As Yurii Prodan, Minister for Energy and Coal Mining, announced at a Ukrainian-Norwegian forum, Ukraine has begun to negotiate with Russia the possibility of importing electric power from that country. “In pursuance of a National Security and Defense Council decision, I have instructed the Ukrinterenerho company to hold talks with the Russian side in order to check what quantities and at what price can be imported,” Ukrainska Pravda quotes Prodan as saying.
While coal deliveries from the aggressor country are still the talk of the town, the Cabinet of Ministers is going to set up a new form of cooperation with Russia. Why? Apparently, the government is thus trying to forestall the shortage of energy supplies in the winter on the domestic market. But is this really the only way for this country to insure itself against the shortage of energy? The Day has put this question to some experts in this field.
COMMENTARIES
Serhii DIACHENKO, energy expert; chairman, Bureau of Comprehensive Analyses and Forecasts:
“There was 2 million tons of coal at the stores of thermal electric power plants at the beginning of the heating season. If coal were supplied systematically, there would be no problems at all with electricity. But there are no deliveries now, while the rebel-occupied eastern territories are not paying to the government for the used energy resources. There is no shortage so far. But if the coal supply problem is not solved, electric power will have to be imported. Its shortage will particularly make itself felt during the peak consumption loads. We have already seen unusually cold winters in Ukraine before. We cannot buy coal in Europe because it will take at least five years to bring the work [of Ukrainian power plants] into line with their standards. To forestall shortages, we must solve the problem of either the reserve fuel oil or coal. We seem to have missed the former option, but the latter one still remains. Will Ukraine be able to make up the shortage of 5 million tons of coal at the expense of imported stores? No one knows.”
Serhii YERMILOV, former Minister for Fuel and Energy of Ukraine (2000-01, 2002-04):
“The Ukrainian and Russian energy systems function separately. There were only connections on direct current lines. Therefore, this is either a political decision on the president’s level, and in this case Prodan should have certain directives from the Foreign Ministry, or unconfirmed information.
“As for importing electricity from other countries, there are transmission lines with Poland, Hungary, Rumania, Belarus, and Slovakia. Most of them are export-oriented, but, if need be, they can be used for import purposes, as Ukraine is doing in the case of receiving reverse-flow gas from the EU. Incidentally, the wholesale price of electricity in the EU is lower than in Ukraine. So, it would be more profitable to buy there. The export of electric power also needs a close examination. Ukraine sells an estimated 1-2 percent of the total electricity produced (190 billion kWh). But the point is not so much in the quantities that are needed to make up the domestic shortage as in the commercial viability of these sales. According to my information, Ukraine has been subsidizing lately, for no apparent reason, the supplies of Ukrainian electricity from Burshtynsky Island to Europe. Is it true? There is no official confirmation because the Ministry for Fuel and Energy says that contract sales prices for this electricity are a secret. Maybe, they will reveal them to you, journalists.
“Where can we take an additional energy resource from? We do this, for instance, by developing nuclear power generation. Nuclear power plants remain underloaded now. In the countries that practice nuclear power generation, the installed capacity utilization factor is 90 percent, while it is 70 percent in Ukraine. This means we can increase power generation by raising this factor instead of building new units. As far as I know, the additional capacities of nuclear power plants have already been partially used to make up the shortage. While earlier the energy they produced accounted for 45-50 percent of the total figure, now it does for 60 percent. Why was this potential not used earlier? On the one hand, for technical reasons: there were not enough backbone networks of electric power transmission and we were short of maneuverable capacities. On the other hand, there were some human factors, such as rampant corruption in this sector, especially on the black market of coal. The people involved in this were trying to squeeze as much as possible from thermal generation in order to sell more coal and gain super-profits. This is why the production of electricity at nuclear plants was slowed down deliberately.
“Another way to offset the shortage is import. Ukraine has now an excess quantity of power-plant coal, but the latter is on the separatist-occupied territory. Where can we get coal from? The closest place is Russia. Poland will hardly help, for it has no anthracite varieties of coal. There are large reserves of this fuel in South Africa, Australia, and the US. So, we should bring it from there. If the supply of these varieties of coal were transparent, Ukraine would have excess coal in a matter of 2-3 months. I mean introduction of electronic bidding in Ukraine, which would attract coal producers, form the market price, and arrange the supply within a month. There is a huge excess of coal in the world, so it is quite realistic to make up for the shortage of coal in Ukraine in two or three months’ time. This should have been done as long ago as May but is not still being done even today. We saw to it that the [parliamentary] coalition agreement included a provision on the organization of such bidding. But then the introduction of this clause was put off until December 2015. In other words, these people are going to reign supreme for another year. I feel they wish to keep old schemes and principles intact. In my view, it is necessary to form a new Cabinet as soon as possible and set things right in the electric power sector. For all these swings from side to side are caused by misrule in this industry. If we put things in order on the energy market and in electric power generation as a whole, we will restore its competitiveness. Following this, we will be able to export electricity and power-plant coal again.”
