How to improve the Methodology of Local Energy Plans: DiXi Group presented the interim results of the Project on the development of  LEPs for communities

The event “LEP for Sustainable Community Development” took place on 21 November 2024. The team of the DiXi Group Think Tank presented the interim results of the project supported by the European Climate Fund (ECF) in order to provide expert assistance to Ukrainian communities in the development of their municipal energy plans.

“Despite the enormous challenges which our team faced during the implementation of this project, it received great attention from the Government, as well as donor organisations, and, most importantly, the great attention of the communities. We regularly receive requests from the communities that hope for further cooperation with DiXi Group. So, with this project, we are paving the path for sustainable development of our country and integrating the vision of communities into the creation of the Ukrainian energy system of the future,” said Olena Pavlenko, President of the DiXi Group.

Representatives of the Koryukivka, Balta, Poltava, Zlatopil and Voznesensk communities spoke about their path and experience gained during the project. A special guests were representatives of the Nosivka community, who shared their experience in implementing previously developed LEP.

“Successful communities are those that have a plan for the implementation of measures in any area.  In one year of the project’s work, when our experts supported communities in the development of Municipal  Energy Plans, we’ve found out that this is a very important and necessary project. Taking into account that DiXi Group cooperates with the Government and central executive authorities, we can provide the information about the challenges that are taking place on the ground and contribute to simplifying the requirements for the development of the document and improving the energy management system”, said Viktoriia Kovalenko, General Manager for Sustainable Development of DiXi Group.

According to the European Climate Fund, the energy transition should take place in three stages: data collection and analysis, planning and development of estimates and project documentation. Therefore, in a joint project with DiXi Group, it was decided to focus on assisting communities in the development of Municipal Energy Plans, because this document covers all the stages mentioned above. The successful implementation of the current project provided a solid foundation for the continuation of the partnership.

“We are going to continue working together with DiXi Group and the next stage of our cooperation will be the development of the specific recommendations on how the methodology of the development of LEPs should be improved and better address the issues of the green energy transition, in particular the use of renewable energy sources, increasing energy efficiency, reduction of CO2 and pollutant emissions. Here we see great prospects and want the communities of this project to become leaders and ambassadors of Ukraine’s sustainable transition,” – Oksana Aliyeva, Senior Advisor at the European Climate Fund (ECF).

During the implementation of the project on the development of LEPs, together with the experts and mentors involved in the project, DiXi Group also analyzed gaps and ways to improve the Methodology for the development of LEPs. During the event, the team of the DiXi Group Think Tank presented recommendations for the creation of energy management departments in the organizational structure of communities; provided tools for the institutional development of communities, and also presented recommendations for improving the legislation in order to develop and implement the LEPs in more efficient way, such as:

Setting the Sustainable Energy Development Goals

The Law of Ukraine “On Energy Efficiency” states that the goals of LEPs are aligned with the national energy efficiency target and the national greenhouse gas emission reduction target. Studying the Methodology for the development of LEPs, it was found that the goals of sustainable energy development are

• the goal of increasing energy efficiency;
•  the goal of developing renewable energy sources.

At the same time, the Methodology does not take into account the requirement to reduce greenhouse gas emissions. Based on the requirements of the Law and the National Energy and Climate Plan, it is advisable to set a separate target for reducing greenhouse gas emissions.

 Establishment of annual indicators

The methodology stipulates that in order to set annual indicators of the goals achievement, it is first necessary to determine the overall goal, and then set the appropriate indicators. However, according to the regulations, it is recommended to first establish annual indicators, while the overall goal is defined as the sum of annual indicators. And the annual action plan is the basis for annual indicators.

That is why our team would form the goal-setting order as follows:

• the goals should be ambitious – each community should make the most of its opportunities;
• the goals should be aligned with the national energy efficiency target / greenhouse gas emission target / renewable energy development target;
• the goals should be in line with the annual indicators set out in the National Energy and Climate Plan;
• the goals should be based on the Action Plan.

