Podcast «What about the economy?»: energy situation in Ukraine after shellings

Podcast «What about the economy?»: energy situation in Ukraine after shellings

Photo: ua.depositphotos.com / palinchak
27 December 2022
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Yulia Mincheva, «Vox Ukraine» and Serhiy Kovalenko, CEO of YASNO energy company, were discussing how Ukraine’s energy system works after mass shelling by russia and what are the forecasts for its recovery in the «What about economy» podcast.

The state of the energy system

The energy system has two large components — electricity generation (producers — power plants) and networks which deliver electricity to Ukrainian consumers.

Ukraine used to have an electricity generation surplus because we have many types of energy generation from nuclear to «green» power plants. But because of shelling the situation changed. Besides, we lost generation from the Zaporizhzhya NPP (located in the occupied Energodar – ed.). Thus now we have to think about how much electricity Ukraine is able to generate in a certain period of time — a day, a week, a month.

As consumers, we should not think in general terms «today there is light, tomorrow there is not, and someday there will be». It is important to understand that the autumn-winter period is long, and we need to save energy. It is not about blackouts but about the situation as a whole – when we do not turn off the lights at home, do not turn off outdoor advertising etc.

Sometimes enough electricity is produced but networks have been damaged, and there is no electricity in some parts of a city. Energy companies work to recover the networks. However, recovery is not always quick, and sometimes networks cannot be restored to full capacity. Such networks cannot withstand the full load, and thus we have to reduce electricity consumption. If we say: «Friends, the network is already strained to the limit and we need to drastically reduce electricity consumption today», consumers have to do this. Since if we do not reduce consumption by 30-40%, some parts of a city will inevitably be left without electricity.

The role of the state in the shift towards energy efficiency

It is difficult to achieve significant results by coercion. Therefore, state regulations should be beneficial for consumers. For example, there are programs that encourage consumers to switch from gas heating and cooking to electric and heat pumps. The state should not only promote this transition, but also partly compensate for its cost. Under this approach, the state and consumers would move in the same direction.

Recommendations for business

Business has lower flexibility than household consumers. However, it is possible to «sacrifice» things that are not a part of business processes – for example, sign lighting, office lighting that can be dimmed.

However, if we talk about some machines powered by electricity, unfortunately, the business cannot turn them off without halting production. I can only advise to have a stabilizing generator or something, so that in case of an emergency outage there is sufficient time to complete business processes correctly. There is a third issue, which I call the «long-term game»  — energy efficiency. In my view, it is necessary to take steps to reduce overall electricity consumption. We launched the «YASNO.Energy efficiency» project to help specific businesses  reduce their electricity consumption. It can usually be reduced by 10-40%, which is beneficial for businesses. We see electricity prices in Europe, so it is risky to expect that it will always be cheap in Ukraine.

Recommendations for consumers

To enable the recovery of damaged electricity networks consumers must first of all pay for electricity in time. Because we have no other source of funds. Currently, household consumers owe us UAH 0.5 billion, and there are also debts by state enterprises and private businesses. This money is required both to pay wages to employees and to recover the energy system.

Secondly, consumers need to save energy, as we have already discussed.

What are the prospects?

I remain optimistic because the Ukrainian system is very powerful. I believe that it will be very difficult to put us into a total blackout. However, we need to be prepared for the worst-case scenarios, when the military pressure on us is quite large. Therefore, I emphasize that every home, every citizen should be prepared for power outages, regardless of their location —  in Kyiv, Chernihiv or Dnipropetrovsk region.

This publication was produced within the framework of the “Support of think tanks” project which is carried out by the International Renaissance Foundation with the financial support of the Embassy of Sweden in Ukraine. Its contents are the sole responsibility of the authors and do not necessarily reflect the views of the Embassy of Sweden in Ukraine and the International Renaissance Foundation.

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