№ 7/2018

Fìnansi Ukr. 2018 (7): 81–99https://doi.org/10.33763/finukr2018.07.081

ECONOMIC SECURITY: THEORY, PRACTICE, MANAGEMENT

PETRAKOV Jaroslav ¹

¹Chernihiv National University of Technology
OrcID ID : https://orcid.org/0000-0001-9123-0642

Fiscal tools application for electricity sector modernization in Ukraine: from normative design to impact assessment

It is the third decade of electricity sector reform in Ukraine. Anticipated energy markets should solve the problems of energy security, sustainability, comfortability and availability of services, as well as national competitive advantages. The EU-Ukraine Association Agreement implementation, together with the adoption of new Cabinet of Ministers’ rules of procedures, requires not only legal drafting but also comprehensive impact assessment to provide quality in legal approximation process and integrate stakeholders into the decision-making process. The research is aimed at reviewing approaches to the application of fiscal tools in the process of reforming the Ukrainian electricity market and assessing the impact of deferred modernization of the electric power industry on the level of energy and fiscal security of the country. We have found the sources of the existing legal approach inefficiency in sectoral transformations, such as market power imbalances and information gap between stakeholders, the weak inclusion of new market participants’ needs by authorities that poses biased perceptions and expectations society-wide. We have identified information asymmetry as the root of insufficient competition and motivation absence to invest in innovative technologies that affect both supply and demand sides. So, electricity market modernization tools should incentivize them both. The recent survey, held on May 2018, revealed strong unsatisfied demand for the information about the objectives of the reforms and expected outcomes, as well as their negative associations with bureaucracy and low personal civil society engagement in reform efforts. We suggest amendments to the legal acts in electricity sector modernization and development areas, as well as on national energy and fiscal security issues, in particular with regard to the terminology of the industry’s capacity to meet consumers’ needs in electric energy, the concept of energy efficiency and long-term energy generation planning, and amendments to the Tax Code Code of Ukraine on the specifics of repayment of arrears for electricity generated at its wholesale market. At the same time, a key factor to manage the risks of effective electricity market modernization should become a high-quality ex-ante impact assessment of legal acts approximation on market and other important energy and fiscal security parameters.

Keywords:electricity sector, energy security, modernization, fiscal security, fiscal tools, capacity

JEL: E62, H23, O13, O23, Q42, Q47, Q48

PETRAKOV J. . Fiscal tools application for electricity sector modernization in Ukraine: from normative design to impact assessment / J. . PETRAKOV // Фінанси України. - 2018. - № 7. - C. 81-99.

Article original in Ukrainian (pp. 81 - 99)

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