Business calls for an update on energy efficiency legislation from 30 years ago

21/ 10/ 2021

Today, MPs will consider draft law №4507 on energy efficiency at an extraordinary sitting on European integration. It is a framework document designed to review the outdated legislation on energy efficiency from 1994 and to promote the implementation of European best practices in production, transportation, transmission, distribution, supply, and consumption of energy. The European Business Association, in general, expressed support for the draft law but drew attention to the need to revise some points that appeared in the working version of the document between the first and second reading. Thus, the following business requests were considered: The inclusion of the proposal on compliance with the requirements of the legislation on personal data protection and confidentiality of information on the amount of energy supplied and consumed by the population that energy supply organizations must provide at the request of local authorities. The exclusion of the proposal on the fulfillment of requirements for the annual reduction of energy consumption established by the energy efficiency commitment scheme only by paying a contribution to the Energy Efficiency Fund or another state fund. This provision established additional financial costs for electricity and natural gas suppliers, which could be subsequently passed on to consumers. The rejection of the proposal to authorize the National Commission for State Regulation of Energy and Utilities (NEURC) to monitor and evaluate the results of achieving the target for an annual reduction of energy consumption. After all, there is a relevant body for this, namely the State Agency for Energy Efficiency. The final version did not include a proposal to grant the NEURC the power to issue guarantees of origin of electricity generated by high-efficiency cogeneration units. Such a provision, according to the EBA experts, could lead to ambiguity of application, as well discrepancies and confusion as to what exactly such a document is certifying and which body issues it. This was not fully in line with Directive 2009/28/EC on the promotion of the use of energy from renewable sources and Directive 2012/27/EC on energy efficiency. Besides, draft law №4507 contains other positive novelties, such as: the involvement of other central executive bodies in ensuring energy efficiency and the definition of their responsibilities; the possibility of developing local energy plans along with the National Action Plan on Energy Efficiency, which will consider the specific needs and capabilities of each region; establishment of requirements for the level (class) of energy efficiency of energy goods/services in public procurement and in the case of acquisition or conclusion of lease (rent) of buildings by public authorities and local governments; establishment of framework requirements for environmental labeling and ecodesign of energy products, including the creation of a database of energy products for goods put on sale and covered by the requirements of technical regulations on energy labeling of energy products; limitations on the intended use of funds that can be saved on the ground after the implementation of energy efficiency measures; the finalization of requirements for conducting energy audits and qualifications of energy auditors; the finalization of provisions on the installation of intelligent energy metering systems; the stimulation of consumers to implement energy efficiency measures by including a comparison of energy consumption in payment documents (receipts) for utilities in the current billing period with the same period last year (in terms of monthly consumption), as well as by providing information on energy efficiency measures or website link where such data is posted, etc. The European Business Association thanks the Verkhovna Rada Energy Committee for considering the position of business and hopes for the support of draft law №4507 by the deputies. Be the first to learn about the latest EBA news with our Telegram-channel – EBAUkraine.

The European Business Association, in general, expressed support for the draft law but drew attention to the need to revise some points that appeared in the working version of the document between the first and second reading. Thus, the following business requests were considered:

The inclusion of the proposal on compliance with the requirements of the legislation on personal data protection and confidentiality of information on the amount of energy supplied and consumed by the population that energy supply organizations must provide at the request of local authorities.
The exclusion of the proposal on the fulfillment of requirements for the annual reduction of energy consumption established by the energy efficiency commitment scheme only by paying a contribution to the Energy Efficiency Fund or another state fund. This provision established additional financial costs for electricity and natural gas suppliers, which could be subsequently passed on to consumers.
The rejection of the proposal to authorize the National Commission for State Regulation of Energy and Utilities (NEURC) to monitor and evaluate the results of achieving the target for an annual reduction of energy consumption. After all, there is a relevant body for this, namely the State Agency for Energy Efficiency.
The final version did not include a proposal to grant the NEURC the power to issue guarantees of origin of electricity generated by high-efficiency cogeneration units. Such a provision, according to the EBA experts, could lead to ambiguity of application, as well discrepancies and confusion as to what exactly such a document is certifying and which body issues it. This was not fully in line with Directive 2009/28/EC on the promotion of the use of energy from renewable sources and Directive 2012/27/EC on energy efficiency.

Besides, draft law №4507 contains other positive novelties, such as:

the involvement of other central executive bodies in ensuring energy efficiency and the definition of their responsibilities;
the possibility of developing local energy plans along with the National Action Plan on Energy Efficiency, which will consider the specific needs and capabilities of each region;
establishment of requirements for the level (class) of energy efficiency of energy goods/services in public procurement and in the case of acquisition or conclusion of lease (rent) of buildings by public authorities and local governments;
establishment of framework requirements for environmental labeling and ecodesign of energy products, including the creation of a database of energy products for goods put on sale and covered by the requirements of technical regulations on energy labeling of energy products;
limitations on the intended use of funds that can be saved on the ground after the implementation of energy efficiency measures;
the finalization of requirements for conducting energy audits and qualifications of energy auditors;
the finalization of provisions on the installation of intelligent energy metering systems;
the stimulation of consumers to implement energy efficiency measures by including a comparison of energy consumption in payment documents (receipts) for utilities in the current billing period with the same period last year (in terms of monthly consumption), as well as by providing information on energy efficiency measures or website link where such data is posted, etc.

The European Business Association thanks the Verkhovna Rada Energy Committee for considering the position of business and hopes for the support of draft law №4507 by the deputies.

Be the first to learn about the latest EBA news with our Telegram-channel – EBAUkraine.