The Cabinet of Ministers will eventually be forced to introduce emergency measures in the energy sector

Photo: Aleksey Solodunov

The government of Ukraine decided to extend emergency measures on the electricity market, which were introduced in August, for another month until November 1 due to the difficulties in the supply of coal and gas generated in Ukraine. The situation in the energy sector in September did not force the Cabinet to take emergency measures, though there are all grounds to expect that they will be introduced in November-December.

Prolong the carte blanche

The Cabinet of Ministers published the order to extend the extraordinary measures for another month that was approved on October 1 only yesterday. This document is practically no different from the previous one of August 13. Indeed, in accordance with both documents companies in the electricity sector should operate in compliance with standards of the safety of the functioning of united Ukrainian energy systems and the directives of the national energy company UkrEnergo.

According to the order, emergency measures will be taken if energy installations are damaged or in cases of disruption of their operation, which could breach the regime of permissible flows of electricity and an overload that could result in a decrease in electricity consumption by more than 100 MWt.

Emergency measures may also be introduced if the reserve of energy generating capacities of the united energy systems of Ukraine drops below the permissible level and fuel reserve at thermo-electric stations (TES) falls below the 20-day threshold over three days, if the supply of gas considerably falls, if electricity is not paid for in full over three months or if the payment for electricity generated by energy companies falls below 90%.

Through the introduction of emergency measures the government can limit the prices on the electricity market, set particular conditions for its sale, introduce compulsory requirements on the production of electricity, its delivery and sale and introduce exclusive terms of the export and import of electricity.

Manual administration of the energy sector approved by the government has already shown its benefits. In particular, Minister of the Energy and Coal Industry Yuriy Prodan said yesterday that due to the shortage of electricity for its own needs Ukraine limited its supply to Crimea by 50% and fully cut off export of electricity to Belarus. Also, a number of units at the Burshtyn TES, which is part of the Burshtyn energy island, and traditionally produced electricity for export, were switched to the Ukrainian energy system. The minister advised that at the moment Ukraine cannot fully cut off the export of electricity to Moldova as the Odesa oblast is supplied electricity through its territory and cannot fully transfer the Burshtyn TES to operate in the Ukrainian energy system as this must be agreed to with European companies, which will take several months.

Reserves are dwindling

According to data of the Ministry of Energy and Coal, the reserves of coal in the warehouses of thermo-electric stations continue to fall. This is the main issue that players on the energy market are concerned about. In September these reserves fell by nearly 10% and on October 1 amounted to 1.9 mn t. On October 1, 2013, the reserves of coal were 4.4 mn t. the other day, Prodan stated that in early October private companies bought 300-400 thousand tons of coal, though earlier he said DTEK and DonbasEnergo planned to import from Russia around 4 mn t.

Nevertheless, with the exception of limitations of export of electricity and local and short-term cut off of Ukrainian consumers from electricity for a few hours in early September, energy companies have so far not taken any emergency measures.

“So far, nobody has taken advantage of this emergency situation,” Deputy General Director of the Energy Research Center Vadym Glamazdin commented to Capital. However, he believes that certain emergency measures will be taken in November-December. “Everyone understands that this winter will be harsh,” the expert noted.

Prodan said yesterday that the timetable for cutting off consumers in emergency situations has already been agreed to.