Wu Wei

Humanitarian gas deliveries from Russia?

Jonathan Stern has proposed the resumption of Russian gas deliveries to Central and Eastern European countries on humanitarian grounds.  You can find his proposal here.

He also makes it clear what the technical problems are at the moment.  The Ukrainians have to have gas to repressurise the network and the fuel to run the compressor stations.  Gazprom is unwilling to release this gas without immediate payment and without assurances that it will not be used for Ukrainian consumers.  Clearly this is where Putin thinks that Ukraine is "stealing" gas.  In fact, Gazprom pays a transit fee so that the gas gets moved on its way to Europe. 

You would think that proper agreements for operating the network would be included in the transit fee (which is not just a cash payment for opening the taps), and thus not a subject of the current dispute.  Yet more arguments for transparent and regulated agreements for gas in Ukrainian.

Recently I was offered a job in the Ukrainian energy regulator working on advising about gas tariffs.  Would have been interesting, but in the current climate of weak government, constant gas disputes with Russia and non-transparent energy sector, it seemed like a task for Sisyphus.

Gazprom continues to shoot itself in the foot:

Ukraine imports in 2008                              48bcm (billion cubic meters)
Ukraine paid in 2008                                  $8.6 billion
Increase in gas price demanded by Gazprom  $3.4 billion
Ukraine offers                                            from $1 billion to $2.7 billion more

EU imports                                                130 bcm
EU pays                                                    $60 billion

Gazprom's loss in 9 days non-supply             $1.1billion

Figures from Wall Street Journal here.

How can anyone pretend this is a commercial dispute?  They would have settled long ago if that were the case.
 

Terms of Reference for gas monitoring (and who buys the network?)

Abdymok provides a copy of the Terms of Reference for the Joint Ukrainian/Russian and EU Monitors here (letter with signatures) and here (actual text).

The letter says that the terms of reference are "for resuming the natural gas deliveries from the Russian Federation through Ukraine to the European Union".

It seems that apart from a start date (from immediate effect) there is no finish date.  Evidently nobody thought this would drag on and as soon as the monitors began monitoring everything would become clear and gas would flow.

Not so, as it turns out.  So how long will the monitors stay there?  It doesn't say.  Their costs are paid for by the countries sending them.  The Terms of Reference guarantee the right of access on the territory of Russia and Ukraine to the metering stations, and the right of access to data. 

How long will this go on? Will it become an annual event?  If the Ukrainian gas network gets sold to the Russians will it still stand, when the next dispute come up? 

Is this really a way to ensure security of gas supply to the EU? 

Now the EU is telling EU gas companies to sue Russia.  It will be an interesting question to see in which jurisdiction they need to sue.  With both Russia and Ukraine strapped for cash, will this help?  Or will EU companies accept the Ukrainian gas network as compensation?  Now that would really put the cat among the pigeons. 

But it might be a reasonable solution for the EU. Then Russia and Ukraine could have their annual battle about prices and the EU could share the gas as necessary.

We seek it here, we seek it there

According to the Guardian here:

But Ukraine blamed Russia. Its state energy firm, Naftogaz, said there had not been enough co-ordination over the routes chosen for the gas and the volumes shipped. "This seriously violates the established practice of reliable functioning of the gas transit system," Naftogaz said.

Ukrainian officials said Gazprom had "deliberately" sent the gas by a route that would have meant switching off gas to Ukrainian consumers in the east of the country. Instead of supplying gas via the traditional route, through Ukraine's Belgorod and Rostov region, it had been sent on a bypass route which would paralyse supplies to the towns of Donetsk and Luhansk. "This is just provocation against Ukraine," said Bohdan Sokolovsky, Ukraine's commissioner for energy security.

Now why would Russia care about Donetsk and Luhansk?  Because they belong to the part of Russia that usually supports Russia.  This forces the European-leaning Ukrainian government to choose between supplying Europe and cutting off the east of Ukraine, or keeping the east happy and cutting off Europe.  Fighting the coming election by gas flows? Looks like more mischief to me.

