Key points – in our brief, #UkraineWorldAnalysis:
We are still working to restore Ukrenergo's high-voltage power transmission systems. Our energy infrastructure was approximately 45-50% damaged.
As of today, 5 nuclear units with a capacity of 4.4 GW, 70% of thermal power plants, 68% of hydroelectric power plants with a capacity of 1.8 GW, and 80% of Ukrenergo's trunk grids have been repaired, and 24 thermal power plants with a capacity of 4.3 GW are currently under repair. Hydroelectric power plants increased electricity generation by 47% over planned production.
For wartime, restoration is keeping pace. Of course, we will not be able to restore the entire power system to 100% of its pre-war condition, but we will enter the heating season with 80% restoration.
As of today, we have accumulated 1.5 million tones of coal, while the plan is to amass 1.8 million tones. So we still have time to stockpile an additional 300,000 tones. We have accumulated 12.5 billion cubic meters of natural gas and are going to stock up 14.7 billion cubic meters by the beginning of the autumn-winter period. Naftogaz plans to increase gas production by 8% this year.
The key energy structure is being strengthened and aligned with a program to secure it. And this year, we have improved our air defense system. This heating season should be easier for us, although this does not mean that there will be no scheduled or emergency power outages.
This does not mean that we should relax, as our energy companies are in financial deficit because of our flawed energy market system, primarily the supplier obligation system and price caps.
Therefore, we need to either significantly raise price caps or abandon them altogether. Secondly, we need to provide liquidity to the market by modernizing the SO model in the future or by providing loans to companies for recovery under the Affordable Loans 5-7-9 scheme.
The peak load in the autumn-winter period would be around 16 GW. We will be able to provide approximately 15 GW of existing generation. That is, we already have a deficit of 1 GW, and we also have to account for a loss of 1 GW due to possible damages. That is, we need to ensure 18 GW for a reliable heating season. To fill the 3 GW deficit, we need to fill the liquidity of the markets, primarily thermal generation companies.
Shunting generation is very important for us. That is, we should also think about adding thermal generation units, not only coal-fired ones, but also gas and oil units. In terms of imports, we can meet our needs at the level of 1.2 GW, and we could also consider opening imports from Romania, which would be helpful.
