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Municipal Energy Reform Project (Merp) Sixteenth Quarterly Report January 1 – March 31, 2017

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Municipal Energy Reform Project (Merp) Sixteenth Quarterly Report January 1 – March 31, 2017 MUNICIPAL ENERGY REFORM PROJECT (MERP) SIXTEENTH QUARTERLY REPORT JANUARY 1 – MARCH 31, 2017 October 2017 This document was produced for review by the United States Agency for International Development (USAID). It was prepared by the USAID Municipal Energy Reform Project in Ukraine. USAID MUNICIPAL ENERGY REFORM PROJECT – SIXTEENTH QUARTERLY REPORT Key to cover photos: MUNICIPAL ENERGY REFORM PROJECT (MERP) SIXTEENTH QUARTERLY REPORT JULY 1 – SEPTEMBER 30, 2017 CLEAN ENERGY IDIQ: AID-OAA-I-13-00015 Contract: AID-121-TO-13-00006 October 2017 DISCLAIMER The authors’ views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. USAID MUNICIPAL ENERGY REFORM PROJECT – SIXTEENTH QUARTERLY REPORT This page is intentionally left blank. TABLE OF CONTENTS BACKGROUND .......................................................................................................................... 1 A. SUMMARY OF PROGRESS AND ACCOMPLISHMENTS ............................................. 3 B. DETAILED DESCRIPTION OF PROGRESS/ ACCOMPLISHMENTS DURING THE REPORTING PERIOD .......................................................................................... 14 B.1 Project Team and Procurement Actions ............................................................. 14 B.1.1 Consulting Agreements ........................................................................................ 14 B.1.2 Subcontracts ........................................................................................................ 14 B.2 Costs .................................................................................................................. 14 B.3 Environmental Compliance ................................................................................. 14 B.4 Progress and Accomplishments By Activity ........................................................ 17 B.4.1 Activity 1: Improve CE Regulatory and Legislative Enabling Environment ......... 17 B.4.2 Activity 2: Promote Investment in CE Technologies and Applications ................ 30 B.4.3 Activity 3: Capacity Building and Dissemination .................................................. 44 B.4.4 Activity 4: Enhance Capacity for the GOU in LEDS ............................................. 44 C. DELIVERABLES ........................................................................................................... 48 D. MILESTONES ...................................................................................................................... 55 E. PROBLEMS .................................................................................................................. 59 F. PLANS .......................................................................................................................... 61 F.1 Activity 1: Planned Activities in Quarter 17 .......................................................... 61 F.2 Activity 2: Planned Activities in Quarter 17 .......................................................... 63 F.3 Activity 3: Planned Activities in Quarter 17 .......................................................... 64 F.4 Activity 4: Planned Activities in Quarter 17 .......................................................... 64 G. PERFORMANCE INDICATORS ................................................................................... 69 USAID MUNICIPAL ENERGY REFORM PROJECT – SIXTEENTH QUARTERLY REPORT III LIST OF TABLES Table 1. Consulting Agreements in Place During the Reporting PeriodError! Bookmark not defined. Table 2. Fixed-price Subcontracts (Purchase Orders) Signed During the Reporting Period ......................................................................... Error! Bookmark not defined. Table 3. Summary of Project Expenditures (USD) .................... Error! Bookmark not defined. Table 4. Status of NEURC Resolutions Prepared with MERP Assistance ............................. 23 Table 5. Funding by City under SEAP Measures Implementation .......................................... 31 Table 6. Projects Included in the Final List for EIB UMIDP ..................................................... 31 Table 7. Summary of Information on the Projects Supported ................................................. 34 Table 8. Current Project Pipeline ........................................................................................... 34 Table 9. Current Status of Design and Cost Documentation Development for Residential Sector Demo Projects ........................................................................... 38 Table 10. Energy Audits of Public and Residential Buildings in Eastern Ukraine ..................... 