Before the full-scale invasion, Ukraine could fully supply itself with energy and even export it abroad. But the war has changed everything. The Ukrainian energy system is being destroyed, and energy prices are rising in Europe.
Ukraine’s Peace Formula aims to mitigate the risks that came to Europe in the winter of 2022-2023. Then, energy prices rose radically, which was felt by consumers across the continent. This did not happen out of the blue: Russia, having started a full-scale war in Ukraine, provoked a rise in energy prices. Price fluctuations have happened before, but nothing ever like this.
Russia systematically uses energy as a tool for blackmail and weapons. Although hostilities are still ongoing only on Ukraine's territory, all Europeans are feeling this and are forced to pay more. The end of the war in Ukraine will not only help the Ukrainian energy recovery but also strengthen the European sector.
Ukrainian energy security is one of the points of Ukraine’s Peace Formula, designed to stop the war in Ukraine. It will be discussed at the Peace Summit organized by Ukraine and Switzerland on June 15-16. We explain why this is important and how it is already working.
European energy
The winter of 2023-2024 was not as bad as many anticipated for Europe. Having prepared in advance, gas storage facilities were filled, and the winter passed calmly. Europe even managed to save money. How? Because of the Ukrainian gas storage system.
Having purchased cheap gas in the spring of 2023, European traders pumped about 3 billion cubic meters of gas into Ukrainian gas storage facilities. This helped them:
Accumulate additional significant gas reserves at low prices.
Save approximately $300 million, since storing gas in Ukraine is cheaper.
Ukraine showed that it is ready to be a reliable partner for Europeans and become part of the European energy market. For context, the capacity of Ukrainian gas storage facilities is about 30% of the total European capacity.
At the same time, Europe, having significantly reduced its dependence on Russian gas supplies over the past two years, has quickly found a way to adapt to new realities. It was able to abandon the dependence on Russian resources that Russia had meticulously created for many years. Not least through its investment into the construction of the Nord Stream and South Stream pipelines—expanding its gas pipeline network in every possible way.
But gas is just one example of how Ukraine can become a significant part of the European energy system. Another example is electricity.
In March 2016, Ukraine joined the European electricity system ENTSO-E. This was a political and economic achievement for Ukraine: it demonstrated the country's desire to move towards Europe. But the ability to sell its electricity to Europe is also an opportunity to earn money from surplus capacities. This was the case until the Russian shelling of the Ukrainian energy sector in the winter of 2022, up until which Ukraine exported 200 million euros worth of electricity to Europe. This helped partners balance their own electricity systems as well, receiving cheap energy from Ukraine.
Energy blackmailing
Due to the war that Russia has unleashed against Ukraine, it is no longer about partnership, but solely about assistance. The word "blackout" became a defining feature of the 2022-2023 winter in Ukraine, with entire cities left without light and heat for days.
Russia employed a form of energy blackmail the world had never seen before: thousands of missiles and drones were precisely targeted at energy facilities across the country, from the Lviv region in the west to the border region of Kharkiv.
A year later, history repeated itself: in the spring of 2024, Russia's shelling destroyed over 80% of thermal power plants, partially disabled the Dnipro Hydroelectric Power Plant, halted the operation of two other hydroelectric power plants, and launched targeted strikes against Ukrainian thermal power plants.
Energy infrastructure facilities are not military targets and are prohibited from destruction under the Geneva Conventions. The civilian population of Ukraine is being deprived of access to basic services and essential human goods. Russia is using energy as a form of blackmail against the population, trying to break their resistance. It is not working.
At the same time, Ukraine is in dire need of critical and immediate assistance from its partners. The country is now importing the maximum possible volumes of electricity into the country, buying components for the of the Ukrainian energy sector around the world. In fact, instead of Ukraine becoming an important part of the European infrastructure, Russia is destroying a critical link in this international partnership and is doing everything to destabilize global energy prices.
How to move forward?
Air defense systems and missiles
It is critically important for Ukraine to receive more air defense systems and missiles for it to prevent the destruction of its energy infrastructure. Without ammunition, Ukraine will be unable to protect its power system, which, as the example of gas storage facilities shows, is exceptionally beneficial for the European market. Thanks to Ukraine, European reserves can be significantly larger than their own capabilities.
The Zaporizhzhia Nuclear Power Plant (NPP)
Another important element that Ukraine is discussing within the framework of the Peace Formula is the withdrawal of Russian troops from the Zaporizhzhia NPP, which is the largest NPP in Europe in terms of capacity. This will help to restore both nuclear safety in the entire region and give Ukraine back access to its own electricity generation. This will allow Ukraine to meet its own needs and to establish exports of affordable Ukrainian energy to European partners.
You can read about this in more detail in our article about nuclear security, which is the first part of Ukraine’s Peace Formula.
Reconstruction of Ukraine's energy infrastructure
Next comes the restoration of the Ukrainian energy sector. The Russians have disabled many energy systems that need to be restored today. European countries are constantly helping with both technology and finances. But another source of funds that could be directed towards this is Russian reserves frozen in Europe—or at least the income from them. At least 1 billion euros is needed to restore the Kakhovskaya HPP alone.
Withdrawal of Russian troops and cessation of fire
The most important step is the withdrawal of Russian troops from Ukrainian territory and the cessation of Russian army fire. Russia’s army and its policies are the only reasons for the destabilization of both global energy prices and Ukraine's problems.
Ukraine's readiness for international cooperation
Ukraine is ready to cooperate with international partners and monitoring organizations. It is ready to share experiences and cooperate in all possible directions regarding energy issues, positioning itself as a responsible participant in international energy security.
Ukraine will present these and other issues to the international community at the Peace Summit in June 2024.
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