energy market

Gas and the people

16.01.2015 | By Ivan Bakhterov

As a matter of fact, the philistine Ukraine was able to feel the critical dependence on energy imports only this year. The gas conflict with our eastern neighbor has led many to understand the highly technical aspects that were previously relegated to the industry community and government circles. For example, it became clear that in 2013 in the total annual consumption of 50.4 bn cubic m the domestic natural gas production stood slightly for more than 41%. The rest was bought abroad

There are other indicators, the value of which is also not a reason to be proud. The current annual gas consumption among population and heat generation companies is close to 25 bn cubic m. For comparison, in 2013 the whole Ukrainian industry used 20 bn cubic m. Despite the fact that in some sectors gas is used as a raw material, and significant reduction of its consumption is very problematic without disruption of production programs. For example, the share of natural gas in the cost of manufactured fertilizers reaches 80%.

Two months ago the State Agency on Energy Efficiency planned to reduce annual gas demand of the population to 8.4 bn cubic m, and demand of heating companies and public sector to 4.6 bn cubic m by 2025. In other words, the reduction in this area will be almost twofold. Thanks to what? Last years draft of the national action plan on energy efficiency by 2020 mentioned that the total cost of the necessary arrangements would exceed US $1.1 trillion. Now the amount of funding is much more modest. In early November the government considered allocation of UAH 440 mn hryvnia (from European sources) for gas substitution programs at enterprises due to installation of boilers, which do not consume natural gas.

For heavy industry gas substitution is not news. Steel industry, for example, has been implementing the technology of injection of coal dust into blast furnaces at its own expense for more than a year. In a number of cases, it helps to eliminate the use of gas for smelting of metal. Five companies in the industry have already mastered such solutions, some are still working in this direction. Depending on its type, the technology helps saving from US $20 25 to US $40 50 on to one ton of gasfree iron. The effect for the plants is very noticeable when several million tons of such metal are produced during the year, both in terms of money, and in terms of hundreds of millions of cubic meters of saved fuel.

The Cabinet suggests that ordinary consumers also take part in the alternative gas campaign. The key idea is to encourage people to replace gas boilers used for heating with their electrical counterparts. The government even promised benefits in charges for electricity. One time there was a thought to allocate UAH 50 mn (across the country) to compensate for the cost of thermal modernization in households. Many households will not get away from gas alternative. Clearly, it will become relevant for people in May 2015, when 40% increase in gas tariffs for the population will come into effect.


Solid fuel units alternative to gas heating boilers are quite expensive. The cost of German automated systems starts at EUR 5,000. Nevertheless, 3 years ago one of the universities in Kyiv equipped a boiler room with a capacity of 2 MW, operating on sunflower husk. And after 1.5 heating seasons the unit has fully paid for itself.

The high cost of imported units stimulates growth of production of domestic counterparts. At least at the end of this summer companies producing solid fuel boilers had orders for several months in advance. And, for example, Ukrteplo works on options to expand its production capacity in 2015.

It is even easier to rural residents. Everyone who knows how to use tools is able to build a biogas plant on their own from scrap materials. Internet is full with diagrams and even videos with detailed instructions for construction and operation of homemade BG-boilers. Craftsmen show people how to make a daily rate of biogas with the help of a bucket of manure or any plant waste, which will provide free family with heat and light, and even with gas after some improvement of the unit.

However, it is not necessary to examine blueprints and drawings, household biogas units can be ordered from a specialized company.

For example, a unit with a 200-liter reactor will cost UAH 10,000 15,000. Market growth potential of alternative fuel systems in Ukraine is enormous. After all, today in our country, according to estimates, there are only about 2,000 thousand household units. For comparison in China there are almost 40 mn of them. Moreover, the total output of biogas in China is 14 bn cubic m per year. This is slightly less than our country had in underground storage facilities on the eve of the current heating season.

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