundra climate, calculation of the previously mentioned parameters is almost impossible. All the climate statistics in Ukraine collected by Central Geophysical Observatory. • No data is available for GDP Deflator with the reference year 2009 to the whole studied period. • No data is available for the manufacturing value added for all the industrial sectors. The lack of data applies to the whole studied period. The State Statistic Service of Ukraine (SSSU) has available the primary data needed to calculate the added value for all the sectors. • No data is available for a volume of water for cooling in energy water use for any year in the studied period. State Statistic Service of Ukraine is responsible for all statistical data and should include this indicators to the list.

  31. Needs and gaps (2) Information gaps concerning Historical data for Energy Demand No energy demand cost data is collected for the all specific sectors of the Ukrainian economy (Households, Agriculture, Services, Industry, and Non-Energy Use) and their sub-sectors. This applies to the whole studied period. This indicator could be calculated for all the sectors mentioned above based on the data provided by energy companies and SSSU. There are no available data for energy demand, consumption and costs, final energy intensity for the particular Service sub-sectors, such as Tourism and Health Services. This applies to the whole period 1990-2010. These sectors included to the common branch Other by SSSU. In Transport sector, the energy demand data in each type of transport (Road, Rail, Air, and Water) is available, but it is not further broken down into Passenger transport and Freight transport. This applies to the whole studied period. There are no data for final energy intensity and demand cost (including per fuel) for all Transport subsectors.

  32. Needs and gaps (3) Information gaps concerning Historical data for Energy Transformation: All financial data required in this section of the database are not available. In particular, there is no available data about the Capital Costs, Fixed OM Costs, Variable OM Costs, and Salvage Value of the energy capacities in the Transformation branches. There are no data about the Maximum Availability, Capacity Credit, and Process Efficiency of any Transformation process. There are no available data for import and export targets for all transformation branches for the whole studied period. No data for potential, efficiency and raw losses available for all transformation branches. This applies to the whole studied period. This data available only at the individual energy production companies. General information gaps: Ukrainian statistic reports have different structure, branches and content compared to Eurostat. Only 3 energy balances (years 2009-2011) published by SSSU respond to the requirements of the Eurostat. Most data (such as branches and sub-branches of energy demand, transformation and production) for the period of 1990-2000 is not available that is why all calculations done using data form year 2000. Because of a different statistic collecting system previously mentioned data were collected and provided by IEA.

  33. National Workshop Development and Assessment of Mitigation / Adaptation (M/A) Climate Change policy portfolios for Ukraine Monday 10 June 2013 Venue:Academic Council Hall of National Technical University of Ukraine “Kiev Polytechnic Institute", 37, Peremogy Avenue, Kiev 03056, Ukraine

  34. Thank you for your attention!

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