Subscriber Login

Features

Ukraine’s Grid Plan: Safeguarding energy independence through EU integration [free access]

September 9, 2019

The energy industry is one of the strategically critical sectors of Ukraine’s economy. In recent times, the country has undertaken significant steps to break away from the decades old over-dependence on Russia for oil, gas, coal and uranium, as well as address restricted access in the energy market. To this end, the country’s power operator, National Power Company (NPC) Ukrenergo took a major step and signed an agreement on June 28, 2017 with the European Network of Transmission System Operators for Electricity (ENTSO-E) to integrate the Ukrainian power grid with the electricity systems of European countries.

 

To meet its strategic goal of interconnecting the Ukrainian electricity market with the European electricity market and integrating Ukraine’s interconnected power system (IPS) into ENTSO-E, Ukrenergo has implemented several programmes aimed at improving technological processes, improving efficiencies, ensuring reliability and reducing technological losses in the power transmission segment.

 

Existing transmission network

Ukrenergo is responsible for operational and technological control of Ukraine’s IPS. Its responsibilities include the transmission of power via trunk power grids from generating plants to the distribution networks of the regional electricity suppliers.

 

Ukrenergo’s transmission system comprises eight regional grids—Central, Crimea, Dnieper, Donbass, Northern, Southern, South-western and Western. These are further divided into 32 structural units of state transmission and interstate electricity networks. The 750 kV network forms the backbone of the power transmission system, while the 330 kV network dominates at the regional level. At the end of 2018, Ukraine had an estimated transmission line length of 21,848 km and a transformer capacity of 78,628 MVA across 137 substations.

 

Ukraine has several grid interconnections with Russia, Moldova, Belarus, Poland, Slovakia, Hungary and Romania. Being part of the IPS of the former Soviet Union, Ukraine has 12 high voltage (HV) connections (220 kV and above) with Russia and two with Belarus. In addition, Ukraine’s western region is synchronously linked with continental Europe through links with Slovakia (one), Poland (two), Hungary (four) and Romania (two). At present, only the power plants on Burshtyn Island in western Ukraine are connected to ENTSO-E’s grid. Further, there are seven 330 kV interconnections with Moldova. All these interconnections are at 220 kV and above voltage levels. In addition, there are various interconnections at 110 kV and below with Russia, Belarus and Moldova.

 

Recent investments

In the five-year period spanning 2014 and 2018, Ukrenergo’s annual investment in the electricity transmission network grew steadily, increasing significantly from around UAH2,320 million (EUR144 million) to UAH3,659 million (EUR114 million). In 2016 alone, Ukrenergo made nearly double or UAH2,081 million (EUR11 million) more in investments as compared to those made in 2014. The majority of these investments have been directed towards capital construction, followed by modernisation and re-equipment of assets.

 

Ukrainian power grid's integration into ENTSO-E

At present, the country faces a precarious energy security situation. To address this issue, one of the strategic objectives highlighted in Ukrenergo’s Transmission System Development Plan for 2019-2028 is the integration of Ukraine’s IPS into ENTSO-E. The impetus behind synchronised regulations is multifold: to enhance regional security, boost energy independence, improve environmental conditions, and promote investment in the energy sector, which is critically needed for the rehabilitation or replacement of Ukraine’s aging infrastructure.

 

Over the past few years, the country has been working on the reform of its electricity market. In this context, in December 2018, the Ukrainian government approved a plan involving measures needed to be taken to synchronise the country’s power systemwith that of the ENTSO-E. The action plan involves several measures, including the setting up of a joint block of regulation of the Ukraine’s United Power System (UES) and Moldova’s power system to ensure that the former’s thermal power plants are ready to work within ENTSO-E; organisation of communication channels for the technological management of UES; upgrade of software and hardware for dispatch control and data collection; the construction of overhead lines (OHLs) and substations; the certification of Ukrenergo; the transition to isolated functioning with the energy systems of countries outside ENTSO-E (Russia, Belarus); involvement of international technical assistance; and the creation of a regulatory block within the energy systems of Ukraine and Moldova.

 

Following the approval of this plan, in March 2019, Ukraine’s Ministry of Finance approved an action plan for the reorganisation of Ukrenergo into a private joint-stock company with 100 per cent stock owned by the state, in line with European energy network standards. The corporatisation of Ukrenergo is considered a mandatory step towards its certification as a transmission system operator (TSO), and is one of the pre-requisites for the launch of a new electricity market and interconnection of the integrated power system of Ukraine with ENTSO-E.

