Ukraine will face an electricity shortage of 2500-4500 MW in winter – Longobardo

The company is forced to import electricity at exorbitant prices in order to sustain the main equipment

In winter, the Ukrainian power system will face a shortage of electricity of 2500-4500 MW, depending on weather conditions. Mauro Longobardo, CEO of ArcelorMittal Kryvyi Rih, made such forecasts in an interview with Forbes.

According to him, since the beginning of the full-scale war, the company has cut its electricity consumption by almost half, from 450 MW to 250 MW. Despite this, the company has to cover a significant demand for electricity through imports.

“We will import to power the main equipment. But the cost of this electricity will be prohibitive. To reduce consumption, we will shut down one of the two blast furnaces in operation starting in November,” said the CEO of ArcelorMittal Kryvyi Rih.

Currently, the company has no plans to invest in autonomy, as the company’s electricity needs are too high to be met by its own generation.

“Before the Russian invasion, we were considering purchasing a wind farm to run on green electricity. Strategically, we are not abandoning this idea. We are talking to energy companies to see if they are interested in building a wind farm or solar power plant near Kryvyi Rih under a long-term contract with us. We need a partner,” Mauro Longobardo emphasized.

The company is studying the electricity needs that will arise after the introduction of electric arc furnaces for the production of low-carbon steel targeting the EU market. Ukraine’s integration into the European Union has created a need to adapt to European standards. Although the EU market was not the company’s main focus before the war, the strategy is now being revised, and the EU is becoming a key priority.

According to the pre-war plan, ArcelorMittal Kryvyi Rih was to undergo a $2 billion reconstruction for green steel production in 2022-2027.

“It was a plan agreed with the group’s management. After the war is over, we will adjust it slightly, but in general terms it will remain the same – $2 billion over five years,” summarizes the company’s CEO.

As GMK Center reported earlier, the cost of production at ArcelorMittal Kryvyi Rih has increased by 40% since 2021, while product prices have fallen. In such circumstances, the company is losing competitiveness in traditional markets – in the Middle East, North and West Africa – and is reorienting itself towards European consumers. The main factors include rising energy costs and high logistics costs.