Prices for electricity supplied from Russia to Ukraine are determined through tenders among Ukrainian buyers.

This was reported by the Russian company-operator of electricity export and import "Inter RAO".

As the company clarified, prices are formed on the basis of commercial offers made by Ukrainian buyers themselves.

On the eve of the deputy of the Verkhovna Rada, chairman of the Independent Trade Union of Miners of Ukraine Mikhail Volynets accused Russia of price dumping in the supply of electricity to Ukrainian consumers.

According to him, Moscow allegedly deliberately lowers the cost in order to undermine the energy industry in Ukraine.

“This is a hybrid energy war in order to finally stop and destroy Ukrainian mines, destroy uranium ore mines, they are now on the verge of stopping, and stop blocks of thermal power plants,” Volynets said on the Rada TV channel.

  • Deputy of the Verkhovna Rada, Chairman of the Independent Trade Union of Miners of Ukraine Mykhailo Volynets

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  • © Mikhailo Volinets

At the same time, the deputy claims that Ukraine is able to do without the supply of electricity from Russia and Belarus, since it has its own capacities. 

However, according to experts, Volynets defends the interests of large Ukrainian electricity producers, and not the national interests of the country.

As political analyst, economist Alexander Dudchak explained in a comment to RT, in the event of a complete stop of imports of Russian and Belarusian electricity, tariffs for Ukrainian consumers will automatically increase.

“We can say that Volynets and other figures like him are lobbying for the interests of Ukrainian electricity producers who are interested in selling electricity to consumers and enterprises at inflated prices,” Dudchak is sure.

This point of view is shared by Stanislav Mitrakhovich, an expert of the National Energy Security Fund, a lecturer at the Financial University under the Russian government.

“Ukrainian electricity producers want to raise prices, and their efforts are aimed at this.

Large capacities, for example, belong to the Ukrainian oligarch Rinat Akhmetov, who is hindered by Russian imports from raising prices.

However, there are other groups of influence, businesses that need cheap electricity supplies.

And they are fighting power engineers, "the expert explained in an interview with RT.

Mitrakhovich recalled that in recent years, the Ukrainian authorities have repeatedly allowed and then again prohibited the import of electricity from Russia.

One of the reasons for these fluctuations is the struggle of oligarchic groups for influence, the expert said.

Variable flow

As a reminder, the contract for the supply of electricity to Ukraine was signed with the Russian company Inter RAO in December 2014.

The document provided for uniform supplies of up to 1,500 MW.

In addition, the agreement included the supply of electricity to Crimea by the Ukrainian company Ukrinterenergo.

In Kiev, the conclusion of an agreement with Moscow was explained by the need to have "insurance" in case of force majeure.

So, Kiev had to resort to the purchase of electricity after the termination of the operation of the Uglegorskaya TPP - in the summer of 2015, the station was on the line of fire in the Donbass.

  • Vladimir Zelensky

  • Reuters

  • © Sergey Dolzhenko

In addition, imports from Russia cost Ukraine less than its own generation.

This was announced back in 2015 by the Minister of Energy and Coal Industry of Ukraine (then this post was held by Vladimir Demchishin. -

RT

).

According to him, at that time the price of Russian electricity for Ukraine was 90 Ukrainian kopecks per kW / h (2.4 rubles), and Ukrainian - 95 kopecks per kW / h (2.5 rubles).

In November 2015, Ukraine nevertheless stopped importing Russian electricity.

However, Ukraine did not succeed in completely abandoning supplies from Russia and Belarus.

In September 2019, the Rada again allowed the purchase of electricity under bilateral contracts.

Deliveries began in October, but already in December 2019, the Rada adopted amendments to the law "On the Electricity Market", which provided for a ban on the import of capacities from Russia.

However, the Cabinet of Ministers prudently retained the ability to lift this restriction to prevent emergencies in the Ukrainian energy system.

Head of State Volodymyr Zelenskyy signed the amendments on December 25, 2019.

In April 2020, the National Energy and Utilities Regulatory Commission (NEURCU) duplicated the restrictions, reducing electricity imports from Russia and Belarus to zero.

