Panic and fear, fear and panic… So that we will freeze, get sick, turn out all the pockets. Such anxious feelings traditionally confuse Ukrainians on the eve of the heating season. Every communal battle is like the last. Therefore, will we overcome the coming winter without a loss?

Government: everything is in order!

However, anxiety is inherent mainly in consumers, minor officials, industry experts. But the government does not show panic. On the contrary, in the Cabinet declare almost one hundred per cent readiness for the heating season.

And it will begin, as always, on October 15. However, local authorities can announce its beginning earlier, in accordance with weather conditions. The Prime Minister Volodymyr Groysman said about it on October 3. And on the second day, the Deputy Prime Minister, Minister of Regional Development, Construction and Housing and Public Utilities Gennady Zubko specified: technical readiness for the heating season is 99.4%. According to the official, the decision on the connection of heat is up to the local governments, as well as to solve the issues of heat supply on infrastructure facilities.

The Government is not only maintaining the Olympic calm but also tries to dissociate itself from this seasonal communal hassle. And it puts all the problems on the shoulders of local authorities. Like, why complain about everything to “nanny” from Kyiv, when there is decentralization in the country? We need more autonomy, initiative, enterprise on the ground. Only for citizens, which can be thrown in the middle of winter frost, it is not easier from the fact, who exactly could not guarantee them the heat.

Anxiety is aggravated by the issue of gas price increase by 25%, which is unlikely to be avoided, the situation with the introduction of subscription fees for heat, the problems with signing contracts and supply of gas between heat suppliers and NAC “Naftogaz” are not entirely clear. In the draft state budget for the next year, there are significantly fewer funds for subsidies for the payment of housing and utility services than this year, only 55.5 billion UAH. And already traditional: an extremely worn out condition of the heating networks, about which, it is unlikely someone will take serious care in the near future.

Experts: not everything is in order!

Nice October days are lulling, but Indian summer is passing. So, is the optimism of the Cabinet justified?

“A certain form is being filled out that was developed by the Ministry of Regional Development once-in grandma’s time, where ticks are made about preventive maintenance, insulation measures etc. All of this, of course, is done”, said Oleksandr Serhiyenko, the Director of Analytical Research Center “City Institute”. “We can take the word that such a formal work is being done. But there is another real problem ‒ the deterioration of heating networks, the large indebtedness of the population to Teplokomunenergo, and in the second ‒ to “Naftogaz”. And “Naftogaz” does not forgive debts, it has fines and penalties, driving enterprises of heat to debts. And those simply have no means for high-quality preventive repairs and, in general, for activities”.

The debt of the population for gas is more than 16 billion UAH. For heat and hot water is a little less. Public utilities are forced to save on preventive repairs and coolants, that is, underheated batteries. Without timely repairs, the quality of services is falling, the depreciation of fixed assets is faster, the number of bursts on distance-heating pipes is increasing. Oleksandr Serhiyenko assures that, for example, Kyivenergo stopped publishing statistics, which indicated an annual increase in bursts. The system all falls into decay, and it must be saved.

“What does the concept of “readiness for the heating season” mean? What the Government is talking about is the current technical readiness, and I see no reason not to trust it”, Tetyana Boyko, the Head of the Housing, Utilities and Energy Programs of the Civic Network “Opora”, explained to Opinion. “But there are serious systemic problems, for example, the absence of a gas supply contract in Kyiv. Can we assume that the city is ready for the heating season if there is a question will there be warmth at all? I think Kyiv is not ready. Another issue is the technical condition of the networks. They are obsolete by two-thirds, and no matter how to prepare them, without a major overhaul or replacement ‒ in case of any serious change in the weather, natural disasters ‒ there is a great chance to get bursts. I cannot say that with such a number of problem networks (more than 70%), Ukraine is ready for the heating season”.

