When a manufacturer, while connected to a distribution network, sells a product at a price tens of times higher than the price at which they could buy the same product locally, it's pure theft. Always. And in a very simple form.
Since 2003, so-called "green tariffs" for generated electricity have been in effect in Ukraine. According to the preamble to the Law of Ukraine "On Alternative Energy Sources," these include renewable energy sources, including solar, wind, geothermal wave and tidal energy, hydropower, biomass energy, landfill gas, wastewater treatment plant gas, biogas, and secondary energy resources, including blast furnace and coke oven gas, coal mine methane degassing gas, and the conversion of waste energy from technological processes.
An interesting detail: the list of alternative (renewable) energy sources is quite specific and does not (or does not) allow for broad interpretation. At the same time, the Law "On Waste" (aimed at reducing and preventing the negative impact of waste (garbage) on the environment and people) has been in effect in Ukraine since 1998. According to the definition of terms given in Article 1 of the Law, waste disposal is provided for—that is, its use as secondary material or energy resources.
Article 5 of the same Law establishes as one of the main principles of state policy the provision of careful use of material and raw material resources and energy resources, and subparagraph (d) of Part 2 of Article 5 of the same Law "On Waste" defines the main direction of state policy in the field of waste management as promoting the maximum possible recycling of waste through direct reuse or alternative use of resource-valuable waste.
That is, the 1998 Law "On Waste" more than transparently "hints" at the need for the disposal and use of waste (garbage) as an energy source (by all direct and indirect indications, classifying waste as a renewable energy source).
And the Law “On Alternative Energy Sources” (adopted five years later) – waste in general and the principles of its use – was sort of “forgotten” and leveled out (leaving only organic waste gas as a source of alternative energy (in the Law “On Alternative Energy Sources” even the term “waste” is used only once in the phrase we mentioned in the section “definition of terms”).
On the topic: Deputies passed a law that allows money to be made from trash.
Perhaps it is for this reason – the exclusion of such a resource as waste (garbage) from the list of alternative energy sources and the oblivion of this most promising area of “double efficiency” (waste disposal and energy production) – that “waste energy” has been left “overboard” and is not an area of interest for politicians, entrepreneurs, environmentalists, and energy specialists.
However, this will be a topic for separate research.
Ukraine, however, has chosen the path of developing (or rather, creating and maintaining the appearance of development) “classic” alternative energy trends – primarily solar and wind.
One of the ways to support "green" producers has become the state's preferential tariff policy towards "green" producers and the establishment of a priority for them to receive funds as payment for the electricity they produce.
With an average exaggerated level of electricity tariff (for consumers) in the amount of 1-2 hryvnia per 1 kW*h (depending on the category (class) of the consumer and the volume of consumption), the National Commission for State Regulation of Energy and Public Utilities set the tariff for some “green” producers at the level of 12-13 hryvnia per 1 kW*h (Resolution of 29.09.2016 No. 1677, positions for producers 24, 25, 31, 36, 37, 57, 82-91), and this is without VAT (and with it all 15 hryvnia per 1 kW*h). In some periods, the National Commission for State Regulation of Energy and Public Utilities “gave” over 50 hryvnias for 1 kW*h of “green” energy (Resolution of 06.08.2015 No. 2140, position 72 for the Berezovskaya hydroelectric power station of Hydroenergo Company LLC) – without VAT (with VAT – all 60 hryvnias).
That is, this specific manufacturer sells a product that can be purchased on the market at a price ten (or more) times lower than what it is sold for...
The situation is absurd and defies all laws of logic and economics. It can only be explained by some delusional pseudo-conclusions like "green energy is the future" and "that's what Europe and the global community want."
For nearly fifteen years, the development and implementation of green energy in Ukraine has been at a Stone Age level. This can be indirectly proven by several factors: when the Russian Federation annexed the Autonomous Republic of Crimea, which boasted numerous highly publicized solar power plants, after Ukraine restricted power supplies, every conceivable way to stabilize the peninsula's energy supply was proposed, from an "energy bridge" across the Kerch Strait to diesel generators and the deployment of nuclear submarines that, docked in port, would generate electricity for Crimeans. But not a word was said about developing "green" capacity. Even Russian propagandists were smart enough not to promote obviously "stillborn" projects.
On the topic: Occupiers in Crimea "squeezed" Oschadbank's collateral for loans to Klyuev.
And it gets worse. In the summer of 2016, Deputy Minister of Energy and Coal Industry of Ukraine Svetelik urged Ukrainians to conserve electricity, citing a shortage in the grid. This is during the summer, at the peak of "green" production, when daylight hours are at their longest, there's no need for heating appliances, lighting, etc.
