Oleksandr Katsuba. After the Ukrainian authorities announced at the Recovery Conference in London that Ukraine’s goal was to build an energy hub, attention focused on attracting investment and technology in energy generation, primarily in the electricity sector.
After the Ukrainian authorities announced at the Recovery Conference in London that Ukraine’s goal was to build an energy hub, attention focused on attracting investment and technology in energy generation, primarily in the electricity sector. But only six months ago, the main focus for Ukraine was not on energy generation, but on energy conservation.
When Russian missiles and Iranian drones attacked our energy infrastructure, our main challenge was to save energy. To spend less. Because generating and transporting it was a problem for us. But this problem did not appear yesterday.
Energy efficiency in Ukraine is a long-standing problem that has been much talked about, but not much has been done since the first gas war with Russia. While private businesses are indeed investing heavily in their own energy efficiency (because the cost of goods or services needs to be reduced for the sake of economic viability), the state, local governments and households have clearly not done enough.
While households (especially residents of apartment buildings) often lack financial resources and favourable conditions from the community, the state and local governments primarily lack political will and good management practices. As a result, the utilities of almost every Ukrainian city lose between 20 and 70% of energy in vain. And this is not just heat loss from uninsulated houses, schools or hospitals. It is even such a trifle as additional electricity consumption for the operation of water utility pumps, as up to 75% of water is wasted at the water utilities themselves. It leaks out through leaky pipes at the level of water mains or in the houses where it is delivered. Yes, this is not a mistake, in small towns like Smila (Cherkasy region), water losses reach ¾.
As a result, Ukraine spends twice as much energy per $1,000 of GDP as the EU average. And it’s not just about the countries of southern Europe, where it’s warm (although huge amounts of electricity are used for cooling rather than heating). The Ukrainian economy spends twice as much per $1,000 of output than the economies of Sweden or Norway, which have a harsher climate.
Scandinavia, in general, was a pioneer in the introduction of energy saving practices, starting this journey back in the 1960s. It was followed by Japan and Germany, and later by other developed countries. Since 2008, Ukraine has made several attempts to introduce an energy saving system at the state level. However, the only major systemic success we can consider is the programme jointly implemented by Ukraine (the Ministry of Regional Development), state-owned banks and the World Bank Group, when USD 800 million was allocated to energy saving projects in the regions as part of the decentralisation reform.
There are also local energy saving programmes at the level of regions and large cities, but these projects are extremely sporadic. In addition, most of these programmes – for example, at the level of the city of Kyiv – are too bureaucratic, difficult to join, or require a significant financial commitment from the residents of a multi-storey building.
The key problem is that the oldest (mostly Soviet) buildings, schools and hospitals have the biggest energy efficiency problems. These are concentrated mainly in small towns, as well as in older neighbourhoods of cities across the country. Local governments lack either the funds or the political will, or both, to implement affordable and adequate energy efficiency programmes. At the national level, the World Bank project is the only attempt so far to implement a systematic and cost-effective national energy saving programme.
To understand the potential for energy saving in Ukraine, I’ll give you just three figures:
- 45% – this is how much Ukraine could reduce energy use to produce each $1,000 of GDP with the use of modern energy saving technologies.
- Before the war, Ukraine was losing UAH 100 million a year due to energy inefficiency.
- Losses due to inefficient water supply systems alone amounted to 4 million per day.
In Europe, and especially in Scandinavia, there is a well-established scheme for implementing energy saving programmes. What should we learn from our partners and allies to ensure that we get the fullest possible positive effect from energy saving policies in the process of building an energy hub?
- Energy saving policies should be comprehensive, provide for benefits (including tax incentives) and affordable financing programmes for all necessary measures – energy audits, design, construction, equipment purchases, etc. In Norway, the Energy Saving Fund has existed since 1981 and is funded by oil revenues, which are used to implement insulation programmes, reduce emissions, convert public transport to electricity and biofuels, and provide subsidies for growing energy forests and recycling waste into fuel briquettes.
- Information policy is very important. Energy saving habits (at the household level) are not only a product of expensive energy, but also of positive propaganda. Children should learn about energy saving habits from school and kindergarten. Parents – from every available source of information. This is how energy saving habits have been introduced in Sweden since 1963 and in Norway since 1967. In 2022, Finland launched the “one degree less” campaign, encouraging every Finn to take specific energy-saving measures. Firstly, to significantly reduce the temperature in all underutilised utility rooms (staircases, warehouses, garages) and living quarters. If the temperature in residential buildings is reduced by one degree, the combined energy savings correspond to the annual consumption of up to 90,000 detached houses with electric heating. The correct temperature for a refrigerator is +5 degrees and for a freezer -18 degrees. Each degree increases energy consumption by about 5%. With effective energy saving, households can reduce up to 20% of their energy consumption.
- A reasonable policy of bans. In Norway and Sweden, no traditional incandescent light bulbs are used, no windows are installed in buildings that do not meet energy saving standards, no walls, roofs and basements are built whose thermal conductivity does not meet the new energy saving requirements, and most importantly, almost all of Norwegian society is psychologically oriented towards using as much renewable energy as possible.The cleanliness in Norway is simply amazing. However, if you take a closer look at the garbage containers, you will see that they usually have 3 different blocks for different types of waste, which makes it much easier to sort and recycle.
- Waste must be converted into energy. The waste that can be recycled goes directly to recycling companies, while the rest is sent to a state-of-the-art incinerator. Incineration makes it possible to supply heating heat and hot water through a centralised network to Oslo and the suburban area (up to 100 km away); the part of the heat that cannot be supplied through pipes is converted into electricity and used again. Organic waste that can decompose quite quickly (e.g. food waste, faeces) is a source of another bioresource – methane gas, which is a product of decay but can be collected and used very successfully to generate heat. The entire waste recycling cycle is environmentally friendly and energy efficient, although it requires costly investments.
- Decentralisation of heat production. In Sweden, most homes and social infrastructure facilities are currently heated and cooled by heat pump systems. The raw material for such plants is the potential of water, the atmosphere and the earth. For example, a station in Stockholm provides heat to 400,000 people in the city. The number of consumers of energy generated by heat pumps continues to grow here, as they are quite efficient and reduce the harmful impact on the environment. There are currently more than 700,000 heat pumps in Sweden.
- In all the countries of the European North (Iceland, Denmark, Sweden, Norway, Finland), it is forbidden to build without complying with energy saving standards. The basic construction technology is the so-called “passive house”.
- Highly effective thermal insulation of the house, not only the walls, but also the ceiling, floor, attic, basement. Several layers of thermal insulation (external and internal) are formed, preventing heat from escaping and cold air from entering. Heat loss is 15 kW per sq.m. In an ordinary house, it is 250-300 kW per sq.m.
- Innovative window systems use two- or three-chamber constructions, and a special technology is used to join windows to walls. The largest windows are facing south, where the maximum solar radiation comes from, which will bring in more heat than it will lose.
- Heat recovery system. The air leaves and enters the house through a special duct. In the recuperator (heat exchanger), the exhaust warm air heats the incoming outdoor air (heated already in the duct by the heat of the ground) and then is discharged outside.
All of these components of energy saving policy are quite clear and easy to implement, given the political will and qualified management. In addition, the Scandinavian approach is not limited to the above, and our Swedish, Norwegian and Finnish partners are happy to share their experience and technologies. Therefore, we can only hope that the Ukrainian state will find the political will to launch a large-scale energy modernisation. The more the challenges of both war and peace push us to do so.
Businessman and public figure Alexander Katsuba
