Energy sector of Ukraine: overview of the situation on 16 March 2022

The actual state of the unified power system of Ukraine

On 16 March 2022, the energy systems of Ukraine and Moldova have started trial synchronisation with the Continental European power system ENTSO-E.

The Ukrainian unified power system is working in a stable mode despite the constant destruction of infrastructure caused by Russian military aggression. Due to active hostilities, more than 928,000 consumers have been left without electricity supply.

The actual situation in the gas sector

38 out of 1,389 gas distribution stations (GDSs) in Ukraine remain shut down. As a result of Russian shelling, the city of Lysychansk lost its gas supply, and the gas pipeline to the Zalissia GDS was damaged. About 259,000 consumers remain without gas supply.

Accounting for infrastructure losses

The Gas Transmission System Operator of Ukraine has developed a mechanism for accounting for destroyed infrastructure and gas losses. The mechanism will be used for filing compensation claims for Russian military aggression.

The actual state of nuclear facilities in Ukraine

The Chornobyl and Zaporizhzhya nuclear power plants (NPPs) remain under the control of the Russian occupation forces.

Occupants provided access to the premises of the Zaporizhzhya NPP to the representatives of Russian State Atomic Energy Corporation Rosatom, exerting pressure and control over operational activities of the NPP’s staff. On 14 March 2022, the Russian occupation forces blew up ammunition that did not explode during the previous shelling in the immediate vicinity of the Zaporizhzhya NPP power units.

The power supply of all installations located on the site of the Chornobyl NPP was restored. The Automated Radiation Control System of the Exclusion Zone has not yet been fixed. The staff of Chornobyl NPP still has not been rotated.

Greenpeace on nuclear safety in Ukraine

Greenpeace addressed the International Atomic Energy Agency (IAEA), expressing concern over the IAEA’s effectiveness in solving the issue of nuclear safety in Ukraine due to its close ties with biased Russian officials. Greenpeace requested suspending functions of the current Deputy Director-General of the IAEA, a former Deputy Director-General of Rosatom, Mikhail Chudakov. The clarification regarding the role of Russian officials in the IAEA and the full disclosure of their communications with Rosatom representatives were also requested.

The actual state of renewables in Ukraine

According to Oleksandr Kozakevych, Chairman of the Ukrainian Association of Renewable Energy, nearly 47% of renewable energy capacities in Ukraine are under the threat of destruction. Almost 89% of the wind farms are located in areas where hostilities are taking place.

Regulatory changes

On 15 March 2022, the Verkhovna Rada of Ukraine adopted the Draft Law of Ukraine № 7137-r amending the Tax Code of Ukraine, including:

  • abolition of the excise tax on gasoline, heavy distillates and liquefied gas;
  • reduction of the value-added tax on crude petroleum products, gasoline, heavy distillates and liquefied gas from 20% to 7%.

On 15 March 2022, the Verkhovna Rada of Ukraine adopted the Draft Law of Ukraine № 7038-r to introduce a differentiated rent for natural gas extraction. The differentiation of rent implies that the interest rates for natural gas directly correlate with its selling price – an increase in the market price for natural gas entails a higher interest rate for extraction.

Information contained in this article is for general informational purposes only, does not constitute legal or any other professional advice and should not be relied upon as a substitute for specific professional advice adapted to the specific circumstances. 

Authors: Maryna Hritsyshyna, Nataliia Hutarevych, Sergiy Bovkunovych

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