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Second Ukrainian Energy Security Dialogue: The Future of Energy Security in Ukraine and the EU

The Second Ukrainian Energy Security Dialogue conference, held by DiXi Group on December 1 in Kyiv, was attended by government officials, industry specialists, experts from Ukraine, EU countries, and the USA. The participants discussed the priority steps to overcome the energy crisis in Ukraine, changes, and challenges in the EU’s foreign energy policy, ensuring the stability of energy markets, reducing dependence on fossil fuels, and further intensive cooperation between Ukraine, the EU, and the USA.

What is the situation in the energy sector?

The energy sector of Ukraine demonstrates resilience and the ability to recover in war conditions with the help of Western partners. The Ukrainian energy system has already survived eight massive attacks and about 10 smaller ones. Volodymyr Kudrytsky, Chairman of the Management Board of NPC Ukrenergo, informed the participants of the conference about this.

During his speech, Tahir Kapetanovic, Chair of the System Operations Committee of ENTSO-E, noted that without connection to ENTSO-E, it would hardly have been possible to stabilize the Ukrainian energy system so quickly. He expressed his admiration for the effective actions of Ukrainian energy workers.

“I am satisfied with the way we monitor frequency stability and all this is automatically regulated between Ukrenergo and other parts of the network. It works very effectively and gives us some confidence in the future that we will be able to support each other,” he said.

The representative of ENTSO-E also pointed to the quality of work of Ukrainian IT specialists in overcoming cyber-attacks on energy enterprises.

Ukraine’s stability in fuel supply was noted by Taras Kachka, Deputy Minister of Economy of Ukraine, Trade representative of Ukraine. The fuel market is now an example of the most decentralized part of the energy sector. “Promotion of fair and equitable competition and fair liberalization in this industry increased the possibility of supplying fuel,” he emphasized.

Mayors of Zhytomyr and Mykolaiv Serhiy Sukhomlyn and Oleksandr Sienkevych spoke about the state of critical infrastructure and energy sustainability measures. Thus, Zhytomyr was the first in Ukraine to sign an agreement on the transition to 100% RES, and switch the city to LED, and currently, it allows turning off the minimum amount of street lighting. The representatives of the regions gave examples of the very first needs for the restoration of the energy infrastructure.

During the speeches, the European partners assured that they will continue to help Ukraine with the equipment necessary to support and restore the energy system at the moment (transformers, generators).

“This is a priority of the highest level. On the basis of the European Commission and with the support of our colleagues, we have a crisis center that focuses on delivering all necessary materials to Ukraine. We regularly receive a list of requests, we try to fulfill and deliver them, although it is not just because of the size of some equipment. In order to find equipment, we contact the manufacturing companies directly,” Mechthild Woersdoerfer, Deputy Director-General for Energy of the European Commission, said.

What’s next with energy security?

Dr. Benjamin Schmitt, Harvard University/CEPA, spoke about the new aspects of the joint energy security policy of the EU, the USA and Ukraine. In the last decade, European energy security has become not only a niche area but also a center of national security. In his opinion, aggressive sanctions are the least that global democracies can do. In particular, he mentioned the introduction of price restrictions on Russian oil in his speech. Not only governments but also civil society, experts, and academic circles should help monitor the implementation of sanctions and possible options for avoiding them.

“It’s no secret that Russia’s war is being financed from revenues obtained from the sale of fossil and nuclear fuels. Therefore, it can be stopped only with a joint coordinated response of the West in the form of sanctions against Russia, – Yaroslav Demchenkov, Deputy Minister of Energy of Ukraine, noted during his speech. – They should be clear and appreciable. Fossil resources and nuclear fuel from russia should be banned from the markets of civilized countries. Otherwise, sooner or later all this will be used not only against Ukraine, but also against the Western world,” he emphasized.

Kristine Berzina, Senior Fellow, Security and Defense Policy, German Marshall Fund of the United States, believes that in the near future there is a need for energy equipment and financing. The medium-term perspective is the replacement of Russian gas in the European market. The role of the United States in the supply of LNG to the European market is becoming increasingly important. Thirdly, it is the role of diplomacy – tripartite interaction between Central and Eastern Europe, Washington, and Western European capitals. The diplomacy of this triangle is important, she noted.

Dirk Buschle, Deputy Director of the Energy Community Secretariat, emphasized that the direct support of Ukraine is not only about logistics from the EU to speed up the delivery of equipment. A special fund was established to collect financial donations. It is important to have different channels for using these funds and purchasing equipment.

In his opinion, in order for Ukraine to become part of Europe, synchronization is necessary not only in technical measures but also in rules and best practices. The level of reforms was significant before the full-scale invasion, now it is important to go the full way of reforming the energy market.

Options for overcoming the energy crisis in the EU were offered by Suriya Jayanti, Senior Fellow, Atlantic Council, Managing Director of Eney, US-Ukrainian decarbonization company.

“Ukraine should focus on its competitive advantages. Before the war, you did a fantastic job of presenting yourself to Europe and the US as a potential future regional clean energy hub. One of the areas that can help implement such an approach is nuclear power. You already have experience working with it – it is a fantastic advantage. All this needs to be thought through and presented now, because it will be much easier to attract investments already planned in the budget cycles of companies,” Suriya Jayanti is convinced.

Experts noted that Europe and Ukraine need in-depth communication on the issues of what energy security is and how it is related to the global goal of implementing the green energy transition.

Answering the question of how Ukrenergo can get more involved in European energy markets, Tahir Kapetanovic, ENTSO-E representative, emphasized the need to continue harmonizing Ukrainian legislation with European legislation.

Dr. Alan Riley, Senior Fellow, Atlantic Council in Washington D.C., Member of the Advisory Committee to the Ministerial Council of the Energy Community, focused on the legal principles that will make it possible to force russia to pay for the damage caused. The key point is not just a violation of international law, but an extremist mass violation – a war of aggression with the intent of genocide. An excellent precedent is the Paris Agreement of 1946, which defines reparations and allows the confiscation of assets abroad. Most of these assets are actually located in London and New York, such as commercial real estate, and investment funds. In addition to seizing assets, Russian oil can be taxed. The UN compensation commission for Kuwait and the tax on Iraqi oil to compensate for losses may serve as a precedent here. In his opinion, it is necessary to move towards the conclusion of a reparation agreement, to use the assets of oligarchs, as well as revenues from oil and gas.

Ukrainian Energy Security Dialogue is an annual meeting that unites Ukrainian, European, and American stakeholders to discuss energy security issues of Ukraine and the region.

Video broadcasting of the event

The event is organized by the analytical center DiXi Group under the patronage of the Ministry of Energy of Ukraine and with the financial support of the International Renaissance Foundation and the Konrad Adenauer Foundation (Ukraine).

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Independent energy educational center

National website of Extractive Industries Transparensy Initiative in Ukraine

Information and analitical website “Ukrainian Energy” is unique   platform to inform