Ukraine: war, refugees and an energy system under attack

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Robin Pomeroy, Podcast Editor, World Economic Forum

• Ukraine energy companies and officials address a World Economic Forum event to discuss the situation and appeal for help.
• Nuclear safety raised as major concern.
• UNICEF describes plight of those caught up in the ‘biggest refugee crisis since World War Two’.

It’s hard to know where to start talking about Russia’s invasion of Ukraine and the impact it is having. But we’re going to try and in this episode of Radio Davos we look at how Ukraine’s energy sector is coping – keeping heat and power to millions of traumatised people.

Before that though, to get an idea of the humanitarian crisis, we speak to James Elder of the UN children’s agency UNICEF, who has just returned from the city of Lviv.

Robin Pomeroy: To talk about the situation in Ukraine right now, I’m joined by UNICEF spokesman James Elder. James, how are you?

James Elder: Hi there. Yeah, I’m OK. Thank you.

Robin Pomeroy: You’ve just got back from Ukraine. What is it that you can tell those of us who aren’t there, who haven’t been there? What did you see? What can you tell us?

James Elder: Look, so much of it is what you’re already into seeing in the airwaves. It is harrowing. Where I was in Lviv in the west of Ukraine, that had been relatively safe until the weekend when we saw missiles rain down there as well, you’re looking at hundreds of thousands of people going through that city. Every single one of them has a story of heartbreak. They’re stressed, they’re sad. I spent every day at the train station watching husbands and wives farewell each other. Fathers get down on their haunches and explain to their sons and daughters why they’re going to a country they’ve not heard of and why dad is staying behind. And that’s those families at that point. It’s taken them usually three or five days to get to that point through freezing conditions, nights in bunkers or worse, makeshift bunkers and basements. So it’s this heartbreaking journey that they’re all making and, to a person none, of them want to. And that, of course, they’re the ones fleeing – the mind-boggling 1.3 million children fleeing. That’s even before we think about those people who are who are unable to get out of the country for whatever reason and are still trapped in this sea of indiscriminate fire.

Robin Pomeroy: So that’s a number – I was just about to ask you then what are the latest numbers in terms of displaced people, refugees and anything else you can tell us, particularly about children, which is what your agency focuses on?

It is in speed and scale the biggest refugee crisis we’ve seen since World War Two.—James Elder, UNICEF

James Elder: The latest figures now – someone listens to this tomorrow and they’ll change – is 2.7 million people are now refugees. Half of that, we say half, so just over 1.3 million children. Now numbers can obviously just be, as I say, mind-boggling and I don’t think compassion often goes, doesn’t go hand in hand, always, with big numbers. But to give a sense, I mean, that’s 1.3 million children refugees in just over two weeks. It is in speed and scale the biggest refugee crisis we’ve seen since World War Two. And as I say, every single one of those children has a story. Countries, those border countries, are welcoming with open arms, but it’s impossible to meet the needs with that speed right now. The psychological trauma these kids have gone through, as I say, they’re all seeing war, they’ve been hiding in bunkers, watching families split up. So there’s an enormous need for psychological support, for trauma support, beyond and above the need for indiscriminate fire and for the war to end. But UNICEF is humanitarian – we’re there left picking up the pieces. But it’s an immense number. It’s growing, it’s growing every single day by tens, fifty thousands. And they need every kind of support you would imagine, from safe water to psychological support to safety, back in Ukraine ,from the missiles that keep raining down.

Robin Pomeroy: Now you’ve seen these kinds of situations before. How does this one in Ukraine compare to other places in the world where UNICEF has had to work.

James Elder: It’s a good question, you know. I was recently in Yemen, and there we had this horrendous number of 10,000 children killed or maimed in that conflict, and that continues. And children keep dying in Syria or in Ethiopia and the Horn of Africa. So as an agency, UNICEF, we are multi-tasking. You know, the global focus is here, but our focus continues to be on those places. But to be specific, I’ve not seen something with the speed and scale of this, and that makes it very difficult to to respond to. So in terms of just sheer numbers in two weeks, it’s immense. As I say, UNICEF, we’re still deeply concerned and operating for those children in Syria. The Syrian refugee crisis, I think, was around just under 300,000 Syrians became refugees in the first 18 months of that crisis, of that conflict just over 10 years ago – 300,000 in 18 months. We hit a million children in less than two weeks. That gives you a sense of the scope of what these what these families, what these children, what the neighbouring countries and of what UNICEF is trying to deal with.

