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The main chaallenges of energy crisis in Ukraine are outdated equipment, dependence on energy imports, and low energy efficiency. Expert in the field of energy, a former deputy energy minister Vadym Ulyda said it in an interview with Radio Liberty. Moreover, in times of crisis and Russian aggression, Ukraine has no clear development strategy. If not to take action today, in 10 years Ukraine risks to forever lag behind all European countries, an expert warns.
Ukraine’s Cabinet extended emergency measures in the energy sector for another month, which were introduced in February due to a shortage of coal anthracite group. Are there real reasons for the state of emergency in the energy sector?
Today Ukrainian energy is in a deep crisis. The problem is not so much to stop coal supply from the occupied territories because it is not the real reason, which they have been naming for three years, for implementing those emergency measures. Buying this coal in other countries is not very difficult. The first coal in 2014 came from South Africa, we can also get it from America or Vietnam.
A long-term solution must be taken to diversify the supply of coal as was done with the supply of gas. Today we do not buy gas from Russia, although it was our main supplier. The issue of energy crisis is much deeper. It is associated with systemic problems that have accumulated over decades and now only deepened after the Russian aggression.
The main problem is outdated and inefficient generating equipment, most of which worked its resources. The second problem is a critical dependence on imported energy, gas, oil, nuclear fuel, and even coal.
In addition, we have very high energy losses and low efficiency. Despite dependence on energy imports, Ukraine uses energy, perhaps in the worst way in the world. Compared with Europe, Ukraine has 3-4 times higher energy consumption. And it has low level of competition. Market reforms are constantly postponed.
But these problems cannot be solved all at once, right?
The main reason is that Ukraine still has no clear vision of its energy future. That is no clear development strategy and solutions to all these issues. The policy in this industry is situational and therefore not sufficiently effective.
President Poroshenko signed a law on electricity market. How electricity market, its formation with extraordinary measures, and manual control market might be associated with each other?
Signing a law is very good thing, because it gives hope that the market would finally be reformed. But this market is expected to be launched in two years. This is not the first law, the first one was signed in 2013, it included introduction of a competitive market in July 2017. This law was replaced by the current law, but it is better than the last one.
Is there at least some progress in integration of the Ukrainian energy market in European one, and whether these steps are carried out?
In my opinion, this is a key issue in the energy sector in general. This process has greatly intensified in 2014. The question is how actively would Ukraine lobby its interests before the European partners and whether it proves that it really wants to integrate. Because electric power system of Ukraine is working in sync with Russian one. And in fact, the Ukrainian grid frequency is adjusted by Moscow. This creates additional threats.
At one time, Ukraine worked in sync with the western countries - Poland, Hungary, and Romania. And the structure of Ukrainian networks was synchronous with the West. This is the chance that Ukraine just has not used for two decades.
Recently you took part in the energy forum. Please tell us about the event.
Today, a draft energy strategy until 2035 is under elaboration. And there are two key points that need to be finished; this is a forecasting horizon. Prediction by 2035 year is too short, if we look at the same strategies of the European Union, they have a strategy until 2050 year.
Secondly, this strategy is not clear and does not contain specific measures: what should we do, and where to take money for it.
This strategy leaves the situation such as it is. That is, it retains that power structure, built yet in the 1960s. A new technology revolution is happening in the world, there is a structural change in energy. This process is known as "energy transition". Due to the development of modern technologies - renewable energy, information technology, and energy-efficient technologies - it provides a synergistic effect that allows to radically change the concept of consumption and production of energy.
The world now refuses from power on fossil fuels. In 2015, in Paris the climate agreement was signed, which brings together almost all countries of the world and their impact on energy policy. For example, EU energy policy involves reducing consumption by 41% by increasing energy efficiency and developing renewable sources - 75% of total consumption. This is 97% of energy.
That is, if Ukraine is not ready for the decisive action, we can just stay on the sidelines forever and lag behind the European countries, which build a sustainable energy system that runs primarily on renewable energy. So if Ukraine preserves its todays structure, based on fossil fuels, it 10 years it will be uncompetitive.