The International Energy Transparency Index Should Become a Permanent Practice – Experts
On December 17, 2020, the results of the first study of the Energy Transparency Index for the three Eastern Partnership countries - Ukraine, Moldova and Georgia - were presented
The more transparency, the more trust. Transparency is a key factor that shows the real state of the market, Marcus Lippold, head of the Support Group for Ukraine from the European Commission, said during the presentation International Energy Transparency Index 2020: Sector Openness Test - Positive or Negative?
“It is important that this year the Transparency Index was extended not only to Ukraine but also to other Eastern Partnership countries. Thus, this tool is being used internationally and will now allow Ukraine to compare its position with other countries. This year DiXi Group together with colleagues from other countries have applied the methodology of the Index for Georgia and Moldova,” DiXi Group President Olena Pavlenko said.
The Energy Transparency Index has been developed to assess the real state of availability and quality of information in the energy sector and to diagnose gaps. This year, the International Index covers 115 indicators based on European and global best practices in information disclosure.
“The Energy Transparency Index is a tool that shows the real state of the market and allows tracking the progress. 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 sectors of countries. At the same time, we have preserved the basic principles of evaluation (criteria) and the “skeleton” (category) of the Index itself,” DiXi Group expert Bohdan Serebrennikov said.
The analysis was carried out in 8 categories, of which 5 are related to the electricity and gas markets and 3 - to intersector issues.
“In the study, we were interested not only in the availability of information or data in open sources, but also their availability, relevance, regularity of updating and storage, usability and completeness. These criteria are measures of transparency and each of the 115 indicators of the International Index was evaluated by six criteria that allows diagnosing problematic issues in a more accurate way,” DiXi Group expert Bogdan Serebrennikov said.
Thus, according to the International Index, the transparency of Ukraine’s energy sector in 2020 has advanced to the average level and its score is 60 points out of 100 possible.
Georgia, which participated in the study for the first time, received a score of 56 points. However, according to international experts, Georgia is at the initial stage of reforming energy sectors. It is noteworthy that the country has developed the Rules of Security of Supply and the Rules of Risk Preparedness.
For the first time, Moldova also took part in the study. Today, it has the lowest transparency scores and received an average score of 53 points.
For example, in the Supply category, the Information on Retail Market Margins (Mark-Ups) indicator, which characterizes the disclosure of data on the level of retail margins in the electricity and gas markets, for Ukraine got 0 scores, as such information is not published by the NEPURC. Although in the EU, it 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 on Reducing Emissions from Large Combustion Plants indicator, Ukraine got 1.75 in the Policy category (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 assessments by the exhaustiveness and regularity criteria 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 in terms of this indicator.
“We hope that the results of the study will be of interest to the 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 revealed problematic issues to specific authorities and energy companies by specific practical recommendations”, Bohdan Serebrennikov said.
“Market players and potential investors who seek an open and fair competitive environment and lower business risks will benefit from the increased transparency. This will allow consumers to be more informed, better protect their interests and rights, and to form active and mature market behavior. In addition, transparent markets will lead to improved service levels and fairer pricing,” Dixi Group expert Roman Nitsovych summarized.
The experts noted that the results of the evaluation will also be of interest to international institutional partners, who will have a better understanding of the country’s policies and energy markets, and will be able to help national governments focus on reforming, opening and improving internal markets.
You can download the Energy Transparency Index 2020: International Edition (English version) and the Table of Indicators by Countries on DiXi Group website - https://bit.ly/3apg8Xy
