“Green” energy transition of Ukraine: strategic and value orientations

Annotation. The article highlights the urgent need for a “green” energy transition of Ukraine in the light of the European “green” agreement (EUGreenDeal), expertly confirms the transformation of the energy sector of Ukraine, substantiates the formation of value-oriented approach and its practical application in developing and implementing public information strategy. on the promotion of climate-neutral energy policy of Ukraine and the benefits of large-scale use of renewable energy sources.

Key words: «Green» energy transition, «Green» agreement (EUGreenDeal), Ukraine’s energy sector, climate-neutral energy policy, renewable energy sources.

Relevance of research

The current global socio-economic crisis caused by the COVID-19 pandemic creates opportunities for a deep systemic transition to a more sustainable economy, the potential of which is to change the behavior of both companies and people in the use and conservation of natural resources. Because consumption and production are the driving forces of the world economy, based on the use of environmental resources, and thus cause a negative impact on the planet.

The last 100 years of global economic development have been accompanied by persistent environmental degradation, climate change, and increasing threats to human survival on Earth. Every year, humanity lives a date, which in the global calendar is called the World Environment Debt Day (Earth Overshoot Day). This day is an annual rubicon, when the amount of renewable resources used by man per year begins to exceed the amount that the planet Earth is able to reproduce. Experts compare the ecological footprint of man (human consumption of renewable resources) with biocapacity (the ability of the planet to recover and absorb waste, including CO2). [2, 13]

When humanity’s demand for environmental resources and services on the calculated date of a particular year in quantitative terms exceeds the measurement of resources that the planet can renew in that particular year, we live the rest of the year consuming the planet’s resources «on credit», ie in environmental debt. This means that humanity continues to reduce the Earth’s natural reserves and accumulate carbon dioxide in the atmosphere. If the forecasts of experts come true and the population of the planet reaches 9.6 billion people by 2050, then to provide humanity with natural resources to support the current way of life will need the resources of the three planets Earth [2]. The dynamics of the dates of the Days of Environmental Debt are presented in Table 1.

The bill to humanity from the planet Earth № 001 from 22.08.2020 (1 day for the planet) is: deforested – 20,000 hectares, caught fish -255,000 tons, consumed 12,500,000 tons of products, dumped garbage – 4,800,000 tons, about CO2 emissions – 88.5 megatons [5].

Large and small companies can thrive and thrive, while playing an important role in tackling global challenges such as climate change, income inequality and social injustice. Specific corporate solutions address cutting-edge technology innovation, liberal democratic values, including gender equality and human freedom, environmental responsibility and global economic success. In the corporate sector of the economy today, it is becoming common practice for most companies to monitor and publicly report on the efficient use of water and energy, carbon emissions, and so on. Various business practices of corporate social responsibility on the environmentally safe path of economic development should be spread in the global business environment [6,7].

If the world’s population switched to energy-saving lamps, it would save up to $ 120 billion annually. Despite technological advances that have contributed to energy efficiency, energy consumption in the world is growing. Globally, the commercial and residential sectors are the second largest area of energy consumption after dynamically developing transport.

In 2002, there were 550 million vehicles in OECD countries (75 percent of which were private cars). In 2020, the number of vehicle owners is expected to increase by 32%. At the same time, vehicle mileage is projected to increase by 40% and global air traffic to triple over the same period.

Households account for 29% of global energy consumption and, accordingly, 21% of carbon dioxide emissions generated as a result of their activities [2] .

The transformation of approaches to energy development in the world in the context of the «green» energy transition is caused by the urgent need to combat climate change. At the end of 2019, the EU announced the Green Course (EUGreenDeal) – an ambitious goal to become the world’s first climate-neutral continent by 2050. EUGreenDeal will significantly accelerate energy transformations in the EU and its partners [9].

There is an urgent need to develop a strategy to inform the public about promoting Ukraine’s climate-neutral energy policy and the benefits of large-scale use of renewable energy sources that meet local needs and contribute to Ukraine’s «green» energy transition.

Today, the global world is one step closer to a new wave of innovation that will seriously change the modern “educational landscape.” The key drivers of such transformations are the renewal of educational programs by building innovative interdisciplinary courses using distance learning and the introduction of interactive forms of learning and IT technologies, participation in international research projects and involving students in this activity, generalization and dissemination of knowledge about sustainable business strategies. Sustainable business strategies require training of everyone, regardless of gender or social affiliation, religion, employment or position in a particular business sector [10,11].

The aim of the study is to form a value-oriented approach to the development and implementation of a strategy to inform the public about the promotion of climate-neutral energy policy in Ukraine and the benefits of large-scale use of renewable energy sources , but taking into account the principle of going concern [17] and the financial stability [12] at the corporate and macroeconomic level.

