Russian-Ukrainian Electricity Trade

Russian-Ukrainian Electricity Trade
December 20, 2019 Policy Briefings

Here is our Policy Briefing “Russian-Ukrainian Electricity Trade”

Effects of enabling electricity imports from Russia and Belarus

Lower coal consumption in Ukraine -> allowing higher coal stocks in Ukraine and hence increasing supply security

Reduced emissions, as typically Ukrainian coal plants are replaced by gas-fired units

Increased Competition in the electricity market -> allowing electricity supply from Russia contests the market power in the highly concentrated Ukrainian market -> can lower electricity prices disproportionally

– Possible revenues for the Ukrainian state -> introducing import quotas allows the state to participate in the excess revenues from importing “cheaper” electricity from Russia

– Loss of revenues for Ukrainian generators -> Lower prices and volumes reduce cash-flow – which could in principle be invested.

– Increasing dependency on Russia

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