The Ukrainian power companies, the SAIDI index, which characterizes the reliability of the networks, four times worse than in Poland

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The level of investment in the grid is the lowest among all utilities infrastructure of Ukraine, stated in the special project “Economic truth” under the title “Who and how much to invest in the Ukrainian energy and utility infrastructure.”

The publication claims that the heat 6543 invest UAH per 1 km, in water pipes – 3450 UAH/km, and the smallest investment get the pipeline – 700 UAH/km and power – 637 UAH/km. in addition, the current tariff model cost+ for utilities and the energy sector leads to higher rates. Every citizen of Ukraine is paying less than $1 per month (RS 22) to maintain all communications on which housing receives electricity, gas, water and heat. But even these funds are distributed between the operators is uneven, and this imbalance leads to acute shortage of investment for electric and gas networks.

However, control over the effective use of tariff funds for investments in the network of state-owned enterprises almost completely absent. A control mechanism exists from private energy companies that control distribution networks, but they have the least opportunity to invest – the current regulatory model cost+ blocks the inflow of investments. This adversely affects the stability and security of networks, writes the portal.

The Ukrainian power companies, the SAIDI index, which characterizes the reliability of the networks, four times worse than in Poland.

“Networks are in poor condition due to acute shortage of investment. In Ukraine, the level of the lowest in Europe. We have investments in kilometres of transmission is five times less than in Romania. The lag from Poland six times, from Germany – eight times, from the UK – 30 times. It is clear that low investment leads to low quality services. Update networks will require at least 15-20 years”, – said the expert of the Kennan Institute (USA) and Ukrainian Institute for the future Andrian Precip.

It is noted that to solve problems required a change in the tariff model. For example, the use of so-called RAB regulation when first involved in financing the modernization of the networks and reducing costs. Thus increase of efficiency will allow profitable to work within the approved tariff.

“Under the current system, cost+ network will have to be upgraded parts for 30 years. But RAB-tariffs help to lead them in effective condition, which will lead to savings in operation. And such savings be calculated and raised for this loans”, writes “Economic truth”.

According to the Director of the Center for energy, natural resources and geopolitics of Ariel Cohen’s new methodology is a solution to this situation: “RAB-tariffs are an integral part of the successful reforms of the energy markets in the Czech Republic, Georgia, Hungary, Poland, Romania, etc. This rate, as shown by the experience of Western and Central Europe, is the key that opens the door to foreign direct investment in the energy network”.

Economist Vladislav Inozemtsev noted that, if Ukraine wants to enter the European level and to integrate their networks with the power grid of its Western neighbours and thus to ensure long-term independence from Russia, it should immediately reform the RAB-tariff. The most effective condition will be the calculation of rate of return on investment at the level of WACC to all assets of the operators of the distribution system.

According to the national Commission, the deterioration of the networks in Ukraine is 80%, said in 2017 the air NewsOne, the then Minister Dmitry Vovk.

According to Delo.ua the national Commission on energy since 2012, is considering a move to the stimulating tariff, but it is still not introduced.