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Nov 1, 2021
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He who does not jump is frozen

In the photo: from November 1, Russia stops deliveries of thermal coal to Ukraine

In the photo: from November 1, Russia stops deliveries of thermal coal to Ukraine (Photo: Viktor Drachev / TASS)

From this Monday, Ukraine, as dreamed of, will become even closer to complete energy independence. It will no longer receive Russian coal, which local thermal power plants use to generate electricity.

The head of the Verkhovna Rada Committee on Energy and Housing and Communal Services announced earlier that Russia will stop deliveries of thermal coal to Ukraine from November 1. Andrey Gerus… It turned out – not a fake.

As explained in the Ministry of Economic Development of the Russian Federation, “the decision was made due to the growing demand for energy grades of coal” and the need in the autumn-winter period “to pay special attention to meeting their own needs within the country.”

The ministry also noted that over the past years, “despite the political situation, Russia has remained the main supplier of coal to industrial and energy enterprises in Ukraine.” Moreover, the share of Russian coal in Ukrainian imports has even increased to 68% since 2019. That is, in physical terms, the volume of supplies for the first nine months of this year amounted to 10.3 million tons.

However, the current ban does not apply to coking coal used in metallurgy. It concerns only grades of coal that are used in the power industry – A (anthracite) and T (lean).

But in this industry the situation is already critical in Ukraine.

According to the Ministry of Energy of the country, as of October 29, about 600 thousand tons of coal remained in the warehouses of the TPP and TPP “Nezalezhnaya”. With the norm for November – about 2.5 – 3 million tons. Due to lack of fuel, the Slavyanskaya thermal power plant has already been completely shut down. And for less than ten days it remained at the Tripolskaya, Zmievskaya, Krivorozhskaya, Zaporozhskaya, Burshtynskaya, Uglegorskaya and Kurakhovskaya TPPs.

Co-chairman of the Ukrainian Fund for Energy Strategies Dmitry Marunich believes that without supplies of Russian coal, Ukraine may not have enough resources, and it risks not going through the heating season. He assessed the problem as “more than serious” and suggested that all this “will deal a colossal blow to the country’s energy complex.”

According to the expert, it would be possible to somehow compensate for the lack of coal by importing electricity from Russia and Belarus.

However, there will be no electricity imports from both countries from November 1 either. And not because, as was first announced in Kiev, Ukraine proudly refused to buy electricity from “unfriendly” neighbors. But because they refused her.

The same Gerus in his Telegram channel explained the situation as follows: “There will be no electricity imports from the Russian Federation since November 1, Inter RAO announced an auction for the sale of electricity on October 20, but on October 21 the corresponding auction was canceled. Also, since November 1, there will be no electricity imports from Belarus, the corresponding auctions for the sale of electricity have been canceled. “

It turns out, wherever you throw – everywhere a wedge.

Coal at Ukrainian thermal power plants is sorely lacking, and there is nowhere to buy it. It is now more profitable for Russia to sell its anthracite to Europe or China, where prices are one and a half to two times higher and there is a rush of demand. Kiev itself previously opposed the purchase of electricity from Russia – they say, such supplies, according to the opinion of the deputy of the Verkhovna Rada Lyudmila Buimisterare killing the energy system of Ukraine.

That is, it may happen that there will be no supplies of either one or the other. And winter is ahead, which promises to be very harsh.

– The level of Ukraine’s dependence on Russia in matters of coal supply is, indeed, quite high, – comments on the situation Stanislav Mitrakhovich, leading expert of the National Energy Security Fund, lecturer at the Financial University under the Government of the Russian Federation. – I would even call this dependence strategic, which is not resolved quickly, unlike other elements of trade between countries.

Let me remind you that the supply of Russian coal to Ukraine has never completely stopped – even during the time of intense hostilities in the Donbas in 2014-2015. There was a period when Russian Railways held back these deliveries – they were in no hurry to import them. But they did not stop completely.

Apparently, we believed that this would be done in the event of a sharp aggravation of the situation in Donbass. And, perhaps, now, after the statement of the Ukrainian side about the use of Bayraktar against the DPR, it was considered that this aggravation had occurred.

But, of course, it is not yet a fact that the embargo will be complete. Europe and China asked Russia – it’s true – to increase coal supplies as much as possible. But Russia is not a magician who, by a wave of a magic wand, can take and produce additional coal, regardless of the state of the mines, transport facilities … etc.

In addition, the Europeans told all of us that they would not need coal at all. We will now invest in expanding production, and the EU will say in a year that coal is not needed, that they have a “green energy transition”.

As for the Chinese direction, large-scale exports there require huge investments in the railway infrastructure. And now the government is discussing how rational it is in general – to spend about 3 trillion rudders on the expansion of the BAM and Transsib.

So it is not so easy for us to redirect coal to other regions of the world.

On the other hand, if Russia strategically believes that it is necessary to prevent Ukraine’s attack on Donbass, then various methods, including economic ones, can be used as pressure on Kiev.

“SP”: – How effective will they be, in your opinion?