40 Table 11. Energy Audits of Public and Residential Buildings in Odesa Oblast ......................... 42 Table 12. Most Important Documents and Materials Produced under MERP during Q16 of the Project ........................................................................................................... 48 Table 13. Q16 Milestones for Activity 1: Improve CE Regulatory and Legislative Enabling Environment .............................................................................................. 55 Table 14. Q16 Milestones for Activity 2: Promote Investment in CE Technologies and Applications ............................................................................................................. 56 Table 15. Q16 Milestones for Activity 4: Enhance Capacity for the GOU in LEDS ................... 57 Table 16. Q17 Milestones for Activity 1: Improve CE Regulatory and Legislative Enabling Environment .............................................................................................. 65 Table 17. Q17 Milestones for Activity 2: Promote Investment in CE Technologies and Applications ............................................................................................................. 66 Table 18. Q17 Milestones for Activity 4: Enhance Capacity for the GOU in LEDS ................... 67 IV USAID MUNICIPAL ENERGY REFORM PROJECT – SIXTEENTH QUARTERLY REPORT ACRONYMS AE Alternative energy BEE Business Environment for Energy EECU Association of Energy Efficient Cities of Ukraine ARVI Aggregated Recovery Value Indicator CBP Capacity Building Plan CCS Center for Climate Strategies CE Clean Energy CEAC Clean Energy Advisory Center CE RC Clean Energy Resource Center CFR U.S. Code of Federal Regulations CHP Combined Heat and Power CIESIN Center for International Earth Science Information Network CMU Cabinet of Ministers of Ukraine CoM Covenant of Mayors CPFF Cost Plus Fixed Fee CSO Civil Society Organization CTF Clean Technology Fund DCA Development Credit Authority DCOP Deputy Chief of Party DH District Heating E5P Eastern Europe Energy Efficiency and Environmental Partnership EBRD European Bank for Reconstruction and Development EC-LEDS Enhanced Capacity for Low Emission Development Strategies EE Energy Efficiency EFOM Energy Flow Optimization Model EIB European Investment Bank EM Energy Management ENU Eastern Ukrainian National University USAID MUNICIPAL ENERGY REFORM PROJECT – SIXTEENTH QUARTERLY REPORT V EPC Energy Performance Contract ERC Environmental Review Checklist ESCO Energy Service Company EU European Union EUR Euro (currency) GCC Global Climate Change GDA Global Development Alliance GDP Gross National Product GHG Greenhouse Gas(es) GOU Government of Ukraine HOA Homeowners Association HORECA Hotel, Restaurant, Cafe / Catering IEA International Energy Agency IEE Initial Environmental Examination IEEC Institute for Environment and Energy Conservation IEF Institute for Economics and Forecasting IFI International Financial Institution IHS Individual Heating Substation IPCC Intergovernmental Panel on Climate Change IRG International Resources Group KfW Kreditanstalt für Wiederaufbau kWh Kilowatt hour(s) LEDS Low Emission Development Strategies M2 Square meters M3 Cubic meters MARKAL MARKet and Allocation Model MDI Municipal Development Institute M&E Monitoring and Evaluation MERP Municipal Energy Reform Project MinEcology Ministry of Ecology and Natural Resources MinEconomy Ministry of Economy VI USAID MUNICIPAL ENERGY REFORM PROJECT – SIXTEENTH QUARTERLY REPORT MinEnergy Ministry of Energy MinJustice Ministry of Justice MinRegion Ministry of Regional Development, Construction, Housing and Communal Services MinSocPolicy Ministry of Social Policy MMP Mitigation Measures Plan MRV Monitoring, Reporting, and Verification MTO MERP Task Order MWh Megawatt hours MW Megawatts NECSRC National Energy and Communal Services Regulatory Commission NEURC National Energy and Utility Regulatory Commission NEFCO Nordic Environment Finance Corporation NGO Nongovernmental Organization OPORA All Ukrainian Public Organization “Civic Network OPORA” PEST Political, Economic, Social, Technological analysis PPP Public-Private Partnership PSA Public Service Advertisement/announcement Q Quarter RC Resource Center RE Renewable Energy REDS Resource Efficiency Development Strategies REP Regional Energy Plan RSEP Regional Sustainable Energy Plan SAEE State Agency on Energy Efficiency and Energy Saving of Ukraine SEAP Sustainable Energy Action Plan SECAP Sustainable Energy and Climate Action Plan SIDA Swedish International Development Cooperation Agency SME Small and Medium Enterprises SMM Social Media Marketing SoW Scope of Work SWOT Strengths, Weaknesses, Opportunities, Threats analysis USAID MUNICIPAL ENERGY REFORM PROJECT – SIXTEENTH QUARTERLY REPORT VII TIMES
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