The share of imports amounted to 38% of the level of exports for 11 months of the year
The Ukrainian power system began importing electricity in significant volumes since July, when the country opened a free market for this energy resource and supplies from other countries became possible.
During the first six months of 2019, import of electricity in all directions was zero, and in July, energy supplies from neighboring countries – Slovakia, Hungary and Belarus – began immediately.
In October, the integrated power system of Ukraine also began to receive electricity from Russia, around which many javelines were broken by opponents and supporters of such imports. As a result, the Parliament and the President imposed restrictions on the import of electricity from Russia. In total, the share of electricity imports in July-November amounted to 81% of the energy that Ukraine exported over the same period. And for 11 months of the year, the share of imports from neighboring countries amounted to 38% of the total level of exports to all countries.
Objectively, wholesale prices for electricity in Russia are lower than in Ukraine, as the cost of electricity production at the generating enterprises of the aggressor country is much lower. Russia itself is one of the world leaders in the mining and export of coal, the prices of which for the Russian market are formed by subtracting the cost of logistics from world centers of pricing and trade (in the ports of Russia, the Baltic countries and North-West Europe) by the netback method to the corresponding railway stations inside Russia where thermal power plants are located (TPPs or state district power stations, as they are called in Russia).
In addition, Russia itself produces nuclear fuel, which sells to Ukraine more expensive than for its nuclear power plants. In addition, the prices for residual oil in Russia, which is also used by local energy, are significantly lower than world and European. This is because the cost of logistics is deducted from international prices by means of a netback to Russian oil refineries, and the cost of delivery to heat generation enterprises is added. The margin of the domestic market (margin of refineries for fuel oil for domestic consumers) is usually small compared to the net netback to refineries.
But to deliver Russian electricity to the border with Ukraine, a Russian exporter needs to pay a significant amount for the transfer, which may cover the difference in production costs.
Electricity imports from Belarus were higher than from Russia in October-November, and it began immediately in July (see infographic). In addition, from the very first months of the market launching, import of electricity from Slovakia began, and from October deliveries from Hungary increased significantly.
Electricity supplies from Slovakia and Hungary are carried out at Burshtyn TPP island and are consumed on the Ukrainian market. At the same time, simultaneously with Burshtyn TPP Island, Ukraine exports electricity to neighboring countries: Hungary, Poland and Slovakia. With the launch of the free electricity market, exports to Slovakia minimized and came down to the level of overflows; at the same time, export volumes to Hungary changed slightly.
In addition, in October-November, Ukraine significantly increased electricity exports to Romania (see infographic). At the same time, electricity was exported to Moldova in approximately equal volumes over 11 months.
The geographical location and the presence of powerful interstate power transmission lines of the IPS of Ukraine allows for a significant exchange of electricity with the power systems of the countries of the European Union (Hungary, Slovakia, Poland and Romania) and the energy systems of the CIS countries (Russia, Belarus, Moldova).
Connection with the power systems of other countries is carried out through the Ukrenergo’s interstate power transmission lines. This ensures a mutually beneficial exchange of electricity, improves the reliability of energy supply to consumers and the integration of electricity markets of different countries.
The IPS of Ukraine is divided into two parts. The main part of the IPS of Ukraine works in parallel with the energy association of the CIS and Baltic countries, and the other, Burshtyn TPP Island, is part of the ENTSO-E association of continental European power systems.
Ukrenergo transfers electricity to interstate power lines in the following areas:
• from Burshtyn TPP Island to Hungary, Slovakia, Romania.
The maximum permissible export capacity is up to 650 MW.
- “Directional transmission” on 220 kV transmission lines Dobrotvorska TPP - Zamosc (Poland)
The maximum permissible export capacity is up to 235 MW.
- Moldavian power system
The maximum flow between Ukraine and Moldova is up to 700 MW, but may be limited to zero.
• Republic of Belarus
The maximum flow rate between Ukraine and Belarus is up to 900 MW.
• Russian Federation
The maximum flow between Ukraine and Russia is up to 3,000 MW.