Russian War Against Ukraine: Energy Dimension (DiXi Group alert) – March 3 | DiXi Group
DiXi Group Logo
uk
www.upscalerolex.to
logo
03.03.2023

Russian War Against Ukraine: Energy Dimension (daily updating DiXi Group alert) 

February 27 – March 3

Summary of the week

— Russia continues deliberate destruction of critical infrastructure facilities. On February 27 and March 1, the occupiers attempted to attack infrastructure with kamikaze drones. As a result of shelling, transmission system damage is reported in the Dnipropetrovsk region and distribution systems damage in the Kharkiv, Sumy, Donetsk, Kherson and Poltava regions. According to the Prosecutor General’s Office, over the past 4.5 months, 255 missiles and drones have impacted energy infrastructure, including 214 at facilities of Ukrenergo.

— Russia’s attacks have damaged the energy infrastructure in the south of Ukraine. On February 27, an emergency disconnection of the high-voltage line cut off power to 500,000 consumers in the city of Odesa and the Odesa district. Specialists managed to quickly eliminate the accident and reconnect all consumers. The Kherson CHP resumed operations after the Russian shelling on February 23-24, and the buildings are fully reconnected to district heating.

There has been no capacity deficit in the power system for 20 days in a row and it is currently not forecasted. The demand is fully covered by generation capacity and a small amount of imports. Exports of electricity could resume in a week, given no significant deterioration of the situation – so the Supervision Board member of Ukrenergo Yurii Boyko.

The IAEA mission reported that the 330 kV backup power line at the Zaporizhzhia NPP was disconnected three times during the week after the sound of artillery shelling. The shelling took place on the other side of the Dnipro River, on the territory controlled by Ukraine. Also this week, the rotation of IAEA experts at the ZNPP took place, which had been delayed for several weeks by Russia.

— According to Naftogaz, given an increase in production, Ukraine can make it without importing gas in 2023. The CEO of Naftogaz Oleksii Chernyshov noted that 10 bcm are currently accumulated in Ukraine’s storages. Naftogaz plans to accumulate at least 15 bcm in storage by the beginning of the next heating period. In that way, with domestic gas production at 18.5 bcm (which includes the planned increase in production of Ukrgazvydobuvannya by 1 bcm) imports may not be necessary. The company will concentrate on the development of assets in western Ukraine and additional 3D seismic surveys.

— Ukraine plans to replenish its gas stocks, inter alia, using the EU joint purchase mechanism. The Vice-President of the European Commission Maroš Šefčovič informed that the volume of joint gas purchases in the interests of EU countries will be supplemented by respective requests from Ukraine, Moldova and Serbia, which are interested in purchasing more than 4 bcm within 3 years.

— Naftogaz will report a 40 billion UAH loss in 2022 – Chernyshov. He associated such financial results with significant accounts receivable: debts for the difference in tariffs (36 billion UAH), debts of DSOs (76 billion UAH), financial gaps due to the performance of public service obligations (158 billion UAH). Also, Naftogaz is not going to return legacy debts of DSOs to GTSOU. The settlement should be carried out within the framework of legislative initiatives and laws that are actually being developed – Chernyshov. Gas Distribution Networks of Ukraine LLC, established by Naftogaz to manage assets (including those transferred to its management as arrested DSOs), changed the CEO (Oleksii Skryl instead of Denys Myrhorodskyi).

— The case against the ex-CEO of Naftogaz Andrii Kobolyev develops further. The Appellation Chamber of the High Anti-Corruption Court annulled the decision of the court of first instance and imposed a preventive measure (229.248 million UAH bail) to Kobolyev. Also, the suspect is subject to several restrictions (hand over foreign passport, cannot leave Kyiv without permission etc). To remind, Kobolyev is suspected of illegally rewarding himself for the victory over Gazprom in the Stockholm arbitration, facing 7 to 12 years of conviction.

The NEURC adopted a decision on the preliminary certification of the gas storage operator (Ukrtransgaz). After this preliminary decision, the Energy Community Secretariat shall provide an opinion, and the Regulator shall make a final decision with due account of the opinion.

— Energoatom has announced a complete refusal from Russian nuclear fuel in 2024. Currently, 7 nuclear units have been switched to Westinghouse Electric Sweden AB fuel. Energoatom is also developing a nuclear fuel production facility, with pre-project works underway and the commissioning scheduled for 2026. Meanwhile, the Ministry of Energy has agreed with European partners to create a subgroup to supervise the corporatization of Energoatom.

