Russian War Against Ukraine: Energy Dimension | DiXi Group Alert – weekly review
June 26 – July 2
Summary
— According to KSE Institute estimates, the direct damage caused by the explosion of the Kakhovka HPP reaches 2 billion USD minimum. Namely, environmental damage is estimated at 1.5 billion USD.
— At the same time, according to the Minister of Environmental Protection and Natural Resources Ruslan Strilets, the estimated amount of environmental damage is 146 billion UAH (app. 3.9 billion USD).
— The President Volodymyr Zelenskyi assumed Russia may resort to a terrorist attack at the Zaporizhzhia NPP by a remote detonation. He said that when Russia is forced to de-occupy the ZNPP, the IAEA should conduct a thorough inspection of the entire site. Also, on June 29-
30, special exercises were held in case of a possible terrorist attack.
— The IAEA reported it has not seen any new mines or explosive devices in the parts of the ZNPP site where its experts were allowed by the occupiers.
— The government has allocated only 23.5 billion UAH of almost 62 billion UAH accumulated under the Fund for Liquidation of Armed Aggression Consequences for various recovery projects.
— On June 27, from 19:00 to 23:00, due to deficit, the power system of Ukraine received emergency assistance from the systems of Romania and Poland (for a total volume of 1,200 MWh).
— The Regulator adopted the resolution on setting price caps on the day-ahead market, intraday market and balancing market. E.g., on DAM and IDM, maximum price caps increased by 40-80% (depending on hours), minimum price cap was set at 10.00 UAH/MWh (for the entire day).
— This boosted the intensity of trading on bilateral contracts market, with 2.82 ТWh sold (almost 32 times more week-on-week). The Base BCM index for July was at 3,051.2 UAH/MWh (+7.1% relative to June). On DAM, the number of hours with prices being close or directly at the level of price caps decreased almost twice.
— The President signed the Law “On Amendments to Certain Laws of Ukraine on Prevention of Abuse in Wholesale Energy Markets”, which implements the provisions of REMIT.
— The Verkhovna Rada adopted the Law (draft No.9011-d) on amendments to some laws of Ukraine regarding the restoration and green transformation of energy system. In particular, it provides for introducing guarantees of origin, the right of RES producers independently to sell electricity on the market (with Guaranteed Buyer to compensate them under the Feed-inPremium mechanism), possibilities for prosumers, preservation of long-term incentives for small domestic solar installations, introduction of the Net Billing option for households.
— Gas imports from the EU countries increased 1.5 times week-on-week. Almost all imports (53.9 mcm) were performed in the “customs warehouse” regime, of which 38 mcm – in the short-haul mode usually used by foreign traders for further injection into storage facilities.
— The NEURC set, starting from July 1, tariffs for natural gas transmission services through the Oleksiivka entry point at 4.45 USD/tcm per day (without VAT). This enabled another gas transmission route to Ukraine.
— The Verkhovna Rada registered the revised draft laws No. 9311-1d, which provides for the corporate reform of TSO, and No. 9024-d “On minimum stocks of oil and petroleum products”, which implements the provisions of Council Directive 2009/119/EC.
— As of July 1, preferential tax rates on motor fuel were cancelled. Thus, the VAT on petroleum products increased from 7% to 20%, the excise tax on petroleum – up to 213 EUR/1,000 liters, on diesel fuel – up to 139.5 EUR/’000l. According to experts, the average prices at Ukrainian filling stations have already increased by 1.98 UAH/l for A-95 petroleum and by 2.03 UAH/l for diesel fuel.
— An online presentation of the InnovateUkraine Green Innovation Fund took place, as provided in accordance with the memorandum between the Ministry of Energy of Ukraine and the Foreign & Commonwealth Office of the UK. The Fund will provide grants to support businesses in the development of highly innovative, sustainable energy technologies and business models.
