Modeling and Strategic Planning of Sustainable Development of Ukraine in the Conditions of Climate Change

Oleksandr DIACHUK,�Ph.D in Engeneering, Leading Research Officer

Institute for Economics and Forecasting �of the National Academy of Sciences of Ukraine

28 October 2024

Content

• Methodological aspects
• Global energy and climate scenarios:
• IPCC
• IEA
• Ukraine’s energy and climate scenarios
• NECP
• Energy Strategy
• NDC’s
• LT-LEDS
• NEEAP
• Ukrenergo

• Project’s energy and climate scenarios:
• Net Zero World Initiative
• UNECE
• IEF/PNNL
• IEF/DEA
• IEF/Henrich Boell Foundation

Methodological aspects

Types of Scenarios

Exploratory scenario

• Technical model runs for calibration and parametrization
• Addresses the question “What can happen?”

For example: What will happen if we limit electricity imports? How this will affect the price? How this will impact the technology mix in power generation or energy consumption?

Baseline (Reference) scenario

• Provides a vision of the energy system development under baseline assumptions (business-as-usual, current (frozen) policy, frozen technology mix, most probable etc.)
• Synchronization with macroeconomic and other models, e.g. for parameterization of energy demands and drivers
• Create a basis for comparison with other (Policy) scenarios

Types of Scenarios (2): Policy scenarios

Approach 1: Target or Normative

Optimal pathway to achieve pre-defined or directively established targets, e.g. on energy efficiency, RE development or reduction of GHG emissions

Defining a target in advance requires an analysis of what such a target might look like given the current understanding of future technologies or budget constraints

Approach 2: Measures

Evaluation of the effects of certain policies and measures, such as the introduction of a feed-in tariff or carbon tax

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Conceals the risks of losing the ambitiousness of the program document, as it is based on a subjective understanding of the effectiveness and feasibility of the proposed measures

Policy scenario: Target –based approach

Policy scenario: measures-based approach

Structure of TIMES-Ukraine Model

The TIMES-Ukraine (energy system wide) model describes all energy (gas, oil, coal, electricity, heat, etc.) flows in the country or all economic sectors related to extraction, production, transformation, final consumption of energy resources, etc.

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The power system model (for example, PLEXOS, used by Ukrenergo) describes in detail only the power sector (electricity production) with a predetermined demand for electricity in the country.

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Models by their nature are not competitors, but can only complement each other.

Structure of TIMES-Ukraine Model

2004 IEF NASU launched studies on energy modelling

2006 Beginning of the TIMES-Ukraine model development under the NASU project

2009 Cooperation with the leading international institutions and first practical use TIMES-Ukraine model in international projects (USAID/Hellenic Aid project “Energy security and the development of markets in Europe and Eurasia: analysis of the national priorities”, supported by IRG (Gary Goldstein) and CRES (George Giannakidis).

2010 First practical use TIMES-Ukraine model for preparing the national strategic document (General Plan of Coal Sector Development in Ukraine through 2020, TACIS project, Human Dynamics).

2011 Developed Information-analytical system (based on TIMES-Ukraine model) for strategic panning and forecasting energy balance.

2012 TIMES-Ukraine model is part of interregional integrated energy model for the Energy Community countries (EC-TIMES).

2012 Joined to the project with International Institute for Applied Systems Analysis (IIASA, Austria).

2013 Development of dynamic computable general equilibrium model (UGEM) and its further use in combination with TIMES-Ukraine model.

2014 Applied grid technologies for parallel computations in TIMES-Ukraine model (in Cooperation with the Cybernetics Institute of NASU)

2015 Beginning of the collaboration with the Danish Energy Agency and Danish Technical University.

2015 TIMES-Ukraine used for the preparation of the first NEEAP and INDC.

2017 TIMES-Ukraine used for the preparation of the LEDS.

2018-2020 TIMES-Ukraine used for the preparation of the second NEEAP and updated NDC.

2022 TIMES-Ukraine used for the preparation of the 2050 Buildings Retrofit Strategy of Ukraine

2023 IEF NASU launched energy modelling activities in the framework of the Net Zero World initiative

2023 TIMES-Ukraine used for the preparation of the National Energy and Climate Plan.

2024 TIMES-Ukraine used for the preparation of the LT-LEDS Strategy.

GLOBAL ENERGY AND CLIMATE SCENARIOS��The Intergovernmental Panel�on Climate Change (IPCC)

https://www.ipcc.ch/

The Intergovernmental Panel on Climate Change

The IPCC prepares comprehensive Assessment Reports about the state of scientific, technical and socio-economic knowledge on climate change, its impacts and future risks, and options for reducing the rate at which climate change is taking place.

