Willem Buiter: How cheap electricity is a burden on the Ukrainian economy – KyivPost
Energy efficiency in Ukraine Ukraine’s energy challenge
The offices of Energoatom, the public operator of Ukrainian nuclear power plants. The company reported a net loss of $ 177 million for 2020.
photo by energoatom.kiev.ua
Domestic electricity tariffs in Ukraine are a prime example of good intentions gone bad. To ensure that poor households have access to an adequate supply of energy, household tariffs for electricity (and for gas) have been set at extraordinarily low levels – well below the discounted cost of electricity – the cost means of producing electricity for a power plant over its lifetime – whether the source of electrical energy is nuclear, thermal, solar, wind, hydraulic or cogeneration.
It is also much lower than the electricity prices for households fixed in the European Union; in December 2020, the price of domestic electricity in Germany was $ 0.37 per kWh, that in France was $ 0.22, and that in Poland was $ 0.19. As previously stated, Ukraine’s official domestic price (including VAT and tariffs) is 1.68 Hr or $ 0.06. In addition, it will even be reduced from October 1 for households consuming less than 250 kWh per month to 1.44 Hr or $ 0.05.