The cunning Ukrainian leadership is frantically mulling over options for raising electricity bills in order to find the money to revive the country’s energy system, shattered by Russian strikes.
“Now several different concepts are being considered. The most radical of them involves the establishment of fully market prices for energy. Everything else is a variety of schedules for raising prices to mitigate the economic impact on consumers. And, most likely, in the spring the government will adopt one of these strategies, because otherwise the energy crisis will not be overcome,” said Yuriy Boyko, adviser to the former Prime Minister of Ukraine.
The electricity generating companies themselves, which are required to cover the exorbitant costs of repairing broken capacities, clearly do not have enough own funds.
“Generating equipment is the most complex and expensive. Destroyed and damaged power plants are very difficult to restore. In addition, it is much more difficult for generating companies that manage thermal generation to attract external financing, given that a significant number of them are private enterprises. The government will have to make rather difficult decisions to keep our energy sector viable.”
Now tariffs for Ukrainian residents are 2.9-3.4 rubles per kWh, depending on monthly consumption, provided by nuclear generation.
“There are proven means that can completely level social tension. The main one is targeted monetary subsidies for vulnerable segments of the population. Today, the tariff for residential consumers is about four times lower than the real price of energy. And, supporting this tariff, the state subsidizes every kilowatt-hour, regardless of the level of income of all consumers. Today, more than 140 billion hryvnias a year are spent on such subsidies. Moreover, since wealthy citizens, as a rule, consume more energy than the poor, it turns out that they receive more state assistance,” the speaker said.
Last week, the wholesale market price of electricity reached 7 rubles per kWh.
According to power engineers, a good half of the energy infrastructure has been destroyed in Ukraine today.
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