Competition vs monopoly in heat supply

Oleksandr Dombrovskyi, Sergiy Savchuk, Georgiy Geletukha, Diana Korsakaite, Volodymyr Kramar in the article “Competition vs monopoly in heat supply” wrote about  the essential prerequisites for reducing the cost of heat and improve the quality of services for consumers. The article was published in the analytical magazine “Housing and communal services of Ukraine”.

The experience of developed European countries shows that one of the effective ways to ensure the development and increase the efficiency of heating systems is the introduction of competitive relations in this area.

Currently, in the district heating of Ukraine, the vast majority of manufacturers and suppliers of heat belong to the municipal or state property. And often these organizations combine activities of production, transportation, and supply of heat and are monopolists in district heating at a given area for decades. Most of them use natural gas, as fuel, which is currently the most expensive energy carrier.

Since July 2016, the fuel component, based on natural gas, accounted for 84% of the tariff for thermal energy for the population.

Read the article “COmpetition vs monopoly” in full (in Ukrainian)