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It also produces Special Reports on topics agreed to by its member governments, as well as Methodology Reports that provide guidelines for the preparation of greenhouse gas inventories. The latest report is the Sixth Assessment Report which consists of three Working Group contributions and a Synthesis Report.

IPCC: AR6 Synthesis Report 2023

Panel (a) The integrated framework encompasses socio-economic development and policy, emissions pathways and global surface temperature responses to the five scenarios and eight global mean temperature change categorisations.

The dashed arrow indicates that the influence from impacts/risks to socio-economic changes is not yet considered in the scenarios assessed in the AR6. Emissions include GHGs, aerosols, and ozone precursors. CO2 emissions are shown as an example on the left. The assessed global surface temperature changes across the 21st century relative to 1850–1900 for the five GHG emissions scenarios are shown as an example in the centre. Very likely ranges are shown for SSP1-2.6 and SSP3-7.0. Projected temperature outcomes at 2100 relative to 1850–1900 are shown for C1 to C8 categories with median (line) and the combined very likely range across scenarios (bar). On the right, future risks due to increasing warming are represented by an example ‘burning ember’ figure.

Panel (b) Description and relationship of scenarios considered across AR6 Working Group reports.

Panel (c) Illustration of risk arising from the interaction of hazard (driven by changes in climatic impact-drivers) with vulnerability, exposure and response to climate change.

IPCC: AR6 Synthesis Report 2023

Panel a shows global GHG emissions over 2015–2050 for four types of assessed modelled global pathways:

• Pathways with projected near-term GHG emissions in line with policies implemented until the end of 2020 and extended with comparable ambition levels beyond 2030 (29 scenarios across categories C5–C7);
• Pathways with GHG emissions until 2030 associated with the implementation of NDCs announced prior to COP26, followed by accelerated emissions reductions likely to limit warming to 2°C or to return warming to 1.5°C with a probability of 50% or greater after high overshoot.
• Pathways that limit warming to 2°C (>67%) with immediate action after 2020.
• Pathways limiting warming to 1.5°C with no or limited overshoot.

IPCC: AR6 Synthesis Report 2023

Figure show a projected changes of annual maximum daily maximum temperature, annual mean total column soil moisture and annual maximum 1-day precipitation at global warming levels of 1.5°C, 2°C, 3°C, and 4°C relative to 1850–1900.

IPCC: AR6 Synthesis Report 2023

GHG, CO2 and CH4 emissions over time (in GtCO2eq) with historical emissions, projected emissions in line with policies implemented until the end of 2020 (grey), and pathways consistent with temperature goals in colour (blue, purple, and brown, respectively);

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Panel (a) (left) shows pathways that limit warming to 1.5°C (>50%) with no or limited overshoot (C1) and Panel (b) (right) shows pathways that limit warming to 2°C (>66%) (C3). Bottom row: Panel (c) shows median (vertical line), likely (bar) and very likely (thin lines) timing of reaching net-zero GHG and CO2 emissions for global modelled pathways that limit warming to 1.5°C (>50%) with no or limited overshoot (C1) (left) or 2°C (>67%) (C3) (right).

IPCC: AR6 Synthesis Report 2023

Panel (a) presents selected mitigation and adaptation options across different systems.

Panel (b) displays the indicative potential of demand-side mitigation options for 2050.

IPCC: AR6 Synthesis Report 2023

The top panel (a) shows global costs per unit of energy (USD per MWh) for some rapidly changing mitigation technologies. Solid blue lines indicate average unit cost in each year.

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The bottom panel (b) shows cumulative global adoption for each technology, in GW of installed capacity for renewable energy and in millions of vehicles for battery-electric vehicles. A vertical dashed line is placed in 2010 to indicate the change over the past decade.

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Renewable energy and battery technologies were selected as illustrative examples because they have recently shown rapid changes in costs and adoption, and because consistent data are available.

International Energy Agency

https://www.iea.org

IEA: Understanding GEC Model scenarios

IEA: Understanding GEC Model scenarios

“The scenarios highlight the importance of government policies in determining the future of the global energy system: decisions made by governments are the main differentiating factor explaining the variations in outcomes across our scenarios. However, we also account for other elements and influences, notably the economic and demographic context, technology costs and learning, energy prices and affordability, corporate sustainability commitments, and social and behavioural factors. While the evolving costs of known technologies are modelled in detail, we do not try to anticipate technology breakthroughs (such as nuclear fusion)”.