There's another lot of nasty stuff from the Ukrainians about Nazi tactics over the siege of Leningrad, none of which is going to help deal with the commercial issues of the gas price, which needs to be settled before things can get back to normal.

The Europeans get involved

What the previous post illustrates, (and especially the Ukrainian text quoted in the comment by blairs) is that dispatching of gas and information about dispatching of gas between Russia and Ukraine does not operate according to the sort of regulations that are promulgated throughout Europe, as part of the developing European gas market.

Gas transmission in Europe is subject to an agreed Gas Grid Code, so that gas is not turned off or down without prior notification and procedures for turning on are specified.  Of course mistakes can happen especially when there are political pressures on the one hand, but also a desire to get things moving again.  But operators used to working in a rational technical world would help out their colleagues. 

Maybe the European observers will make some recommendations about this for future reliability?  Are they going to make suggestions about a preferred route for the flow of European gas, when Ukrainian gas is turned off next winter?  With remote reading of the flows at the measuring stations so that the European monitors can stay at home and give us proper reports on what is happening? 

Nobody seems yet to be commenting on the precedent that this sets for future energy supply.  Perhaps we could expect new monitors to reveal the progress on repairs to the oil pipeline which supplies Lithuania, closed for a couple of years (?) for "repairs" and forcing the Lithuanians to import oil for Mazeikiu Nafta oil refinery. 

Gas with a life of its own (apparently)

In an article here about the current attempts at disinformation in the gas war, the Jamestown Foundation points out the following:

Disinformation operation two—Ukraine turned off the valves on the pipeline
preventing deliveries of Russian gas to EU countries. Gazprom deputy CEO
Alexander Medvedev, who is also a member of the coordinating committee of RUE (RosUkrEnergo) told a
press conference in London on January 6 that it was Ukraine that had closed down
the transit of gas to Europe and that Russia played no role whatsoever in this
(Vedomosti, January 6).

The following day Oleh Dubyna, the head
of Naftohaz, called Medvedev’s statement “absurd” and pointed out that all the
gas cutoff valves were located on the Russian side of the border. Dubyna
produced maps of the pipeline system, which clearly proved his assertion (UNIAN
press agency January 8).

Then, to make matters worse for Gazprom and
Putin’s disinformation operation, the world press reported on January 8 that
“Russia said on Thursday it would restore gas supplies to Europe through
Ukraine, once international monitors were in place…” (Ukrayinska
Pravda, January 8). If Gazprom’s original claim that Ukraine had shut down
the flow of gas to Europe were true, how could Russia now be ready to resume
shipments of gas that it claimed not to have shut down in the first place? Would
Russian troops move into Ukrainian territory, occupy the pipelines in that
country, and open the nonexistent valves?

How is it that the Putin, Medvedev and Gazprom think they can get away with such rubbish?  Doesn't anyone tell them they are constantly shooting themselves in the foot? Or is that just a silly question when you have tame press and a tame public.  However, a tame public is not usually to be found amongst people who are cold and who are losing their jobs.

Just at the moment, the next issue seems to be "hunt the gas".  The gas left Russia for Ukraine, but hasn't been seen since, and can't be found even by the EU monitors. 

More on the disinformation about middleman RosUkrEnergo is also provided. On the one hand this shadowy organisation was introduced at Russian insistance, and the Ukrainians (particularly Timoshenko) have been trying to get rid of it ever since.  On the other hand Putin claims he knows nothing about it.  What, sign such an important contract, without finding out who the other side is?  Is he stupid? maybe not but he's creating a suitable impression.

An alternative to the new Ignalina?

It seems the problem of replacing Ignalina Nuclear Power Plant is very much on the mind of Andris Piebalgs, the European Commissioner for energy.  Ignalina is  due to close its final unit at the end of 2009 but was recently the subject of a referendum during the election in Lithuania to delay its closure.  The closure was agreed around 2003, with the first unit already closed in 2005, so it is not as if the closure of the second unit comes with no warning.  The nuclear lobby in Lithuania is very keen to have a replacement, but unfortunately economics dictate that it must supply other countries as well and nobody else is keen to cough up with the rather uncertain costs of nuclear at the moment. 

