Energy Transparency Index 2020: International Dimension

Since the beginning of development of the Energy Transparency Index in 2018, we wanted to create a tool to comprehensively assess the information openness of the sector, detect gaps, analyze in detail and track progress. Moreover, we sought to see the Index as a flexible and universal tool that can be used internationally, as it provides greater opportunities for comparative analysis, ranking and dissemination of countries’ best practices. In 2020, we present the results of the first such research for the three Eastern Partnership countries – Ukraine, Moldova and Georgia.

To conduct the assessment, a team of experts adapted the methodology in terms of markets and indicators, taking into account the size and structure of energy countries. At the same time, we preserved the basic principles of assessment (criteria) and the “skeleton” (categories) of the Index. The analysis was conducted in terms of eight categories:

• Balances (energy statistics)
• Natural monopolies (operation of network operators)
• Supply (operation of electricity and gas markets, including rules, competition and pricing)
• Reliability and security (data, rules and reports on the security of energy supply)
• Consumption (energy accounting, service standards and proper consumer notification of prices, subsidies and energy efficiency)
• Reporting (financial and non-financial corporate reporting)
• Policy (policy-making, policy implementation and reporting)
• Governmental authorities (public expenditure, including the provision of state aid; adoption and monitoring of the effectiveness of regulatory decisions by governmental authorities – the profile ministry, the regulator and the antimonopoly authority).

In the research, we were interested not only in the presence of information or data in open sources but also their availability, relevance, regularity of updating and storage, usability and exhaustiveness. These criteria are measurements of transparency and each of the 115 indicators of the International Index was assessed by six criteria allowing to diagnose problematic issues more accurately.

For example, in the “Supply” category, the indicator “Information on retail market mark-ups”, which characterizes the disclosure of data on the level of retail mark-ups in the electricity and gas markets, for Ukraine received 0 points, since such information was not published by the National Commission for State Regulation of Energy and Public Utilities. Although in the EU, this is one of the important indirect indicators of retail market competitiveness, monitored by national regulators and the Agency for the Cooperation of Energy Regulators (ACER). Such information is published in Georgia and Moldova. However, the explanation is quite simple – in both countries, pricing in retail markets is still almost fully regulated, which is far from the practice of European markets.

But according to the “National plan to reduce emissions from large combustion plants” indicator from the “Policy” category, Ukraine received 1.75 points (out of a maximum of 4 points). Despite the adoption and publication of the national plan in 2017, there are no annual action plans for its implementation, so the scores for the criteria such as “exhaustiveness” and “regularity” were reduced. At the same time, Moldova has not developed a national plan at all, and Georgia has not been able to approve it for several years. Thus, both countries received 0 on this indicator.

We hope that the research results will be interesting to the governmental authorities, as they reveal gaps in the disclosure of information and data for which they are responsible. By the way, the Index team addressed the problematic issues discovered with specific practical recommendations to the governmental authorities and energy companies.

Market players and potential investors seeking an open and fair competitive environment and lower business risks will also benefit from increased transparency. This will allow consumers to be more informed, better protect their interests and rights as well as form an active and mature market behaviour. In addition, transparent markets will lead to improved service levels and fairer pricing.

We believe that the assessment findings will also be of interest to international institutional partners, who will have a better understanding of the countries’ policies and energy markets, and will also be able to help national governments in reforming, opening and improving the performance of internal markets with greater focus.

If you want to learn more about the methodology and compare the assessment findings in each country, join the presentation “International Energy Transparency Index 2020:  Sector Openness Test – Positive or Negative?”

The event will take place on 17 December at 11:00 a.m. on the Zoom platform. To participate, please click on the link to register before 5:00 p.m. on 16 December. A link to the event will be sent to all registered participants by the end of the day on 16 December.

The event is part of the Energy Transparency Index – a Powerful Tool to Strengthen the Transparency of the Energy Sector Project implemented by DiXi Group NGO together with World Experience for Georgia (WEG) and Community for advocacy and public policies WatchDog.MD (Moldova). The project is supported under the regranting program of the EU-funded Eastern Partnership Civil Society Forum.

The project benefits from support through the EaP Civil Society Forum Re-granting Scheme (FSTP) and is funded by the European Union as part of its support to civil society in the region. Within its Re-granting Scheme, the Eastern Partnership Civil Society Forum (EaP CSF) supports projects of its members that contribute to achieving the mission and objectives of the Forum.

Grants are available for CSOs from the Eastern Partnership and EU countries. Key areas of support are democracy and human rights, economic integration, environment and energy, contacts between people, social and labour policies.

This publication was produced with the financial support of the European Union. Its contents are the sole responsibility of DIXI Group NGO and do not necessarily reflect the views of the European Union.