International Energy Agency

IEA: Net Zero by 2050 Data Explorer

“The interactive graphs below include global historical and projected data for the Net‐Zero Emissions by 2050 scenario as presented in the Annex A Tables of Net Zero by 2050: A Roadmap for the Global Energy Sector. The definitions for fuels and sectors can be found in Annex C of the report” - IEA.

IEA: Net Zero by 2050 Data Explorer, Total energy supply, 2019-2050

IEA: Net Zero by 2050 Data Explorer, Electricity generation by technology, 2019-2050

IEA: Net Zero by 2050 Data Explorer, CO2 emissions by sector, 2019-2050

IEA: Net Zero by 2050, Roadmap for the Global Energy Sector

“This special report is the world’s first comprehensive study of how to transition to a net zero energy system by 2050 while ensuring stable and affordable energy supplies, providing universal energy access, and enabling robust economic growth” - IEA.

IEA: Net Zero by 2050, Roadmap for the Global Energy Sector

IEA: Net Zero by 2050, Roadmap for the Global Energy Sector

IEA: Net Zero by 2050, Roadmap for the Global Energy Sector

IEA: Net Zero by 2050, Roadmap for the Global Energy Sector

IEA: Net Zero by 2050, Roadmap for the Global Energy Sector

IEA: Net Zero by 2050, Roadmap for the Global Energy Sector

IEA: Net Zero by 2050, Roadmap for the Global Energy Sector

UKRAINE’S ENERGY AND CLIMATE SCENARIOS

NECP, Energy Strategy, NDC’s, LEDS, NEEAP’s,�TSO “Ukrenergo” and other

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Ukraine’s National Energy and Climate Plan

Source: https://me.gov.ua/Documents/Detail?lang=en-GB&id=d3c7185c-8669-4ce9-8da0-29a47b4b95a2&title=NationalEnergyAndClimatePlanOfUkraine2025-2030

The Government of Ukraine approved NECP on June 25, 2024

Ukraine’s NECP

• The National Energy and Climate Plan of Ukraine (NECP) is a strategic document aimed at coordinating energy and climate policies to ensure sustainable development and economic recovery of Ukraine.
• The preparation of NECP is Ukraine's obligation under the Energy Community, in accordance with the requirements of Regulation (EU) 2018/1999 and the relevant methodological recommendations of the European Commission. The document was also supposed to be prepared in accordance with the orders of the President of Ukraine dated November 8, 2019, No. 837/20192 and March 23, 2021, No. 111/2021. In addition, the development and approval of NECP is a condition for the distribution of financial assistance from the EU under the future Ukraine Facility.
• The development of the draft NECP is carried out by a group of leading experts associated with DiXi Group think tank and the Institute of Economics and Forecasting of the National Academy of Sciences of Ukraine, with the support of the Embassy of United and the US initiative Net Zero World.

National Energy and Climate Plan of Ukraine

2025-2030

Structure of NECP

Ukraine’s NECP Scenarios

• NECP assesses whether the state's energy and climate goals can be achieved through existing (WEM scenario) and planned (WAM scenario) policies and measures, as assessed by modeling tools, including TIMES-Ukraine model.
• Two mandatory scenarios developed:

1) with existing policies and measures (WEM) = implemented + adopted

2) with planned (additional) policies and measures (WAM)

• Implemented – policies and measures for which one or more conditions are applicable as of the date of submission of the NECP: there is an applicable EU law or directly applicable national law, one or more voluntary agreements have been concluded, financial resources have been allocated, human resources have been mobilized.
• Adopted – policies and measures for which, as of the date of submission of the NECP, an official government decision has been made and there is a clear commitment to further implementation.
• Planned -policies that are at the stage of discussion and have a real chance to be adopted and implemented after the date of submission of the NECP.