– According to the State Statistics Committee of Ukraine, of the total volume of coal that the country imported last year, two-thirds is coal from Russia. But this together – thermal coal and coking coal for metallurgy.

The metallurgical industry is one of the most important in Ukraine. All other industries depend on it, along the chain of connected enterprises, jobs and even the level of the national currency in relation to the dollar. It is very difficult there without metallurgy

But even without electricity, the situation is not easy. Moreover, Ukraine has not accumulated a lot of coal before the heating season. And from November 1, there will be no deliveries.

I can assume that if the situation does not change, the situation in Ukraine will be very, very deplorable. In this case, most likely, it will be necessary to start saving coal, and some consumers will have to be turned off. First of all, the industry in order to save electricity for the population.

And then it turned out that Russia refused to sell electricity to Ukraine.

According to Deputy Gerus, the Russian company Inter RAO, the only one that has the right to export electricity, refused to hold the auction.

“SP”: – Why refused?

– It was assumed that Ukraine will correct its legislation in this part. Because it has been quite pretentious for several years already that prohibits or allows the import of electricity from Russia.

Last winter, for example, Ukraine was actively importing electricity from the unified power grid of Russia and Belarus since sometime in February. February was very cold.

This year it was assumed that due to the lack of coal at the TPPs, they will buy from November. And a week ago, everyone was sure that Kiev would lift its ban. But it turns out that Russia is in no hurry to agree to this request from Ukraine.

I think the explanation is about the same as with coal. This is an element of pressure associated with the fact that recent actions by Ukraine have led to an escalation of the conflict in Donbass.

Maybe, of course, the situation will change. But this option has been on the table since 2014 and apparently it finally worked.

The question is, to what extent is Russia itself ready to raise the stakes in the game? But we will probably see it soon.

Without supplies of electricity and coal from Russia, the situation, as I said, in Ukraine will deteriorate sharply. Although there is still a question of how Belarus will behave. That is, if Moscow can coordinate actions with Alexander Lukashenko so that he also refuses to sell, this is one story. If Lukashenka refuses Russia, it will be different.

And, of course, if we proceed from the hypothesis that this is a method of pressure, then it would be better if Belarus did not supply either.

“SP”: – What will happen if Russia suits Ukraine with an energy blockade and stops supplying all energy carriers and oil products?

– I think such actions are possible if there is a goal – to stop the offensive of the Armed Forces of Ukraine. And, perhaps, the Russian leadership considered that the use of UAVs is just that “last straw”. Therefore, they took tough measures.

But, in this case, it is necessary to negotiate with Minsk, otherwise the effectiveness of these measures will not be as high. Since not only electricity is supplied from Belarus, a part of coal exports goes through it. Plus, there are also Russian oil products, which are also exported through Belarus.

That is, if you imagine the situation that Russia will stop supplying electricity, coal (including coking coal) and oil products to Ukraine, then it will be a severe blow for the “square”. Especially coal and electricity in a cold winter.

Because it will be very difficult for her to compensate for the lack of coal. That it will not work so quickly to find a replacement for the Russian one. After all, the point is not only that it is necessary to transfer power plants from anthracite to grade G (gas) coal, although this is also not a free pleasure. The problem is that other coal will be more expensive.

Again, coal will have to be imported (if not by rail) through ports. Ukraine has only three deep-water ports – Odessa, Nikolaev and Ilyichevsk (now Chernomorsk). But they also work for all other tasks – through them, for example, there is the export of Ukrainian metallurgical products, wheat, etc. And a port that will receive a lot of coal will simply not be able to do other operations.

Then, where to order this coal? In Poland? So, she herself imports Russian coal, there is not enough of it there. Anthracite is generally scarce where in the world you can buy. They tried to buy from South Africa, but their coal is of poor quality. Then there was an attempt to switch to American, but America does not produce very much anthracite. Therefore, the full contract was not even fulfilled.

“SP”: – Is it the most profitable for Russia?

– Undoubtedly. And this logic prevailed among them. The situation with petroleum products is a little less difficult, because they are easier to import and more energy-intensive. Yes, this leads to an increase in value in the domestic market of Ukraine. But this problem is somewhat easier to solve than the situation with coal and electricity.

Electricity cannot yet be imported from other countries in the world. For the reason that Ukraine – all of its territory – has been synchronized precisely with Russia and Belarus since the time of the GOELRO plan, since the 1920s. last century yet.

Only a part of the territory of Ukraine, which is called “Burshtyn energy island”, is singhonized with Europe. This is a technological region in the west of the country, which, as part of a trial European integration, was connected with neighboring European countries. Export-import operations are possible there, but this will not help the rest of Ukraine.

“SP”: – So, the winter for Ukraine will not be very easy?

– If we imagine that Russia will be consistent on this issue, then, indeed, the winter will not be easy. All the more so if we make sure that Belarus does not supply oil products, electricity and coal there. In this case, pressure on Ukraine can be large-scale, and this, in my opinion, is a fairly effective way to end hostilities. Or at least their proliferation.

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