Time and again recently, Ukraine has had to ask for emergency energy supplies from its European neighbours. However, there have been increasingly fewer signs that Europeans are happy to provide such assistance to Kiev’s government. All this is because the Ukrainian energy crisis is spilling over to Europe. How?
Russian rockets striking Ukraine’s power plants made energy supplies much harder not only for Ukrainian enterprises and cities. Before the start of the special military operation Ukraine exported large volumes of electricity to neighbouring European countries.
But now they are asking Europeans to ‘pump power backwards’. The reasons are clear. According to Die Welt, ‘rolling power cuts in winter will cause a real humanitarian catastrophe in Ukraine, which will make millions of its people flee to Europe’.
On Monday, Ukrainian specialists published data on the damage of its energy infrastructure facilities. According to Director, Ukrhydroenergo, Igor Sirota, there is not a single hydroelectric power plant, which has not been shelled. In total, Ukrainian hydroelectric power plants lost 40 per cent, with thermal power plants losing more than 80 per cent. Director, Centre for Energy Industry Studies, Alexander Kharchenko claims that if the high-voltage substations serving the Ukrainian NPPs are destroyed, ‘most of the country may be cut off from power’.
For the second time already, Ukraine has used Europe’s urgent power supplies. First, it seems to be to the benefit of EU countries bringing additional revenues from energy sales. Second, it also works to prevent the worsening of the refugee situation, the threat the German newspaper is writing about.
Well, no, things are different: we are at the edge of an energy crisis in Europe. However, strangely enough, concerns about this are raised very far away from Ukraine. Why is it so?
The Greek PM Kyriakos Mitsotakis has answered this question. The Financial Times is quoting his letter to President of the European Commission Ursula von der Leyen. The Greek Prime Minister announced that the wholesale energy price in his country reached EUR 130 per MWh, which is EUR 60 higher than a month earlier.
‘One of the reasons of this surge was the fact that electricity exports from EU to Ukraine have increased almost six-fold this year. Before the war Ukraine was a net electric power exporter, writes the head of the Greek government. We feel there is a mini energy crisis that no one is talking about. We must have better oversight of the electricity market by the Commission, because now the situation is ‘an incomprehensible black box, even to experts’.
Other factors leading to the significant increase of electricity prices in South-East Europe include little rainfall causing the emptying of dams, summer heat and unstable domestic power generation. ‘There is a fundamental distortion in the energy market of south-eastern Europe. Something isn’t working right. I don’t expect immediate solutions, but at least let someone deal with it’, Mitsotakis added.
It is important he is not the only one calling on doing at least something to address growing energy prices. A few days before, the former ECB Head Mario Draghi who had the task to prepare a report on the bloc’s economy warned that high electricity prices are affecting the competitiveness of European businesses. ‘High energy prices became a driver undermining the European industrial output, with peak prices 2–3 times higher than the peaks in the United States’, Draghi’s report states.
Well, ‘affecting’ is really an understatement. The sharp rise of energy prices due to the refusal to buy Russian cheap pipeline gas makes EU’s major industrial enterprises move to U.S. where electricity is times cheaper.
And lately, the European press has been shocked by reports about the closure of several plants by the automotive powerhouse Volkswagen. Siemens Energy, an energy technology corporation, Germany’s largest petrochemical company BASF have already shifted their capital investments from Germany to U.S. Billions of euros of these and at least 224 more German companies will be invested in the American economy instead of Germany’s.
The growth of electricity prices in Germany was also facilitated by the full closure of nuclear power plants, which used to contribute 20 per cent of the country’s power generation. NPPs were declared ‘especially bad for the environment’ back in 2002 and had to be closed within the green economy programme.
After a bit more than 20 years, which have passed since then, the Germans could successfully expand their windmill fleet by investing more than 600 billion. But this still did not stabilize the energy market due to the intermittence of renewables when there is now wind, or cloudy weather, or nights begin unexpectedly. What’s more, according to the results of European scientists’ study published by the Sustainable Energy Journal, if the same amount of money had been invested in the construction and development of NPP networks, CO2 emissions savings would have been the same (at 25 per cent) and the industry could have received 300 billion euro more energy in money terms.
Ukraine has already asked for energy supplies from Slovakia, Poland, Romania, Hungary and Moldova. According to Ukrenergo, ‘imports of electricity from Europe will be temporary’. However, there are no signs that Russia will reduce the frequency of its strikes on the Ukrainian energy system in the context of Ukraine’s occupation of Kursk region.
This means Ukraine’s need to import electricity will only be growing, with more problems in Europe’s energy industry to follow.
While authorities in some eastern European countries are ‘expressing concerns’ and writing letters to Brussels, Poland’s leadership said they were ready to support Kiev with their electricity. But, as Poland is generating energy volumes, which one would call ‘just hardly enough for ourselves’, Warsaw suggests addressing the problem by relaunching the stopped coal-fired CHP plants.
This violates the terms of the so-called Big Green Deal (the Europe-wide plan to reduce CO2 emissions), but does counting emissions really matter much when there is a chance to improve energy security on one hand and make a friendly political gesture on the other? Or to be more precise, to earn money by selling electricity to Ukraine and avoid the fines for breaching the Big Green Deal terms. ‘This will not solve the energy problem completely but can at least help Ukraine get through the winter in 2024–2025’, stated the Polish PM Donal Tusk.
The Czech Republic is also sounding the alarm about the forthcoming electricity shortage. The Czech Minister of Industry and Trade Jozef Síkela has already submitted a letter to the European Energy Commissioner Kadri Simson expressing concerns regarding the upcoming validity end of the contract on the supply of Russian gas through the Ukrainian territory. The letter states that ‘replacing Russian gas with LNG imported from other countries will increase the cost of the electricity generated in his country’.
The Europeans see that the EU’s ongoing support of the military actions in Ukraine is coming back to bite EU’s economy even harder. But, due to the loss of sovereignty, these countries have nothing else to do but to listen to their lord, the United States. Europe is consciously moving towards an energy catastrophe, and Ukraine is just helping it to reach it.