Decarbonisation: key objectives in the RES sector

• Goals from the draft National Renewable Energy Development Action Plan:
• The share of RES in the final energy consumption is 27%;
• Indicative RES targets in gross final energy consumption:
• Heating and cooling - 35%
• Electricity - 25.4%
• Transport - 14%
• Indicative development trajectories by RES sectors and technologies until 2030
• Goals from other strategic documents:
• Share of alternative sources in heat production: 30% (2025), 40% (2035) (Concept of implementation of state policy in the field of heat supply)
• The share of RES generation: 25% in 2030 (2030 National Economic Strategy)
• The share of alternative fuels and e/e in transport: 50% by 2030 (2030 National Transport Strategy of Ukraine)

NECP Modeling Results: Total Primary Energy Supply

NECP Modeling Results: Final Energy Consumption

DECISION OF THE MINISTERIAL COUNCIL OF THE ENERGY COMMUNITY

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NECP Modeling Results: Share of RES in GFEC

DECISION OF THE MINISTERIAL COUNCIL OF THE ENERGY COMMUNITY

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NECP Modeling Results: Electricity Generation

• The power sector decarbonizes even in the WEM scenario.
• Coal is phased-out by 2030 (in case of high carbon prices) and replaced by renewables and nuclear in the WAM scenario.
• In WAM scenario gas-based generation gradually switches to biomethane, so that in 2045-2050 there was no fossil gas.

NECP Modeling Results: GHG Emissions

DECISION OF THE MINISTERIAL COUNCIL OF THE ENERGY COMMUNITY

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2050 Energy Strategy of Ukraine

Source: Unavailable

The 2050 Energy Strategy

• On April 21, 2023 the Government of Ukraine adopted the 2050 Energy Strategy of Ukraine.
• On the Ukraine’s Recovery Conference in London (2023), Minister of Energy German Galushchenko said “The key goal of the strategy is to transform Ukraine into the energy hub of Europe, which will help the continent finally get rid of dependence on Russian fossil fuels thanks to the clean energy produced in Ukraine”. Another important strategic goals is to achieve climate neutrality of the energy sector by 2050.
• «The Energy Strategy of Ukraine until 2050 sets ambitious targets for increasing renewable and nuclear energy capacity, as well as increasing the use of carbon-free electricity in end-use sectors» - (2023) Deputy Minister Yaroslav Demchenkov.
• Technical assistance in the development of the 2050 Energy Strategy of Ukraine was provided by the government of Great Britain. The KPMG company was chosen as the project consultant, which developed a simplified model using the TIMES generator.
• The strategy remains closed, not public, but according to KPMG, when preparing ESU2050, they developed at least two energy scenarios based on different indicators of economic growth – base and intensive.

Nationally Determined Contributions of Ukraine to the Paris Agreement

Source: https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://unfccc.int/sites/default/files/NDC/2022-06/Ukraine%2520NDC_July%252031.pdf&ved=2ahUKEwj39qyU9fSGAxUtGhAIHWh0DB8QFnoECBIQAQ&usg=AOvVaw1ujzynaQ_BKLx6v1fhmQhd

Intended Nationally Determined Contribution (INDC)�of Ukraine to a New Global Climate Agreement

• Ukraine as a Party of the UNFCCC and the Kyoto Protocol prepared its Intended Nationally Determined Contribution (INDC) that was approved by the Governmental Decree dated September 16, 2015 # 980-p and submitted it to the Secretariat of UNFCCC on September 19, 2016.
• According to the First NDC, Ukraine defined its target not to exceed 60 % of the 1990 greenhouse gas emissions (GHG) level in 2030.
• Ukraine ratified the Paris Agreement on July 14, 2016 by the Law of Ukraine “On Ratification of the Paris Agreement”.

Updated Nationally Determined Contribution�of Ukraine to the Paris Agreement

• Ukraine has committed itself to achieving the target of reducing GHG emissions of 65% by 2030, compared to 1990 (incl. LULUCF), reaching carbon neutrality until 2060 as foreseen in the 2030 National Economic Strategy.
• The Ukrainian NDC includes GHG emissions and targets for its uncontrolled and occupied territories, however the detailed information on the economic activities and GHG emissions on those territories is missing.
• To assessing the level of GHG emissions used the TIMES-Ukraine model, mass balance model for Waste sector and specific excel-based tools for the Agriculture and LULUCF.

Updated NDC: Analytical Review

• This publication is prepared by the Ministry of Environment with the aims to summarise and combine a number of analytical inputs and information largely drawn from the technical reports of the EBRD’s project “Support to the Government of Ukraine on updating its Nationally Determined Contribution,” in cooperation with Institute for Economics and Forecasting of the National Academy of Sciences of Ukraine; combined with analytical review of the sectors conducted with the support of the Low Carbon Ukraine (LCU) Project and BE Berlin Economics GmBH. The EBRD project was sponsored by the government of Sweden (Sida), and this publication is drawing from the numerous deliverables under the EBRD Project, but prepared as a separate document.
• Discussions of the modelling results were conducted with the participation of the Ministry of Economy of Ukraine, the Ministry of Energy of Ukraine, the Ministry of Agrarian Policy and Food of Ukraine, the Ministry of Infrastructure of Ukraine, the Ministry of Community Development and Territories of Ukraine.

