Energoatom welcomes government go-ahead for electricity exports

08 July 2015

The Ukrainian government's approval last month of a pilot project to transfer electricity from unit 2 of the Khmelnitsky nuclear power plant to the European Union will not only fund the addition of two reactors, but will also "open up new prospects" for the country to export power to European markets, the head of Energoatom said yesterday.

Ukraine's Cabinet of Ministers adopted a decree on the Ukraine-European Union "energy bridge" on 15 June, "effectively giving the green light to the project", Energoatom president Yuri Nedashkovsky said.

In March, Energoatom, Ukrenergo and Polenergia signed a memorandum of understanding on the project. Energoatom which operates all of Ukraine's nuclear power plants, said the agreement will make it possible to use all its available nuclear capacity and attract funds for the completion of the third and fourth reactors of the Khmelnitsky plant.

Ukrenergo is a Ukrainian state-run power distribution company, while Polenergia is a vertically integrated group of companies working in energy generation, trading and distribution. Polenergia is part of Kulczyk Investments, a privately-owned Polish investment company.

The export of energy will be made possible by disconnecting Khmelnitsky 2 from the national grid.

"Isolation of unit 2 will enable long-term contracts to be agreed on the sale of electricity according to a transparent and clear pricing formula," Nedashkovsky said. "This in turn will provide the opportunity to attract the level of funding required to complete Khmelnitsky 3 and 4."

Work has started on a feasibility study for the project, which will "assess all the problematic issues, the economic component, the deadlines and everything else", he said. "It is a very opportune moment to implement the project because, in the coming years, Poland will be in great need of additional volumes of electricity."

Although most of Poland's new power generation projects over the next few years will be coal-fired, the country wants to reduce its exposure to volatile European carbon prices. To achieve this, it is also building more gas-fired generation and new electricity interconnections in order to increase imports of cheaper power from neighbouring countries.

The Ukrainian government's adoption of the resolution "is the result of six months of hard work" that Energoatom and Ukrenergo carried out for the project agreement with the relevant government ministries and departments, Energoatom said.

Kharkov-based Ukrenergosetproekt, the general designer of Ukraine's electricity network, is working with Khmelnitsky Nuclear Power Plant Energoprojekt in Kiev on an analysis of work to commission a 750 kV overhead transmission line from the Khmelnitsky nuclear power plant to Rzeszow in Poland. That work will include linking up with the grid of Burshtyn Island thermal power plant - Ukraine's biggest coal-fired power station.

The project was launched as part of the creation of a trans-European energy network (TEN-E) and also part of the Baltic Energy Market Interconnection Plan (BEMIP), which started as an EU initiative in 2008. To help build and finance important energy infrastructure, the EU identified a number of priority corridors under its TEN-E strategy. These corridors require urgent infrastructure development in order to connect EU countries currently isolated from European energy markets, strengthen existing cross-border interconnections, and help integrate renewable energy. BEMIP projects are part of the European Economic Recovery Plan.

UK bank Barclays has expressed interest in helping to fund the project, Energoatom said.

Researched and written
by World Nuclear News

Filed under: Energy policy, Ukraine