Every company should have a contingency plan for energy supply

The situation in the Ukrainian energy sector is certainly very difficult. In recent months, the enemy has been deliberately destroying our thermal and hydro generation. According to some estimates, about 50% of our generating capacity has been destroyed. The problem is also exacerbated by the fact that thermal and hydro generation performs a shunting function, which means that the stability of the power system is at risk. All this has a huge current impact on our entire economy and its prospects.

The nature of this situation is further complicated by the lack of time. There are actually 5-6 months left before the onset of cold weather, which means that we need to find emergency solutions. In addition, there is a risk of repeated attacks on the energy infrastructure by the aggressor, which could further complicate the situation in the Ukrainian energy system.

What to do?

Despite the fact that our power engineers are giving 100%, demonstrating professionalism and a high level of responsibility by restoring damaged grids and generating capacities, the situation is so complicated that the government and business must develop and implement a comprehensive approach to stabilizing the energy supply system.

In our opinion, it should include the following steps:

1. The government should develop a clear comprehensive plan to prepare the functioning of our economy and society in the current environment. The plan should provide for coordination of the work of all parties and be targeted to each region and economically active enterprise, especially such energy-intensive industries as iron and steel, chemicals, etc.
2. Each region should have separate groups with the appropriate powers, whose decisions on limiting energy supply to industry should take into account the specifics of production and technological cycles. We now have many complaints from businesses that actual power outages do not coincide with planned schedules, which leads to additional losses and the inability to plan production processes.
3. It is necessary to increase ENTSO-E (European Network of Transmission System Operators for Electricity) limits and transmission capacity to increase electricity imports. These measures are mostly technical in nature.
4. A balanced approach to determining the share of imports in total electricity consumption by industrial enterprises should be taken to avoid blackouts. Currently, this figure is set at 80%. This figure is completely unrealistic, as it does not take into account our capacities in terms of imports and the financial condition of the industry. Our energy-intensive industries will not be able to withstand such tariffs and will lose their competitiveness. In our opinion, this figure should be no more than 50%.
5. It is necessary to clearly prioritize the current use of available resources for the restoration of generating facilities. The increase in the electricity tariff for households on June 1 should bring in about UAH 50 billion in additional revenues on an annualized basis. «Energoatom, which is to receive 85% or more than UAH 40 billion, wants to use these funds to complete the completion of nuclear power units. In our opinion, under the current conditions, it is necessary to allocate funds to restore damaged generation, rather than to facilities that will be commissioned in 7-8 years at best.

Implementation of distributed generation

Restoration of thermal and hydro generation facilities requires huge investments and years of hard work. Therefore, the rapid introduction of distributed generation – gas piston and gas turbine power plants – is extremely relevant and important. International partners can provide financial and technical assistance to supply energy to critical infrastructure and the population, but businesses are put in a position where they must partially take care of the stability of their own energy supply.

To implement this plan, all opportunities to access credit resources, purchase the necessary equipment from all over the world, and make the most efficient use of external financial support should be used. A relatively quick implementation of distributed generation can be achieved through the development of plans for each region, taking into account critical facilities and enterprises.

Conclusion

The prospects for a stable energy supply for the industry in the short term are very difficult. No one can say for sure what will happen in the winter. I expect that we will maintain the stability of the power system. But now we have to prepare as much as possible for a negative scenario. This should be done by each region and each individual enterprise according to an individual plan, taking into account its own characteristics.

The current situation requires very close cooperation between the government, business and our international partners, as well as transparent mechanisms for allocating available resources to restore generation to increase the resilience of the national power system. We need to act as quickly, systematically and coherently as possible.