Modern economic POTENTIAL OF UKRAINE

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Energy generation and distribution

The power industry satisfies the country’s demand for electrical energy and has the capacity to boost its exports. The aggregate capacity of energy generating stations in 2005 is 52.7 mn kW, to which steam power plants and thermoelectric plants contribute 63.9%, nuclear power plants – 26.2%, hydroelectric stations and hydroelectric pump storage power plants – 9.7%, and alternative energy sources – 0.2%.

The cornerstone of the country’s power industry is the United Electrical Energy System (UES) of Ukraine, UES runs centralized supplies of electrical energy to local consumers and interacts with the energy systems of neighbor countries to ensure the export and import of electrical energy through interstate power mainlines and substations with voltages of 220-750 kV.

The power grid consists of approximately 1 mn km of aerial and cable power lines of 0.4-150 kV voltage, around 200 ths. transformer substations (voltage 6-110 kV) with a gross determined capacity exceeding 200 ths. MVa.

Today over 92% of power generating units at thermal power plants have outdated infrastructure and need upgrade or replacement.

Heat supply

Ukraine has a well-developed centralized heat supply system. Heat consumption breaks down as follows: industry – 35.4%, housing and community sector – 43.7%, other economic segments – 20.9%.

Some 250 thermoelectric plants operate in the country. The major fuel for the plants is natural gas (76-80%), but they also use black oil (15-18%) and coal (5-6%).

The country’s heat supply segment has more than 100 ths. boiler houses of various purposes. Natural gas is the main fuel for boiler houses (52-58%), liquid fuel contributes 12-15%, and coal adds 27-36%. A substantial volume of heat is produced by individual (apartment) generators, with boilers and household stoves based on gas, liquid, and solid fuel.

Most thermoelectric plants have outdated equipment which does not correspond to present-day environmental requirements, and calls out for reconstruction, upgrade, or complete replacement.

To meet the demand of Ukrainian consumers for heat energy, its production should grow almost 1.8 times, from 245 mn Gcal in 2005 to 430.9 mn Gcal in 2030.

Satisfying thermal power demand along with simultaneously maintaining secure energy levels, economic efficiency, environmental safety, and comfort requires, wherever possible, the replacement of natural gas with other kinds of primary energy, but first of all, of domestic origin.

The thermal supply system is forecast to develop through 2030 in the following directions:

• higher level of thermal energy production by thermal and nuclear power plants – an increase of 1.7 times, from 56.4 mn Gcal to 93.9 mn Gcal; the simultaneous reduction of the share of natural gas in heat energy production – through the stage-by-stage replacement of gas heating with systems of accumulating electrical heating;
• expanding the application of electrical heat generators, which will enable the efficient use of these capacities beyond the heating season for air conditioning. This will even the seasonal load on the energy system. Heat energy production by electrical heat generators is forecast to grow to 180.0 mn Gcal by 2030 as opposed to 1.7 mn Gcal in 2005;
• increase of heat energy production by apartment generators by 1.4 times from 24.0 mn Gcal to 33.3 mn Gcal;
• expanding heat energy production volume through the intensive application of energy saving technologies and the use of alternative and renewable energy sources; and
• reduction of thermal energy generation primarily of natural gas-fueled boiler systems1.7 times down (from 148.8 bn Gcal to 85.9 mn Gcal).

Hydroelectric plants and hydroelectric pumped storage power plants total 5.1 mn kW in capacity. These plants account for less than 10% in Ukraine’s balance of energy system capacity, which fosters a shortage of switching and regulating capacities.

Nuclear energy

The country’s four nuclear power plants run 15 power units, which have worked an average 54.2% of their service lives.

Taking into account the long investment cycle for the construction of new facilities, continued exploitation of nuclear power units beyond the period spelled out in these projects is of strategic importance.

The main problem for Ukrainian nuclear power plants is the treatment of depleted nuclear fuel (DNF) and radioactive wastes. Only Zaporozhye Nuclear Power Plant has its own storage for depleted nuclear fuel. The storage was engineered for the complete service life of the plant. Other nuclear power plants have not yet solved the problem, and the DNF of the other plants is shipped to enterprises in the Russian Federation for storage and further processing

Activities as to transfer to alternative sources of nuclear fuel procurement for Ukrainian plants began in 2000. In 2005, third power unit of the Yuzhno-Ukrainskaya (Southern Ukrainian) nuclear plant started research and industrial exploitation of the first of six heat-generating systems engineered by Westinghouse.

