Ukraine still remains an energy-dependent country – our nuclear energy sector which supplies the half of the energy in the country to consumers, functions purely on imported fuel. Furthermore, we waste a lot of energy and the underdeveloped energy market pushes away investors.
Without Sweden and Russia, there will be no nuclear power plants in Ukraine
More than half of energy in Ukraine is produced from nuclear fuel imported from Sweden and Russia as we don’t have uranium enrichment plants. During first 6 months of 2017, we purchased 51% of nuclear fuel from a Swedish company Westinghouse. Other 49% were procured in Russia. The price of Russian fuel was higher – USD 131,1 million for 101,6 tons while the price of Swedish was lower – USD 82,7 million for 105,7 tons.
The situation with gas is better – we import only one-third of it: 82% from Poland, 9% from Slovakia and 9% from Hungary. The rest of needs are covered by our own production. The similar situation is in the coal sector – the internal output covers 73% of needs, while other 23% are met via import from Russia (50,2%), USA (27%) and Canada (8,7%). The main suppliers of petrochemical products in Ukraine are Belarus (53%), Russia (23%) and Lithuania (8%).
Ukraine has enough mineral resources for its own consumption
Ukrainian reserves of coal constitute 34,4 billion tons. Under the current level of consumption, these reserves are sufficient to cover our needs for 834 years. At the same time, reserves of gas are quite modest – only 600 million cubic meters. Though, even this volume would be enough for us to become independent from gas import in case we’ll increase its production. According to the government’s plans, we should achieve this goal by 2020 through the increase of investments in the gas production industry.
We waste 80% of the produced electrical power
Around 30% of the electrical energy is produced in Ukraine from coal, 63% from uranium and only 7% from other sources. Though, because of outdated infrastructure and equipment, only 20% of the generated output goes directly to consumers.
Energy market is emerging in Ukraine
In 2015 laws “On Gas Market” and “On Electrical Energy Market” were adopted in Ukraine with a view to create competitive energy market in Ukraine. Even though these laws still didn’t fully entered into force, the industrial gas market doesn’t constitute a monopoly anymore.
EU develops alternative energy sector while shutting down nuclear power plants
EU and Ukraine equally use coal for electric energy production as it’s quite difficult to abandon it because of its affordability. Though, in order to decrease the environmental pollution, EU is heavily investing in renewable energy which already provides 18% of the electrical power consumed by countries-members. At the same time, Ukraine continues to rely on nuclear energy, not investing into alternative methods of its production. Only 1% of electrical energy in Ukraine is produced from renewable sources.
Ukraine has the potential to become a country independent of the energy import. In order to make this happen, we should consume our resources more responsibly, create competitive conditions at the energy market as well as attract investments to this sector. It will allow us to improve our infrastructure and equipment as well as increase energy production from renewable sources.
This guide was crafted by the content-marketing agency Top Lead in cooperation with experts from The American Chamber of Commerce of Ukraine as well as partners: law firm AEQUO Law Firm, companies DTEK, Bosch Ukraine, and Henry-Bleyzer.