Ihor Syrota: Ukrhydroenergo faced serious challenges in the first half of 2024

- It’s been already three years since Ukraine has been living under daily russian terror. The enemy continues to attack and destroy Ukraine's energy infrastructure. Since the beginning of the year, the country's hydropower facilities have been hit by a number of attacks. Could you tell us what losses Ukraine has suffered in the hydropower sector, and how Ukrhydroenergo's HPPs and PSPs are currently operating?

- In total, since the beginning of the full-scale invasion till now, Ukrhydroenergo’s power plants experienced 120 attacks. Over the past 5 months, russian terrorists have already made 8 large-scale missile and drone attacks on Ukraine’s energy facilities. Speaking of the 1st half of this year, we can say that since March 2024, we have suffered significant losses in hydropower sector, and I have to emphasize, that the entire hydropower generation has experienced some devastating damages. On March 22, russian missiles attacked Dnipro HPP, the largest hydroelectric power plant in Ukraine.  Today, we have equipment that has been destroyed and requires considerable effort to repair and restore, as well as significant financial resources. We are facing a difficult task - to restore our operations as much as possible for the autumn and winter period. This task is a priority because, despite our losses, we must continue providing the power system with balancing and emergency reserves during peak hours of electricity consumption.

- The energy system is preparing for serious challenges ahead of the autumn and winter period; so what work is currently being done by hydropower specialists in this area?

- Our specialists are taking on a range of measures to ensure a stable supply of electricity during the autumn and winter period; this includes a large-scale repair campaign, restoration works, and some work to protect our power plants. Ukrhydroenergo's specialists are constantly analyzing the current situation in the energy system to make sound decisions on further actions. All energy companies, together with the Government, are doing everything possible to prepare for the winter season.

- Could you tell us whether you involve support from international partners in the recovery process?

-  Yes, we do. Because the support, assistance and decisive actions of the international community are extremely important for our country now as never before. Since the beginning of this year, we have continued to actively cooperate with international partners and financial institutions. In February, Ukrhydroenergo received financial support from the EBRD and the Government of Italy for EUR 200 million - we signed a Loan Agreement to finance the Hydro Power Plants Emergency Restoration Project.

Since the beginning of the year, we have signed a number of memoranda. Specifically, in February, there was signed a Memorandum of Cooperation with Respekto Grupė, a Lithuanian company, to help restore and develop hydropower industry in Ukraine. Also, at the annual Ukraine Recovery Conference (URC 2024) in Berlin, a Memorandum of Cooperation was signed between Ukrhydroenergo and AECOM to implement projects for the restoration of destroyed hydropower generation. During the same conference, we agreed with the World Bank to allocate a part of the loan for the restoration of damaged HPPs and PSPPs. 

Over these six months, we also participated in international events that were strategically important for the recovery, including the 54th World Economic Forum in Davos, which was useful in our work to ensure energy security both at the national level and as part of a global security strategy.

Moreover, we are constantly involved in meetings with international companies, heads of government agencies and businesses, and we continue to reiterate that we urgently need the sky to be well-protected to restore lost and build new hydropower capacities.

- Every first half of the year, hydroelectric power plants let the spring floods pass through. This year, the company had to pass high waters under conditions when the plants were constantly under attack by the enemy. How did you manage to work and control the high waters?

- By late February, the river's flood volume was close to the long-term average. However, the flood of 2024 had its own peculiarities that affected the operation of hydroelectric power plants. Throughout the whole winter, the temperature was unstable. Periods of cold snaps alternated with periods of warming, which created favorable conditions for the formation of the spring flood. The hydropower industry was ready to meet the high waters. During the pre-flood period, we completed all the planned activities to prepare the main and auxiliary equipment at the company's power plants. We also performed relevant works to check the reliability of hydromechanical equipment, cranes, gates, communications, vehicles, and the availability of emergency supplies. In March, Ukrhydroenergo's power plants operated at inflows that were within the established levels, and this situation was favorable for the energy system. The hydropower industry was able to support the grid and provide the population with the necessary electricity.

On March 22, the enemy launched a missile attack on Dnipro HPP, which caused significant damage to the dam, structures and equipment. During the spring floods, when hydroelectric power plants are most efficient, the loss of such an energy giant was a real challenge for the UES of Ukraine. However, we overcame it as well.

Meanwhile, the high waters period has now been replaced by a period of abnormal heat. However, despite the higher water temperature in the Dnipro River, Ukrhydroenergo's power plants continue to operate in normal mode and provide balancing capacities to the Ukrainian grid. Our HPPs and PSPPs have organized work to ensure maximum safety of employees and safe operation of equipment, conducted additional briefings, adjusted work schedules and organized optimal work regime for employees.

- On June 6, 2023, the enemy exploded Kakhovka HPP. A year has passed. What have been the consequences of that destruction for Ukraine since then? What actions has Ukrhydroenergo taken so far?

- The consequences of the destruction of Kakhovka HPP have not yet been fully calculated. The scale of this tragedy can be assessed only after the de-occupation of Kherson region. The destruction of the power plant and emptying of the reservoir affected the water supply of Ukrainian population, the environment of the region, infrastructure, agriculture, Zaporizhzhia Nuclear Power Plant and the energy sector. There are various assessments of the impact of the explosion on the environment and the agricultural sector. The assessments were carried out by both international expert groups and Ukrainian scientists, including a separate working group at the National Academy of Sciences of Ukraine that was set up to analyze the consequences of the destruction of Kakhovka dam. However, after the explosion, neither chemical, bacteriological, nor radiation analyses of surface waters and soils were performed; and no other studies were conducted, because it is impossible to conduct them in the context of military aggression.

