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Gas to be measured not in cubic meters, but in kilowatts: How it to affect utility payments in Ukraine?

Author : Olena Holubeva

Source : 112 Ukraine

Yesterday, the Verkhovna Rada adopted in the second reading draft law No. 2553, which provides for the transition to the European gas metering system - energy units
22:27, 3 November 2021

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The main indicator of the quality of natural gas is the heat of combustion (calorific value). The higher the calorie content, the less gas must be consumed in order to boil, for example, a liter of water or warm a room. For this reason, gas consumption in Europe is measured in energy units, while in Ukraine it is still in cubic meters. Regardless of whether the gas is of high quality or not, Ukrainians, unlike Europeans, pay for the entire volume that passes through the meters.

Yesterday, the Verkhovna Rada adopted in the second reading draft law No. 2553, which provides for the transition to the European gas metering system - energy units. If the deadlines for introducing the norms of the bill will not be postponed, from the next heating season in the payment cards of Ukrainians the volume of gas consumed will be indicated in cubes and in kW / hour.

But there is a nuance that negates the whole positive. It is expensive to change the meters of Ukrainian household consumers for those that would take into account the consumption of gas in energy units. Therefore, gas consumption will be calculated using the old formula. This will definitely not lead to a decrease in payments, and given that temperature coefficients will also be taken into account in the charges, it is possible, on the contrary, will even grow.

What the transition to energy units means?

In theory, the transition to gas metering in energy units should eliminate the inequity related to the quality of the resource, Yevgen Natsvin-Stepanov, First Deputy Head of the Board of the Association of Energy Suppliers said. According to him, this approach allows the consumer to receive information about the real cost of consumed energy and choose which energy source is more profitable. "In an ideal picture of the world, a consumer will be able to make a rational decision about choosing an energy source - to use, say, gas or electrics for heating. But in real life, of course, we understand that a very small percentage of consumers have both a gas and an electric boiler at home, and this choice for them is, rather, a question of a more distant future," said Natsvin-Stepanov.

The transition to energy units is beneficial for industrial enterprises. For businesses, the fact that you have to pay for the energy consumed, not the volume, translates into significant cost savings. For large enterprises, it is even possible to install separate meters that will account for consumption in energy units, says Gennady Kobal, director of ExPro Consulting.

“For traders, the transition is also beneficial. When they import gas, they buy it in Europe based on the price per megawatt, but in Ukraine it is converted into cubes based on the methodology. If this system changes, then there will be no losses or misunderstandings when importing from Europe. It is also beneficial for mining companies, since it is not very fair when one company produces "rich" high-calorific gas, and the other produces "dry" gas, but at the end they receive the same prices for their goods," Gennady Kobal said.

It should be noted that any, even a very good idea, depends on its implementation, and the transition to gas metering in energy units is no exception. "You can cheat both in cubic meters and gigacalories or joules. And if the Ukrainians are fooled in calories, it won't be easier for them," said Oleksiy Kucherenko, a member of the Committee on Energy and Housing and Utilities.

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It is expensive and there is no money to replace millions of household gas consumers with meters that would take into account energy consumption. Therefore, the old methodology for converting gas volume into energy volume will be used for the calculation.

According to Kobal, underground gas storage facilities and a gas transmission system will first be registered in energy units.

“I think that for the first time there will be parallel gas metering in cubes and in energy units according to the formula approved by the regulator. The operator will enter the consumption data into the consumer's personal account, display it in receipts and transfer it to the GTS operator's platform," agrees Yevgen Natsvin-Stepanov.

According to the text of the bill, consumers will have access to information on the amount of "weighted average gross calorific value, the amount of energy consumed by gas, its physical and chemical characteristics (Wobbe number, moisture dew point, carbohydrate dew point, nitrogen and sulfur content)". At the same time, it is not clear how this can help a pensioner in the village to prove the fairness or injustice of the gas payment charged to him.

It should be noted that already now, the operator display not only information on gas consumption in cubic meters, but also in energy units. And what does this give the consumer, how does it help to reduce the payment order? Probably, the indication of the price in cubic meters and energy units from the supplier will have a similar effect in the absence of meters that take into account the consumption of gas in energy units.

In addition, most of the norms of the voted draft law come into force no earlier than May 1, 2022, and a number of them - from May 1, 2023. That is, there will be no changes for consumers in connection with the approval of the transition to metering in energy units in the current heating season.

If the norms of the bill are not pushed back in time, which, let's be honest, often happens with progressive initiatives in Ukraine, already in the next heating season we will witness how the problem of "frosty coefficients" will sink into oblivion. "The transition to energy metering units will help reduce the estimated technological losses of operators. So far, the so-called" frost coefficients "have been partially included in the volumes of technological losses for operators, that is, bringing to a standard temperature of 20 C the component of losses will disappear," Leonid Unigovsky, head of the Expert Council for the Development of the Gas Industry and the Natural Gas Market, told 112ua.tv.

Temperature coefficients will be included in the formula for converting cubes to energy units. This translation will be temperature sensitive.

As you know, heated battles over temperature coefficients have been going on for several years. Most Ukrainians considered the coefficients in payments adjusted for temperature jumps to be extremely unfair, which increases the final gas price. At the same time, operators are convinced that gas molecules behave differently at different ambient temperatures and this affects the amount of fuel consumed by households. Last year, NKREKU put an end to the furious disputes on this matter. The Commission has taken into account the "bringing to standard conditions" in the tariffs of operators of gas distribution stations, providing for them a larger volume of technological gas losses.

Thus, if the scenario envisaged by the draft law is implemented, household payments will definitely not decrease. But depending on what the formula for converting cubic meters to kW will be, it may increase, experts say.

***

The bill approved by the Verkhovna Rada contains a number of other positive norms. If the authorities nevertheless decide to switch to gas metering in energy units from the next heating season, the margin of traders and Naftogaz when importing gas will become more obvious. Now, when registering imported gas from EU countries and pumping it into Ukrainian UGS facilities, the method of converting to volume units is used. Gas comes from Europe to the border in kW. For this reason, the difference between Ukrainian and European prices for Ukrainian consumers has not been obvious until now. With the transition to the European accounting system, everything will change.

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