 

In May 2019, Ukrenergo also completed the tests of power generating units at thermal power plants (TPP), combined heat and power plants (CHP), and hydroelectric power plants (HPP) for the synchronisation with ENTSO-E.

 

Finally, in July 2019 the country took a major step to meet the challenges in the domestic market and adopted a new electricity market model, which will operate in accordance with EU standards. The groundwork for the reform of Ukraine’s electricity market was laid in 2017, with the adoption of the Law of Ukraine On Electricity Market. The reform involves the introduction of a European model,which aims to stimulate competition and the emergence of new players.

 

Smart grid initiatives

Ukrenergo is currently facing two major problems in managing its grid infrastructure. First is the issue of obsolete equipment, which fails to provide real-time information, deemed necessary for operational calculations. Secondly, with the ongoing development of alternative renewable energy sources (RES) such as wind and solar, Ukrenergo requires the implementation of a system that will forecast RES generation output.

 

Additionally, in a move to offset the consequences of stochastic electricity generation from RES,  Ukrenergo is planning to launch demand response and power interchange of vehicle-to-grid (V2G) systems, providing for the connection of electric vehicles to the common network not only for charging but also for excess electricity supply.

 

Key planned projects

In line with Ukraine’ strategy to integrate its power systems with ENTSO-E, Ukrenergo has outlined the development of its longproposed Ukraine–EU Energy Bridge project. The project entails the reactivation of the existing 750 kV OHL between the Khmelnytsky nuclear power plant (NPP) (Ukraine) and Rzeszów (Poland), and interconnection of Unit 2 of the Khmelnytsky NPP with the Burshtyn energy island, a Ukrainian territory in the Lviv region that is permanently connected to the European power grid. The project will allow for the export of an additional 1 GW of electricity to EU countries as well as transport power from Germany and Poland to Hungary, Romania and the Balkan countries, besides attracting financial support required for the development of nuclear power generating capacities.

 

In addition to the above project, Ukrenergo is developing the Balti (Moldova)–Novodnestrovsc (Ukraine) interconnection jointly with Moldelectrica of Moldova. The project entails the construction of a 122-km-long, 330 kV OHL between Balti in Moldova and Novodnestrovsc in Ukraine. Of the total line length, about 34 km will be in Ukraine.

 

In another development, the TSOs of Ukraine and Slovakia–Ukrenergo and Slovenská Elektrizačná Prenosová Sústava, A.S. (SEPS, A.S.) respectively—agreed to build a new power line to boost power transmission between the two countries. According to the agreement, a new 400 kV OHLis proposed, which will connect the existing 400 kV Mukachevo (Ukraine) and Velke Kapusany (Slovakia) substations via a single-circuit line with the possibility of upgrading it to a double-circuit line in case of an increase in the volume of interstate flows.

 

Major domestic projects include the 845-km-long, 750/330 kV Kakhovska–Primorska–Dnistrovska–Khmelnitska transmission project. This project,also known as the Second Backbone ultra high voltage (UHV) corridor, includes the construction of the 275-km-long, 750 kV Kakhovska–Primorska line (2021); the 320-km-long, 750 kV Primorska–Dnistrovska pumped storage plant (PSP) line (2024); and the 250-km-long, 330 kV Dnistrovska PSP–Khmelnitska NPP line (2024).

 

Another key project is the 104-km-long transmission line between the Novoodeska and Artsyz substations. The project is being planned to provide a connection between the remote southern part of the Odessa region and Ukraine’s power grid.

 

Table 1: List of key planned domestic projects

Project

Voltage (kV)

Length (km)

