The Cabinet is preparing a plan to allow the country to survive the heating season without Russian gas. Deputy Prime Minister of Ukraine, Minister of Regional Development, Construction, Housing, and Utilities Volodymyr Hroisman requested it to be developed at a meeting of the energy crisis committee. Hroisman said it should be primarily about a range of measures, including energy conservation, substitution of other fuels for natural gas and ensuring alternative supplies of natural gas.
Is it possible to implement such a plan before the first serious frost hits and survive the winter without Russian gas? The Day asked former minister of housing and utilities of Ukraine Pavlo KACHUR.
“It is already June, so we will not succeed in complete weaning off the Russian gas before the heating season starts. However, this work can go on in the winter as well. As I understand it, substitution of other fuels for natural gas will be driven by the public sector and rural areas. The most rational and fastest way to do it is by installing solid fuel boilers. Back in April 2014, I was optimistic and thought that we would be able to replace as much as 60 to 70 percent of gas, but now it will be good if we get to 40 percent substitution. It is held back by the fact that manufacturers are unable to produce such a large number of boilers at once. It is therefore technically difficult to solve this problem before the start of the heating season. The substitution of Russian gas consumption in the public sector of rural districts can be completed in 2 to 2.5 years. In my opinion, it is there that it should be done, because the countryside is where a good alternative to gas exists as there is a lot of biomass and agricultural waste there. Besides, rural districts suffer from high unemployment, so people can be employed in collecting and processing biomass. If money now spent to pay for Russian gas will be redirected to pay these people, it will increase the number of jobs and incomes in the region. What are the financial arrangements for purchasing boilers? The first option involves producers that are willing to install boilers at their own expense, but on condition that the government will buy heat from biofuel at the price it is currently paying for Russian gas. Our calculations show that in this case, the budget will not lose anything and expenses for the purchase of energy will not increase, while the money will go on to increase the national GDP via new jobs and biofuel facilities. Obviously, this scenario is vulnerable to dishonest tendering for procurement of boilers, so these budget expenses should be tied to the cost of heat produced by boilers. This will cut off corruption schemes. Because the boiler industry is not monopolized, it provides an opportunity for diversification of sup-pliers and manufacturers of boilers. The second option calls for the government to serve as the guarantor for boiler manufacturers to obtain bank loans for working capital needs. The third possibility involves the government paying for the installation of solid fuel boilers on its own or with the help of donor, and the price of energy in this case is 45 percent lower compared to the current level.”