To resist Russia, Ukraine must help itself

As Russia grips Ukraine in a military and energy grip and NATO sounds the alarm bells, the Kiev government must urgently focus on strengthening its military and energy security. Ukraine certainly needs Western diplomatic and military help to thwart plans to invade Moscow, but it also needs to protect itself against the Kremlin’s subversive intention to weaken the state and divide its society by energy shortages and the deprivation of transit income.

President Vladimir Putin has made it clear that Moscow does not accept the existence of an independent, pro-Western Ukrainian state. He has staged a proxy war in the Donbass of Ukraine in an attempt to legitimize the rebel entities controlled by Moscow which can veto any major political decision by Kiev. The main objective of Russia’s military build-up along Ukraine’s borders is to convince the Biden administration to push Ukraine to agree to the creation of autonomous regions on its territory that would cripple the country’s Western aspirations. Kiev’s surrender to Moscow will only encourage a new Kremlin encroachment on Ukrainian territory.

However, even if another military intervention is postponed, the autocratic regime in Russia will seek to destabilize the democratic Ukrainian government by any means at its disposal. In particular, its energy offensive will intensify and Ukraine is ill-prepared to resist. Moscow is on the verge of successfully implementing its plan to bypass Ukraine as a gas supply route to Europe. Construction of two new mega-pipelines, Nord Stream 2 and TurkStream, has been completed. US sanctions have failed to stop Nord Stream 2, and President Joe Biden’s agreement with German Chancellor Angela Merkel has lifted further obstacles to its construction. If Nord Stream 2 is certified by the German regulator and the European Commission, all Russian natural gas transit will be diverted from Ukraine. Such a development will deprive Ukraine of its importance as a gas transit country for Moscow, making it more vulnerable to an invasion.

In addition, Poutine declared in 2019, once Nord Stream 2 is operational and Gazprom will no longer use the Ukrainian route, the country will no longer be able to source Russian gas backwards from Europe. The statement indicates that Moscow will monitor the amount of gas Ukraine’s neighbors receive from Nord Stream 2 to ensure that there are no additional volumes they could sell back to Kiev.

But the energy squeeze is not just about Ukraine’s gas sector. In November, Russia sale of coal prohibited to Ukraine and blocked the transit of coal from other countries, such as Kazakhstan. Meanwhile, around a quarter of Ukraine’s electricity is produced in coal-fired power stations, and since a significant number of coal mines remain in the occupied Donbass territories, Ukraine has had to import coal.

Ukraine has a significant nuclear power generation capacity, which supplies more than half of its electricity. However, here too it is heavily dependent on Russia. Most nuclear reactors still run on Russian fuel and the spent fuel is returned for storage in Russia. Although cooperation between Ukrainian nuclear operator Energoatom and Westinghouse is gradually developing, nine of the fifteen nuclear power plants still depend on Russian fuel.

An agreement signed in September between the United States and Ukraine provides for the completion of a nuclear reactor and the construction of four others; the project will be implemented by Westinghouse and Energoatom. But the deal urgently requires a central storage facility for nuclear waste, a project the US company Holtec has been working on since 2017.. However, there is significant difficulties facing the project and it is still unclear whether government inefficiency or interference from Moscow prevented this storage facility from becoming operational.

Solar and wind power plants are promising sources of energy, which helps to strengthen Ukraine’s energy independence. In 2020, the share of renewable energy amounted to 7.3 percent of electricity and growing rapidly. However, the government’s energy policy is plagued by incompetence and corruption that make the country more vulnerable in Moscow. To keep electricity prices low for households and businesses, the government has introduced price caps in the electricity market, which ensure that thermal generation has no money to buy coal. This affects both the public company Centerenergo and the private energy company DTEK. And although DTEK imported coal (mainly from the United States) and also helped contract charcoal purchases for the state, Russia will likely continue to use such restrictions to put pressure on Kiev.

Over the next few years, Ukraine will need to reduce the share of coal in its energy mix from the current 35% to meet Europe’s carbon reduction targets. The economic downturn from the pandemic undermined the government’s incentive program and resulted in accumulate debts to companies producing renewable energies. Debts have been repaid recently, with the exception of those held by DTEK, the largest wind power producer, which controls around a quarter of Ukraine’s renewable power generation capacity.

Sadly, as winter approaches and Russia puts military pressure on Ukraine and cuts energy supplies, President Volodymyr Zelenskyy appears more concerned with currying favor with oligarchs determined to keep electricity rates low rather than pursuing critical energy reforms. Perpetual political struggles, media wars between oligarchs and accusations of national coup attempts, as well as failing energy policy, undermine Ukraine’s stability and statehood. This will further weaken the economy and foster the social unrest that Russia is exploiting to its advantage. The Biden administration must work closely with Kiev to strengthen its energy security and counter threats from Russia.

Janusz Bugajski and Margarita Assenova are Senior Fellows at the Jamestown Foundation in Washington DC. Their latest book is called Eurasian disunity: Russia’s vulnerable flanks.

Image: Reuters.

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