When darkness affects the economy: what awaits business due to energy shortages
10 November 16:25
EXCLUSIVE
Ukraine is entering the most difficult stage of the energy season since the full-scale invasion. Following Russia’s latest massive attacks on energy infrastructure facilities, the country is facing the threat of long power outages of up to 12 hours. As housing and utilities expert Oleh Popenko explains in a commentary
“Let us say right away that no mobile equipment can be imported to ensure generation. It is physically impossible. You see, we need gigawatts of capacity, and such mobile equipment does not physically exist. We are talking about the capabilities of Ukrainian generation, the ability to generate electricity and simultaneously transmit it to the end consumer.
Moreover, our power system has certain peculiarities. If we are talking about night time or day time, this is the base load that is covered by nuclear power plants and their generation. In the morning and evening hours, we cannot provide… We are covered by hydro and thermal power plants. Given the fact that most CHP plants are destroyed and the operation of hydroelectric power plants is also hampered, we cannot provide electricity supply, for example, from 07:00 to 11:00 in the morning and from 17:00 to 22:00, and even until 23:00,” states Oleh Popenko.
According to the expert, the electricity shortage is exacerbated by the fact that there are practically no operating thermal power plants on the left bank of the Dnipro River, and the transmission of electricity from energy-supply regions has become impossible. Even nuclear power plants are now unable to produce electricity at full capacity due to damage to the network’s nodal elements.
“We also need to understand that we cannot ensure the transmission of electricity from energy-sufficient regions to energy-deficient ones. For example, from the right bank to the left bank, because we have no nuclear power plants on the left bank, and most of the thermal power plants on the left bank are broken. And this region is already deeply energy-deficient. The Russians destroyed transformer substations, and all this has led to the fact that today we cannot ensure the transmission of electricity to energy-deficient regions,” the expert states.
As a result, the country is facing peak deficits in the morning and evening hours, when the demand for electricity is growing the most. Popenko emphasizes that it will take at least several weeks to restore the damaged infrastructure, provided there is no new shelling.
“That is, we have a huge complex problem. It will take time to restore the same transformer substations that were destroyed by the Russians. And it may take not one, not two, not three weeks. And let’s also say that the Russians destroyed the transformer substations that are responsible for supplying electricity from nuclear power plants. That is, even electricity from nuclear power plants is not fully supplied to us today. That is, we cannot even fully launch the operation of nuclear power plants. That’s why all of this together gives us these very sad figures of up to 12 hours (without electricity – Ed.). Although I think that if there is no shelling, we will probably stay somewhere in these figures. And if there is further shelling, the situation may worsen,” summarized Popenko.
At the same time, economist Andriy Novak in a commentary
“If the predictions of 12-hour power outages do come true, it will create serious problems for most Ukrainian businesses. Even if the company can partially compensate for the lack of electricity with alternative sources, it is primarily generators.
For enterprises with powerful equipment that require a lot of light, this will still create problems and the need to stop the production process for several hours. This, in turn, reduces the number of products produced, which reduces revenue and worsens the financial performance of the company. This reduces profits and it is possible that many companies will be forced to send some of their employees on forced leave, paid or not. By the way, many companies have already introduced hourly wages,” the expert emphasizes.
Thus, the energy crisis could escalate into a wave of economic losses that will affect almost all regions of the country.
“Of course, when there is no work, some employees will not be paid in full. So, of course, there will be economic losses in the event of prolonged power outages. And this is what businesses will face almost all over Ukraine, because we see that blackouts occur not only in the cities of massive shelling, but also because the government is using electricity transfers from region to region. In fact, power outages are already happening almost all over Ukraine, so businesses and organizations all over Ukraine will suffer economic losses,” explained Andriy Novak.
As a reminder, Khmelnytsky and Rivne NPPs were forced to reduce electricity production as a result of damage to their power substations by Russian attacks on November 8.
