Methodology

The Energy Transparency Index methodology is based on the universal statistical method of multidimensional weighted average, used to assess complex objects, processes, and phenomena. The Index dimensions include specific transparency indicators, their sets (categories, subcategories, and energy markets), and transparency aspects (criteria).

Indicators and Categories

An indicator is a specific way of measuring the transparency of a certain object (e.g., energy company, public authority), process (e.g., pricing, regulation, trade, etc.), or phenomenon (e.g., market, competition, etc.). A set of indicators forms the lowest level of the Index decomposition. The Index studies analyzed 100+ indicators with indispensable and sufficient transparency features (contents of information, its format, frequency of updating, etc.) defined in European legislation and/or best global practices of information disclosure.

The Energy Transparency Index studies focus on two energy markets: natural gas and electricity, as well as cross-sector issues.

Grouping the indicators into categories allows stakeholders to obtain information regarding the transparency and accountability in various parts of the energy sector throughout its value chains. By analyzing the requirements and practices of information disclosure, the indicators were grouped into eight categories:

Balances: Defines the transparency of annual and monthly energy statistics.
Natural monopolies: Defines the transparency of transmission and distribution system operators.
Supply: Defines the transparency of rules, competition, prices and pricing in the energy markets.
Reliability and security: Defines the transparency of stocks and reserves, rules and reports on the security of supply.
Consumption: Defines the transparency of energy consumption metering, customer service standards, information for consumers on prices and tariffs, subsidies, preferences and other aid, and energy efficiency programs.
Reporting: Defines the transparency of corporate financial statements and auditor reports, management reports, payments to the government, information regarding final beneficiaries.
Policy: Defines the transparency of implementing policy documents on energy and sustainable development, energy efficiency, environmental protection, combating climate change, and renewables.
Public authorities: Defines the transparency of public spending, as well as designing, adopting, and implementing policy and regulatory decisions.

For the convenience of assessment and analysis, indicators in each category were grouped into subcategories and groups.

Transparency criteria

The transparency criterion is an aspect of assessing transparency of an object, process, or phenomenon. Each indicator was evaluated by six transparency criteria:

Availability: The existence of information in open sources.
Accessibility: A measure of free access to information.
Relevance: Availability of information for the most recent reporting period or the moment of assessment.
Frequency: Compliance with the requirements regarding the regularity of updating and storing the information.
Usability: Convenience and simplicity of using disclosed data and information.
Completeness: Availability of exhaustive information required to be disclosed following legislative requirements or best global practices.

Transparency criterion	Score
Availability (C_av)	0 – information unavailable 1 – information available
Accessibility (С_ac)	0 – access to available information requires payment of a fee or prior request 0.5 – access to available information requires authorization (after providing user’s personal data) 1 – information in free access
Relevance (С_rl)	0 – information for the most recent reporting period unavailable 1 – information for the most recent reporting period available
Frequency (С_fr)	0 – information not updated and not available for past periods 0.5 – information updated but not available for certain past periods 1 – information updated according to requirements and available for past periods
Usability (С_us)	0 – information available in a not machine-readable format (jpg, png, pcx, tiff, scanned pdf, etc.) 0.5 – available information can be copied or processed (numerical: docx, pdf, html, xlsx (unstructured data)) 1 – information available in a machine-readable format (numerical: xlsx (structured data), csv, xml, json; textual: docx, non-scanned pdf)
Completeness (С_in)	0 – information to be disclosed unavailable within the required period 0.5 – information to be disclosed partially available within the required period 1 – all information to be disclosed is available within the required period

Each Index’s indicator was assessed via monitoring the open sources (websites of public authorities and energy companies, open data and institutional repositories). The aggregate score of each transparency indicator was calculated by the following formula:

Т_i = C_av × (С_ac + С_rl + С_fr + С_us) × С_in

with С_аv, С_ac, С_rl, С_fr, С_us, С_in are scores for the availability, accessibility, relevance, frequency, usability and completeness criteria, respectivel

If any information can be obtained only for a fee or upon prior request (С_ac = 0), it was considered unavailable (С_аv = 0). For all qualitative indicators, С_rl = С_fr = 1 if the information was available (С_аv = 1) and accessible (С_ac = 1).

Considering the large size of the transparency indicators, they were considered of equal weight. Therefore, the average values were used to develop sub-indexes for the categories, subcategories, and markets

Aggregation Of Scores

To calculate the total Index score, weightings of the Index’s categories were applied:

Category	Weighting
1. Balances	0.05
2. Natural monopolies	0.20
3. Supply	0.20
4. Reliability and security	0.05
5. Consumption	0.20
6. Reporting	0.10
7. Policy	0.10
8. Public authorities	0.10

Interpretation Of Scores

All scores were converted into a 100-point scale as 25 Т_i , rounded off and given the following interpretation:

Limitations

The Index cannot be applied to assess the transparency of:

The energy sector in real-time, since its calculation requires the processing of large amounts of information for the reporting period (as a rule, the one preceding the period, during which the assessment is delivered);
All participants of energy markets and/or public authorities; therefore, assessments of certain indicators in the Natural monopolies, Consumption, Reporting and Public authorities categories were delivered on the basis of a representative sample.

Samples

«Natural monopolies» category

Transmission system operators (TSOs): legal entities responsible for the operation, dispatching, maintenance, and development of networks as well as for ensuring their long term capacity to meet reasonable demand for transmission of electricity and gas;
Distribution system operators (DSOs): legal entities operating in the largest cities and responsible for the safe, reliable, and efficient operation, maintenance and development of distribution systems in electricity and gas.

«Consumption» category:

Financial and management reporting and Fiscal reporting (partly) subcategories: energy companies ranked among top taxpayers, including entities of public interest as defined by the Directive 2013/34/EU;
Reports on payments to the government indicator: state-owned and private extractive companies with the largest production of natural gas, oil and gas condensate, and steam coal;
Information about final beneficiaries indicator: largest joint-stock energy companies selected from the primary sample of companies applied in the Financial and management reporting subcategory, with securities eligible for trading on stock exchanges

«Public authorities» category:

Public spending (partly), Transparency of public administration subcategories: public authority in charge of energy policy (ministry), national regulatory authority, competition (antitrust) authority.