April 30, 2015

We Are Replacing Ukrainian Thermal Electric Power Industry with the Russian Nuclear One

Bohdan Sokolovskyi

Before we start talking about power industry, it is not superfluous to remind that it is very simple and easy to evaluate, analyze and even criticize the actions of others. But it is very difficult to make decisions. Especially when positions differ. Therefore, this material, based, inter alia, on many—year experience, should be taken as the author's personal point of view.

Electric power industry, along with oil and gas (including the oil refining) industries, is one of the most important components of the Ukrainian energy sector. And that, in turn, is the basis of all our other industries. And by and large — the foundation of national security of any state.

Unfortunately, the question of energy engineering in our country are underestimated by authorities, and its independence is not paid due attention.

For example, it is difficult to tell whether anyone is engaged in inventory, in particular, in the energy industry. How and who exactly consumes electricity? Where and how much of it are we able to produce? From what raw materials — imported or our own? If from imported — whose is it? Which objects can be de-energized, and which cannot (e.g., hospitals, maternity homes, and so on). Or, if the electricity is not available, who has to be provided with the reserve power? And so on. But such a concept (in the context of re-formatting the Ukrainian SSR into Ukraine) at the dawn of Ukrainian independence, back in 1992, was put forward (and thoroughly developed), the then People's Deputy of Ukraine I. Yuhnovskyi. His ideas were supported by the People's Movement of Ukraine for Perestroika. Unfortunately, in many respects “thanks to the Kremlin's “fifth column”, those reforms were never carried out, like never were implemented many other things. I repeat: it is thanks to the “fifth column”, which in the energy sector of Ukraine has been one of the most powerful.

We may talk a lot about Moscow’s unwillingness to have an independent Ukraine next to it. But the fact remains – both,  the KGB of the USSR and Politburo of the CC of the CPSU most fiercely had been fighting the Ukrainian People's Front, which in those days was called the NRU, rather than other people's fronts in the USSR, inclusive, with respected Baltic, Georgian, etc ones. A little later, the Kremlin's agents in the majority moved to other influential Ukrainian parties and projects that had been or were being formed, successfully controlling the NRU. In particular, they actively promoted tycoonization of the Ukrainian economy. As a result — “we have got what we have got”.

So now it would be worth to come back to the origins of the latest Ukrainian statehood and start all over again, in particular, on energy issues. Let us admit: we made a mistake in the 1990s when we believed those who was eager to “steer” the state.

It is no secret that more than 42 % of electricity in the country is generated by thermal stations (TPS and TPP). Both types use carbon as a raw material (about 2/3 stations) or (as a rule) — imported gas. How the Ukrainian state controls thermal power industry — we saw in the past year, especially during the “rolling blackouts”. That is, it almost does not control at all. By the way, for naive people, little versed in the energy sector, it is difficult to understand how at the order of the head of the state, you can stop these “blackouts” if there is no power as such? Or is it yet another Ukrainian know-how? Or was some electricity still available?!

The problems that have emerged can be explained by Ukraine's not controlling some mines in the Donbas. This is logical. Because those, uncontrolled mines, extract most of the so—-called “anthracite” coal, to use which were designed about half of Ukrainian TPS and TPP. In this regard, it is not clear why all the Ukrainian miners, in particular – those from controlled by Ukraine mines of the Donbas, Dnipropetrovsk region and Lviv-Volyn basin are not being paid salary on time? After all, there, especially in the Lviv and Volyn regions, there is no war!

All this became clear during the heated argument between the miners and the Minister of Energy and Coal Industry of Ukraine V. Demchyshyn at the 3rd Congress of miners April 21, 2015.

In talks about this congress one could hear different things: from “it got miners” up to “the miners have been organized and used”.  So far it is hard to sort all this out. Although, as the saying goes, there is no smoke without fire. But in any case it is difficult to dispute the fact that the grains of discontent fell into fertile soil and sprouted.