The proposal of our team will allow us to set ambitious goals aligned with the national documents, which will be based on the developed action plan and will be realistic to achieve. Those goals will meet the financial, organizational and technical capabilities of communities as well.

Monitoring the goals achievement

After analyzing the legislative framework, the project team also found the lack of a national energy efficiency monitoring system and short deadlines for the reporting on the implementation of the plan, including inconsistencies in reporting deadlines between the parties involved.

Within the deadlines for reporting, communities must not only collect, verify data and prepare the report in accordance with the requirements of the Methodology, but also approve the annual report by the decision of the relevant council. At the same time, for adoption of such a decision by the council, it must be made public at least 30 days before the council meeting, which does not always occur monthly.

One of the most significant problems in the development of LEPs, as well as in monitoring the goals achievement, is the collection and verification of the data. The sources of data are the structural subdivisions of executive authorities; public utilities (not always subordinated to the city council); private enterprises, in particular energy supply companies.

It is obvious that the collection of the data from structural subdivisions of the city council can and should be established by the responsible structural unit. But, the private enterprises do not always provide the necessary data. It is advisable to pay special attention to the energy supply companies. They refuse to provide data, referring to the Resolution of the The National Commission for State Regulation of Energy and Public Utilities on information protection (No. 349 of 26.03.2022) and confidentiality of commercial information, as well as wartime restrictions. This creates difficulties in the development of LEPs and will create difficulties in monitoring of the goals achievement. This issue needs to be regulated at the legislative level.

The recommendations of the DiXi Group Think Tank in addressing these issues are as follows:

• To develop the forms for providing information on the consumption of energy resources for certain periods and to include them as the annexes to the Methodology.
• To amend regulations that would oblige the energy supply organisations to submit data in the prescribed form within the established timeframe.
• Review the list of statistical reports provided by utilities and private enterprises, including energy supply companies.
• Agree on the dates of submission of reports on the implementation of the LEP to the State Agency for Energy Efficiency and Energy Saving.

Among other things, during the event, the project’s mentors presented methodological problems related to alignment of the usage of energy planning sectors and end users, benchmarking, and also mentioned transfer factors, forecasting changes in prices and tariffs for energy and utilities.

The event was attended by the representatives of the central executive authorities, in particular Artur Obidnyk, Head of the division of Methodological Support and Regulation of Energy Efficiency of the Energy Efficiency Department of the Ministry for Communities and Territories Development of Ukraine, and Andriy Shyyan, Head of the Department of Energy Efficiency Development of the State Agency for Energy Efficiency and Energy Saving of Ukraine. 

According to Artur Obidnyk, work on the mechanism of Local Energy Plans started back in 2021, and the approval of the Methodology took place after the start of a full-scale war, when the country faced challenges related to energy security and energy supply. In this regard, the relevance and importance of the mechanism has increased dramatically.

“We understand that not all communities have the capacity and necessary data for the high-quality development of energy plans. So far, we don’t have enough experience, but it is very important that we have already started. And the project implemented by the DiXi Group with the support of the partners is the first aid to municipalities on how to write and implement their own energy plans in order to understand future direction to move and to make our energy systems safe and sustainable, buildings – energy efficient, public transport – convenient and environmentally friendly; how to improve the heat supply and water supply systems, improving the quality of service and ensuring uninterrupted operation. At the same time, we need to take into account the challenges that we face today and those that may arise in the future,” Artur Obidnyk summed up.

You can watch the video of the event at the link. 

* Municipal energy plan is a type of local energy plan aimed at sustainable energy development of the territory of the community, which covers objects (systems) located on the territory of the community, and is approved by the relevant council in accordance with the Methodology for the development of local energy plans.

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More about the project of support the development of municipal energy plans for 10 Ukrainian communities: http://bit.ly/3O77Fvk