Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.

2019 CIGRE export plan
"Very glad to announce that as of today, Ukraine can export electricity to the EU market. It will provide an additional source of electricity for the EU. And much-needed revenues to Ukraine. So we both benefit."[vdL tweet, June 30,2022]

Flanders Investment

VZ | How Ukraine will freeze, 7 Oct

Energy Mathematics

According to Ukrainian media estimates, since 2014 Ukraine has lost 33% of energy generation (in the territories controlled by Russia). Ukraine lost 10 power plants in 2014-2015, another 17 in 2022. Zaporizhzhya NPP certainly stands out among them. But that doesn't mean the rest aren't worth considering. For example, Zaporizhzhya TPP (Energodar) has an installed capacity of more than 3,500 MW and can potentially produce 23-25 ​​billion kWh (the annual plan for ZNPP for 2022 was 37 billion kWh). In other words, the loss of Energodar is a hole that Ukraine physically has nothing to close and which will largely determine the problems of the Ukrainian winter of 2022/23.

Ukraine lost another 4% of electricity generation as a result of hostilities from February to September ( estimated [23 Sep] by the National Council for the Reconstruction of Ukraine). However, it is obvious that these data do not take into account the attacks on the energy infrastructure that were inflicted on September 11-12 (Kharkovskaya CHPP-5, Zmievskaya CHPP, Pavlodarskaya CHPP-3, Kremenchugskaya CHPP). In general, the damage and reduction in the capacity of the energy system looks monstrous for Ukraine and it is not entirely clear how, against this background, Zelensky manages to sell electricity to Europe.

But, firstly, sales will soon stop, which Zelensky has already warned Europe about : "We will not have enough volume to heat our homes, and this time is approaching." Secondly, the energy system of Ukraine is losing capacity simultaneously with a decrease in consumption. At the beginning of October, there were 4.2 million Ukrainian citizens in the EU who received the status of temporary protection. According to GMK Center's spring assessment , WBO has reduced electricity consumption by 40%. Then it recovered, but even at the end of August it was 30% lower than last year's figures.
Yury Korolchuk, an expert at the Institute for Energy Strategies, urges people to be prepared for five-six-hour rolling blackouts. But rolling blackouts for Ukraine are not new, but the realities of the last few years. Moreover, this year firewood (of which 7-7.5 million cubic meters are going to be stored) began to appear in reports on the procurement of fuel for the winter, and the mayor of Lviv said back in August that the city was buying potbelly stoves and storing fuel for them.
What about gas? In the summer, Naftogaz asked [July] for several billion dollars to purchase 5-7 billion cubic meters of gas in order to bring reserves to 19 billion cubic meters. But there was no money for this - and by now only 14 billion cubic meters have been accumulated.

On the one hand, the situation here is approximately the same as with electricity: consumption is falling. Kherson, Zaporozhye, Donetsk, Lugansk[,] and Kharkiv regions are either completely written off the balance sheet, or supplies to them will be cut to a minimum. "In most cities of Kharkiv, Donetsk, Mykolaiv, Sumy, Chernihiv regions[,] and Zaporozh* there will be no heating. There will be no gas in winter, there will be electricity periodically," such a frightening forecast was published in the Legitimny Telegram channel. ... The Delo publication publishes news [6 Oct], the essence of which is that Naftogaz is delaying the conclusion of gas supply agreements with gas distribution companies in the Kharkiv and Dnipropetrovsk regions. ...

by Cat on Mon Oct 10th, 2022 at 08:49:26 PM EST
Reuters | Gas price talks resume, Kiev rejects latest Russian offer, 11 July 2014
The European Commission, the EU executive, took on the role of brokering trilateral price talks after Russian President Vladimir Putin suggested three-way negotiations, but five rounds so far have failed to get a deal.
Ukraine's Prime Minister Arseny Yatseniuk at a cabinet briefing on Wednesday made clear Ukraine rejected Russia's offer to lower gas prices by removing export duty, a measure that would not be written into the contract and was therefore at the whim of Moscow. ...
Ukraine votes to keep western companies out of gas industry, 25 July
Ukraine's parliament has rejected allowing EU and US companies to buy up to 49 percent of oil and gas company Naftogaz, and also said they were against liquidating the national energy monopoly.

Kiev rejected splitting the company in two, a measure encouraged by the West in order for Naftogaz to comply with Europe's third energy package, which doesn't allow one single company to both produce and transport oil and gas.
There had been rumors the state would sell off at least 15 percent of Naftogaz in a public offering, however, the conditions in Ukraine's capital and equity market aren't strong enough to get a high enough price.
Ukraine's Rada needed a minimum of 226 votes to support the reform, but only 94 deputies were "for" the change. In the first reading, it received 229 of the 226 votes [?] required to restructure the company. Voting bloc dynamics changed on Thursday after the ruling coalition dissolved itself triggering an early parliamentary election after the government resigned.

Following the rejection of privatizing Naftogaz, Prime Minister Yatsenyuk announced his resignation as head of the government. The vote took place among other proposed budget reforms, defense spending, as well as a discussion on how to tackle Ukraine's gas debt.

Naftogaz's debt to Russia now exceeds $5 billion. Crippled finances prevent the company from paying for Russian gas supplies, much of which have already been delivered....

Reuters | Naftogaz bondholders reject debt freeze, Kyiv rejects payment plea, 25 July 2022
Ukraine's state-owned energy company Naftogaz looked to be on the brink of default on Monday, after bondholders refused its two-year debt freeze plan and the government rejected a last minute request to change course and keep making its payments.

Naftogaz said in a statement that with so few bondholders supporting its debt freeze proposal ahead of a deadline on Tuesday, the "required quorum" needed to pass the plan was "not expected to be met."....

Bloomberg Law | Naftogaz Offers Debt-Freeze Plan With Government Blessing, 2 Aug
Ukraine's state-run oil and gas company NJSC Naftogaz Ukrainy put forward a new debt-freeze plan, which has government backing and largely mirrors the postponement in debt payments the sovereign seeks to secure in separate talks with its creditors....
euronews | Ukraine faces key test on debt freeze plan in bid to avoid messy default, 9 Aug
When announcing its proposal, Ukraine's finance minister Sergii Marchenko said it had "explicit indications of support" from some of the world's biggest investment funds including BlackRock, Fidelity, Amia Capital[,] and Gemsstock.

Creditors of Ukravtodor and Ukrenergo, two state-owned firms that have government guarantees on their debt, also have until Aug. 9 to vote on a plan similar to the sovereign....

Reuters | Ukraine's creditors agree 2-year freeze on $20 billion overseas debt, 12 Aug
With no sign of peace or a ceasefire on the horizon nearly six months after Russia's invasion began, holders of around 75% of the outstanding total agreed to Kyiv's proposal, documents showed.

"Ukraine will save almost $6 billion on payments," said Prime Minister Denys Shmyhal in a statement. "These funds will help us maintain macrofinancial stability, strengthen the sustainability of the Ukrainian economy and improve the power of our army."...

by Cat on Mon Oct 10th, 2022 at 10:05:22 PM EST
[ Parent ]


Top Diaries

Occasional Series