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

Dear subscribers! Due to the suspension of funding for all US foreign assistance programmes for 90 days, the weekly review ‘Russian War Against Ukraine: Energy Dimension’, which used to be prepared within the framework of the USAID Energy Sector Transparency project, will be published in a limited format – as a summary of the main events in the sector. In the near future, DiXi Group plans to send a survey to the subscribers to receive feedback on the priority thematic sections of the review that should be continued to be covered. This will allow the team to match the interests of readers with available resources and develop an optimal format for the weekly review during the period of suspension of USAID support. We would like to thank our audience for their continued interest in the weekly review ‘Russia’s War on Ukraine: The Energy Dimension’. We would also like to assure you that we will continue to look for opportunities to develop this information and analytical product in order to meet the interest of our audience in a timely and high–quality manner.

January 27 – February 2

Over five days of the previous week (January 27-30 and February 2), electricity supply was restored to more than 117,000 consumers – the Ministry of Energy.
On February 1, Russia launched a combined strike on Ukraine with missiles of various types and UAVs; in response to the attack, Ukrenergo introduced preventive emergency power outages in 7 regions of Ukraine, which were canceled within three hours.
On January 29, the sole 750 kV power line at Zaporizhzhia NPP was disconnected due to the activation of a protection system; at South Ukraine NPP, one of two 750 kV lines was disconnected due to ‘unspecified military activities’, which temporarily reduced the power output of one of the reactors.
Ukraine will receive EUR 200 million from the EIB to purchase equipment to restore Kaniv, Kremenchuk, and Dnipro hydroelectric power plants – Prime Minister Denys Shmyhal.
Last week, commercial electricity exports from Ukraine amounted to 34.6 GWh (+57% WoW), while imports amounted to 28.9 GWh (+11%). For the first time in 46 weeks, Ukraine had a positive weekly balance in electricity trade.
The monthly Base BCM (bilateral contracts market) index for February was formed at 5,413.8 UAH/MWh (+1.6% compared to January).
Due to a decrease in demand caused by warming, the average hourly price of electricity on the day–ahead market (Base DAM index) decreased to 5,607 UAH/MWh (–2.8%) over the week.
President Zelenskyy signed a law extending the moratorium on bankruptcy of a number of state–owned energy enterprises, including coal mining companies and the uranium mining company SkhidGZK, until January 1, 2026.
In 2024, distribution system operators repaired more than 29 tsd km of overhead power lines – State Inspectorate for Energy Supervision of Ukraine.
Ukrenergo published updated tender documentation for the construction of 700 MW of highly maneuverable generation. Applications for participation are accepted until February 28, 2025, and the construction of the facilities should be completed by the end of 2027. The capacity of the facilities should range from 5 to 80 MW, with a control range of at least 80% of the installed capacity.
As of February 1, 3.37 bcm of gas was accumulated in Ukrainian underground storages (11.2% of the total working capacity), withdrawals amounting to 304.6 mcm over the week.
The NEURC published a draft resolution that will allow the UGS operator to include in the tariffs for gas storage, withdrawal and injection the costs of forming an emergency stock of materials to restore damaged gas storage facilities.
The Regulator approved a new reporting form for gas distribution system operators that will allow the NEURC to determine their actual revenues and expenses in 2022–2024. This will make it possible to calculate compensation for costs associated with the consequences of Russian aggression and the moratorium on raising gas distribution tariffs.
The European Commission plans to continue negotiations with Ukraine on gas transit to Europe. Ukraine is ready to provide transit services at the request of the European Commission, but the decision depends on European partners, says Deputy Prime Minister Olga Stefanishyna.
Three biomethane plants are already operating in Ukraine, four more are expected to be launched in 2025, which will increase total annual production to 111 million cubic meters – Bioenergy Association of Ukraine.
Fuel prices in Ukraine will increase by more than 13% in 2025 due to a gradual increase in excise taxes – the National Bank of Ukraine’s forecast in its January 2025 inflation report.
The presentation of the RDNA4 report on the assessment of damage and recovery needs resulting from Russian aggression is scheduled for mid–February 2025, said Maryna Denysiuk, Deputy Minister of Communities and Territories Development of Ukraine.
Denmark will adopt the Transition Cooperation Program for 2025–2028, which is aimed at infrastructure restoration, energy security, humanitarian assistance and support for democratic reforms in Ukraine. The total budget of the Program is DKK 2.8 billion.