Purchases of imported electricity for business should be weighed – expert

It is necessary to carefully and reasonably distribute the mandatory volumes of purchases of imported electricity between certain groups of consumers in order not to harm the economy of Ukraine. About this writes an expert on energy, Minister of Energy of Ukraine (2020) Olga Buslavets.

At the end of June this year, she notes, electricity imports to Ukraine increased to 850 million kWh against 450 million kWh in May.

Also in June, the use of interstate crossing by importers increased to 77% of the nominally available (1700 MW). In May, this figure was 57%.

The estimated income of the system operator Ukrenergo from the sale of crossings at the relevant auctions since the beginning of the year amounted to about €18 million.

Olga Buslavets recalled that, by decision of the government, the business imports electricity, in particular energy-intensive industrial enterprises.

«The cost of imported electricity for them includes the cost of access to the interstate crossing (the system operators of our European neighbors and Ukrenergo earn), which are extremely overpriced due to the scarcity of the available crossing value in the amount of 1700 MW, as well as duty and excise duty,» she explained.

The expert recalled that until June 1, 2024, the mandatory volume of purchases of imported electricity, in order to guarantee its non-disconnection due to a shortage in the power system, amounted to 30% of the total consumption every hour. From June 1, by the decision of the CMU, it was increased to 80%. This happened without justification and discussion with business and industry associations, without analysis of the impact on the economy, etc.

«This leads to the loss of competition of our energy-intensive enterprises. For example, the price of imported electricity for Arcelor Mittal Kryvyi Rih, taking into account the cost of delivery, is more than twice the price of electricity compared to the price of electricity paid by their competitors in this industry in Western Europe, «emphasizes Buslavets.

According to the expert, the import of electricity is vital for enterprises to be able to work, pay taxes, ensure the flow of currency into the country, etc. However, it is necessary to carefully and reasonably distribute the mandatory volumes of purchases of imported electricity between certain groups of consumers, so as not to cause irreparable damage to the Ukrainian economy.

In addition, according to Olga Buslavets, in order to reduce the costs of domestic industry for the import of electricity, it is necessary:

• take all possible measures to coordinate with European countries (ENTSO-E) the maximum increase in the permitted capacity of the interstate crossing,
• resume long-term auctions (monthly, quarterly, annual) at the interstate intersection.

As GMK Center reported earlier, Interpipe is concerned about the consequences of the introduction of the 80% electricity import norm. Such a decision of the government can lead to numerous negative consequences for the domestic industry as a whole.

Also, each enterprise must have a backup action plan for energy supply – available business opportunities include the installation of gas piston and gas turbine power plants. This opinion was expressed by Anatoly Kinakh, president of the ULIE, co-chairman of the National Tripartite Socio-Economic Council.