— Planning for the upcoming winter season has begun. The President Volodymyr Zelenskyi chaired an extended meeting to discuss the future operation of the power system. The current tasks include completing the heating season and preparing for the next one, as well as working to protect the system.

Working groups at the level of the Cabinet of Ministers, the Ministry of Energy, and the NEURC are considering options for raising electricity prices for households – so the NEURC Chair Konstiantyn Ushchapovskyi. According to the Advisor to the Prime Minister Yurii Boyko, the tariff for household consumers is about four times lower than the real price of electricity, and more than 140 billion UAH a year is spent on subsidies.

— Ukraine asks the EU to start preparing the 11th sanctions package as soon as possible. Reacting to EU Special Envoy on Sanctions statements regarding the change of focus, the Ministry of Foreign Affairs spokesperson Oleh Nikolenko said that Russia still has access to huge financial and technological resources and that it is not the time to ease sanctions. The President Volodymyr Zelenskyi emphasized that Ukrainian diplomats and the entire government are working to extend global and, in particular, European sanctions to the Russian nuclear industry, Rosatom, and all those involved in the missile program and nuclear blackmail of the terrorist state. He also signed three decrees on the sanctions on a number of Russians.

— Ukraine is also seeking to expand its coalition of allies. As the Head of the Presidential Office Andrii Yermak informed, during the Saudi Foreign Minister Prince Faisal bin Farhan Al Saud visit, two documents were signed that formalized the provision of a 400 million USD aid package to Ukraine: 100 million USD in humanitarian aid and 300 million USD in oil products. Meanwhile, the UN General Assembly is expected to consider the issue of a special tribunal on Russia’s crimes against Ukraine at the end of March – so the Deputy Head of the Presidential Office Andrii Smyrnov.

— A number of acts aimed at European integration and ensuring the recovery process were adopted. The Verkhovna Rada has adopted several laws: on transfer of the Recovery Fund from the Ministry of Finance to the Ministry of Communities, Territories and Infrastructure Development, on mandatory appointment of multi-apartment buildings’ managers (after the end of martial law), on development of charging infrastructure for electric vehicles, on development of highly efficient cogeneration, on corporatization of Energoatom. The Cabinet of Ministers reduced the list of exceptions introduced during martial law, which allow public procurement without transparent tenders. The government also approved the 2023-2030 Strategy for the Development of Industrial Parks.

— The government has started self-screening on the compliance of Ukrainian legislation with EU acquis in order to start accession negotiations by the end of the year. By June 30, 2023, ministries and other central executive authorities have to conduct self-screening and by August 30 – submit a report to the government. The President Volodymyr Zelenskyi called for the start of negotiations on Ukraine’s accession to the EU. By the end of 2023, the government will fulfill all recommendations of the European Commission necessary to start negotiations, the Deputy Prime Minister Olha Stefanishyna said.

— Ukraine expects to strengthen cooperation with the OECD. On March 1, the OECD Ukraine Liaison Office was opened in Kyiv. The Prime Minister Denys Shmyhal said a program with measures for Ukraine’s membership in the OECD could be signed in June. The OECD team was also invited to join the development and implementation of the concept of Russian assets confiscation in its member states

— The government amended the action plan to prevent the abuse of undue influence by oligarchs, referring to the need to receive the Venice Commission opinion. For instance, the development of a draft law on regulating the security of electricity and natural gas supply was postponed until April 2023. The amendments assume an update of the Energy Security Strategy, while the assessment of the level and threats to energy security has been postponed to December 2023.

— The Ministry of Energy, with the support of the EBRD Ukraine MDA and in cooperation with the Reforms Office of the Cabinet of Ministers and DiXi Group think tank, has launched the AidEnergy online platform to inform donors about the needs of energy companies, process and confirm donors’ offers, distribute humanitarian aid, and report. As of March 3, Ukraine has received aid for the energy sector from 30 countries with a total weight of over 5,300 tons. Namely, this week Ukraine has received a powerful autotransformer from Lithuania. Its transportation was the largest logistics operation ever coordinated by the EU Civil Protection Mechanism.

Our platforms

https://ksep.energy/en/

Independent energy educational center

http://eiti.org.ua/

National website of Extractive Industries Transparensy Initiative in Ukraine 

http://ua-energy.org/

Information and analitical website “Ukrainian Energy UA-Energy.org” is unique   platform to inform

Our platforms

https://ksep.energy/en/

Independent energy educational center

http://eiti.org.ua/

National website of Extractive Industries Transparensy Initiative in Ukraine 

http://ua-energy.org/

Information and analitical website “Ukrainian Energy UA-Energy.org” is unique   platform to inform