Updated NDC: Scientific Based Report

• This is the Final Synthesis Report, prepared under the EBRD project framework “Support to the Government of Ukraine on Updating its Nationally Determined Contribution (NDC)”, funded by the Government of Sweden (Sida) and implemented by the Institute for Economics and Forecasting, National Academy of Science of Ukraine (IEF) as the lead agency, jointly with national and international experts.
• “This report aims to present Ukraine’s updated NDC development process and is not the updated Ukrainian NDC itself as adopted by the GoU in July 2021. The updated NDC of Ukraine is the outcome of an extensive stakeholder consultation and political discussion. It is informed by the project’s technical analysis and reports, but it is not entirely consistent with the Paris-aligned pathway proposed within this project. It is important that the reader distinguishes between what was proposed as a result of the technical analysis presented here and what has been adopted by the GoU as its updated NDC. This highlights the nature of the NDC, which is ultimately a political decision that has legal standing and therefore requires the raising of political ambitions”.

Updated NDC: Modeling Framework

• As a result of consultations and coordination with the GoU, a set of internationally recognized modelling tools was selected for Ukraine’s NDC scenario modelling framework approach (see Figure 2.1 of this report). The TIMES-Ukraine model was used for GHG emission pathway modelling in the energy sector, together with the dynamic Ukrainian general equilibrium model and modelling tools based on the IPCC approach – mass balance model for the Waste sector and EXCEL-based application for the LULUCF sector. A combination of the optimization least-cost energy system, macroeconomic (CGE) and sectoral models is the most common method of determining long-term, cost-optimal energy/emission pathways based on a range of different assumptions.
• The core of the project’s analysis work consisted of macroeconomic projections and pathway modelling of GHG emissions based on four designed scenarios.
• It is important to mention that the project was building long-term emission pathways extending beyond the NDC 2030 time frame to assist the GoU in building long-term pathways and to ensure continuity of its climate ambition actions in the long term while achieving the NDC target in 2030.

EBRD/IEF: Modeling Scenarios for Upd NDC

The following four NDC/GHG emission pathway scenarios were modelled:

• Scenario 1, or the “Business as usual (BAU) scenario”, was set as an “exploratory scenario”, assuming that no fundamental changes take place and particularly that no additional emission reduction measures are implemented during the projected period.
• Scenario 2, or the “Reference scenario”, contains numerous targets and indicators to be achieved according to the current legislation modelled as policy constraints with a policy-specific timeline (e.g. the 2035 Energy Strategy indicators and targets and the NEEAP, NREAP and LEDS indicators).
• Scenario 3, or the “Climate-neutral economy scenario”, contains the same set of policy targets as applied to the Reference scenario with an additional target constraint imposed on the level of GHG emissions per capita by 2070.
• Scenario 4, or the “Combined sensitivity scenario”, was modelled on the baseline economic development scenario and included the conditions of Scenario 2 for the sectors of agriculture and LULUCF as well as various sensitivity options, including carbon tax and nuclear variables and others.

EBRD/IEF: GHG pathways by updated NDC scenario

• Detailed modelling results are presented in the EBRD/IEF Report 3: Modelling Report and Report 4. Part A: Policies and Measures.
• In general, the modelling results show that the GHG emissions (including those in the LULUCF sector) are consistent with the IEA and IPCC scenarios for the 2050 pathway only in Scenario 3 and the Combined sensitivity scenario.

EBRD/IEF: GHG in UA, EU and selected countries

• Figure shows how Ukraine’s climate commitments (in the first and second periods of the Kyoto Protocol, the first and updated NDCs, the 2035 Energy Strategy of Ukraine and the 2050 LEDS corresponded to the actual trajectory of GHG emissions and how the combined sensitivity scenario corresponds to the theoretical trajectory to reach carbon neutrality by 2070.
• Figure also shows the trajectory of GHG emissions with a new target for 2030 and carbon neutrality in 2060.

• In addition, Figure also shows how much more the EU, Poland, the USA and Canada in particular need to undertake to achieve their new goals and indicates that the goal of achieving carbon neutrality is an easier task for Ukraine.