The methods of analysis, synthesis and theoretical generalization were used in the research.

Research results

The panel discussion «Energy Transformation of Ukraine» held on March 11, 2020 in the American Chamber of Commerce in Ukraine [14] with the participation of key actors in the domestic energy market, government officials, analytical, consulting, marketing, legal, news agencies highlighted key issues and prospects ways to transform the energy market of Ukraine.

According to the presented infographic of the directory «Energy of Ukraine» (2020) [15], based on research data from the International Energy Agency (IEA), U.S. Energy Information Administration (EIA), British Petroleum (BP), in 2040, half of the world’s energy (50%) will be consumed in the form of electricity. The increase in energy consumption in the world in 2040 will be + 32%, in physical terms from 13.5 billion tons of oil equivalent (ie) – in 2017, to 17.9 billion tons .is. – 2040. According to experts, in 2040 the source of №1 (29%) for electricity production in the world will be renewable energy sources (RES): solar, wind, geothermal and bioenergy [18, 19, 20, 21]. The increase in the share of RES in the structure of energy consumption by type of fuel in 2040 will be + 381%, from 4% – in 2017 to 15% – in 2040 [See Fig.1.]. Experts also note that all the growth in energy consumption in the world falls on developing countries (non-OECD members) in physical volume: from 7.8 billion toe. – in 2017 to 12.1 billion toe – 2040. In addition, 84% increase in energy consumption in the world in 2040 will be covered by RES (50%) and natural gas (34%) [12, p.4].

Markets, customers and the environment are being transformed in the context of energy efficiency, energy security and sustainable development. The processes of transformation of the energy sector of Ukraine solve a number of tasks, namely: its integration with the European sector; modernization of the energy transportation and transmission system in order to improve the quality of market services; providing simple mechanisms for selecting and changing service providers in order to introduce market mechanisms for the functioning of the sector; creating policies and tools to effectively support citizens in the context of building energy efficiency in the future.

Already today, there is a gradual integration of Ukraine’s energy sector with the European one through joining the EU energy associations ENTSO-E, ENTSOG.

According to the Energy Community, AEQUO, the level of implementation of European standards in Ukrainian legislation as of November 2019 is in the field of energy efficiency: labeling of energy efficient products – 92%, development of the market of ESCO services – 85%, energy efficiency of buildings – 80%, national action plan on energy efficiency – 64%, institutional capacity – 63%; in the field of environmental protection: sulfur content in fuel – 73%, provisions on environmental impact assessment – 66%, nature protection system – 53%, reduction of emissions from large combustion plants – 50%; in the field of climate change: national systems for monitoring and reporting on greenhouse gas emissions – 36%, national energy and climate plan – 20%; in the field of statistical data: report on the quality of energy statistics – 100%, annual statistics – 70%, price statistics – 67%, monthly statistics 50%; in the field of infrastructure: determination of the responsible body -0%, creation of regulations of procedures – 0%, involvement of the National Commission for Energy Regulation – 0% [12, p.6].

Technological solutions for the transition to clean renewable energy are already widely available in the modern world and continue to grow rapidly, but the regulatory and policy aspects of renewable energy implementation and energy efficiency measures still face significant challenges and obstacles in Ukraine.

The study of the Institute of Economics and Forecasting of the National Academy of Sciences of Ukraine presents three potential scenarios for the future of Ukrainian energy: Conservative, Liberal and Revolutionary. According to the Revolutionary Scenario, which envisages consistent state measures to support renewable energy sources and energy efficiency, by 2050 their share in total final energy consumption may increase to 91% while reducing the primary energy intensity of GDP to 0.07 tons AD / $ 1,000 USA. This scenario assumes that the share of electricity in the structure of final energy consumption will increase from 17% in 2012 to 56% in 2050, and the potential for the use of existing renewable energy technologies in Ukraine is sufficient to meet growing electricity needs while replacing obsolete , worn-out and environmentally hazardous capacities of traditional energy [16].

Ukraine’s potential is quite strong, especially in solar and wind energy. But energy projects usually take time to pay off. That is why it is necessary to find solutions aimed at finding and developing new ideas for energy efficient consumption. Clean energy is a shared responsibility: there will be a demand from society, there will be progress and support for business. The COVID-19 pandemic factor has severely worsened the investment attractiveness of Ukraine’s energy sector, and falling quotations on extractive fuel have widened the price gap between it and renewable energy sources. In these conditions, the transition to a «green» energy supplier is difficult.