Nuclear fuel cycle. Ukraine has large reserves of uranium, the main raw stock for nuclear fuel production. Since 1995, production of uranium concentrate by Ukraine’s only uranium producer, Vostochniy (Eastern) Mining and Concentrating Works (VostokGOK), was maintained at 22-30% of Ukraine’s nuclear energy sector demand.

Poor financing of the uranium industry’s development put VostokGOK into a crisis and postponed the commissioning of the Novokonstantinovskiy deposit.

Uranium ore reserves in Ukraine can meet demand in the nuclear power industry with local natural uranium in the long run. Once the industry switches to reactor systems based on fast neutrons, the potential of Ukraine’s uranium reserves will grow 60-70 times.

The development of uranium production to meet Ukraine’s nuclear power industry demand for uranium raw till 2015 requires that annual uranium production be increased more than 3 times, and by 2030 more than 7.5 times. The production of uranium concentrate to fully meet demand in Ukraine’s nuclear power industry by 2030 should be based on the following steps:

• a 20% rise in uranium production in 2006-2007 by improving output from the Smolinskaya and Inguletskaya mines of VostokGOK by upgrading mining equipment and the application of new technologies;
• the construction of the Novokonstantinovskaya mine, with the first 100 ths. tons of ore to be produced in 2008; 500 ths. tons by 2012, and the full engineered rate to be reached in 2015 with a further increase of production capacity to 2.5 mn tons of ore per annum;
• from 2006 till 2010, the commissioning of a field underground hole leaching traverse, servicing of these fields till 2025 to receive a uranium concentrate at 15% of the volume demanded by Ukraine’s nuclear power industry with lower cost as compared to standard technology; and
• commissioning of new uranium deposits.

Directions for zirconium production development:

• cooperation in zirconium alloy and rolled production with the Russian Federation to make use of the RF’s technology to consider the demand of the nuclear energy sectors of Ukraine and Russia;
• export of domestic zirconium products to the world market, and foremost for the needs of the nuclear power industry of the USA and the European Union.

The strategic task here is to create the domestic production of nuclear fuel. For this purpose, cooperation with nuclear fuel producers will expand in the short run through establishing domestic zirconium production – metallic zirconium, zirconium alloy, rolled products, and accessories.

By the end of 2006, the country should launch production of enough zirconium tetra-fluoride to handle Ukraine’s demand of 250 tons per year.

Production facilities for rolled zirconium output should be put on line by 2010.

The production of zirconium alloy and round billet at Zirconiy (Zirconium) Scientific and Production Enterprise is forecast to be launched by 2012.

Power grid

Because of the bad state of the electrical supply network, its inability to meet current standards and patterns of electricity consumption, as well as the low number of counting devices, the level of technological expenses for transportation and supply of electrical energy is rather high.

To meet consumer demand for a high quality and reliable electricity supply, the following steps should be made:

• in 2005-2010 – to launch no less than 30 ths. km of new and reconstructed electric power lines (voltage 0.4-150 kV);
• in 2011-2020 – to run an annual commissioning of no less than 15 ths. km of such lines;
• in the following years – to maintain the annual construction of electric power lines according to the demand of a growing electricity load for consumers and to renovate effective power lines. Meanwhile, the construction of new electric power lines and transformer substations, as well as the reconstruction of effective stations should be held in the light of the economic needs of rural citizens being transferred from gas consumption to electrical energy.

The construction and modernization of 35-150 kV substations should be directly dependent on the level of further energy supply to industrial, agricultural, and community consumers. The rates of construction should stay ahead of the increase of electricity load.

The development and reconstruction of electric networks in rural areas should be made at the expense of local and state budgets and entrepreneurs.

Technical refit, reconstruction of electrical networks, and their development should be based on Ukrainian legal standards taking into account recommendations of the International Electrotechnical Commission and regional features related to reliability and environmental security. The processes should also consider the real value of land and maximum use of fixed materials and equipment of domestic origin.

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