Of course there are perfectly good alternatives available including an existing power plant running on gas, but when the gas comes from Russia, that doesn't seem a reliable solution.

But it was a bit of a surprise to read about alternative method of meeting Lithuania's electricity demand here.

At the meeting of the Ecodesign Regulatory Committee today, EU Member States endorsed the European Commission's proposal for a regulation aimed at improving the energy performance of external power supplies. The regulation is expected to cut the EU's electricity consumption of these devices by 30% by 2020, compared to a "business as usual" scenario.

This fourth measure under the Ecodesign Directive will drastically improve the energy performance of external power supplies, which everybody is using together with many household and office products. It is a concrete contribution to reach the EU's energy efficiency and climate protection targets, while saving citizens' money", said Energy Commissioner Andris Piebalgs.

An external power supply (EPS) is the device that converts power input from the mains power source into lower voltage output for household and office products such as mobile and cordless phones, notebook computers, modems etc. With the energy efficiency standards approved today, the electricity losses related to external power supplies will be reduced in the EU by 9 TWh, that is approximately 30%, by 2020, compared to a "business as usual" scenario. The savings are equal to Lithuania's yearly electricity consumption and would lead to approximately 3.2 Mt CO2 emission savings per year. Further savings are expected in other parts of the world as well as an indirect impact of this measure, since external power supplies are sold and used worldwide.

So other countries please note: remember to disconnect your chargers now (no need to wait for the new ones) and do your bit for Lithuania.


Technorati Tags: Lithuania, energy efficiency, Ignalina

Cyprus to allow EU aid to Turkish Cypriots

The Greek Cypriot government has announced it will drop legal action against EU aid to Turkish Cypriots in the north of the divided island, in a boost to chances for settling the long-term dispute between the two communities and between Europe and Turkey.

The decision unveiled by Nicosia on Tuesday (3 June) involves eight European Commission tenders "relating to services and projects for the economic development of the Turkish Cypriot community," a government spokesperson said, according to AFP.

So announces the EUObserver here.

Can you imagine anything so silly as Cyprus suing the EU? It's because the EU decided to reward the Turkish Cypriot vote in favour of the UN solution for a united Cyprus. Don't they deserve some help after all this time? And why not let the EU pay for the help rather than having to fund it yourself after reunification? Look what happened to West Germany.

Isn't this a bit off-topic for my blog you may ask? Well yes and no. I don't normally blog much about work, but you may have noticed that I disappear off to North Cyprus every now and then.

I've been advising on one of these tenders "relating to projects", and I'm just off there again in a couple of weeks.

Whilst in North Cyprus we learn to use a new set of vocabulary. We may not talk about North Cyprus but only the Turkish Cypriot community (who presumably have no territory and have to have a small "c"). The territory of North Cyprus is referred to as

the areas of the Republic of Cyprus in which the government of the Republic of Cyprus does not exercise effective control.

The Republic of Cyprus does not allow the European Commission to operate in North Cyprus (who's the boss here then, on a territory with no effective control?). So the EC officials lurk in the offices of a German quango and when there's not enough room to work we take over the top floor of a local hotel.

Then we learn to refer to all Turkish structures in North Cyprus with quotation marks. So I have been engaged in helping the Turkish "Council of Ministers" (there is no "Ministry of Energy") how to restructure "Kibtek" the power "company". I have to write "company" as it seems to be a relic of the British occupation, and is a type of legal entity last seen in Britain in the 70s. We also have been discussing a draft "law". Our reports say things like this:

Even if “adopted”, the status of this “law” will not be clear as to its context within the legal framework of the Republic of Cyprus. However, the value of such “law” can in any case be appreciated as a step towards harmonising with the regulatory practice of the EU, instead of continued observance of an outdated electrical code of colonial times.

Not quite sure why we need this "law", since there is a perfectly good law in the Republic of Cyprus just waiting to be applied in the area "where the Republic does not exercise effective control", thus enabling some more steps towards "effective control". I'm sure that with the use of some creative "Newspeak" and quotation marks, the Republic of Cyprus law could be applied rather easily.

