The draft update of the Energy Strategy of Ukraine through 2030 places major emphasis on developing the electrical power industry sector on the foundation of the coal and nuclear industries
Politicians’ numerous statements, as well as the existence of the national project Energy of Nature, may create the impression that the government has clear plans for the massive implementation of renewable sources of energy. However, both the effective Energy Strategy of Ukraine and the recently published draft update of its electrical power industry chapter emphasize the development of the coal and nuclear industries. The share of energy from renewable sources is to reach 10 percent in 2030. That output — which Ukraine is planning to reach in 20 years — is already being produced in the EU today.
THE SMALL ALTERNATIVE
The EU has set a goal of implementing the 20 – 20 – 20 formula. This means that by 2020, EU countries must reduce electricity consumption by 20 percent, and produce 20 percent from renewable sources. “By 2001, the share of such energy sources was 45 percent in Norway, 29 percent in Sweden, almost 26 percent in New Zealand, 23 percent in Finland, 21.5 percent in Austria, almost 16 percent in Canada, and 10 percent in Denmark,” Valerii Borovyk, president of Alliance New Energy of Ukraine, said comparing the situation at home and abroad. “Meanwhile, we are lagging behind.”
Research by Ukrainian scholars and the European Bank for Reconstruction and Development proves that Ukraine can quite feasibly produce 30 percent of its energy from renewable sources by 2030. “The UNO gives a figure of 80 percent in the world by 2050,” Dmytro Khmara, an expert in energy industry for the National Ecological Center of Ukraine, said. “With a strategy like this, Ukraine will have a hard time trying to keep up with the pace set by the world. We should try to reach at least 30 percent in 2030.”
MAKING THE SAME MISTAKES
The experts whom The Ukrainian Week has contacted are unanimous in their criticism of the document concerning the update of that part of the Energy Strategy which was made available to the general public. “The previous Strategy envisioned an almost threefold increase,” said Khmara. “According to the most recent amendments, the increase in consumption for the period up to 2030 is fixed at 30 percent. Meanwhile, other nations are trying to reduce electricity consumption. This is revealed even in Ukrainian electricity exports, volumes of which have shrunk almost 50% over the past three or four years. Ukraine has a very inefficient communal services sector and industry. There is a huge potential for energy conservation. Sadly, the government does not make this a priority.”
Ukrainians can also expect inevitable growth in energy prices. Tackling this issue is also part of the president’s reform program. At the moment, consumers are paying rates which are three times below real production and supply costs. The pricing policy will certainly affect consumption, too. “We can take gas as an example,” Khmara noted. “After the increase in the price for gas, gas consumption shrunk from 81 billion cubic meters to 55 billion cubic meters per year, or approximately 40 percent. The same will happen to electricity consumption figures.”
OUR NUCLEAR FUTURE
In the eyes of the state, the development of the nuclear power industry in Ukraine remains unquestionable. Meanwhile, Europe is building almost no new nuclear reactors. Finland is an exception, but even so they are about three or four years behind schedule and 1.6 billion euro over budget. With this in mind, the Ukrainian government’s plans to build five or six reactors, as envisaged in the amendments, seem simply unrealistic. Even more unrealistic are plans to build 22 new reactors — a project stipulated in the previous edition of the Strategy. The construction of these reactors is scheduled for after 2023; in the meantime, units 3 and 4 of the Khmelnytsky Nuclear Power Plant are to be expanded (much to the dismay of people living in Khmelnytsky and Ostroh, who have already spoken out strongly against the plans).
Furthermore, many units at Ukrainian nuclear power plants will soon run past projected serviceable life. In 2010, this serviceable life was extended by 20 years for two reactors at the Rivne power plant. The same is in store for 70 percent of reactors in the decade to come.