2050 Low Emission�Development Strategy of Ukraine

Source: https://unfccc.int/documents/181275

The 2050 Low Emission Development Strategy

• The LEDS determines national stakeholders agreed vision on decoupling further economic and social growth and greenhouse gases emissions.
• At the national level, the LEDS is an instrument for public administration and shaping of climate responsible behavior of both businesses and citizens, while at the international level, it supports a global target on stabilization of GHG concentration in accordance to the scenario of global average temperature increase confinement to well below 2°С of preindustrial level.
• Strategy objectives:
• Transition to energy system which envisions the use of energy sources with low carbon content, development of the sources of clean electricity and heat energy, increase in energy efficiency and energy saving in all sectors of economy …
• Increase in the volumes of carbon absorption and uptake with the help of best climate change mitigation practices in agriculture and forestry.
• Reduction in GHG emissions such as methane gas and nitrogen oxide predominantly associated with fossil fuel production, agriculture and waste.

The LEDS: Energy Modeling Scenarios

• The LEDS describe four policy scenarios:
• Energy efficiency – includes policies and measures which aim to increase efficiency in the use of energy resources and energy saving accompanied with enhanced quality in energy services and energy resources supply;
• Renewable energy – includes policies and measures which aim to support and stimulate the renewable energy development in Ukraine;
• Modernization and innovation – includes policies and measures which aim to modernize the fixed assets used in traditional energy (energy resources generation, transition and consumption) and implementation of innovation technologies (such as smart networks, industrial production and use of hydrogen etc.);
• Market transformation and institutions – includes business measures, which directly or indirectly affect structural shifts in economy and in goods and services markets; regulatory and management practices at the national and sector level; standards and codes; public aware

The LEDS: Modeling and Scenario Framework

• Quantitative model calculations of GHG emissions reduction under Baseline scenario are performed with the help of economic-mathematical optimization model of energy flows of Ukraine (model TIMES-Ukraine).
• Dynamic General Equilibrium Model with extended energy block was used to estimate the social and economic outcomes of Ukraine's energy decarbonization policies and measures implementation. Unification of the said two models was performed through application of the same assumptions with regard to economic growth rate, in particular, aggregated GDP growth rate.
• Assessments of economic outcomes of low carbon policies and measures show that their implementation is characterized with generally positive macroeconomic effects.
• The scope of GHG absorption in the forests is projected based on two main scenarios of Ukraine’s midcentury forestry development - «business as usual, » scenario developed on the basis of expert modification of previous and modern trends in economic and social development, and «forward looking scenario,» which envisions achievement of forestry and natures protection activities targets in accordance to government strategies defined priorities and programs. The third, additional scenario, made it possible to estimate the scope of GHG absorption in the process of forest cultivation (afforestation) in the area of million 1.4 hectare, which, given the “forward looking” scenario implementation shall by 2050 ensure increase in Ukraine's forest cover up to 19.4% and approximate it to optimum level

2030 National Energy Efficiency Action Plan

Source: https://zakon.rada.gov.ua/laws/show/1803-2021-%D1%80#Text

The 2030 NEEAP of Ukraine

• The second National Energy Efficiency Action Plan was developed and adopted according to the Energy Efficiency Directive (EED) 2012/27/EU.
• Ukraine’s NEEAP has been drawn up in accordance with the template laid down by the Energy Community Secretariat. Each action plan analyses the effects and, if necessary, revises current measures and establishes new sectoral measures in order to ensure that the objectives are met in 2030.
• The NEEAP presents an overview of expected energy savings due to current and planned activities that are aligned with the requirements of the EED. Those activities are disaggregated by relevant sectors and their due diligence has been conducted. It consists of 28 measures which were identified through comprehensive and robust consultations with all relevant stakeholders representing the Government, public and private sector, and other relevant groups.
• Energy savings calculations were undertaken for each measure taking as much as possible the bottom-up approach. It was calculated that those measure will achieve 26,307 ktoe in primary energy savings and 10,440 ktoe in final energy savings. Those present 22.3% of the expected primary energy consumption for the year 2030.

The 2030 NEEAP Scenarios

• The targets for energy efficiency for the year 2030 were estimated based on the following steps:
• Reconstruction of the Business as Usual (baseline or BAU) scenario for energy consumption.
• Setting a top-down target for energy efficiency based on the Ukrainian strategic goals as stated in the Energy Strategy for 2035 for energy intensity (units of energy per units of economic output), and expected level of economic output.
• Developing a bottom-up analysis for how certain policy measures could achieve these savings – as modelled in the TIMES-Ukraine model.

