Energy consumption declined in the late 20th century after the breakup of the Soviet Union.
Ukraine has a diversified energy mix, and no fuel takes up more than a third of the country’s energy sources. The primary fuel has traditionally been coal, which dropped to 30% in 2018. Natural gas (28%) and nuclear (24%) follow.[11]
Ukraine has been estimated to possess natural gas reserves of over 670 billions cubic meters (in 2022),[12] and in 2018 was ranked 26th among countries with proved reserves of natural gas.[13] Its total gas reserves have been estimated at 1.870 trillion cubic meters.[14] In 2021, Ukraine produced 19.8 billion cubic meters (bcm or Gm3) of natural gas. To satisfy domestic demand of 27.3 bcm that year, Ukraine relied on gas imports (2.6 bcm) and withdrawal from underground storage (4.9 bcm). Winter demand can reach 150 mcm per day.[15] To meet domestic demand, Ukraine plans to increase domestic natural gas output to 27 bcm.[citation needed]
During Soviet times, Ukraine produced a record of 68.7 bcm in 1976. At the time of independence in 1991, production was at 26.6 bcm, and fell in the 1990s to about 18 bcm. Since the mid-2000s, production has stabilised between 20 and 21 bcm.[16] According to a report issued by the OECD, over 70% of domestic gas production is extracted by UkrGasVydobuvannya,[17] 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.[18]
Ukraine stopped buying gas from Russia in November 2015 to reduce gas dependence after the outbreak of the Russo-Ukrainian war,[19] but instead buys it indirectly from traders in Western Europe as part of the Russian gas that transits through Ukraine.[15] The contract to transit Russian gas expires at the end of 2024.[20]
Coal mining has historically been an important industry in Ukraine.[21][22] Coal mining in Ukraine is often associated with coal-rich Donets basin. However this is not the only coal mining region, other being Lviv-Volhynian basin and Dnieper brown coal mining basin. The Donets basin located in the eastern Ukraine is the most developed and much bigger coal mining region in the country.
Ukraine was until recently, the third largest coal producer in Europe.[23] In 1976, national production was 218 million metric tonnes. By 2016, production had dropped to 41 million metric tonnes. The Donets Black Coal Basin in the eastern Ukraine, with 90% of the nation's reserves, suffers from three connected problems: (1) mines are not profitable enough to sustain capital investment, resulting in twenty-year old mining equipment and processes, (2) the government, taking advice from the International Monetary Fund, has discontinued $600 million annual mining subsidies, and (3) the Ukrainian government refuses to buy from mines controlled by the self-proclaimed Donetsk People's Republic and Luhansk People's Republic.
Electricity
Electricity production by source, 1985–2020
Electricity production fell from 296 TWh in 1991 to 171 TWh in 1999, then increased slowly to 195 TWh in 2007, before falling again.[24]
In 2011, Ukraine joined the European Energy Community, however there has been slow progress on implementing European energy regulations.[25]
In 2014, total electricity production was 183 TWh; 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. 8 TWh was exported to Europe. In 2015 electricity production fell to about 146 TWh largely due to a fall in anthracite coal supplies caused by the War in Donbass.[26][27]
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% and 28% during July. The bulk of Energoatom output is sold to the government's "guaranteed buyer" to keep prices more stable for domestic customers.[25][28]
Since 2017 Ukraine sought to divest itself of dependency on the Unified Power System of Russia (UPS) and instead connect westwards to the synchronous grid of Continental Europe, thereby participating in European electricity markets.[29][30] Power lines coupling the country to the grids of neighbouring Poland, Romania, Slovakia and Hungary existed, but were de-energised.
A necessary prerequisite of Ukrainian integration was for the country to successfully demonstrate it was capable of running in a islanded manner, maintaining satisfactory control of its own frequency. To do that would require disconnection from the UPS grid, and a date of 24 February 2022 was set. This proved to be the date Russia invaded Ukraine, but the disconnection nonetheless proceeded to schedule. Ukraine placed an urgent request to synchronise with the European grid to ENTSO-E, the European collective of transmission system operators of which it was a member, and on 16 March 2022 the western circuits were energised, bringing both Ukraine and Moldova, which is coupled to the Ukrainian grid, into the European synchronised grid.[31][32][33] On 16 March 2022 a trial synchronisation started of the Ukraine and Moldova grid with the European grid.[31]
In 2021, Ukraine's nuclear reactors produced 81 TWh — over 55% of its total electricity generation,[38] and the second-highest share in the world, behind only France. The Zaporizhzhia Nuclear Power Plant, the largest nuclear power plant in Europe, is in Ukraine.
The 1986 Chernobyl disaster in northern Ukraine was the world's most severe nuclear accident to date.
Perovo Solar Park
In Ukraine, the share of renewables within the total energy mix is less than 5%.[39]: 27 In 2020 10% of electricity was generated from renewables; made up of 5% hydro,[40] 4% wind,[41] and 1% solar.[42] Biomass provides renewable heat.[39]: 35
Finance
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 [Uglesintezgaz] and the energy ministry".[43]
Elementum Energy Ltd owns the most power plants.[44]
^ ab"Factbox: Ukraine's energy options limited in event of Russian gas disruption". Reuters. 2022-02-24. Retrieved 2022-02-27. Ukraine has not imported gas directly from Russia since 2015, but it buys it from Western traders as part of the Russian gas that goes through Ukrainian territory to Europe. [..] If Russia maintains gas transit through Ukraine and transit gas pipelines remain operational, Ukraine is able to provide the population and industry with gas. [..] In theory, gas could be imported at up to 40 mcm per day, but this is barely feasible due to a lack of freely available resources in Europe and funds to buy it.
^Böttcher, Philipp C.; Gorjão, Leonardo Rydin; Beck, Christian; Jumar, Richard; Maass, Heiko; Hagenmeyer, Veit; Witthaut, Dirk; Schäfer, Benjamin (15 April 2022). "Initial analysis of the impact of the Ukrainian power grid synchronization with Continental Europe". arXiv:2204.07508.