Gas and coal

At the end of September, the press service of “Naftogaz” reported that nearly 16 billion cubic meters of blue fuel were injected into the country’s underground gas storage facilities. And this amount of gas, they say in the company, is enough for the heating season.

“The issue is not so much about the volumes, although the larger the reserve is, the calmer the heating season can be”, Valentyn Zemlyansky said to Opinion, the director of energy programs at the Center for World Economy and International Relations of the National Academy of Sciences of Ukraine. “This concerns not only gas but also coal, fuel oil. The energy system likes a significant reserve because any force majeure can occur: weather, technical, political ones. But there are two approaches here ‒ technical, which requires a larger reserve, and business, that is, to purchase less gas, to spend less on its storage in storage facilities. And our daring reformers approach the issue from a business point of view, not a technical one”.

With coal reserves, things are worse than with gas. According to Valentyn Zemlyansky, the situation with anthracite became hostile after the blockade of Donbas in 2016. Earlier, Ukraine was part of the global coal market as a supplier, and after 2014 became an importer.

“And in this case, the volumes of gas that we bought in other countries are replaced by the volumes of Russian anthracite, because Russia is its largest producer in the world”, Mr Zemlyansky continued. “With the brand G, as far as I know, the situation is more or less normal. The problem is that the coal industry is beginning to decline, the part of it that remained in the territories under our control, I mean the Lviv-Volyn coal basin. The state does not provide enough funds, and it is not clear what will happen next, because at one time a restructuring plan was developed, according to which part of the enterprises had to be closed and partly to be sold. Now nobody remembers this plan. Subsidies from the state budget were enough until April of this year. Next year we will see how much money will be invested in it”.

Fee for heat

It is unlikely that consumers will be pleased with the issue of payments for the received heat, after all, they will have to deal with two tariffs ‒ payment for used Gcal of heat and subscription fees. Where did the subscription fee come from? Experts say it is charged based on the costs that operators will incur to maintain the heating networks in proper condition. Then, will the pipes finally be repaired and they won’t be broken anymore?

“From the available materials it can be concluded that we are talking about the return to the practice of 2001, when there were conditionally constant payments during the year and conditionally variable during the heating season. This is simply a division of the tariff into two parts”, Gennady Ryabtsev explained to Opinion, director of special projects of Scientific and Technical Center “Psyche”. “And this is not enough in order to keep the entire system in proper condition”.

So, the pipes will continue to burst, and the consumer will not be able to influence it. Local government, independently, when it wants, will introduce tariffs and methods for the monthly fee, developed by the National Commission for State Regulation of Energy and Utilities. Techniques are imperfect, they are refining. That is, what is being done is not what Western partners demand from Ukraine. The heat should be supplied by one company, and another company, not connected with the first, should control the state of the networks, instead, both these functions are assigned to one structure that is not interested in pipe patching. But there is a way out of the situation, albeit a difficult one.

“Households need to unite, to order energy audit and take measures on thermal modernization, that is, insulation”, Gennady Ryabtsev advised. “You should not demand from the Cabinet of Ministers to reduce tariffs, but should install new boilers or boiler rooms in the basements or in attics, isolate the house network, replace them with more efficient ones. Everything is determined by desire. Our citizens are accustomed to the fact that everything is decided by the Government, pays them subsidies. But the Government will not do it but will do everything to desert from this area of social responsibility. It does not bring profit, but only incurs losses and lowers the rating of officials as politicians”.

Debts are pushing

“Debts of the population will grow, as evidenced by the statistics of the last three years”, Oleksandr Serhiyenko said. “In 2015, we raised the price of gas, and immediately the debts began to grow, and this is from year to year. The lion’s share of gas and heat debt is central heating plus hot water. At the beginning of this year, it reached about 43-44 billion UAH. In the summer, as a rule, population repays it”.

How exactly the debts of the population will grow is not easy to calculate. At least, because the exact number of households in the country is not known. This is due to the lack of a census, the latter took place back in 2001.

