Energy sector experiences difficulties, but there are no grounds for panic says Ukrainian official

Energy sector experiences difficulties, but there are no grounds for panic says Ukrainian official
August 04, 2015.

Kyiv, August 4, 2015. The situation in the energy sector is extremely difficult, and there are a number of issues to tackle, but nevertheless, there are no grounds for panic according the Vice Prime Minister of Ukraine Valeriy Voshchevskyi, who made this statement during a round table discussion at Ukraine Crisis Media Center. According to him, one of the main issues facing the energy sector is coal as a means of heat generation. “Our main problem is A-grade anthracite which is located in the uncontrolled territory. We need to bring at least 800,000 tons per month from there and another 1,400,000 to 1,500,000 tons of G-grade coal from the controlled territory,” said Voshchevskyi.

This entails a number of problems, including difficulties at coalmines and logistic problems. “In fact, we have only a single railway line, Yasynuvata-Kozlovate. All the freights from locations with train traffic go through there. It is highly insufficient, though, as it deals with all of the freights from all directions,” said the minister. “We aim at establishing another line, Mayorsk-Mykytivka, which would connect to Yasynuvata. It can take in up to twenty train-pairs, eliminating the coal transportation problem.” Unfortunately, combat continues in this area at present. The official hopes the logistical problem will be solved during negotiations in Minsk while it is on the agenda. Among the most pressing problems, Voshchevskyi listed the delay in payments to the power industry as well as the necessity to establish the precise market price of coal.

According to the Chairman of Independent Trade Union of Miners of Ukraine Mykhailo Volynets, the amount of coal stocked by thermal power stations is 1,370,000 tons, while the minimum demand is 2,500,000 tons. “The share of anthracite is only 592,000 tons, and 478,000 tons out of this amount is stored at Luhansk thermal power station,” said Volynets. He added that Luhansk thermal power station works “like an independent island” due to the volatile situation and shortage in electric grid work. “A number of thermal power stations powered by anthracite have stopped. Trypilska and Kryvorizka thermal power stations may stop anytime soon,” added Volynets.

 

The Vice Prime-Minister stated that the anti-crisis staff has the situation under control. “The system is functioning, there are 1,500,000 tons of coal in stock and we are applying all efforts to increase this amount at least to 2,500,000-3,000,000 tons,” emphasized the government official. According to Voshchevskyi, the State Enterprise EnerhoRynok will get a loan of two billion hrvynia for the heat power industry in order to overcome problems in the energy sector. Voshchevskyi said the foreign component would increase in several weeks’ time. It will take a maximum of two weeks for Ukraine to make a decision on the amount and place of the planned coal purchase. At the same time, Voshchevskyi did not exclude the possibility of purchasing Russian coal, if the price is satisfactory. Coal from South Africa is a priority now, as it is cheaper at 65 dollars per ton. The first 80,000 tons are already unloading in Illichivsk.

Oleksandr Rohozin, Vice-president of the All-Ukrainian NGO Energy Association of Ukraine believes the threat of system crash in the energy sector is high. He considers the present-day situation in the electric power system a crisis. “We need to prepare not only plan A, but plans B and C, considering various alternatives for keeping the energy situation in the country under control,” he added.

According to Olha Belkova, deputy head of the parliamentary committee on Fuel and Energy Complex, Nuclear Policy and Nuclear Safety, the present situation is not a catastrophe, for there is a clear plan of action on every level, both in the public and private sector. “All we need to do is string ourselves up to answer the question regarding what our final aim is,” she said. According to Belkova, it is necessary to concentrate on preparation for the heating season. All district heating companies, power stations and gas supply utilities must be supplied with the sufficient amount of fuel to survive the winter with comfort.

According to the Vice Prime-Minister, for the implementation of reforms in the energy sector Ukraine needs to have a thorough plan, and rely on it while making further decisions. The government invited foreign experts to accomplish this goal. Voshchevskyi stated that Ukraine should assess the situation based on information from various sources and make their proposals, taking into consideration the proximity of the heating season. According to William Bryan, the US Deputy Assistant Secretary for Infrastructure Security and Energy Restoration who works on Ukraine issues, the steps to be made are as follows: increasing the coal supply to Ukraine, saving electricity and regulating the energy line load. In addition, Bryan believes it necessary to well-stock power stations before the heating season.

 

According to Johanness Baur, deputy head of the European Commission Support Group for Ukraine, Ukrainian energy sector policy should rely on energy efficiency. “It is a key issue for energy independence of Ukraine,” he emphasized. Moreover, the government is readying to incite energy efficiency measures through the passing of necessary legislation. In Baur’s opinion, it is necessary to diversify energy sources, strengthen regulator’s independence and restructure Naftogaz.

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