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AREA STUDY: UKRAINE VI. ENERGY 1 6/24/2015 ARETE-ZOE, LLC
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AREA STUDY: UKRAINE VI. ENERGY
1
6/24
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5 A
RET
E-ZO
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• Energy overview • Energy dependence on Russia • Electricity • Nuclear energy • Crude oil & Refined Petroleum products • Coal • Hydro & Other renewable • Natural Gas – deposits • Natural Gas – infrastructure • Crimea • Major disputes and disruptions • Environment • Chernobyl accident and current situation
VI. ENERGY
• Production | Consumption | Export | Import • Domestic energy production 1990-2010 • NAFTOGAZ organizational structure • Energy sector organization • Economic and energy indicators 2000-2010 • Energy intensity indicators • Energy consumption • National Projects
ENERGY OVERVIEW
ENERGY OVERVIEW: Production | Consumption | Export | Import
CRUDE OIL PROVED RESERVES: • 395 million bbl (1 January 2014 est.), country comparison to the world: 53 NATURAL GAS – PROVED RESERVES • 1.104 trillion cu m (1 January 2014 est.), country comparison to the world: 26
Source: CIA factbook
198,1
262,3
19,65
68,52
175,3
317,7
52,55
0 6
80,98
0 0 1,5
126,5
32,9 0
0
50
100
150
200
250
300
350
Electricity (billion kWh) Refined petroleumproducts (bbl/day)
Natural gas (cu m) Crude oil (bbl/day)
Production
Consumption
Export
Import
Domestic energy production 1990-2010
Source: IEA
Nuclear energy in Ukraine
Source: IEA
Coal
Oil Gas
Nuclear
Hydro
NAFTOGAZ organizational structure
Source: IEA
Economic and energy indicators 2000-2010
Source: IEA
Energy intensity indicators
Source: IEA
Energy consumption
Source: IEA
National Projects The first list of the National Projects was defined during by the Committee on Economic Reform in 2011
New Energy National Priority: • LNG-Terminal – building of receiving terminal of 10 billion cubic of liquefied natural gas on the Black Sea
coast of Ukraine . The dependence on the monopoly of natural gas imports to Ukraine generates systemic economic problems as well as the political threats.
• Energy of Nature - the construction of wind and solar power stations. «clean» energy source - wind and sun with the planned amount in 2000 MW of capacity. This Project will be implemented mainly in the Crimea and Zaporizhzhya where the main problem is electricity transportation.
New Life Quality National Priority • Affordable Housing Project housing for experts in strategic priorities, cheaper than market price • Clean City Project- modern system of solid domestic waste recycling complexes • Clear Water- providing of the population of Ukraine with high quality drinking water • Open World National Project informational and communicational educational 4G network • City of Future - creation of a strategic plan and system of projects for city development • New Life, a new quality of maternity and childhood protection.
Olympic Hope 2022 National Project - Winter Olympic Games 2022 in the Carpathians.
New Infrastructure National Priority • Air Express Project –- passenger railway from Kyiv to Boryspil International Airport (funding from China) • The Danube corridor • Kiyv Ring City Road • Industrial Parks industrial production infrastructure. • Technopolis National Project–innovative development and high technology infrastructure. • Agro Perspective: Grain of Ukraine, Revived Cattle Breeding, Green Markets
National Projects
• Gas import prices 2006 – 2012 • Gas import dependency 2001-2011 • Economic situation in Russia • Russia: exports, capital flows, corporate foreign debt,
international reserves
ENERGY DEPENDENCE ON RUSSIA
Gas import prices 2006 - 2012
Gas import dependency 2001-2011
Economic situation in Russia
• High oil and gas revenues in the 2000s stimulated consumption-led growth in Russia, with low investment and increasing dependence on imports. Government intervention in the economy crowded out private investment, and corporations came to rely on international financing.
• In 2014 Russia experienced a sudden fall in oil prices and Western sanctions. Devaluation helped to preserve currency reserves and to rebalance government finances, but also led to a drop in consumption.
• A drop in domestic production costs supported industrial output in the first quarter of 2015. Exports of raw materials increased but the import substitution effect was small, due to low domestic consumption and high prices for investment.
• Recent data show a fall in manufacturing output and continued drop in investment and retail turnover. A new phase of the crisis is starting: while many Russians expect a V-shaped crisis, they may face prolonged decline that could undermine trust in Putin’s policies.
• Access to external financial markets is crucial for the Kremlin. If financial sanctions are reduced, it might stimulate capital inflow and permit an import substitution policy that could stabilize the economy. Combined with mid-level oil prices, this could allow a “demodernisation strategy” – a period of stagnation buttressed by an authoritarian political system with an anti-Western ideology.