“If tariffs are raised, the level of consumer non-payment will start to grow”, Valentyn Zemlyansky said. “But, most importantly, it will entail a chain reaction, because people will begin to hide the white salary. If someone earns 10 thousand UAH, then at higher rates it would be better to take the minimum salary, everything else is in an envelope to receive a subsidy. And next year subsidies will be 16 billion less. And people would just stop paying. The situation with the price of gas is still not clear. It was necessary to set it on July 1. The Ministry of Energy had to say what the price would be. This has not been done”.

“I don’t see a particular problem with non-payments, we all pay on time, except for the state, it does not reimburse benefits and subsidies, does not pay in time for budgetary institutions,” Tetyana Boyko assured. “A fairly good system of subsidies covers the most vulnerable groups of the population. And, perhaps, because of the increase in gas prices, this situation will change a little, but I do not think that there will be significant non-payment. It should be in the range of 5-7%”.

However, Alyona Babak, deputy chairman of the Parliamentary Committee on Construction, Urban Planning and Housing, stressed that the debts of the population will grow tremendously. Indeed, in case of the rise in gas prices, people should feel positive changes, which is not happening.

“For example, if the Government would give at least 2 billion UAH to each region and said that these funds will go as co-financing for the insulation of houses”, said Babak. “To direct the amount that goes to subsidies, in one year to thermo-modernization. But so that it can be done in the summer, and not at the end of the year. For example, 54 billion UAH in one year to warm the houses, but it should be on the terms of co-financing people should give something, then local government, then the state. And people would understand that we are entering the heating season with warm houses. That is, we feel comfortable only in houses. We do not see what is happening in the streets, so it’s impossible to change everything there in one day. These are lengthy processes”.

How to overcome the winter?

Opinion asked the famous Ukrainians, “What problems are you afraid of in the future heating season?”

Viktoriya Stakh, writer (Kyiv):

“We, in Kyiv, are not afraid of anything: if only there is electricity. Even if central heating radiators are slightly warm, electric heaters can always be used. My retired parents moved to live in the village and the house is heated by gas boilers, it is much more difficult ‒ they have to sleep in warm sweaters, saving on heating. The prices there are really exorbitant, especially for pensioners”.

Ostap Drozdov, journalist, writer (Lviv):

“I have autonomous heating in the apartment, so I depend only on the weather. I turn it on, if I want to, I turned it off, if I want to. I am very economical. Usually, the temperature in my apartment is around 18 degrees. I often go abroad and have taught myself that people are extremely economical about heating, nobody is heating there to go in a T-shirt at home in winter. Everywhere is very fresh. I turn on the boiler somewhere in the middle of October, not earlier, and even then at a minimum. With such gas prices, it is impossible to do otherwise. I sympathize with people with central heating. I would eliminate it completely all over the country”.

Mariya Larchenko, journalist (Kropyvnytsky):

“In this heating season, we are wary of the fact that every season in Ukraine has two main problems. The first is the exorbitant, inadequate, unmotivated prices for heat, which for a simple Ukrainian are like a noose around the neck. And the second is the quality of providing this heat for this big money. Why for our utilities the cold come “completely unexpectedly” ‒ they begin to repair pipes, boilers, batteries not in the spring or summer, but in cold weather and frosts. Last year, in many schools, kinder gardens and medical institutions they had +9 +12 in the middle of November. Hope to God, this year something will change”.

Yevhen Polozhiy, writer (Sumy):

“There will be one problem ‒ the next increase in gas prices. It seems to be necessary to raise the price to the market, but the trick is that the rest of goods and services in Ukraine already either have a market price, or are close to it, or even exceed it. Therefore, a gas price hike will cause a disproportionate price increase in most sectors of the economy. Price balancing, given the oligarchic structure of the Ukrainian economy, will be a sensitive issue in the next two or three years”.

Text by Viktor Tsvilihovsky


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