At the UN Climate Change Conference in November 2021, Kiev has committed to decarbonise its energy sector as part of a major energy reform, including the decommissioning of its coal-fired thermal power plants (i.e. phasing out coal by 2035), as well as to increase investing in renewables.
In connection with this commitment, another coal-related event should be mentioned, namely the fact that US coal shipments also arrived in Ukrainian ports in November 2021, to mitigate Ukraine’s coal shortage. By 2022, seven more cargo ships of coal will arrive as part of the same ’aid programme’. Following the agreement of heads of states, the United States sent coal to Ukraine for the first time in 2017. However, the current situation is significantly differs from the then situation, as the recent coal shortage started after Russia’s halt in exports to Ukraine.
If I had not got profound knowledge on Ukrainian mentality, I would be surprised how the statement about decarbonization could have been expressed in almost the same day when we were jubilating the arrival of the cargo ships with tons of coal. Ukraine’s commitment at the Climate Change Conference is driven by pure political motives, by the desire of international acceptance and, last but not least, by money, but there is no real intention to change the system. The Ukrainian economy and energy sector, which highly depends on thermal coal, will not be able to phase out coal either next year or by 2035.
Ukraine’s energy sector is more vulnerable than any other sector of the economy because it is highly dependent on other countries, mainly the former Soviet member states, especially Russia. Ukraine inherited this system of dependence after the collapse of the Soviet Union, and now this particular system seems to be destroying its economy.
Let us quickly go through the most important components of threats Ukraine is facing with regard to energy issues.
The coal needed for coal-fired thermal power plants has been discussed above. Ukraine’s largest coal exporter is Russia, which, motivated by political reasons, has stopped deliveries to Ukraine. Ukraine is trying to balance the deficit from an ‘aid donation’.
As for the gas supplies to Ukraine, the situation is at least as miserable as in the case of coal, or even worse, since in this respect it is impossible to deny the truth, namely, that Russia has suspended the Ukrainian gas transit and endangered the gas supply and heating of millions of Ukrainian citizens following the agreement between the United States and Germany on Nord Stream 2 gas pipeline. In addition, Ukraine no longer receives reverse gas from its European partners. Ukrainian state-run institutions, ministries and local governments can only protect themselves against skyrocketing gas prices by switching off the heating.
In terms of electricity, Ukraine produces approx. the half of its own consumption from its nuclear power plants. For the other 50%, it depends on foreign supplies, i.e. it needs imports, which previously had come mostly from Russia and Belarus, up to a self-imposed ban on purchases from these countries. Trying to cope with the energy shortage, Ukraine has suspended the bans on imports from Russia and Belarus. And then Moscow and Minsk announced that they were unfortunately unable to supply Ukraine with electricity. However, Minsk later began supplying electricity to the Ukrainian energy system under the emergency assistance agreement. The situation can easily result power outages for Ukrainian household consumers.
The nuclear power sector in Ukraine is based on 15 reactors at 4 operating nuclear power plants (NPPs). If there is anything in the energy sector that can be considered a Soviet legacy, it is the NPPs of Ukraine. Soviet masters had originally designed the lifetime of the reactors for 30 years, but this lifetime could be extended by an average of another 25 years after modernization. These power plants have always been serviced by Russia’s Atomstroyexport. The nuclear fuel also comes from Russia, and the nuclear waste has to be shipped back to Russia. Ukraine tried to change this situation in 2018 when it contracted for a $ 250 million of US funding to build a spent nuclear fuel storage facility. In addition, Ukraine’s state-owned nuclear company Energoatom signed a contract with the US Westinghouse in the summer of 2021. According to this agreement the unfinished blocks in the Khmelnitsky NPP could be replaced by Westinghouse reactors. In addition, Ukraine also had talks with Skoda and Areva, but all of this is dwarfed by Ukraine’s long-standing and long-range dependence on Russia with regard to its existing and operating Soviet-designed NPPs.
Driven by the desire to get rid of the Soviet legacy, Ukraine is trying to join European power systems. In February 2021, the government confirmed the need for implementing the ’energy bridge’ project to Poland and Hungary. As a demonstration of its Western orientation, Kyiv plans to complete the synchronization of its power system with the European electricity grid in 2023. I highly doubt this plan would be realized, given that Ukraine is currently facing the worst energy crisis of its history, and no better perspectives for 2022 can be seen.
In addition to the instability of security of supply of energy resources, I would like to mention one more sensitive aspect, namely the vulnerability of the IT infrastructure of the Ukrainian energy systems. In 2015 and 2017, unidentified hackers managed to temporarily infiltrate the IT systems of Ukrainian energy grid companies with massive cyber attacks, using the Blackenergy and the Petya malwares, and disrupt the electricity supply to consumers. The hackers also managed to turn certain systems offline, e.g. the radiation monitoring system of the Chernobyl Nuclear Power Plant. Russian officials, of course, denied any involvement.
My impression is that if Russia decides to supply gas, electricity, coal, or any other basic fuels for Ukraine at a contracted price, the Ukrainian households and municipalities can turn the heating up. But if the Kremlin decides to suspend the shipments, it can actually cause a dead-lock for Ukraine. And in case Ukraine miraculously still finds a solution to get rid of its Russian dependence, there is still room for a sophisticated malware attack to destroy Ukraine’s power systems in a minute, in order to put Ukraine’s government under pressure.
It seems to me that Ukraine is no longer in a position to choose between the Soviet legacy and the desire to belong to the West. This alternative which may have been existing for Kyiv in the 1990s is not valid any more. This question is out-of-date, it has been surpassed by a Kremlin-created reality.
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