Special attention has been paid to the social element of the coal industry restructuring, including its present state, experience of European countries, dialogue with communities, international support, and future development of the sector. The measures aiming to mitigate social ramifications of the coal industry restructuring should be tightly coordinated with the programmes intended to bring social transformation to the areas affected by mine closures/mothballing. Such programmes should involve arranging public efforts to restore infrastructure, creating new jobs, providing consultations and financial support to business initiatives, setting up business incubators, and introducing temporary special economic regimes in the areas hit by mine closures.

Ukraine’s 2035 New Energy Strategy (NES) envisages that the thermal generation will retain its role in balancing the Ukrainian power grid. All the energy sector participants face common challenges: supply of energy resources (indigenous and imported), renovation of generating units, energy efficiency improvement, reduction of pollutant emissions and mitigation of the negative impact upon the environment, and Ukraine’s participation in global initiatives, notably the 2015 Paris Agreement, seeking to prevent and overcome negative consequences of the climate change.

The NES implementation is planned to achieve a more than two-fold decrease in the GDP energy intensity by 2035. This task will require high-technology solutions, substantial investment, updated legislation, and structural changes to the economy. The investment needs to be supported by reforms, easier access to the market, and transparent and streamlined legal and regulatory mechanisms. The state has to minimise its investments, while fostering an incentive investment climate as much as possible.
Globally, coal has enabled a significant improvement in the quality of life and helped ensure access to electricity. Even highly-developed countries, such as Japan and Germany, continue to heavily rely upon thermal power generation. Subject to internal and external support, Ukraine can leverage experience gained in research and development to bring together the advantages of coal usage and benefits from the adoption of new clean technologies in order to carry out the obligations it assumed as a party to the Association Agreement and a member of the Energy Community.

Proper attention to the situation in the coal sector and coal-fired generation will help Ukraine strengthen its role as a responsible European country in building up relations with the European Union in line with the Memorandum of Understanding on a Strategic Energy Partnership signed in Brussels on 24 November 2016. While recognising a special situation in Ukraine, it would be reasonable to fully embrace all the available cooperation opportunities “to reform and restructure the Ukrainian coal sector, with due regard to environmental and social aspects”.
The Memorandum envisages that the parties will agree on and execute annual plans to implement it. Incorporating the coal industry in the annual plans will ensure transparency towards the inside and outside stakeholders as far as the industry restructuring, problematic issues and ways to tackle them are concerned. This format will be a crucial component to ensuring reliable operation of the Ukrainian power system during peak load periods on the grid.

The Ministry of Energy and Coal Industry of Ukraine will play a key part in coordinating and implementing the industry restructuring policy. Pursuant to the European practices, these efforts need to rely on close cooperation and dialogue with all the relevant parties, including communities and non-governmental organisations. As shown by the experience of the European countries that have already gone through or are in the process of energy transformation, constructive and consistent efforts on the part of the Ministry and the industry will guarantee successful achievement of the NES targets with a minimum negative impact upon the social aspect and the environment.