TSO “Ukrenergo” Adequacy Reports�(2020)

Source (2020): https://ua.energy/wp-content/uploads/2020/03/Zvit-z-otsinky-vidpovidnosti-dostatnosti-generuyuchyh-potuzhnostej-2019.pdf

Preparation, approval and publication of Adequacy Reports

• According to the Law of Ukraine No. 2019-VIII On the electric energy market the transmission system operator annually develops a report on the assessment of the adequacy (sufficiency) of the generating capacities to cover the forecasted electricity demand and ensure the necessary reserve, taking into account the security of supply requirements.
• The procedure of preparation, content and methodological approaches of preparation of the report are determined by the Transmission System Code.
• The report covers a scenario assessment of the forecast power and electricity balances of IPS of Ukraine for the short, medium and long term periods, taking into account, in particular, structural, economic, market, environmental conditions, demand management measures and energy efficiency, in compliance with operational safety standards.
• The report is approved by the Regulator and should be publish on the official website of TSO. The last adequacy report was approved in February 2024.
• The last few annual adequacy reports are not public because they contain sensitive information related to the war in Ukraine, they will be published after the termination or abolition of martial law in Ukraine.

Methodology and Scenarios of Adequacy Reports

• The methodology of modelling electricity demand and its coverage in the IPS of Ukraine is based on mathematic models grounded on coordinated forecasts of economy and energy sector development.
• Preparation of the adequacy report involves several stages of scenario formation. First, energy-economic scenarios are developed:
• Reference scenario, which was formed in order to obtain a model assessment of the timely and complete implementation of all current legislation, as well as projects of normative legal acts developed and presented as of the date of the report development.
• Climate Neutral Economy scenario, which provides for the timely implementation of legislation (current and drafts) as in the RS, as well as additional climate policies, measures and innovative technologies (CCS, hydrogen, fuel cells, power to X (gas, fuel, heat)). This scenario corresponds to the global goals of preventing an increase in the average temperature in the world by 1.5°C from the pre-industrial level, taking into account the provision of the strategic goals established by the EU-2050.
• Maximum economic efficiency scenario - as a conditional middle ground between the Reference and Climate Neutral Economy scenarios, based on realistic assessments of the possibility of energy transformation to a climate-neutral economy.

Methodology and Scenarios of Adequacy Reports

• Finally, the adequacy report of Ukrenergo provides modeled scenarios for the development of the power Integrated Power System of Ukraine by two scenarios - Basic and Targeted scenarios.
• Basic scenario of the development of generating capacities, storage and demand management for the perspective of the next 10 years according to the "bottom-up" approach.
• Target scenario shows the development of generating capacities, storage and demand management, taking into account the results of long-term forecasting of development of the IPU of Ukraine in the medium and long term period, according to the criterion of minimizing electricity price. On the one hand, the strategic goals of development of power sector, in particular renewable energy, and limitations on GHG emissions, defined by strategic documents, and, on the other hand, achieving the permissible values ​​of criteria for compliance (sufficiency) of generating capacities).

PROJECT’S ENERGY AND CLIMATE SCENARIOS

Net Zero World Initiative, UNECE, IEF/PNNL, IEF/DEA, IEF/Henrich Boell Foundation and other

Ukraine’s Decarbonization Pathways

• In a collaborative effort to promote the resilience and sustainability of the energy system as part of Ukraine’s reconstruction, this project has harnessed the expertise of the leading DOE National Laboratories and distinguished Ukrainian research institutes and think tanks.
• The modeling team used the TIMES-Ukraine model, developed by the Institute for Economics and Forecasting (IEF) of the National Academy of Sciences of Ukraine, and improved in 2023 with the support of the DOE national laboratories to model decarbonization pathways.
• Developed scenarios for achieving net-zero emissions in the energy sector, which are aligned with the goals of the 2050 Energy Strategy of Ukraine.
• The report explored three main scenarios: Reference, Net Zero Base, and Net Zero Intense. Both Net Zero scenarios are designed to achieve net-zero greenhouse gas (GHG) emissions in the energy sector; the Net Zero Intense scenario assumes higher economic growth and clean energy exports.