Meanwhile, Ukraine is overproducing electricity at the same time that existing reactors are not even working at full capacity. This begs the question: Why build new ones? “A MAGATE document concerning efficiency in the use of operating facilities stipulates that reducing operating time at reactors to 80 percent and lower is economically inefficient,” Khmara said, “None of the Ukrainian reactors works 80 percent of time. On average, this figure hardly ever reaches 70 percent.”
“Nuclear reactors are not working at full capacity because the energy system does not need this much electricity,” explained Borovyk. “It is totally confusing why we should talk of the construction of new power units, if we are not operating existing reactors at full capacity. Although one thing is quite clear: the Russians need to sell Ukraine their equipment with dubious shielding at the highest possible prices.”
The government is planning to spend 24 billion hryvnias to extend power units' serviceable life; 40 billion hryvnias to finish construction on the Khmelnytsky Nuclear Power Plant; and another 100 billion hryvnias to build new units beginning in 2023. “The funds are not being invested correctly,” Borovyk said, “We would do better to spend this money on supporting the development of renewable sources of energy, subsidizing the population and small businesses (with the goal of installing biomass heaters and thermal pumps), and using wind and solar energy just like neighbouring countries are doing. Meanwhile, we are obsessed with grand projects, investing funds where even today the facilities are not being used at full capacity.”
By the way, Ukraine still does not know exactly what to do with its spent nuclear fuel. The only ready solution today is to just leave the problem for the next generation to solve. The postponed solution simply envisions storing nuclear waste for more than 50 years. “Today, this is a question of ecology, but tomorrow it will be a question of economy,” Khmara said, “Sweden and France are already trying to solve this problem today, while their power units are working and making money. France is going to spend 30 million euro to find a solution to this issue.”
THE SECRET OF THE FOUNDATION
The Energy Strategy of Ukraine for the Period until 2030 was passed in 2006 and is supposed to be updated every five years. This year, adjustments were the responsibility of experts from the Foundation for Effective Governance, established by Rinat Akhmetov. Ecologists and NGO activists complain about having no access to the process of the development of the new document. “Just like in 2006, when the Strategy was being passed, this time we had difficulties not only in influencing the process, but even in getting to know about it,” Khmara complained, “An official statement was only made after the amendments were decided. So far we have only been acquainted with the electrical power industry sector, which comprises 12 percent of the total balance of fuel and energy resources. The fate of the other industries remains obscure.”
Suggestions made by ecologists for amending the updated Strategy have so far been ignored. “NGOs have been dealing with the Energy Strategy since 2005,” Khmara continued, “Over this time, a lot of material has accumulated. We have sent our suggestions to the Foundation, but we haven’t received any response from them. Neither has the Foundation organized any public events where the document being drafted could be discussed.”
Meanwhile, the very status of the Energy Strategy remains vague. “When we speak about energy efficiency or solutions for problems in the coal industry, we hear that the Energy Strategy is not a binding document,” Khmara noted, “But when it comes to the nuclear industry, for example, extending the operational lifespan of old power reactors, every order quotes this document.”
In the next decade, 11 of 15 Ukrainian power units will have run past their serviceable life. There are plans to extend these again by another 10 or 20 years.
Ukraine’s coal industry remains subsidized by the state, serving as a source of enrichment for top management, despite the high mortality rate and poverty of miners.
Over six months, state-owned enterprises in the coal industry have earned 18 billion hryvnias – almost $10,000 per month per miner.
The unpaid wages at mines under the Ministry of Energy totaled 6.5 billion hryvnias on July 5, 2011.
Over the past six months, all state-owned enterprises have jointly produced 7.5 billion hryvnias worth of marketable coal (while over 3 billion hryvnias was allocated from the state budget “for partial compensation of the cost of coal production.”)
Accidents in the Ukrainian coal industry took 37 lives in just the most recent month. In 2010, the death toll reached 93, compared to 107 in 2009.
The Organization for Security and Cooperation on Europe has suspended its monitoring mission in eastern Ukraine following protests near its headquarters in separatist-controlled Donetsk, the chief monitor said on Sunday