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March 07, 2013

Ukraine at the Edge of Energy Poverty: How to protect vulnerable social groups?

Presentation of a public policy brief on "Ukraine at the Edge of Energy Poverty: How to protect vulnerable social groups?"

Reforming the gas and electricity markets in Ukraine is likely to have negative side-effects for ordinary consumers. Firstly, rates for these utilities will rise significantly for residential users. The privatization of power companies will also force greater discipline regarding payments for service and deadbeat customers are more likely to find themselves cut off. Under these circumstances, vulnerable consumers, such as pensioners, the handicapped, large families, risk finding themselves hit by energy poverty. At the same time, if these sectors are not reformed, then Ukrainian society as a whole will lose greatly because the quality of services and the infrastructure for their delivery will deteriorate for all consumers, across the board.

This means that the liberalization of energy markets has to be accompanied by reforms to the social welfare system. The negative impact of price hikes on vulnerable consumers can be reduced and even eliminated altogether if the requirements of the Energy Communitys social programs are met. Once the categories of consumers who are eligible for assistance are revised and a Social Action Plan is drawn up, it will be possible to protect ordinary Ukrainians against energy poverty.

However, the Government is currently delaying making changes to the social welfare system, which remains untargeted and ineffective.

An ICPS study offers answers to such questions as:

  1. Which consumer groups are the most vulnerable to price hikes and likely to find themselves suffering energy poverty?
  2. What changes to social policies regarding the system of residential services subsidies, preferences, and so on are necessary?
  3. What timeframe for bringing utility rates up to their commercially viable levels is the most socially acceptable?

ICPS has opened an online debate during the course of which ICPS analysts will provide answers to questions and comments from the public. This open forum will continue until April 1, 2013. If you want to offer your feedback on this document, write to us at ffice@icps.kiev.ua or visit us on Facebook.


: ? from ICPS
Attached files: Energy_draft_2602.pdf