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Interview Deputy Chief of the IMF Mission to Ukraine Trevor Lessard

Text: Diana Pavlenko

Mr. Trevor, my first question will be about our energy system. As we know, russian attacks on energy sector have significant impact on European regional energy market, including driving up prices. And I want to ask you, if there are any specific calculations, showing, how losing by Ukraine, for example, 1 gigawatt of capacity, affects regional GDP?

So one of the things that we mentioned in our reports, and you're right that given the attacks on the energy sector since the spring, we're looking at a potential peak energy gap over the winter of about three to four gigawatts. Of course, that varies a lot, on how cold the winter is, demand, and also there's a lot of installation and repairs that are taking place. So it is an estimate that has a lot of volatility.

Now, one of the parts of the solution in terms of trying to close the energy gap is imports from Europe. There is a technological limit to the volume of electricity that Ukraine can import. So, cap also limits effects on the European economies. And when you look, the amount of energy that Ukraine could import maximum right now, let's say 1.6-1.7 gigawatts (after recording the interview, ENTSO-E decided to extend the electricity import limit for Ukraine from 1.7 GW to 2.1 GW from 1 December 2024 - IF-U), is relatively small.

And it isn't enough for Ukraine.

True. but the most given technological capacity right now is 2 to 2.1 GW, which is not "nothing". But if you look at the size of the Eastern European economies, 2 gigawatts are a rounding error in terms of their energy consumption is. And they also have additional capacity that could come online, including new green energy