As for this congress, we can draw three main conclusions:

Firstly, there was only one positive thing about it — the Ukrainian national anthem, opening the congress. You should have seen the faces of those singing miners to once again make sure that they are — citizens of Ukraine, and not of some other state, and will be able to stand up for themselves and for their state;

Secondly, the indisputable fact remains that the Ukrainian government has done very little, or rather, nothing to predict and prevent the development of the miners' discontent. Any unrest, especially those of the miners, should be predicted and prevented regardless of the reason for their occurrence. But here no one even thought it necessary to explain anything or to have a frank dialogue.

Thirdly, it seems not everybody in power realizes with what exactly they are joking.

As for the Minister — it is a separate story. But to cut a long story short, one should not envy the country, where the Minister does not have any professional or political experience. While on the other hand, he is a good, honest guy. And he deserves kind words at least for having honestly admitted on 11th March that in Ukraine are illegally consumed about 2 million tons of oil (although other estimates are much higher: 10-15 million tons) at 8.5 official ones. He did say that. And then what? Has at least one investigation been opened? And where are our law enforcement agencies? Where is the Government? Where is the Parliament? After all, at stake are 25-40 billion hryvnyas, if you start from the Minister's words. And if we take other expert estimates, it is the matter of hundreds of billions of hryvnyas. Maybe there is no need to rely on loans and cut back the income of Ukrainian citizens? Maybe we should really eradicate corruption in the sector and thus fill the state budget? This proves once again that we have enough funds. All we need is the desire to use them properly.

And yet, how to eliminate the deficit of Ukrainian anthracite coal and to maintain the level of production of other sorts of coal? To substitute it with imported coal and thus to support the foreign miners, laying off our own ones? That would be wrong. It is appropriate to emphasize that we have an opportunity to expand the consumption of coal of gas group. And this way our miners would have jobs. To do this, it is necessary to equip a number of TPS and TPP so that they could consume either anthracite coal from the Donbas, or gas coal, including from other basins (for example, from Poland). Surely, this is what the Minister of Energy and Coal Industry of Ukraine should be doing right now. He and no one else. Because what we can see now: Poland is concerned about reequipping of Ukrainian stations for a different type of coal, and it allocates for this about 50 million Euros. This was said by their Prime Minister at the meeting with our President April 8, 2015. While in Ukraine, the Ministry of Energy and Coal Industry does not care. In any case, no money is allocated or is planned to be allocated, although the budget was adopted after the problem had been voiced. It is appropriate to note that at the above-mentioned Congress, the same Minister said: we need 2 billion US dollars to reequip TPSs and TPPs. Although the same Ministry (almost the same mid and lower-level employees) back in 2008, spoke about a much smaller amount (almost an order of magnitude!). The question is: when was the Ministry of Energy of Ukraine honest? Or: has anybody been punished for the wrong information?

Of course, the coal industry has to be reformed and modernized. First of all — to improve the safety of miners. Most likely, within the framework of the reform miners' jobs will have to be cut. It is inevitability, necessity. But it is not an end in itself! It is time to abandon old traditions and to cut wisely. So as not to support preservation of jobs in other countries by cutting our own. And it would be correct if the positions were reduced only if new, not worth than the reduced ones, jobs were being created in the region. And it is an urgent task for our Parliament. In this way, it is necessary to restructure the entire Ukrainian economy. Many countries have gone through this, and their experience can and should be studied and implemented. Not excluding even the experience of the Soviet Union.

Finally, within the framework of the above-mentioned Congress, the head of the energy and coal department said that, they would increase the quota of nuclear energy by reducing the thermal one. That is, we'll reduce consumption of coal? And this means – we'll reduce its production and, accordingly, — will fire thousands of miners? And it was voiced before the “warmed up” miners' audience? When there are incomprehensible arguments about closing of mines? The Minister-politician should not do so, should he?