Robin Pomeroy: And what response needs to happen now?

James Elder: First and foremost that response is to keep pushing as much as anyone can for the war to stop. And then it’s an enormous response in-country because there are many children who cannot flee. UNICEF has now got in another 100 tonnes over the weekend of things like emergency medical supplies. You know, I saw children in hospitals, in ICU, in incubators – they cannot leave. Or at least it’s much more complicated and dangerous for them to leave. So these emergency medical supplies that UNICEF gets in – surgical equipment, midwifery equipment because mums are having babies in bunkers in makeshift maternity wards. That kind of supplies that UNICEF is getting in are life-saving. Getting them to Kyiv, getting them to Kharkiv and getting them into Lviv where I just was, that’s essential. And then for those millions now outside of the country – and it will, unfortunately, it looks like it may be millions more if the war doesn’t stop – psychological help, child protection, tracking and tracing, which UNICEF does well but is an enormous task. We’re very worried about trafficking right now, given the scale. Education, you’re looking at a million refugees in Poland. These kids need some normality – that goes hand-in-hand with trauma support. And then the basics: water, sanitation, be it for those countries absorbing such huge amounts or those people in in the east of the country, say Mariupol, who’ve been cut off from fresh water for days on end.

Robin Pomeroy: Are you as an agency able to get into places like that?

James Elder: Yes. We were recently doing water trucking in Mariupol, but it’s not to the scale we need because every time there’s talk of a humanitarian corridor, it’s broken. Every time civilians feel that they can go down a corridor there’s there’s attacks again, which makes it very difficult. We want civilians out and agencies like UNICEF to go in. So yes, we’re maintaining a footprint in every area we can, including active conflict areas, but not to the level we want to, because those humanitarian corridors have not been respected.

Robin Pomeroy: What about long term? Do you foresee there’ll be a time when these millions of people will be able to go back to their homes?

James Elder: …Yes. I go from what Ukrainians say to me, and of the hundreds of families, usually mums and children who are good enough in their moments of deep stress and sorrow to talk to me as they were leaving. I did not speak to a person who did not want to be back. They wanted to be back, in their words: a physio who wants to be with her patients, or a teacher with her students, or a daughter with her dad. Everyone wants to be back. Now will the security and safety of the country? Outside of UNICEF’s mandate. But to talk to those people in terms of what the refugees [want] – they want to return, they would like to return tomorrow. In their eyes they certainly see themselves back in a couple of months.

Robin Pomeroy: To talk about the energy situation in Ukraine, I’m joined by Kristen Panarali, who’s head of energy at the World Economic Forum. Kristen, you convened a very important event a few days ago at the World Economic Forum, online. Tell us what it was and why you did it.

Kristen Panerali: We convened a special roundtable on Ukraine’s energy crisis. We did this to to bring together [company] chief executives and and senior leaders from academia and civil society to hear directly from Ukrainian leaders on their immediate needs regarding the power and the energy situation, and especially the efforts to maintain electricity and heat for the people of Ukraine. What was special about this event was that it was really bringing together the global energy sector with [business leaders and] the policymakers from Ukraine that are so impacted by what is going on.

Robin Pomeroy: Yes, and we’ll be hearing you actually had people on that call, a Zoom call, with dozens of people on it around the world. You had people from Ukraine, including an energy minister and people working on the ground in the energy sector. We’ll hear from them and we’ll hear what it’s like to be in a massive country like Ukraine which is now a war zone. Are the lights still on? Is there still heating on in this country, which is very cold right now? We’ll be hearing about that. But let’s start by hearing from Børge Brende, who’s president of the World Economic Forum. This is Børge Brende setting the scene for this meeting.

War in Europe

Børge Brende: I think it’s a very special moment. Who would have imagined that there would be war again in the middle of Europe in the 21st century? As you have seen, the World Economic Forum has condemned aggression by Russia against Ukraine, and our full solidarity is with Ukraine’s people and all those who are now so terribly suffering innocently from this totally unacceptable war, from Kharkiv to Mariupol to Odessa, also in Kiev.

Robin Pomeroy: Børge Brende of the World Economic Forum introducing this session that, Kristen, you convened a few days ago. The next person we’re going to hear from is the chief executive officer of Naftogaz.

Kristen Panerali: Naftogaz is Ukraine’s largest state-owned company and leading enterprise in energy, so they operate in the full cycle of oil and gas activities.

