Coal shortages multiply Ukraine’s misery
KYIV: With the rich seams of coal in eastern Ukraine under rebel control and Russia cutting off supplies, the Kyiv government faces the awkward prospect of turning to its enemies for help.
As winter set in, the biggest fear in recent months was that Ukraine would run out of the natural gas that heats the country.
A last minute deal with Russia averted that disaster. But now a new one is looming as coal shortages threaten to leave the country desperately short of electricity.
Ukraine gets some 40 per cent of its power from coal-fired plants, and has traditionally had a surplus of coal, producing some 86 million tonnes at last count in 2012.
But the Russian-backed rebellion in the east has cut the government off from large swathes of the coal-rich mining region of Donbass.
Then, without warning, Russia announced it was stopping coal supplies to Ukraine last week, claiming “force majeure” but offering no explanation.
“I don’t know for how long Russia intends to stop coal deliveries. If it stops them for a long period, our thermal stations will not be able to function at full power,” said Ukraine’s Energy Minister Yuriy Prodan.
Official statistics shows the country needs a million tonnes of anthracite coal per month to feed its power stations. By November 24, only 1.8m tonnes were left in the reserves.
Experts say Ukraine is short some three million tonnes for the winter season.
“The energy ministry is doing absolutely nothing to resolve the problem. If a solution isn’t found quickly, we will have
massive electricity cuts like in the 1990s,” said Oleksandr Kharchenko, director of the Centre for Energy Research in Kyiv.
Ukraine has three options, none of them very appealing. It can ship in coal from abroad; the United States, Vietnam and Australia are potential suppliers.
But deliveries would take around a month and would be far more expensive at a time when Ukraine’s economy is teetering on the verge of collapse. A tentative deal with South Africa appears to have fallen through for reasons that remain unclear.
The second option is to buy electricity directly from Russia. Prodan said the government was considering the option.
But Ukraine is already heavily reliant on its giant neighbour for heat, and is reluctant to also depend on it for light.
Politically, it would be a very hard sell. A deputy energy minister was fired recently for authorising a Ukrainian company to import Russian electricity.
The final option is the most awkward: buying coal from the very rebels its army is fighting.
With nearly 4.5m tonnes of coal stored in Donbass reserves, it would be the quickest and cheapest option. Separatist leaders said in September that talks were planned, although the government denied this.
The symbolism of trading with the enemy may be too much for the Kyiv authorities to stomach, and it would
undermine recent moves to starve the rebels of funds by cutting off banking facilities and government spending.
Whatever choice Ukraine makes, time is running out.
“The shortages will start in mid-December. In February, the situation will be very serious,” said Kharchenko.
Published in Dawn, November 30th, 2014