Energy Scandal in Ukraine

A huge scandal is brewing in the Ukrainian energy sector. The new acting Minister of Energy Olga Buslavets has proposed to solve all problems of the industry by reducing the operation of nuclear power plants.

To this end, an order was issued to the State owned nuclear power producer Energoatom to put a complete stop to three nuclear power pants with a generating capacity of 3000 MW, and a decrease in production by another 5 reactors. This is the equivalent of stopping the entire Rivne NPP or half of the Zaporizhzhya NPP, and will entail the mothballing of 10 out of the 15 nuclear reactors operated by Energoatom.

This drastic action is likely to cause the bankruptcy of the state owned company and hugely increase the electricity bills of the long suffering Ukrainian consumers.

What is the purpose of this action? It would appear that the closure of the nuclear units will enable DTEK’s solar power stations to continue to operate at a high “green” feed-in tariff to the Ukrainian grid. Coal stations (which are also owned by DTEK) will also receive additional market share on the Ukrainian electricity market.

These decisions are costing the Ukrainian state billions of dollars in losses, and will mean that Energoatom becomes virtually bankrupt. But in order to save Energoatom, members of Ukraine’s Parliament (The Verkhovna Rada) can vote on a special law that will allocate UAH 10 billion to help Energoatom in the form of internal government debt bonds (OVDPs).

Under this scheme Energoatom would also save DTEK, by helping the company to avoid the fate of Privatbank, that is, nationalisation.

Gerus

The shutdown of two nuclear units is scheduled for May 10th. After launching her rescue strategy for DTEK, the acting Minister of Energy Buslavets almost lost the approval of parliament to her appointment. The head of the parliament’s energy committee, Andrei Gerus (pictured), is opposed to such a massive nuclear shutdown. There is also the question of justice, and the cost to the Ukrainian state of bailing out DTEK.

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James Wilson

James Wilson

James Wilson is a freelance journalist and regular contributor to EU Today. He is a long term resident of Belgium, and has more than 30 years international experience in media, journalism and corporate communications and publishing.

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