Robin Pomeroy: And we’re going to hear from the chief executive of Naftogaz, Yuriy Vitrenko.

Ukrainians need heating

Yuriy Vitrenko, Chief Executive Officer, Naftogaz: The energy sector of Ukraine is vital, is critical, for Ukrainians because their life depends on it. Currently, it’s minus temperature in Ukraine. Ukrainians need heating, they need electricity, as well as water and food and medicine. And unfortunately, as we speak, in some of the big cities in Ukraine, people are left without these critical supplies, like the city, for example, of Mariupol, of roughly 400 [thousand] citizens. And it’s already a humanitarian catastrophe over there.

Robin Pomeroy: Yuriy Vitrenko, the chief executive officer of Naftogaz in Ukraine. Kristen, tell us about the next speaker who’s the head of DTEK.

Kristen Panerali: DTEK is the largest private sector electricity company in Ukraine. They generate electricity through solar, wind and thermal power plants. They distribute and supply electricity to households. And they also produce coal and natural gas. Maxim Timchenko is the CEO of DTEK.

Robin Pomeroy: And this is Maxim Timchenko telling us how they’re coping.

Energy system coping – so far

Maxim Timchenko, Chief Executive Officer, DTEK: DTEK is one of the major power producers in the country and basically we do whatever we can to keep our energy system in stable operation. As of today, we keep production of coal and natural gas at pre-war level. Today, nine power units are in operation producing about 20% of electricity in Ukraine. And basically, we are quite confident that as of today, because situation is changing every every day, we will keep going – the same level of stability – and with our [the Ukrainian] nuclear company SE Energoatom, [we] will keep operating our energy system in the proper way.

Robin Pomeroy: And this is Yuriy Vitrenko again, also talking about how he sees the energy situation on the ground in Ukraine right now.

Threats to road and rail

Yuriy Vitrenko: In most parts of Ukraine, we are able to provide heating be it, individual heating or more centralised heating. And just to remind, 90% of Ukrainian households depend on natural gas as a source for heating. So currently, we have enough of our own production, gas in storage and some imports, to provide again the resource for our consumers. But the problem is in many areas in Ukraine that are on the frontline the Russian army is deliberately targeting some civilian infrastructure. They’re destroying centralised heating plants. They’re destroying some distribution gas networks that are used to supply gas for the cities. That’s why they’re left without heating and, in many cases, without electricity. Also, logistics is damaged. The Russian Army blocked the ports that are used to import coal, that are used to import crude, used to import oil products. Railway logistics is also limited, and there are bottlenecks. Sometimes it’s deliberate targeting by the Russian army. A similar situation was with roads. So that is why it’s becoming more and more difficult to deliver coal, to deliver oil products to Ukrainians.

Robin Pomeroy: So, Kristen, at this event, were there certain things that those Ukrainians were asking from the rest of the world?

Kristen Panerali: I heard two very concrete asks. One was very practical. And this is a real direct ask for materials in order to help support the energy infrastructure and security of supply. So really practical things like equipment, from wires to generators, to protective equipment for their workers. And the other asks were more focused on some of the geopolitical and economic issues. For example, the primary ask, which we’ll hear from several of the leaders on this, is to embargo oil and gas from Russia.

Robin Pomeroy: Let’s hear from Yuriy Vitrenko again, the chief executive officer of Naftogaz.

Sanctions

Yuriy Vitrenko: On the one hand, there is, of course, military help that is needed for the Ukrainian army to defend Ukraine, to defend the Ukrainian people, to defend the free world, I would say. At the same time, sanctions are needed as well because they help changing the calculus of Putin’s regime so that they understand that the West is no longer soft, the West is no longer appeasing the aggressor, and the West is ready to confront and contain Russia. If Putin understands it, then he will make this decision to stop the war.

Robin Pomeroy: Kristen, we’ll come back to the sanctions a bit later. Let’s hear now from the deputy minister at the Ministry of Energy in Ukraine, Yaroslav Demchenkov. This is how he framed the war.

War on democracy

Yaroslav Demchenkov, Deputy Minister for European Integration, Ministry of Energy of Ukraine: Russia is destroying our life, our land, our infrastructure. But they will never destroy our internal unity and freedom. And I believe it will never destroy the alliance among Ukraine and our Western partners. For more than two weeks, we held the battle of one of the biggest armies in the world. But Ukrainians defend not only Ukraine. Today, we defend the values and principles on which the democratic world was built after the Second World War. I urge you to see the reality of the situation. Russia wages this army against the West, against democracy, against liberty, against humanity, and Putin will not stop until we stop him, with force.

