The Cabinet of Ministers of Ukraine has approved the country's energy security strategy.

The document has not yet been published, but its key theses were voiced during a government meeting chaired by Prime Minister Denis Shmygal.

The strategy lists 29 threats.

Among them are cyberattacks, "Russian aggression", incomplete integration with the energy and gas systems of the European Union, deterioration of the fixed assets of the energy sector, increased market competition and "deepening energy poverty."

The objectives of the strategy are to ensure the availability of all types of energy resources and the efficiency of their use, as well as the sustainability of the functioning of the country's energy sector.

In addition, the document says that Ukraine will strive for European integration and independence in shaping its energy policy.

“In accordance with this, three key scenarios have been identified, according to which the energy sector can develop, depending on the threats,” said the Minister of Energy of Ukraine Herman Galushchenko at the meeting.

The first scenario is called baseline and assumes no changes, while the second takes into account the factor of “unfriendly influence,” which implies an increase in Moscow's external influence.

The third scenario, on the contrary, provides for a "positive transformation", which, from the point of view of the Ukrainian Cabinet of Ministers, will become a reality if the European course is irreversible.

  • Meeting of the Government of Ukraine

  • © Cabinet of Ministers of Ukraine

Ukraine's energy security strategy was created on the basis of the national security strategy approved by President Volodymyr Zelenskyy in September 2020. 

This doctrinal document also speaks of Moscow's "aggression" and the need to modernize the country's energy sector.

In particular, the strategy of the national security of Ukraine enshrines the course towards sustainable development and environmental safety of the fuel and energy sector, and the introduction of renewable energy sources.

"Hot topic"

Experts believe that the most important challenge for the Ukrainian energy industry is not Moscow's policy, but the degradation of equipment at power plants and the obsolescence of the main pipelines, including the gas transmission system (GTS).

“Kiev constantly blames Russia for its problems in order to somehow justify its own failures.

The wear and tear of all equipment of power plants and gas pipelines in Ukraine is close to a critical level.

And, perhaps, the most pressing issue is the prospects for modernizing the gas transmission system, ”said Alexander Frolov, deputy general director of the Institute of National Energy, in a commentary on RT.

The Ukrainian authorities fear that the need to use the GTS will disappear with the commissioning of Nord Stream 2 and after the completion of the current contract with the Russian Federation on gas transit to Europe, which is valid until 2024.

Kiev hopes to conclude a new agreement on the pumping of Russian blue fuel for a period of 15 years in the amount of 45-50 billion cubic meters.

m per year.

Otherwise, Ukraine will lose about $ 3 billion annually.

An RT source in the Ukrainian Cabinet of Ministers claims that in fact, Kiev is aware of the fragility of the prospects for continuing gas transportation after 2024.

“Now there is an active discussion of what to do with a pipe no longer needed by anyone.

There are no real options yet, "says the interlocutor of RT.

To date, Moscow has not announced its final position on the issue of gas transit through Ukraine.

The Kremlin and Gazprom believe that the decision to transport fuel through the GTS should be made on the basis of economic feasibility and profitability.

Under the terms of the US-German deal on Nord Stream 2, Washington and Berlin agreed to insist on extending the contract for pumping Russian gas through the Ukrainian GTS for a 10-year period.

In response, Russian diplomats called the document's style "unacceptable" and the threats against Moscow "groundless and useless."

  • Power lines in Ukraine

  • Reuters

  • © Valentyn Ogirenko

In a conversation with RT, Ukrainian political analyst Alexander Semchenko noted that it was Kiev's Russophobic policy that served as one of the main reasons for launching the construction of the Nord Stream 2 project.

“By and large, the project appeared as a result of hostile actions on the part of Ukraine, lack of confidence in the fact that Ukraine is able to reliably ensure the transit of Russian gas,” Semchenko explained.

According to experts, in addition to the implementation of Nord Stream 2, Ukraine's energy sector is negatively affected by the course of disconnection from the common energy system with Russia and Belarus and integration into the European market.

According to Frolov, Kiev's European integration in the energy sector is expressed, in fact, in "purely physical synchronization" with European systems and an increase in tariffs for industry and the population.

“This means that Ukraine is switching to the standards of the European energy system, which inevitably leads to an increase in payments.

After all, Europeans pay a lot of money for consumed energy resources.

There is no need to talk about the positive consequences of such a policy: manufacturers will go bankrupt, and citizens will give the last, ”says Frolov.

In addition, according to the expert, Kiev hopes that after the integration of energy systems, the EU authorities will start investing in the modernization of Ukrainian power plants and infrastructure.

“However, Europe is not interested in supporting the energy sector of Ukraine for the simple reason that it is profitable for it to make it an importer of electricity.

Moreover, under the pretext of fighting for the environment, Kiev is actually forced to abandon coal generation, although this entails inevitable degradation of the industry, ”Frolov said.

Semchenko also drew attention to the fact that the Ukrainian government is recklessly closing coal mines.

According to his forecast, the decline in coal production will eventually paralyze the operation of thermal power plants.

"Colossal risk"

Another resonant decision of the government at the meeting on August 4 was the transfer of six thermal power plants to NJSC Naftogaz of Ukraine.

As Shmygal explained, the transfer of these enterprises to the ownership of Naftogaz will provide them with everything they need for the heating season.

Meanwhile, a RT source at the Ministry of Energy and Coal Industry of Ukraine said that the Cabinet of Ministers had given six CHPPs to the corporation because of debts to it.

“All this was done in order to deal with the CHPP's debt to Naftogaz and to better prepare for the heating season.

But this is unlikely to help.

If we talk about tariffs, they should soon grow by 30-40% for heating and hot water, ”the source said.

  • CHP in Ukraine

  • Reuters

  • © Valentyn Ogirenko

In turn, the interlocutor of RT in the Ukrainian government said that the Cabinet is trying to make Naftogaz a profitable company.

This is what the IMF demands from Kiev.

According to Frolov, the transfer of six CHPPs to Naftogaz is a consequence of the struggle of different groups for financial flows.

At the end of 2020, the net loss of Naftogaz amounted to 19 billion hryvnia (about 51.6 billion rubles at the current exchange rate).

The former head of the corporation, Andrey Kobolev, explained the deplorable results of activities by low gas prices on the domestic market, the debt of private gas supply companies for the selected fuel and the loss of control over the GTS operator.

“With the takeover of new enterprises, Naftogaz is trying to compensate for its losses from the loss of money for transit and, frankly, not very effective management.

Yuriy Vitrenko is known for being a supporter of tariff increases.

One can only predict new problems for end consumers in Ukraine, ”explained Frolov.

Semchenko also believes that the transfer of six enterprises to Naftogaz is dictated by Vitrenko's aspirations to increase the company's revenues.

In his opinion, this will not affect the quality of preparation for the heating season.

Summing up the discussion of the prospects for the energy industry in Ukraine, the expert noted that instead of attacks on Nord Stream 2 and attempts to integrate into the EU energy system, it would make sense for the Ukrainian government to pay more attention to the modernization of thermal power plants and the safety of nuclear power plants.

“The Ukrainian authorities refuse to understand that the power plants currently in operation were designed in Soviet times, and therefore nuclear power plants are focused on using Russian-made fuel rods.

Breaking such ties means exposing the country to colossal risks, ”summed up Semchenko.