Energy Security by Nikolai Mouraviev & Anastasia Koulouri

Author:Nikolai Mouraviev & Anastasia Koulouri
Language: eng
Format: epub
ISBN: 9783030010331
Publisher: Springer International Publishing

Supply of Energy Resources

The conflict with Russia forced Ukraine to seek ways of reducing dependence on Russia for the supply of energy resources. In relation to the supply of energy resources, Ukraine is facing three key and challenging tasks: (i) to support domestic energy producers in order to increase the share of own energy resources, (ii) to diversify imports of energy resources, and (iii) to improve the structure of total primary energy supply (TPES). The latter refers to the total amount of primary energy that a country has at its disposal, including energy extracted from natural resources, imported energy minus exported energy. TPES could be improved by lowering the share of natural gas in it, through the development of renewable energy sources and by increasing the share of green energy in the energy mix of the country.

Ukraine’s economy has traditionally experienced power shortages. Due to the annexation of the Crimea and the military conflict in the east of Ukraine, as well as the economic recession, this problem became more acute in 2015. For instance, coal mining decreased by 36.7% compared to 2014 (BP Statistical Review of World Energy 2016). At the same time, Ukraine ranks third in Europe, after Norway and the Netherlands, in terms of proved gas reserves (BP Statistical Review of World Energy 2017). However, many gas and oil reserve sites are undeveloped, or the volume of extraction is low. By increasing the efficiency of energy consumption and the production volumes, Ukraine has the opportunity to completely eliminate the need to import gas (CMU 2016b).

However, the increase of energy production requires constant and significant investment in new technology, the development of new fields and intensification of production in the developed reserves. While large deposits often appear to be considerably exhausted, smaller deposits lie at a great depth and are more difficult to explore, which requires investment in research and new, often expensive technology. The domestic public and private financing is limited, while any possibility of an inflow of foreign investment requires further improvements to the business climate in Ukraine and a need to solve a range of sectoral problems. These include:unstable fiscal policy (in particular, significant increase of rent payments for subsoil use in 2014–2015);

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