I can say for sure that the Kakhovka Reservoir definitely should be restored. And this should be done, first of all, not for the energy sector, but for the needs of people and regional water supply.

As regards the actions, after the Cabinet of Ministers approved the Resolution on the implementation of the pilot project for the construction of Kakhovka hydroelectric scheme, as part of the first stage, we, together with the design institution, completed the design of structures as part of the preparatory activities for Kakhovka hydroelectric scheme. This stage also includes the design and construction of a retaining structure in the tailrace of Dnipro HPP.  The design has also been completed. However, due to the need to ensure the safe operation of Dnipro hydroelectric scheme and given the current situation at Dnipro HPP after this year's missile strikes, the construction of the retaining structure is currently not possible until the power plant is fully restored. As regards the second stage, it will begin after the de-occupation of the territory. This stage will include surveys, construction of structures as part of the preparatory measures for Kakhovka hydroelectric scheme, dismantling of the destroyed buildings and structures of Kakhovka hydroelectric scheme, as well as development of the construction design for Kakhovka HPP.

Another important step taken by the Government this year is that in March, the Cabinet of Ministers of Ukraine banned the misuse of land formerly covered by the Kakhovka Reservoir. Thus, for the period of martial law in force and for five years after its termination or cancellation, it is prohibited to create, transfer ownership, or use and change the intended use of land plots on the territory formerly covered by the Kakhovka Reservoir.

- Now, is the world currently helping us to overcome the consequences of Kakhovka HPP destruction?

- Unfortunately, the international community did not properly respond to the destruction of Kakhovka HPP, which unleashed the aggressor's hands in further attacks on hydropower facilities. This, in turn, triggered a situation where today we do not have a single power plant in the company that has not been attacked by the enemy.

I believe that in order to avoid another environmental disaster caused by the destruction of hydropower facilities, international partners must switch from words to actions and help Ukraine protect the sky. I would like to emphasize that the world community's indecision threatens to collapse the energy sector in Ukraine.

- Have you applied to any international or Ukrainian courts regarding the crimes committed against the energy sector of Ukraine?

- Yes, we have. Thus, in autumn 2022, Ukrhydroenergo filed a lawsuit with the European Court of Human Rights against the russian federation for compensation for damages caused by Russia's unprovoked military aggression against Ukraine. At that time, the ECtHR accepted Ukrhydroenergo's claim for consideration. Recently, we have additionally informed the court about the case and, in order to protect the violated rights and interests as soon as possible, we asked the court to consider making this case a priority in connection with russia's terrorist actions.

We also initiated investment arbitration proceedings with the Russian Federation. Ukrhydroenergo sent a letter with an official notification of the dispute resolution and it was received by the president, government and other authorized bodies of russia. Currently, the Company, with the support of the Energy Community Secretariat and with the participation of an international legal advisor, has developed an International Litigation Strategy, and we believe that applying to international arbitration is the most viable way to compensate for losses from the terrorist act at Kakhovka HPP.

Additionally, we are preparing lawsuits in national courts to compensate for the damage caused by Russia's missile attacks on the territory of Ukraine, which resulted in the destruction and damage to the Company's equipment and other assets.

- Despite all the challenges that you have managed to overcome in the first half of this year, Ukrhydroenergo continues to work actively in the electricity market. Could you tell us how the company's operations are currently organized?

- This July marks the 5th anniversary of our operation in the electricity market. Despite the significant difficulties caused by the war, the electricity market is developing and improving, taking into account the peculiarities of the Ukrainian grid, generation and consumption structure. Since 2019, our company has become an active participant in the market, taking part in all market segments. We sell electricity on the Ukrainian Energy Exchange and trade on the DAM and IDM segments with a fast response to any changes in hydro regimes, as well as supply and demand. Our company is one of the main players in the balancing electricity market, providing peak load coverage, frequency and power regulation, and mobile emergency reserve in the UES of Ukraine. The biggest challenge that currently exists and needs to be addressed is the financial balancing of the market. There are two factors that create debts in the electricity market: the imperfection of the mechanism for assigning special obligations (PSO) and the issue of debts in the balancing market (BM). We are working in the market, however, we are facing new challenges, especially in the context of the post-war reconstruction of our country.

- Is it difficult for hydropower professionals to work nowadays, in particular, considering that they are currently working in highly dangerous conditions, because the enemy keeps trying to attack HPPs and PSPPs?

- It is not easy for hydropower specialists to work now, that is true. Permanent air alerts and the danger of missile strikes have a significant impact on the work of specialists at the power plants, and on the possibility of recovery. We protect our people during air alerts: they must go down to the shelters, and when the danger is over, they come out and continue working. However, I should mention that it is much harder for our soldiers who are out there on the front line. That is why we are doing everything we can to ensure that our soldiers on the front line are protected. There are many volunteers and military personnel among the hydropower workers. 140 employees of our company went to the forefront as volunteers. I am proud of the hydropower workers who are defending the country, both on the energy front and on the front line.

- You have repeatedly said that despite wartime, we need to continue developing and working for the future. What prospective projects is the company currently working on?

= Currently, our plans include the completion of Dniester PSP construction. We also plan to start the construction of Kaniv PSPP and, after the de-occupation of Ukrainian territories temporarily captured by the enemy, we will start the next stage of the project to reconstruct the destroyed Kakhovka HPP.

However, I would like to emphasize it once again: our priority is to protect our facilities, get prepared for the autumn and winter period and generate electricity to provide Ukrainians with electric power.