Ukraine to buy electricity not only in Belarus but also in Russia – an expert
In an updated memorandum with the IMF, the Ukrainian authorities promised the partners to abandon the price restrictions on gas, heat and hot water. How it will affect the payments of Ukrainians, how Ukraine enters the winter season and why the country may need to import electricity from Russia on air Ukrainian radio says Yuri Korolchuk, an expert at the Institute of Energy Strategies.
Was the condition to refuse the price restriction unexpected for Ukraine?
This is not a new birch for Ukraine. In January-February, the price of gas jumped to $ 500 per thousand cubic meters and raised the question of raising tariffs for the population by Naftogaz and other gas suppliers who have chosen this resource abroad. And it turned out that the state, in order not to increase debts, it is easier to set an administrative price of 6.99 hryvnia. After this situation, the IMF, in assessing the government, in fact remained silent and did not assess it in any way.
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The IMF rather supports its position that Ukraine has taken on the readiness to integrate into international gas and electricity markets, which, in turn, has established a market price. The new memorandum confirms the step-by-step movement in this direction. For people, this will result in higher tariffs.
Why age rates?
The issue is that the infrastructure and system of electricity production, gas supply consume infusions. Nuclear power plants, transmission lines – worn out and in need of reconstruction, modernization. The gas system also has gas distribution stations and gas compressor stations. The current tariff, less than 2 hryvnias, is understated. The objective tariff, which should be – 3.5 hryvnia.
Otherwise, there will be no money to buy process gas, pay salaries and replace the network. The new memorandum states that the IMF cannot change its position, and the state can. It is always possible from its financial and economic resources from certain individuals and consumers. The government will raise the issue of price regulation to prevent the system from collapsing.
Will the state be able to abandon the price limit on tariffs?
We see an example of previous memoranda that were broken, not implemented, ignored in some respects. Therefore, I think a similar fate awaits this memorandum. The norm of maintaining a limited price for gas, heat and water and applying it as a result will not be met. Economic activity is performed. Incomes are declining due to both restrictions and the corona crisis. Debts have an age period in any case, so the state has this segment of gas tariffs.
Will the conflict and Akhmetov have consequences for Zelensky for stability in the Ukrainian energy sector?
I assessed the conflict between Zelensky and Akhmetov as a bargain for the next parliamentary and presidential elections. Some people try to shape it in some way to support it. This is a political aspect. As for energy, I do not think that Akhmetov is using the me, which is in his hands, in order to in some way negatively affect the integrity of the balance of the power system of electricity production, supply. Because he is also limited in certain actions.
On the import of electricity from Belarus and Russia
We have fully increased the volume of electricity imports from Belarus – 900 megawatts. I think that now we have reached the stage of waiting for the import of electricity from Russia. In the current real situation, Ukraine should buy energy not only in Belarus but also in Russia. People are preparing for this because there is a hole in the power system. And 900 megawatts from Belarus is proof of that.
Our situation is as follows: we import electricity from Belarus and Russia, burn gas, which is scarce, and limit the energy industry. Industry is business. Restrict business – withhold less income, profit, etc. People need to understand that in times of crisis there may be restrictions on electricity for the rescue system.
What is known
- Ukraine started the heating season 2021-2022 against the background of the global energy crisis, coal shortages and rising energy prices. Gas prices in the world have risen more than ten times, coal – four times.
- number of rivers Ukraine risks a shortage of coal in the warehouses of thermal power plants (TPPs). According to the Ministry of Energy, before the start of the heating season, Ukrainian coal reserves were three times smaller than normal.
- On the evening of November 10, President Volodymyr Zelensky stated that the energy system in Ukraine was “tragic,” according to media reports. Address of the President published Office of the President. “The energy crisis is not in – without the energy crisis in the world today. Ukrainians are acting in this situation, but it is certainly not a tragedy, as narrowed by some hysterical media. It is definitely better than many other countries,” – said Zelensky.
- Energy Minister Herman Galushchenko assures that Ukraine will pass the 2021 heating season without hindrance, despite problems with fuel imports. Galushchenko said the government would expand the use of nuclear energy for the heating season.
- Minister of Community and Territorial Development Oleksiy Chernyshov stated that as of November 5, 90% of Ukraine’s housing sector is supplied with heat.
- Ukrenergo reported that on November 2, Belarus and Slovakia supported emergency electricity supplies to Ukraine at the request of the Ukrainian side. The reasons for the power shortage in Ukrenergo were the increase in energy consumption at thermal power plants (TPPs) during the seasonal growth of consumption.
- On November 5, Energy Minister Galushchenko said that no kilowatts of electricity imports into Ukraine had arrived. On November 6, the Belarusian Ministry of Energy announced that it had resumed electricity supplies to Ukraine.
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