Ministry of Energy: De-politicization of gas issue, diversification of energy supply and implementation of the EU legislation are key achievements regarding energy policy in the international field


Kyiv, December 29, 2015. De-politicization of gas issue, diversification of energy supply and implementation of the EU legislation are the key achievements of the Ministry of Energy and Coal Industry of Ukraine regarding energy policy in the international field, said Mykhailo Bno-Ayriyan, head of the European Integration Department at the Ministry of Energy and Coal Industry of Ukraine at discussion at Ukraine Crisis Media Center. According to him, the ministry managed to depoliticize gas relationship with the Russian Federation due to international support, bringing them to the level of ‘business oriented relationship’. “Price of gas for us decreased by 100 USD per 1000 m3, and we expect further price reduction,” said   Bno-Ayriyan. Relations with Russia are viewed in terms of the EU energy security now. Owing to diversification, volume of reverse gas supply increased in two and a half times in comparison with the previous year. Bno-Ayriyan named anthracite diversification, namely from South Africa, as an important component from this viewpoint, as well as increase in nuclear fuel diversification. “Five out of 13 deliveries next year will be not from Russia, which is one of the major steps for strengthening internal energy security of our country,” emphasized the official.

Bno-Ayriyan also mentioned more intensive cooperation with international financial organizations. In particular, he referred to lean agreements with the World Bank, European Investment Bank and European Bank for Reconstruction and Development. Considerable progress has been made in implementation of legislation.   Speaking of the implementation of tasks by the ministry in 2015, Bno-Ayriyan said that they managed to reach a compromise for extending winter package of gas supply and approve the laws on natural gas market and sent the law on electricity market for consideration to the Verkhovna Rada. Adoption of this law will become one of the major tasks for 2016. Moreover, representative of the ministry said his team coped with procurement of necessary energy resources to survive through the heating season. “We have enough gas and coal today and we do not share the previously spreading panic,” said Bno-Ayriyan.

Volodymyr Omelchenko, director of Razumkov Center energy programs, believes that increase in reverse supplies of natural gas from the EU and decrease in natural gas consumption in Ukraine is the biggest achievement of the energy sphere this year. “We have cut the consumption from 42.6 billion cubic metres last year, and this year’s forecast is around 34 billion cubic metres. Thus, at the expense of our own natural gas extraction and reverse supply we will manage both theoretically and practically to provide gas to the full extent and be independent of import from the Russian Federation. Around 70 percent of this year’s import consisted of natural gas from the European Union, which is of a record big volume,” said Omelchenko. The expert claimed that a decrease in natural gas extraction by 3% as a drawback. In his opinion, it resulted from inconsiderate rent policy in this sphere. Another drawback mentioned by the director of Razumkov Center energy programs was Ukraine’s dependence on supply of anthracite from Russia and the self-proclaimed ‘Luhansk People’s Republic’ (‘LPR’) and ‘Donetsk People’s Republic’ (‘DPR’). “This energy dependence evolves into political dependence, which is intolerable in the context of warfare with the Russian Federation,” believes Omelchenko. He suggests directing all the efforts to energy saving, energy efficiency and diversification of coal supply through efficient use by Ukrainian generation, liquidating such dependence.

In this context, journalist Igor Maskalevych suggests reconstructing power plants to consume other type of coal. “There is anthracite in Ukraine on the temporarily occupied territories only, and the world reserves of this type of coal are few. “Seven plants out of 14 in Ukraine are fully dependent on anthracite supply,” he said. It is worth while remembering that hybrid war with Russia is in progress. Maskalevych mentioned shifting from ‘Moscow-Kyiv’ pattern in relationship to ‘Moscow-Kyiv-Brussels’ as an attainment. “We are dead in the water in Moscow-Kyiv formula, we will be beaten to a pulp, which was the case, as a matter of fact. In Moscow-Kyiv-Brussels case Russians suddenly got hit in return, which surprised them immensely,” explains Maskalevych. He believes it is necessary to build proper system in Ukraine, when it does not depend on weather, for we will manage to survive through warm winter, but the system will collapse if the winter is cold.

Olena Pavlenko, president of analytical center DiXi Group, mentioned considerable growth in the speed of European directives implementation in the energy sphere during past two years. “Gas, electricity and the “Third Energy Package” made considerable progress, while there are still bigger issues in the sphere of energy efficiency, renewable sources of energy and environment,” she informed. Pavlenko also said that the European experts and Energy community started much more actively cooperating with the Ministry of Energy, which means they reached understanding and moved to a new level of interaction.