Energy Transparency Index of Ukraine
The Energy Transparency Index has been designed to comprehensively assess the availability and quality of information in the energy sector.
The Index is:
- a final product providing a comprehensive assessment of the information disclosure of the energy sector and its components and diagnosing gaps;
- a universal tool enabling an in-depth analysis with a breakdown into categories, criteria, and specific markets, as well as tracking changes – both in time and in comparison with other countries.
The Index’s ultimate beneficiaries are the consumers, as their awareness improves the possibility of protecting their rights and helps rationalize economic behavior in the market. More transparent and competitive energy markets will promote the improvement of services for consumers and fair pricing. A strong interest in the Index exists among companies and potential investors seeking an open, competitive environment, a better relationship with the government and communities, and reducing business risks. The Index will help public authorities responsible for information disclosure to improve their transparency and respective regulations. Foreign partners will be able to better understand the energy policy and markets of Ukraine.
The Index includes 200+ indicators and is based on specific regulatory requirements and best global practices of information disclosure.
The assessment is based on data analysis solely from open sources, focusing on the energy sector performance along the value chain “from producer to consumer”.
Annual Index scores
The methodology of the Energy Transparency Index applies the statistical method of multidimensional weighted average, used to assess complex objects, processes, and phenomena.
An evaluation of Ukraine's energy sector transparency is carried out annually. The total index score can vary from 0 to 100, which allows tracking the overall level of transparency of the energy sector and its dynamics.
Interpretation of scores
All calculated transparency scores (by category, subcategory, market, public authority) are converted into a universal 100-point scale, rounded off to the integer digits, and have the following interpretation:
Transparency by category
All indicators of the Index are grouped into eight categories reflecting various aspects of the energy sector functioning:
- "Balances": transparency of annual and monthly energy statistics;
- "Natural monopolies": transparency of transmission and distribution system operators;
- "Supply": transparency of rules, competition, and pricing in energy markets;
- "Reliability and security": transparency of stocks and reserves, rules and reports on security of supply;
- "Consumption": transparency of service standards, metering, information for consumers about prices and tariffs, subsidies and other aid, energy efficiency programs, commercial offers of suppliers, and price comparison tools;
- "Reporting": transparency of corporate financial statements and auditor reports, management reports, disclosure of non-financial information, payments to the government, information regarding corporate governance and final beneficiaries;
- "Policy": transparency of implementing strategic and program documents of energy policy and sustainable development, the policy on energy efficiency, environmental protection, combating climate change, and renewable energy, etc.;
- "Public authorities": transparency of public spending, developing, adopting, and implementing policy decisions, forming management bodies.
The chart demonstrates the level of Ukraine's energy sector transparency by categories of the Index and allows assessing the progress by respective dimensions (you can select up to three years in the filter).
Transparency by subcategory
To provide a deeper understanding of Ukraine's energy sector transparency, the indicators of Index categories were grouped into subcategories. It allows to see a detailed picture and more clearly identify gaps.
The chart below demonstrates transparency scores of subcategories relating to eight categories of the Index.
Transparency by energy market
Transparency of energy markets is critical for promoting their competitiveness, effective performance, fair pricing, a favorable investment climate, and better consumer services.
The Index encompasses five energy markets:
- natural gas;
- oil and liquid fuel;
- steam coal;
Total transparency scores were calculated for each energy market, as well as scores by sectoral categories - Balances, Natural monopolies, Supply, Reliability and security, Consumption - related to a particular energy market.
The other three categories - Reporting, Policy, and Public authorities - are cross-sectoral and relate to the whole energy sector. Thus, they were not included in calculation of the markets' transparency.
Energy markets are characterized by different levels of regulation and legislative requirements regarding the disclosure of information by their participants. These differences eventually influenced the results of Ukraine's energy markets transparency assessment. For the still developing energy markets - steam coal and heating - the calculated scores should be considered only for reference.
The Index has a hierarchical structure, where the bottom level comprises specific indicators and the top level represents a total Index score. All indicators are evaluated by six transparency criteria:
- completeness of information.
The overall scores of indicators vary from 0 to 4. The table below reveals the entire Index "tree", its internal structure, as well as demonstrates transparency scores for all elements and dimensions of the Index.
At the bottom Index level, one can identify specific gaps in transparency of Ukraine's energy sector. These are the so-called "black boxes" – the indicators, information on which is entirely unavailable.
Annual reports of Energy Transparency Index of Ukraine
All scores by particular Index's indicators along with the comments and other related information can be found in detailed assessment tables.