NZWI: Energy and Climate Scenarios

• The Reference scenario assumes that no fundamental changes occur throughout Ukraine, often referred to as a “business-as-usual” scenario. Specifically, this includes no additional emission reduction measures, policies, and implementation of energy efficiency improvements, deployment of renewable energy sources, penetration of new technologies, and implementation of environmental and climate commitments happen with rates observed over the past years.
• The “Energy Strategy of Ukraine” scenario shows the net zero GHG pathway for energy sector of Ukraine taking to account key assumptions and targets of the Energy Strategy of Ukraine till 2050. The strategy is closed for public review, but the Ministry of Energy of Ukraine and KPMG provided the main findings and goals of the Energy Strategy 2050. The strategy envisages Ukraine achieving carbon neutrality in the energy sector by 2050, which will be achieved through the development of modern and safe nuclear, renewables, modernization and automation of transmission and distribution systems etc.
• The Net Zero Ukraine scenario builds on the Energy Strategy scenario by including all technological change capabilities, additional sectoral targets (e.g. in buildings, transport, industry), options for the development of bioenergy and nuclear, green and clean energy export options, European integration energy and climate obligations, etc. DAC and CCUS helps reduce emissions from the power sector and industry.

NZWI: Scenario Matrix

NZWI: Total primary energy supply (TPES)

• The structure of TPES doesn’t not change much in Reference scenario.
• In the Net Zero scenarios there is a rapid phase-out of fossil fuels – first coal, followed by natural gas and oil – and increases in wind, biofuels, solar, hydro, and nuclear.
• In 2050, TPES needs are met by domestic production. Renewable sources make up just over 50% of TPES in 2050, with nuclear providing another 49%.
• Building retrofitting and electrification of industry and transport contribute to the permanent reduction of TPES.

NZWI: Total primary energy supply (TPES)

• In the Reference scenario, electricity consumption grows slowly.
• Electrification is much more rapid in the Net Zero Base scenarios, with complete electrification of light-duty vehicles, along with moderate electrification of freight transport, heating, cooking, and water heating in buildings, light and heavy industry.
• The increase in electricity consumption is much more rapid in the Net Zero Intense scenario, reaching roughly more than five times 2020 levels by 2050.
• The increase electricity consumption is driven by greater economic growth, greater industrial production, and deeper electrification, and for hydrogen production.

NZWI: Total primary energy supply (TPES)

• To achieve net zero CO2 emissions by 2050, emissions should be reduced in all sectors, including in times of economic recovery after the war, though not all sectors will be able to reach net zero by 2050, especially heavy industry and energy supply sector.
• Therefore, CCUS technologies both in the power and heat sectors and industry, as well as DAC technologies should be implemented starting in 2040 or earlier.
• In implementing CCUS technologies (which are still uncertain) at bioenergy power and heat plants, it is possible to achieve negative GHG emissions as biofuels are considered climate-neutral energy resources.

The net-zero transition significantly improves energy security and resiliency of the national economy, which will contribute to its adaptability to future climate changes and conditions.

UNECE project: Carbon Neutrality in Ukraine

• Since Ukraine is a candidate for joining the EU, Ukraine's climate targets should be the same as in the EU - climate neutrality (net zero) by 2050 with the subsequent increase in negative GHG's emissions.
• The Carbon Neutrality scenario assumes faster rates of GHG emissions reduction in the first decades and slower rates at the end of the modelling horizon.
• This publication builds on the recommendations from the Pathways to Sustainable Energy Project and the UNECE Carbon Neutrality Project. The project supports countries’ efforts to reach carbon neutrality and attract investments into clean infrastructure projects. The publication forms part of the UNECE Carbon Neutrality Toolkit.
• Countries are invited to put into practice the UNECE Carbon Neutrality toolkit.

PNNL/IEF: Decarbonization scenarios of the heat sector

• District heat can remain an important heating source in Ukraine in a resilient, decarbonized future and could help bolster energy security.
• The models find that about 100% of district heating in 2050 will come from a mix of low-carbon domestic resources, including electric heat pumps (powered by local renewables), industrial waste heat, synthetic fuels (hydrogen and methane), and biofuels (biogases).
• Models show that a future, resilient, and EU-oriented Ukraine will significantly shift the fuels used in district heating and electricity generation.
• Reaching economy-wide GHG net-zero emissions in 2050 in Ukraine will require almost a complete elimination of direct emissions in the buildings.

Transition to 100% Renewables in Ukraine

Practical TIMES-Ukraine scenarios and results

Municipal TIMES-Zhytomyr model

Questions

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