During this same period of time (season), the "third" world country of Chile was distributing electricity... free of charge to anyone who wanted it, due to its surplus, precisely because production exceeded consumption, thanks to the efforts of those same "green" producers.
And in Germany, thanks to the green sector, electricity prices actually became… negative… Germans paid consumers extra for actively turning on air conditioners and other electrical appliances to balance production and consumption…
Let's remember that these events occurred at the same time, but had completely diametrically opposed content – energy hunger in Ukraine (despite the vaunted "greens," which were fussed over at all levels, praised for their "saving" and "exclusivity") and energy abundance in poor Chile and far from southern Germany...
What a theater of the absurd... Such a disgrace could only have happened for one reason: theft, short-sightedness, an unwillingness to delve into the problem, and the unprofessionalism of domestic energy officials (often ordinary crooks).
But back to the point.
We frankly assert that when a manufacturer, while connected to a distribution network, sells a product at a price tens of times higher than the price at which they could buy the same product locally, it is pure theft. Always. Under any circumstances.
And in a very simple form.
All you have to do is declare yourself an alternative producer, eager to help the energy industry and develop high technologies... Then, all you have to do is hang fans or other devices on the roof or façade of your house, or place them in an industrial zone, calling them "solar panels," and connect them to the grid, installing a meter for the product produced (electricity). This meter will show that this very device (a generator of "green" solar/wind/ether/ionosphere energy) has released a certain amount of electricity into the grid. Let's say, 100 kWh. At a price of 10 hryvnia per 1 kWh (that's just a modest estimate). And for the 100 kWh shown on the meter, the producer will be paid 1000 hryvnia.
What will go unnoticed by the public is the fact that this mysterious, creative device, which produces electricity from the Sun or even the Moon, is a dummy and contains nothing more than a power cable to the other end of the device, where this cable connects to the grid and consumes electricity at a price of 1 hryvnia per 1 kWh.
So, 100 kWh were purchased for 1 hryvnia, paying 100 hryvnias, and then immediately "sold" back to the grid for 1000 hryvnias. The economic benefit is 900 hryvnias. If you're not too brazen and occasionally "share" with the regulatory authorities who might suddenly show up and try to check your connection diagram, you can live quite comfortably, constantly running the same amount on your meters and maintaining the appearance of active electricity trading.
Those who don't believe us can verify the validity of our arguments thanks to the official position of the Department of Physical and Technical Problems of Energy of the National Academy of Sciences of Ukraine and the Department of Electric Power Complex of the Ministry of Energy and Coal Industry:
On the topic: Lviv scientists have invented a portable solar power station. As always, they were appreciated in the West.
The responses used polite and evasive language, such as "no system guarantees it" and "it's entirely possible from a technical standpoint." This is understandable, as more categorical statements would be a direct admission of theft. Personally, based on life experience, we have the authority and the courage to assert that in our reality, there's a simple rule: if it's possible to steal, they will steal. It's undeniable. Moreover, the validity of this thesis is confirmed in practice by the example cited above—the existence of an electricity shortage, despite the simply "insane" PR campaign of "alternative energy" companies, who are portrayed as the saviors of energy and beacons of energy independence. Yeah, right...
So, the situation is actually simple. The fundamental and singular problem of Ukraine's energy sector is the imbalance between tariffs and prices. This imbalance is insane, unjustified, insane, and harmful. The rule is simple: if goods (services, resources) with state-controlled prices and significantly different prices exist and are traded in the same market within physical proximity, the cheaper goods will be sold as expensive, stealing the "delta."
This has always been, is, and will always be the case. Unfortunately. There are countless examples of tariff lawlessness and energy imbalances. And we will return to this analysis again and again, breaking down and examining comprehensively both the causes of these imbalances and distortions, and their consequences.
The solution is to use professionalism and sober judgment to eliminate cheap populism, illusions, cliches, and stereotypes, and to ensure, above all, equal rights and opportunities—equality (but not egalitarianism). Then, the industry's development will be driven by market forces and by equalizing prices and tariffs for the same goods—there will be no point or opportunity to steal.
Until then, we will once again, amidst the apparent abundance of "green" producers and the accompanying shortage of their goods, watch our neighbors with bewilderment, wondering how they managed to develop their energy sector, maintain balances, and avoid theft...
Irina Kremenovskaya, PhD in Law, Senior Research Fellow; Alexey Svyatogor, Attorney, Postgraduate Student; specially for Argument
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