Scheduled completion

Kreminskaya–Jubile transmission line

500/220

80

2019

Rivnenska NPP–Kyivska transmission line

750

NA

2020

Pobuzhzhya–Talne–Glade transmission line

330

89

2021

South Ukrainian NPP and associated transmission lines1

750/330

350

2021

Dnestrovskaya HPP–Vinnytsia transmission line

330

150

2021

Mukachevo–VeľkéKapušany transmission line

400

51

2021

Novoodeska–Artsyz transmission line 

330

104

2022

Ternopil–Chernivtsi transmission line

330

230

2022

Lutsk Severnaya–Ternopil transmission line

330

223

2023

Kaniv PSP transmission project

330

230

2023

Kyivska–North Ukrainian transmission line

750

114

2023

Pivdenna–Pershotravneva No.1 and No.2 transmission line

330

41

2023

Zaporizhzhya NPP–Krivorozhskaya transmission project2

750/330

400

2024

Novovolynsk–Yavoriv transmission line

330

135

2024

Pridneprovskaya TPP–Livoberezhna transmission line

330

30

2024

Connection of 750 kV Kyivska substation to 330 kV network

330

175

2025

Kakhovska–Primorska–Dnistrovska–Khmelnitska transmission project3

750/330

845

2021/2024

Kurakhovskaya TPP–Belitskaya transmission line

330

132

To be decided

Sloviansk–Kreminskaya transmission line

330

30

To be decided

Note: 1–Under the project, 150 km is at 750 kV and 200 km is at 330 kV; 2–The 750/330 kV project will have 120 km at 750 kV and 280 km at 330 kV; 3–Under this project 595 km will be at 750 kV and 250 km will be at 330 kV.

PSP–pumped storage plant; NPP–nuclear power plant; TPP–thermal power plant; HPP–hydropower plant

Source: Ukrenergo; Global Transmission Research

 

Grid development and modernisation investments

According to Ukrenergo, the utility plans to invest over EUR2,000 million up to 2029. Of these investments, EUR1,135 million will be directed towards substations and EUR800 million on OHLs.

 

Under this plan, the annual estimated investment until 2022 is much higher than the average annual investment in the past five years. Ukrenergo is seeking support from multilateral organisations to pursue its ambitious development plan.

 

In the past, significant investments have been directed towards new construction and modernisation of the transmission infrastructure, supported by financial assistance from the European Bank for Reconstruction and Development (EBRD), European Investment Bank (EIB), International Bank for Reconstruction and Development (IBRD) and Germany’s KfW Entwicklungsbank (KfW Development Bank).

 

Some of the major focus areas for investments highlighted by Ukrenergo are given below.

 

Substation automation programme

This programme will increase the reliability and security of the transmission grid and achieve the technical level required for integration of Ukraine’s IPS into ENTSO-E. It provides for phased reconstruction with the introduction of process control systems (PCS). The utility will undertake the reconstruction of all substations in two stages, 2019–2023 and 2024–2029, respectively. The programme, with an approximate investment of EUR585 million, involves 60 units of fully automated 220-750 kV substations and 27 units of new 220-750 kV autotransformers.

 

Elimination of bottlenecks in the grid

Under this programme, Ukrenergo has outlined investments worth EUR347 million. These investments will cater to the construction of new projects involving 620 km of 330 kV OHLs, three units of 330 kV substations, rehabilitation of five units of 330 kV substations and two units of 330 kV switchgears.

 

RES integration 

This programme entails the construction of 750 km of new 330-750 kV OHLs, a new 750 kV substation, upgrade of 220 kV substation to 330 kV, rehabilitation of 330 kV switchgear, and a pilot project to build a 220 MW energy storage system (ESS).

 

In 2018, Ukrenergo participated in negotiations with France’s TSO Réseau de Transport d’Électricité (RTE) and its subsidiary RTE International for the construction of the 200 MW ESS associated with the programme. The negotiations resulted in the signing of a Memorandum on Cooperation with the French counterparts and forming a grant application for project financing.

 

In the next 10 years, the utility will invest EUR740 million (including EUR684 million on new projects) in the project portfolio under this programme.

 

Interconnector development programme

According to Ukrenergo, the utility has allocated EUR332 million for this programme. It entails the construction of 434 km of new OHLs at 330-750 kV voltage levels; rehabilitation of 300 km of 750 kV OHL and two units of 330 kV substations; as well as expansion of 750 kV substation.

 

Conclusion

Energy is the linchpin of Ukraine’s dependence on Russia.In the past few years, the Ukrainian power operator has made significant progress in achieving energy security by addressing the bottlenecks associated with itsgovernmental policy as well asfinancial and technological constraints. So far, Ukrenergo has made the appropriate strategic investments to transform its power sectorand integrate its grid into ENTSO-E. However, although the writing is on the wall, the timely and cost-effective transformation of the power sector canbe a critical pillar in building an effective and stable national security and economic blueprint for Ukraine.