As one the most energy inefficient former
Soviet republics, Ukraine could benefit enormously from improving the way it
uses its power. This could both reduce foreign energy dependency, which comes
at a heavy political cost, and stimulate the economy as a whole. But government
efforts are stymied by lack of will in the best of cases, and conflicts of
interest in the worst.
According to the International Energy Agency
(IEA), the level of energy intensity of Ukraine’s economy is 13 times higher
than that of Germany and about 5 times higher than Poland’s (see graph). This
means Ukraine spends 5 times as much power per unit of gross domestic product
as Poland. A massive shadow economy means Ukraine’s problem is not quite so bas
as official figures suggest, the problem is clear.
Some progress has been made. Ukraine’s energy
intensity indicator fell from 3.19 in 2006 to 2.63 in 2009. The past two years
were particularly positive, bringing the measure down to 1.44 in 2012.