TL: CURRENT STATE OF THE UKRAINIAN ENERGY SECTOR AND INTERNATIONAL ASSISTANCE. SO: Greenpeace International, Antony Froggatt (GP) DT: November 29, 1995 Keywords: nuclear power energy ukraine republics / For the last two years negotiations have been taken place between the G7 and the Ukrainian government over the future of the Chernobyl nuclear power plant northern Ukraine. On 28th November, the talks broke down and have now been postponed indefinitely. At present two units, 1 and 3, of the Chernobyl station continue to operate, contributing approximately 6% of the total electricity production in Ukraine. Unit 4 of the station has not operated since April 1986 when it was the site of the world's worst nuclear power plant accident. In 0ctober 1991, the second unit's turbine hall was burned down and has not operated since. However, officials from the Chernobyl station state, that the unit can be restarted and unless the Western Governments assist with alternatives, then this will happen in 1996. State of the Negotiations. The Western governments package appeared to include. * About US $ 500 in grants, which are likely to be targeted at short term operational improvements at the two operating units at Chernobyl. In addition resources have been pledged by the European Union for work to increase the safety at the Sarcophagus which surrounds unit 4. However, whatever sum is granted to the sarcophagus the present finances will fall well short of the estimated $1 billion required. * About $1.8 billion in loans from international institutions such as the World Bank, European Bank for Reconstruction and Development, European Union and bi-lateral agencies. - At the European Union Summit in Corfu in the Summer 1994, the European Union, pledged 400 million ECU loan from the Euratom Facility for the completion of the VVER 1000 reactors (Khmelnitsky 3 and Rovno 4). However, Euratom can only contribute 40% of the total budget, therefore if this project goes forward it is likely that the European Bank for Reconstruction and Development will also contribute. If the funding for the completion of the reactors is included, it will not be the least cost option available to Ukraine, and therefore under the EBRD's energy policy, they should not contribute. - In mid November the World Bank announced that it was prepared to lend Ukraine $3 billion over the next 3 years for reform of the Energy and Agriculture sectors. The World Bank has already lent Ukraine $500 million, including $114 million for the refurbishment of hydro stations. * About $900 million from the Ukrainian side. It is unclear what the international loans and Ukrainian government package will exactly contain, however, it is reported that there approximately 20 projects which are being considered. If the proposal is signed it will commit to the closure of the Chernobyl station by the year 2000. Energy Option for Ukraine. Between 1990-1994 the fuel supply to the power stations has decreased by 30%. This is in part due to problems with payment for supply and also due to a decrease in demand, due to changes in the industrial sector and decreases in industrial output. The decrease in energy demand allows a unique opportunity to rebuild the energy sector in Ukraine in one which is environmentally and economically sustainable. To this end Greenpeace have produced a number of reports on the energy sector in Ukraine outlining the energy options available. Firstly, 1994, the Oko-Institut produced for Greenpeace a study "Essential Elements in the Ecological Reform of the Energy Industry in Ukraine". This showed between 1990 and 1993 there was a 23 % decrease in electricity production in Ukraine, which equates to 90% of the nuclear capacity in the country. That attempting to complete the VVER 1000 reactor to a Western Safety standard is not economic. The study concluded that it would be possible to phase out nuclear power in Ukraine in 15 years, by each citizen of the European Union contributing $2.80 per year. Then in November 1995, Greenpeace Ukraine produced, "Ukraine: The Potential for Energy Saving, Alternative power supplies and the Closure of the Chernobyl Nuclear Power Plant" This report identifies the potential for renewable energy options and energy efficiency projects. Both of these are key for the development of a sustainable energy path for Ukraine as they offer energy security through a series of diverse and small scale energy sources. As importantly, they give greater energy independence to Ukraine, which at the present time is heavily reliance on Russia for its energy sources. In addition, by increasing the efficiency of energy use, Ukraine will decrease its foreign dept, as energy is one the largest uses of foreign exchange. It is calculated that for 1995 Ukraine used $4-5 billion of energy from Gazprom. The main conclusions of the report are. * Wind power : There is a massive potential for economic wind power in Ukraine. In particular in the Crimea region, it is estimated that 20 GW of installed capacity could be operational on the short term. The present generating capacity of Chernobyl is less than 2 GW There is potential to replace part (500MW) of the Chernobyl station using a combination of wind power and hydro storage pumps in the Kiev region. * Geo-thermal : Experts from the State Scientific- Research, Design-Construction Institute of Unorthodox Power Generation and Electric Engineering have proposed a three- stage programme for geothermal power generation development. The full implementation of the programme could lead to the replacement of between 7-10% of the country's fossil fuel use. * Small Scale Hydro : Official estimates show that the full exploitation of the available capacity in Ukraine could produce 4 times more energy than is at present produced by all power stations. In addition, the report looks at the potential for Solar Power, Biomass and increase supply side efficiency through the greater use of combined heat and power stations supply side efficiency. * Energy Efficiency : Scientists from the Institute of Energy Saving Problems have shown that energy savings can reach 65% from the total demand (this figure corresponds to about 100 million tonnes of oil equivalent [toe]). Of this, 80% of savings can be achieved in the industrial sector alone and approximately one third of the savings might be achieved at no cost and low cost measures, further improvement may need more substantial investments. Even Western experts who carried out the Global Energy Saving Strategy for Ukraine (within the frame of European Commission's TACIS program) who are very cautious in their estimates for potential energy saving estimate it to be 40 million toe, approximately 26% of present demand. The programme proposed that the first priority was organisational and technical measures that would allow, with almost zero costs, a reduction in overall power consumption by 5 - 10% within 1 - 2 years. It can be seen that a variety of options are open to Ukraine, to not only phase out nuclear power, but also rapidly decrease their dependence on fossil fuels and eventually move towards a fossil free economy. The present negotiations on the future of Chernobyl offer a unique opportunity for investment into a sustainable energy path. For further reading. "Ukraine: Potential for Energy Saving, Alternative Power Supplies and the Closure of the Chernobyl Nuclear Power Plant", Greenpeace Ukraine, November 1995. "Essential Elements in the Ecological Reform of the Energy Industry in Ukraine", Final Report of a study Commissioned by Greenpeace, Oko-Institut, March 1994. "Non-Nuclear Options for Replacing Chernobyl", Natural Resources Defense Council, June 1994. "Ukraine Nuclear Power Sector, Fact-finding Mission on Nuclear Safety", 5-8 April 1994, European Bank for Reconstruction and Development and World Bank. "US/Ukraine Evaluation of Energy Options to Replace the Chernobyl Nuclear Plant", June 23 1994.