Thus, first of all, there is a gradual transition to European standards of functioning: a free market is introduced, mechanisms of fair competition are provided, there is a further liberalization of all components of these markets. The second focus of the transformation is the introduction of effective strategies and policies for environmental friendliness of the energy sector of Ukraine: decarbonization (reduction of emissions), increasing the efficiency and expansion of energy efficiency programs, providing favorable conditions for the development of RES. Particular emphasis should be placed on the third focus of Ukraine’s energy sector transformation, namely customer focus: quality and availability of services, support for market mechanisms for selecting and changing service providers, balanced energy pricing policy, state support for vulnerable groups, open dialogue with civil society on sustainable development of the energy sector of Ukraine and active involvement in the processes of its transformation of territorial communities.

In Ukraine, there is a need to create institutions and mechanisms for mass retraining of adults and comprehensive information on programs to activate, train, motivate and empower individuals and organizations to make energy efficient decisions and transform responsibility for social change. And this is not only, and not so much the preservation of the environment, it is also the ecology of consciousness. That is, social optimism, educational programs, development of non-profit media. Advanced research on the readiness of businesses and consumers for the «green» energy transition needs to be developed and combined with ongoing behavioral science lessons to develop individual climate solutions for different users and populations.

The process of planning a strategy to inform the public about the promotion of climate-neutral energy policy in Ukraine and the benefits of large-scale use of renewable energy sources should begin with a comprehensive, active and expanded dialogue between the state and the public on sustainable development of Ukraine’s energy sector. organization of public information companies in order to direct them to spread the values of the «green» energy transition of Ukraine. For energy education of civil servants and company managers in the context of the new Energy Strategy of Ukraine for the period up to 2035 «Security, efficiency, competitiveness» and EUGreenDeal, it is necessary to prepare and implement training courses.

The most important, in our opinion, is the formation of confidence of energy consumers in public and private institutions on the balance of policy and its instrumental implementation in the formation of energy prices, state and social support for vulnerable groups. And this requires the formation and dissemination of values of sustainable development for the entire population of Ukraine by demonstrating and promoting solutions for energy efficiency, activating a critical understanding of meeting their own needs without loss to future generations. In addition, it is necessary to create equal access for all segments of the population, regardless of their wealth, religious and gender affiliation to the information campaign and education.

And the most important thing is to capture the imagination of citizens and instill in them confidence in positive future socio-economic transformations through the «green» energy transition of Ukraine.

Such a value-oriented approach is needed to form an open dialogue between the state and energy suppliers with civil society on the sustainable development of Ukraine’s energy sector.

Conclusions

Thus, it should be emphasized that Ukraine’s energy sector is constantly integrating with the European one, electricity and gas markets are functioning, heat and green energy markets are being developed, and there are steps to be taken by consumers to vary their energy suppliers. Changes in the energy sector of Ukraine, its transformation are taking place, but they are slow and burdened by the factor of the COVID-19 pandemic, which has significantly worsened the solvency of the population and mechanisms for forming an open dialogue on sustainable development of Ukraine’s energy sector.

Of course, thorough systemic transformations of Ukraine’s energy sector require the efforts of all stakeholders: the state – the modernization of subsidies for the energy industry; manufacturers – refusal to use fossil fuels; energy suppliers and customers – rational use and transition to «green» energy suppliers.

The transformation of Ukraine’s energy sector opens up opportunities for sustainable development. However, in order to realize these opportunities in practice, it is necessary to understand and support these transformation processes both on the part of the state and on the part of all interested stakeholders, first of all suppliers and consumers of energy services.

The value-oriented approach, which is the basis for the formation of an open dialogue between the state and energy suppliers and civil society on sustainable development of Ukraine’s energy sector, includes: organization of public information companies to promote the values of Ukraine’s «green» energy transition; energy education of civil servants and managers of companies in the context of the new Energy Strategy of Ukraine for the period up to 2035 «Security, efficiency, competitiveness» and EUGreenDeal; promoting energy efficiency solutions and enhancing a critical understanding of meeting their own needs without harming future generations among the general population, creating equal access for consumers of energy of all wealth, religious and gender groups to information and education; dissemination of values of sustainable development in the civil society of Ukraine; instilling confidence in energy consumers in positive future socio-economic transformations due to the «green» energy transition of Ukraine.

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Liudmyla Petrashko,
Doctor of Economics, Professor,

Olena Martyniuk,
Ph.D. in Economics, Associate Professor,
Kyiv National Economic University named after Vadym Hetman, Kyiv, Ukraine

Diana Kucherenko,
Ph.D. in Economics, Associate Professor,
Science and Research Institute of Social and Economic Development, Kyiv, Ukraine