Russia: exports, capital flows, corporate foreign debt, international reserves
• Production | Consumption | Exports | Imports | Capacity
• Electricity production overview • Energorynok • Electricity generation capacity • Export/import • Power stations • Power lines, thermal generator locations • Electricity consumption • Electricity prices (industry and households)
ELECTRICITY
ELECTRICITY Production | Consumption | Exports | Imports | Capacity
PRODUCTION: 198.1 billion kWh (2012 est.) CONSUMPTION: 175.3 billion kWh (2012 est.) EXPORTS: 6 billion kWh (2012 est.) IMPORTS: 1.5 billion kWh (2012 est.) INSTALLED GENERATING CAPACITY: 54.89 million kW (2011 est.)
64,9
24,3
10,1 0,6
Electricity generated in Ukraine by source %
Electricity - from fossil fuels
Electricity - from nuclear fuels
Electricity - from hydroelectric plants
Electricity - from other renewablesources
Source: CIA factbook
Electricity production overview
• The Ukrainian electricity system is at risk.
• Doubling of the electricity demand by 2030 (estimate from 2012)
• Outdated thermal production facilities and higher fuel costs make the Ukrainian electricity system vulnerable and substantial investments are required to ensure reliable supply of electricity in the future.
• The generation facilities are only utilizing 38% of their capacities. This is mainly due to old, inefficient plants and poor transmission lines.
• Coal and nuclear contribute with more than 80% of the total electricity generation of around 180 TWh (2010). The renewable share is currently at around 7% of the generation.
• Renewable energy plants below 10 MW receive some of the highest subsidies in Europe.
• The implementation of green tariffs in 2008 increased the average price received by renewable energy producers to around 23 EUR cents per kWh. This is around 8 times higher than the non-renewable wholesale price.
• Producers of solar power receive the largest subsidy at around 47 EUR cents per kWh.
• Despite attractive green tariffs, renewables in Ukraine implies high risk for investors.
• The investment climate is as important as green tariffs for installing new renewable capacity. Corruption, powerful oligarchs and political instability are creating large barriers for investors wanting to do business in Ukraine. This will be analyzed more thoroughly in our next report on Ukraine
Source: Differ
ELECTRICITY GENERATION CAPACITY
Source: Differ
ELECTRICITY IMPORT/EXPORT
Source: Differ
Power stations
Power lines, thermal generator locations
Electricity consumption
Electricity - consumption (billion kWh)
Definition of Electricity - consumption: This entry consists of total electricity generated annually plus imports and minus exports, expressed in kilowatt-hours. The discrepancy between the amount of electricity generated and/or imported and the amount consumed and/or exported is accounted for as loss in transmission and distribution.
Electricity consumption 1990-2010
Data source: World Bank, World Development Indicators
Source: CIA World Factbook
Electricity prices
• Nuclear power plants • Nuclear reactors
NUCLEAR ENERGY
Nuclear plants in Ukraine
• Hydrocarbon resource map • Hydrocarbon deposits, infrastructure • Oil pipelines, pumping stations, refineries,
terminals • Institutions & responsibilities • Total production of RPPs
CRUDE OIL & RPPs
Hydrocarbon resource map
Source: IEA
Hydrocarbon deposits, infrastructure
Oil pipelines, pumping stations, refineries, terminals
Hydrocarbons ownership Kharkhov
Institutions & responsibilities
Gasoil Diesel Fuel oil
Total production of RPPs
• Major coal basins
COAL
Major coal basins
Hydroelectric stations
HYDRO POWER STATIONS
Hydroelectric stations
Name Power (MW)
Year of built Location Coordinates
Dnieper Hydroelectric Station 1,500 1927–1932 Zaporizhia 47.869444°N 35.086111°E
Dniester Hydroelectric Power Plant 702 1973—1981 Novodnistrovsk 48.59391°N 27.452903°E
Dniester Hydro-Accumulating Power Station
2,268 1983—2008 Novodnistrovsk 48.514387°N 27.47436°E
Dniprodzerzhynsk Hydroelectric Station
352 1963 Dniprodzerzhynsk 48.548504°N 34.541016°E
Kiev Hydroelectric Station 388.8 1964 Vyshhorod 50.588305°N 30.51178°E
Kaniv Hydroelectric Station 444 1972 Kaniv 49.766667°N 31.475°E
Kremenchuk Hydroelectric Station 625 1959 Svitlovodsk 49.075°N 30.251°E
Kakhovka Hydroelectric Station 351 1955 Nova Kakhovka 46.775°N 30.368667°E
Kiev Hydro-Accumulating Power Station
235 1970 Vyshhorod 50.608333°N 30.485333°E
Tashlyk Hydro-Accumulating Power Station
905 1981—2006 Yuzhnoukrainsk 47.7968399°N 31.1806154°E
• Natural gas market organization • Shale gas reserves • Gas production in Ukraine • Natural gas market • Natural gas prices • Impact of gas import cots on budget
NATURAL GAS
Natural gas market organization
Source: IEA
Gas production in Ukraine
Source: Resilience
Natural gas market
Source: IEA
Natural gas prices
Source: IEA
Impact of gas import costs on budget
Source: IEA
• Major gas transit pipelines to Europe • Gas deposits and infrastructure I • Gas deposits and infrastructure II • Gas export pipeline capacity • Russian gas storage facilities
NATURAL GAS INFRASTRUCTURE
Major gas transit pipelines to Europe Ukraine depends on imports to meet about three-fourths of its annual oil and natural gas requirements and 100% of its nuclear fuel needs. After a two-week dispute that saw gas supplies cutoff to Europe, Ukraine agreed to 10-year gas supply and transit contracts with Russia in January 2009 that brought gas prices to "world" levels. The strict terms of the contracts have further hobbled Ukraine's cash-strapped state gas company, Naftohaz.
