Short description of the overall project

The purpose of Energy Security Project (ESP) is to enhance Ukraine’s energy security. Improving the energy legal and regulatory environment and increasing resilience of energy supply will help USAID to achieve broad-based, resilient economic development as a means to sustain Ukrainian democracy. Providing assistance for the creation and development of free market mechanisms is the main goal of ESP. The assistance to key energy institutions supports the implementation of an essential component of USAID’s Ukraine Country Development Cooperation Strategy. ESP will help the Government of Ukraine (GOU):

• to provide affordable, reliable, resilient and secure energy to its citizens;
• assist the Government of Ukraine to integrate into European energy markets by helping key government agencies and the energy regulator to meet EU energy acquis requirements, including the Third Energy Package;
• improve energy security establishing competitive energy markets in electricity, natural gas and district heating sectors;
• increase energy supply in Ukraine by facilitating private sector-led energy investments in, and increasing  production of renewable energy sources.

Short description of activities financed by the donation

• District Heating / National
  • Targeted legislation to improve district heating
  • White paper on district heating policy, for a larger white paper on energy policy
  • Regulatory Asset Based tariff model applicable to district heating
• District Heating / Municipal
  • Organizational, management, accounting, and technical assistance.
• Communal Utility “Kyivteploenergo” (KTE)
  • Support for KTE application to EBRD for loan
  • Economizers at CHP-5
  • Less expensive source of heating supply for summer at CHP-6
  • Demonstrations of high efficiency boiler and improved network
  • SCADA system
• Electricity
  • Opening of the wholesale electricity market
  • Power system network study
  • Enhanced market monitoring support to NEURC
  • Regulatory Asset Base tariff model for electricity utilities
  • Incentivizes investment, improve quality of service, and monitoring and control
  • European integration – ENTSO-E
• Natural Gas
  • Upstream issues, including PSAs and regulation
  • Functional and technical specification for SCADA and EDM for TSO
  • Regulatory Asset Based tariff model for natural gas utilities
  • Incentivizes investment, improve quality of service, and monitoring and control
  • Gas balancing issues (DSO/TSO)
• Renewable energy
  • Auction design support
  • Power system analyses
  • Renewables and the interplay with the ancillary services market
  • Feasibility studies