Energy in Ukraine describes energy and electricity production, consumption and import in Ukraine. As an industry it is part of the Fuel and Energy Complex that combines smaller industries such as power generation and distribution, coal, oil and gas mining industries as well as transportation of resources. Ukraine's geographic position and proximity to Russia explain its importance as a natural gas and petroleum liquids transit country. Approximately 3.0 trillion cubic feet of natural gas flowed through Ukraine in 2013 to Austria, Bosnia-Herzegovina, Bulgaria, Croatia, Czech Republic, Germany, Greece, Hungary, Moldova, Poland, Romania, Slovakia, and Turkey. Ukraine depends on Russia for its supplies of natural gas and oil while being a net-exporter of electricity and coal. Ukraine tries to diversify energy sources.
Overview
Gas
Ukraine was the 6th highest importer of natural gas in 2009. Ukraine stopped buying gas from Russia in 2015 due to the Russian presence in eastern Ukraine. In disputes Russia has stopped gas delivery in 2006 and 2008. In 2009 80% of the European Union gas from Russia was delivered via Ukraine. The largest domestic gas producer is UkrGasVydobuvannya, a subsidiary of the state-owned company Naftogaz. Private gas production companies in Ukraine are DTEK Oil&Gas, Ukrnaftoburinnya, Burisma, Smart Energy, Poltava Petroleum Company, Geo Alliance Group, and KUB-GAS. In 2019, Ukraine produced 20.7 billion cubic meters of natural gas, while its annual domestic demand was 26 bcm. To satisfy domestic demand, Ukraine relies on gas imports, which totals approximately one third of its domestic demand. To meet domestic demand, Ukraine plans to increase domestic natural gas output to 27 bcm. According to a report issued by the OECD, over 70% of the domestic gas production is covered by the Naftogaz subsidiary UkrGasVydobuvannya.
Coal
Electricity
In 2014 total electricity production was 183 TWh, of which 8 TWh was exported to Europe; 88 TWh from nuclear, 71 TWh from coal, 13 TWh from natural gas, and 9 TWh from hydroelectricity. Electricity consumption was 134 TWh after transmission losses of 20 TWh, with peak demand at about 28 GWe. In 2015 electricity production fell to about 146 TWh largely due to a fall in anthracite coal supplies caused by the War in Donbass. Electricity production fell from 296 TWh in 1991 to 171 TWh in 1999, then increased slowly to 195 TWh in 2007, before falling again. In 2011 Ukraine joined the European Energy Community, however there has been slow progress on implementing European energy regulations. On 1 July 2019, a new wholesale energy market was launched, intended to bring real competition in the generation market and help future integration with Europe. The change was a prerequisite for receiving European Union assistance. It led to in increased price for industrial consumers of between 14% to 28% during July. The bulk of Energoatom output is sold to the government's "guaranteed buyer" to keep prices more stable for domestic customers.
Nuclear power
Ukraine was 8th top nuclear electricity producer in 2009. 46.7% of domestic electricity generation was nuclear. This was the 2nd largest share, only France was higher. The largest nuclear power plant in Europe is in Ukraine. Energoatom is the state nuclear company founded in 1996. It has about 38,000 employees. The 1986 Chernobyl disaster in Northern Ukraine was the world's most severe nuclear accident. Lack of coal for Ukraine's coal-fired power stations due to the War in Donbass and a shut down one of the six reactors of the Zaporizhia Nuclear Power Plant lead to rolling blackouts throughout Ukraine from early till late December 2014. In 2018 Energoatom stated that electricity prices were too low to cover the cost of new nuclear fuel, and called for a price increase.
Ukraine signed a loan agreement in-principle for $3.65 billion with the China Development Bank in 2012, during President Viktor Yanukovich's term of office, contingent on the development of agreed development projects in the coal and gas sectors. However, by April 2017 Ukraine had not agreed any suitable projects due to a "lack of convergence in the positions of and the energy ministry".
Corruption
is one of the top problems in Ukraine, characterised as a systemic phenomenon, which exists in all sections and levels of the public administration. Ukraine gets gas from Gazprom via third parties. Gazprom did not publish any reporting on anti-corruption programmes. In 2015 corruption allegations were made against Energoatom, Ukraine's nuclear power operator, with concerns raised by Prime Minister Arseniy Yatsenyuk. In March 2016, Energoatom's assets and bank accounts were frozen by Ukrainian courts over allegedly unpaid debts, against which Energoatom is appealing.