However, in mid-December 2020, the commission again lifted all restrictions on the import of electricity from Russia and Belarus and allowed the conclusion of supply contracts in 2021.

The decision to lift the restrictions allowed Kiev, against the backdrop of abnormal cold weather in January 2021, to turn to Belarus for emergency supplies of electricity.

According to the Belarusian side, Minsk supplied Kiev with 3.1 million kWh of electricity at this request.  

In early February, the Ukrainian authorities turned to Belarus with a new request for urgent supplies of electricity.

This time, due to accidents at two Ukrainian thermal power plants, as well as due to bad weather, as a result of which power lines were automatically disconnected in seven Ukrainian regions.

At the same time, imports from Russia also increased - in early February, Inter RAO, at the request of the Ukrainian side, increased the supply of electricity to Ukraine during the daytime from 200 MW to 500-700 MW.

And in mid-February, it became known about a new increase in the supply of electricity from Russia to Ukraine - up to 1140 MW.

In energy networks

At the same time, the Ukrainian authorities are trying to restrain electricity tariffs for consumers.

Recall that from the beginning of 2021, the preferential price for electricity has ceased to operate in the country, which was applied by imposing special duties (VCO) on some suppliers.

Refusal from this scheme should have led to an increase in tariffs for the population to 3.30 hryvnia (8.8 rubles) per kWh.

The Cabinet had to soften the blow - the action of the WZO was extended.

However, the preferential tariff for the first 100 kW / h was canceled, which was previously 90 Ukrainian kopecks (2.4 rubles).

Now the cost of electricity for consumers is 1.68 hryvnia (4.5 rubles) per kWh, including the first 100 kWh. 

  • Power lines in the Lviv region

  • Reuters

In March, the Prime Minister of Ukraine Denis Shmygal said that the specified tariff for the population would be preserved.

Kiev's efforts to curb electricity prices have already angered the IMF.

As the Ukrainian energy expert, co-founder of the Institute of Energy Strategies, Yuriy Korolchuk, wrote in his article for Glavred, the IMF wants Kiev to significantly increase electricity tariffs for the population.

The expert made such conclusions based on the words of the head of the IMF office in Ukraine Josta Lyngman.

In an interview with Interfax Ukraine, Lyngman stated the need to "identify additional financial resources" for the electricity sector.

“An important part of this is mobilizing actual sources of income,” he said.

The IMF official added that Ukraine is now using an outdated Soviet-era power generation infrastructure that needs modernization.

As Stanislav Mitrakhovich explained, the Ukrainian authorities do not invest in the country's energy sector.

“Therefore, she is not always ready for such tests as, for example, severe cold.

Ukraine should expand its capacity, but this is not being done.

Problems are also added by figures demanding a break in cooperation with Russia.

As for the accusations against Russia, if Moscow really wanted to harm the Ukrainian energy system, it would simply refuse to supply electricity to Ukraine, ”the expert said.

Alexander Dudchak adheres to a similar point of view.

According to the expert, the pressure from the IMF does not so much help Ukraine to overcome the problems as it aggravates the situation.

“The Fund is interested in promoting tariff increases in Ukraine.

This will make competitive, for example, American LNG, which will no longer stand out due to its high cost against the general price background.

The same applies to electricity, ”the expert said.

  • Yosta Lyngman, Head of the IMF in Ukraine

  • © usubc.org

The idea of ​​leaving the unified energy network with Russia, promoted by the Ukrainian authorities, is part of this plan, Dudchak is sure. 

The expert noted that today no European country can exist in isolation from other energy systems and neighbors.

For example, such a partnership is necessary in case of force majeure in order to cover the temporarily increased need.

“Ukraine could, if necessary, receive electricity and offer its own, be a full-fledged worthy partner in this process.

But for this it is necessary to exclude the political component, to work normally with all countries and, first of all, with Russia, whose resources make it an irreplaceable partner.

So, if something undermines the stability and energy security of Ukraine, it is its desire to destroy ties with long-term partners, ”the expert summed up.