In the end there will be one law and another "law" to be harmonised. No doubt this will mean more work for people like me.

The guy I work with was a bit miffed when he found he was being sued (not personally) for what the EU was doing. The Republic decided to do this just before its presidential election, so I was quite pleased when the more conciliatory Communist won instead of the isolationist old-timer.

Hopefully my next trip will help getting some of this EU assistance to North Cyprus (even though probably the first effect will be to increase their electricity bills).



Technorati Tags: Cyprus, North Cyprus, frozen conflicts

Carrefour-- an electricity supplier

Commissioner Piebalgs welcomes the entry of a
supermarket chain as a new electricity supplier in the Belgian market

Energy Commissioner, Andris Piebalgs has welcomed on 29 May the launch
of Carrefour Energie EcoPlanet, a program that will make the supermarket chain a
new provider in the Belgian electricity market. The Carrefour Group, one of the
Partners of the Sustainable Energy Europe Campaign, is the first European
retailer to sell electricity to final consumers.

So reads the latest press release from the European Commission. Don't they know about the Lithuanian supermarket chain that bought the Western Electricity Distribution Network in Lithuania? Since Piebalgs comes from next door Latvia, you would think he knew, at least.

New Europe showing Old Europe the way, perhaps.

On the other hand the shareholdings have got more tortuous, since the days when Western Electricity Networks just went by the name of Vakaru Skirstomieji Tinklai (VST).

At that time, in a privatisation, the government shareholding was bought by VP Market, owners of the Maxima supermarket chain based in Lithuania but now expanded throughout the Baltics. VP Market is the company which brought the Acropolis Hypermarket to Vilnius.

Then in 2004 VP Market set up the company NDX Energija to operate VST and has been buying up the other 20% of shares held by small shareholders, including some originally held by Sweden's Vattenfall and then by Germany's E.ON Energie.


Since then, a new company called LEO.LT (Lithuanian Electricity Organisation) has been set up by the government owned electricity companies and NDX Energija in order to make plans for a new nuclear power station.

It's a long way from the supermarket business.


Technorati Tags: electricity, supermarket chains, Belgium, Carrefour, Lithuania

How much energy do you use at home?

My one bright idea over Easter has bit the dust.

I was reading an article in the Economist about kit which allows you to monitor in real time how much energy you are using at home. There are two options: the Owl and the Wattson. They both work by a unit clipping onto the main electricity cable of your house, which then transmits wirelessly to a display panel which you can put in your living room. I particularly liked the Wattson as it looks cool and changes colour from blue to red as your electricity usage increases (so you can go and turn some of your appliances off).

I thought we could demonstrate this in Georgia on our exhibition stand and in our office. But then we noticed a snag. In the UK, the cable from the meter to the fuseboard is normally easily accessible so it is not a problem to clip on the wireless unit. In Tbilisi at least, all premises (offices and houses at least) have been remetered, so that the meters are situated at the entrance of the building in a big cabinet so the meters are easily read, and maintained by the electricity company. So the connections are not accessible, eliminating all the illegal and unmetered connections there were before and making it difficult to make any new ones. Even in our office the main cable from the meter is enclosed in the wall plaster and not easy to tamper with.

So the new measures to prevent illegal connections make it impossible for us to use the Owl and the Wattson. Shame.

Anyone know a reliable gas supplier?

Pardon me, but is this the same Gazprom who was protesting last week against the new EU measures, insisting that it is the reliable gas supplier of Europe? Now it is threatening LOUDLY in public to cut off gas to Ukraine (and thus inevitably to Europe eventually) just as a slightly pro-western government might be formed? If it really was a commercial debt there would be no special need to publicise it just now, would there?

Russia just doesn't get it, does it? That actions to neighbours speak louder than reassurances to us.

And if the Baltic States and Poland continue warning about this behaviour and its long term consequences, and the EU does not act? Gasprom will learn it can freeze Germany into submission as well.

Thank God for Gazprom. Even more work for us energy policy guys. It's an ill wind .... :)