And to the point: does not he know that nuclear power industry in Ukraine is more dependent on the aggressor than the coal one? Is there no one to tell him? It turns out that the “fifth column” worked well, and our country is still mired firmly in the embrace of the aggressor?

Speaking of Ukrainian nuclear power industry. It is known, for example, that a little less than half of our electricity is generated in recent years at NPPs. Almost all of the fuel comes to us from Russia. Importantly, the Japanese-American Westinghouse Company for over 7 years now has been adapting its fuel to Russian one only at 2 (out of 15) blocks of the Southern NPP. Implementation the experience at other Ukrainian reactors will take time. That is, it is naive to believe that in the nearest future it will be possible to abandon the Russian nuclear fuel. And if the Kremlin just wanted to press Ukraine, they would ban export of nuclear fuel (which is potentially possible). In this case, no later than in one year our entire energy system would collapse. After all, for the replacement of nuclear power industry (up to 90 milliard kWh per year) with, for example, mobile electric power stations, more than 3 million of 5 kW stations working clock wise would be needed. The whole world does not have that many!

Question: why is the Kremlin today suffering such enormous losses among its military, losing military equipment, keeping the army “in good shape” and so on? Answer: First of all countries — potential victims of the aggression of the RF should dwell on this question. Of course, all this can be avoided. But no sooner than in 5 years.

To systemically settle the issue of dependence on the RF for nuclear fuel, there are two ways: either to independently produce fuel for Russian reactors (which is unrealistic, if only because the world will not allow us to enrich uranium), or to replace these reactors with reactors of some other type of non-Russian production. And it should be done gradually — as the life of a reactor ends.

And so it is clear that it is important for Ukraine to switch to other types of nuclear reactors. Best of all, in this regard, are the Canadian CANDU. They can “burn” un-enriched uranium, of which we have a lot; and “burn” all the used materials. Once, in 2007, this question was already being worked on in Ukraine. A Commission was created including representatives of Energoatom, National Academy of Sciences of Ukraine, the Ministry of Energy of Ukraine, the Presidential Secretariat, and others. There were positive findings. The President during his visit to Canada met with the local nuclear scientists. Cooperation began. But the idea was never implemented. Perhaps it is worth returning to this project? Moreover, in many countries, particularly in neighboring Romania, they have the experience of using CANDU reactors.

The use of Canadian technologies in Ukrainian nuclear power industry will not mean that cooperation with Russian nuclear scientists will stop. But this requires a calm, peaceful environment. The Russians should be treated as foreigners. Although both now and before, the Ukrainian-Russian cooperation in the energy sector, including nuclear one, to be honest, has never been easy. Rather, it has become possible due to the Russian Federation's monopoly. And if Russia were one of Ukraine's many partners (in other words — if there was a fully realized concept of diversification), the Russian Federation would behave differently. To tell the truth, there are many objective experts in Russia. For example, in 2010 the cost of the completion of two units for Khmelnytsky Nuclear Power Plant angered first of all Russians. Remember, at that time completion of 2 the units of the KhNPP by Russians was estimated by the Russian side in 10 billion US dollars. Our then authorities meekly agreed to such a sum. While in China, at the Tianwan NPP the construction of the same 2 blocks “from scratch” cost of 1.7 billion US dollars. We emphasize that in our case it was completion. But the completion should be cheaper than construction from “zero”.  So it is not clear why the Russian Federation's attitude to Ukrainians is the way it is. Luckily, the project was not implemented.

Also open remains the question: Do we need new nuclear units right now? Does Ukraine need extra power? Because according to many power engineers, we lose in the transmission of electricity to the consumer more than 12 %. As I have previously mentioned in my speeches, in Poland they lose about 9 %, in Germany — 6 %. Of course, it is far too early for us to compete with Germany, but we could try and look up to Poland. If we go out on its level of losses, we’ll save approximately power of one unit operating at Khmelnytsky NPP.