Gas deposits and infrastructure I
Source: IEA
Gas export pipeline capacity
Source: IEA
• Russian Ukrainian Pact (April 2010) • South Stream route • The VANCO PSA dispute • Ukraine without Crimea • Crimea without Ukraine • Hydrocarbon fields in Crimea
CRIMEA
Russian Ukrainian Pact (April 2010) BLACK SEA FLEET
Yanukovych agreed to extend until 2047 the basing rights of Russia's Black Sea Fleet in Sevastopol, and Russian President Dmitry Medvedev agreed in return to lower the price Ukraine pays for Russian natural gas by 30 percent through 2019.
The parliamentary debate over the agreement devolved into a melee, but the measure narrowly passed. The agreement was pushed through the Rada without regard for transparency or democratic procedure. There was no expert evaluation of the draft in parliamentary committees.
CONCERNS: • The geopolitical implications for Ukraine of basing the Black Sea Fleet in Sevastopol
• Loss of informal control of the Crimea, its vital sea-lanes, and the natural gas deposits to Russia.
• The fair rate that Russia should pay in rent for using the base
• long-term rent at $100 million / year is about one-fifth of what experts calculate it should be
• The price Ukraine should pay for Russian gas
• gas prices that will save Ukraine some $1-$3 billion annually for only the next nine years
• The cost to Russia of transporting gas through Ukraine's pipelines
• below-market gas transit fees
The deal's passage unleashed a riot in the Rada, complete with egg throwing and smoke bombs. Yanukovych's subsequent negotiations with Russia over closer cooperation on aviation, nuclear energy, transportation, and gas transit have led to protests across Ukraine.
Source: Foreign Affairs
Source: The Washington Post
Source: The Washington Post
Hydrocarbon fields in Crimea
• EU-Russia gas connections • The current gas dispute • Cost and effect of available instruments • Russian dependence on Ukrainian transit • Russian gas price for Ukraine
RUSSIA-UKRAINE GAS DISPUTES
EU-Russia gas connections
Source: Bruegel
THE CURRENT GAS DISPUTE
Cost and effect of available instruments
Source: Bruegel
Russian dependence on Ukrainian transit
Russian gas price for Ukraine
• Green House Gas (GHG) emissions by sector • Industrial pollution • Major pollutants • Indicators relevant for GHG emissions • GHG Emissions projections
ENVIRONMENT
Green House Gas (GHG) emissions by sector
Source: IEA
Industrial pollution
Major pollutants
Ash (g/kWt/year)
NOx (g/kWt/year)
SO2 (g/kW/year)
Source: IEA
Indicators relevant for GHG emissions
Source: IEA
GHG Emissions projections
Source: IEA
• Chernobyl exclusion zone • Baltic Sea/Black Sea Divide (fallout) • Cesium 137 fallout • New safe confinement project
CHERNOBYL AND CURRENT SITUATION
Chernobyl exclusion zone
Kiev
Chernobyl exclusion zone
The intensity of soil radiation is shown in colour from green (0.01), through yellow to red (34.69 µSv/hour).
BALTIC SEA BLACK SEA DIVIDE
Irrigated land: 21,750 sq km (2010) Total renewable water resources: 139.6 cu km (2011) Freshwater withdrawal (domestic/industrial/agricultural): • total: 19.24 cu km/yr
(24%/69%/7%) • per capita: 415.7 cu m/yr
(2010)
Cesium 137 fallout
New safe confinement project
EU-Ukraine Summit: EU steps up its contribution to nuclear safety in Chernobyl with €70 million (April 2015) Chernobyl shelter Conference Secures Funding For Completion Of Chernobyl New Safe Confinement
