Russian War Against Ukraine: Energy Dimension | DiXi Group Alert – weekly review

October 30 – November 5

Summary

• • A thermal power plant in the Donetsk region and the Kremenchuk oil refinery were among targets of Russia’s attacks on energy infrastructure.
  • Ukraine needs a protective “shield” through air defense systems and equipment, as well as the upply and stockpiling of energy equipment in Europe – so the Minister of Energy Herman Halushchenko.
  • The war has affected over 20% of Ukraine’s protected areas, according to the Ministry of Environmental Protection and Natural Resources.
  • The IAEA team of experts rotated at the occupied Zaporizhzhia NPP. The IAEA Director General Rafael Grossi said that the reduced number of personnel and limited availability of spare parts could potentially affect the operation of safety systems.
  • Demand was covered by electricity produced in Ukraine and imports from Poland, Slovakia,
    Moldova, and – for the first time since 2022 – Romania. On November 2, first daily joint auctions were held for the sale of capacity in the Ukraine<->Romania directions.
  • Capacity between Ukraine and Poland, Slovakia, and Moldova is traded on unilateral auctions. Ukrenergo expects joint auctions will become operational on the JAO platform in Q1 2024, same as the resumption of commercial exchanges with Hungary.
  • On October 31, in order to balance the power system, emergency assistance was received from Poland in the form of purchasing a surplus of Ukrainian electricity.
  • Pursuant to the REMIT, with the support of the USAID Energy Sector Transparency project implemented by DiXi Group, the Regulator ensured the functioning and published the Registry of Participants of the Wholesale Energy Market.
  • The NEURC implemented 4 of 35 measures to implement the requirements of Law No.3220-IX “On Amendments to Certain Laws of Ukraine Regarding the Restoration and Green Transformation of the Energy System of Ukraine”, 25 measures have the drafts approved and pending adoption. Also, the Regulator published a ranking of DSOs and universal service suppliers by indicators of the quality of electricity supply.
  • In the framework of preparing the Ukraine Plan for the Ukraine Facility, 32 policies were identified and recommended for implementation in energy sector.
  • The government has adopted a procedure that will allow new enterprises in 20 coal mining towns in the Volyn, Donetsk, Luhansk and Lviv regions to import production equipment without paying VAT.
  • The State Nuclear Regulatory Inspectorate decided to extend the operation of South Ukraine NPP Unit 1 for another 10 years, until December 2033.
  • The government approved the supervisory board of GTSOU with three independent members (David Charles Davis, Jan Chadam, Serhii Konovets) and one government representative (Svitlana Hrynchuk).
  • In October, the average retail price for LPG increased by 2.44 UAH/l to 28.19 UAH/l. Prices continue to rise in the wholesale segment as well: at the recent auction on UEEX (November 1), some lots reached 58,500 UAH/t.
  • The Ukraine Energy Support Fund, the funds of which are spent to purchase equipment for the affected companies, has exceeded 300 million EUR – so the Minister of Energy Herman Halushchenko.
  • The government approved signing of an agreement on financing the EU Support for Recovery and Reform initiative (335 million EUR) – in particular, for repairing or restoring residential and important economic facilities, critical municipal, transport, and energy infrastructure, reconstruction of damaged buildings, and improving energy efficiency.