You're reading: Better data will help energy efficiency

That Ukraine needs to increase its energy efficiency to become truly independent is an axiom. Achieving said efficiency is no easy feat, however, as it requires proper strategic planning and future projections, based on adequate, complete and verifiable data. The lack of such data, along with proper channels for its analysis, appear to be among the main obstacles on Ukraine’s way to improved energy efficiency.

Contradicting figures have been a staple in Ukraine’s natural gas extraction, procurement and consumption practices, leaving the public to wonder how their tariffs were calculated and how much of its own natural gas Ukraine could actually produce annually.

But more recently it was another fossil fuel which exposed just how vulnerable Ukraine’s energy sector is and what a desperate need for transparency exists. The ongoing blockade of coal produced in separatist-controlled parts of the Donbas triggered the government’s declaration of a state of emergency in the energy sector.

Such a critical situation could have been avoided, thinks Tetyana Boyko, utility programs head at OPORA, a non-governmental nationwide network of public activists.

“The question of blockade wouldn’t be as acute, if the information on the energy tariffs and the use of funds was prepared and shared in advance, along with the volumes of trade with the occupied territories,” she said in her presentation at the Extractive Industries Transparency Initiative conference in Kyiv on Feb. 21.

The EITI is an independent and voluntarily supported international standard, whose main goal is to promote open and accountable management of extractive resources. It exists in 51 countries around the world and provides analysis of extractive companies’ contracts and licenses, production, revenue collection, revenue allocation, and social and economic spending of state’s income from extractive industry, based on data, provided by companies on one side and state authorities on the other.

Disclosing all this data leaves little to no space for corruption and creates transparency and accountability by informing the public debate and promoting understanding. The EITI is supported by a coalition of stakeholders from government, companies and civil society.

The 2014–2015 EITI report on Ukraine, presented at this year’s conference, shared analysis of the extractive industry’s role in Ukraine’s economy, as well as information on the state of natural resources reserves and key players in the industry. It also highlighted the issues on which Ukraine needs to concentrate its efforts, in order to comply with the EITI standard and improve transparency of state revenues from the use of its natural resources and resource management.

While in EITI-compliant countries, companies and state authorities are obligated to share and disclose data, Ukraine’s 2014–2015 EITI report is based on companies’ voluntary data submission. According to the report, out of the 97 major extractive companies, only 51 provided information to be used in the report. In addition, seven extractive companies which weren’t originally contacted provided their information. Needless to say, such incomplete data creates an incomplete picture.

Ukrainian energy companies are not required by law to make reports of their business activities public, which makes it impossible to adequately assess their activities and can only lead to speculation. An attempt was made at the legislative level to improve this situation, when bill No. 4840 on Information Disclosure in Extractive Industries was presented for vote in Verkhovna Rada of Ukraine on Feb. 21. The bill didn’t pass. It will be resubmitted for committee review later this year.

EITI is a rare initiative to systemically assess Ukraine’s natural resources and implement unified international standards for calculations and projections, which would allow for more efficient management of the country’s energy sector and avoid potential future crises. At the moment, Ukraine doesn’t have the proper tools to quickly react in a critical situation, and assess its own capabilities, when met with adversity.

One such tool would be a convenient reporting process. Many companies continue submitting reports to supervising authorities in paper form, instead of electronically. Naturally, this creates space for human errors, not to mention the amount of time necessary for systematization of such data.

A unified functional platform for collecting and keeping data in a consolidated electronic format is essential. Dina Narezhneva, Head of the National EITI Secretariat in Ukraine, stated: “Many developed countries have electronic system for information submission, the main amounts of data are available in the open – we should be striving for such result as well.”

Anatoliy Bondarenko of Texty.org.ua, a media focused on data visualization, believes that, in addition to open electronic data, the public and all interested parties should have access to tools, such as programming code, that would allow them to double-check energy tariff calculations. “At this point, it’s mostly people’s intuitive impressions, not based on data,” he said in reference to public’s ability to assess current energy tariffs, during his EITI conference presentation.

Ukraine also needs independent agents who would conduct analytics. According to Oleksiy Shalaysky, editor of Nashi Groshi, a public procurement watchdog site: “Think tanks that would specialize in the energy field and systematically deal in this area are missing in Ukraine.”

Lack of independent experts to conduct extensive calculations and analysis in energy sector, along with incomplete data and no legal requirement for private companies and state entities to disclose information, are holding back Ukraine’s progress in energy sector efficiency.