Robin Pomeroy: Yaroslav Demchenkov, the deputy energy minister of Ukraine. This is what he had to say about the way Ukraine’s energy system is functioning now.

Keeping the system running

Yaroslav Demchenkov: In these extremely harsh conditions, the Ukrainian energy system keeps working, providing energy for people, industry and the military. The situation is really very critical, but I can assure you that Ukrainian energy professionals are doing a great job to keep our energy infrastructure functioning. We are working on the fastest possible route for securing the supply of energy in these terrible times for our country. Restoration of destroyed and damaged infrastructure of the energy sector and more.

Robin Pomeroy: Yaroslav Demchenkov, the deputy energy minister, also spoke about the potential risk to the nuclear plants, the civilian nuclear power plants, in Ukraine.

For the first time in history, we have a major war in a country with over a dozen nuclear reactors.—Yaroslav Demchenkov, Deputy Minister for European Integration, Ministry of Energy of Ukraine

Nuclear threat

Yaroslav Demchenkov: The biggest threat that could affect all of Europe is nuclear. Russia has crossed all red lines, is acting as a nuclear terrorist. We all are afraid of a nuclear war. And now, for the first time in history, we have a major war in a country with over a dozen nuclear reactors and thousands of tonnes of radioactive spent fuel. Ukraine operates 15 nuclear power units, including six at Europe’s biggest nuclear power plant in Zaporizhzhia, which also has an open-air spent nuclear fuel storage. But we have to realise that Russia has already started it when it captured the Chernobyl and the Zaporizhzhia power plants. Every day, Europe is balancing on the edge of nuclear disaster due to the Russian actions.

Robin Pomeroy: Yaroslav Demchenkov, the deputy energy minister, talking there about the threat, potential threat, to nuclear plants. It was very interesting, Kristen, to hear also from someone from Japan, which has more recently than Ukraine – Ukraine’s been the home to Chernobyl, which had a meltdown infamously in the 1980s – Fukushima in Japan exactly 11 years ago, when these people were talking a few days ago. Who is the speaker we heard from Japan?

Kristen Panerali: Mr Tatsuya Terazawa is the chairman and CEO of the Institute for Energy Economics in Japan. And this is a top energy and environmental think-tank based in Japan. Mr Terazawa, in fact, is a former official from Japan’s Ministry of Economy, Trade and Industry and I think that his words are were really powerful. Let’s let’s hear what he had to say.

Exactly 11 years ago, the Fukushima nuclear accident took place. It was caused by a tsunami – a natural disaster. It is quite unfortunate that this time another nuclear disaster [could] be caused by human deeds.—Tatsuya Terazawa, Chairman & CEO. Institute of Energy Economics Japan

Japan fears a Ukrainian Fukushima

Tatsuya Terazawa, Chairman & CEO. Institute of Energy Economics Japan: All the people in Japan stand together with our friends in Ukraine and today, March 11th, is a special day for us. Exactly 11 years ago, the Fukushima nuclear accident took place. And it was caused by a tsunami – a natural disaster. But it is quite unfortunate that this time another nuclear disaster can be caused by human deeds. So it makes us very, very much worried. At Fukushima, as you know, the nuclear accident was caused by the loss of power and loss of power was caused by the tsunami. But this time, a military attack can at any point dysfunctionalize the power supply of the nuclear power plants in Ukraine. We are extremely worried and it was a miracle for us to be able to stop that nuclear accident from going out. But with the lack of staff in Ukraine, in the nuclear power plant, once there is a power shortage, I’m not quite sure if we can really stop them. So I’m worried about the Russians’ objective. What are they doing to try to secure the safety of nuclear power plants? They should be concerned about safety as well. And what can we do or anyone of us can do to stop the nuclear accidents to take place in Ukraine which would affect other countries in the world?

Robin Pomeroy: Tatsuya Terazawa of Japan. And Kristen we also heard from someone from the trade union movement. Who was that?

Kristen Panerali: Atle Høie, the general secretary of the Industriall Global Union. That is an organisation that represents 50 million mining, energy and manufacturing workers from from over 140 different countries. I think it’s the largest sectoral global union in the world.

Chernobyl: power cuts and exhausted workers

Atle Høie, General Secretary Industriall Global Union: We’re in constant contact with all of the industrial workers and energy workers in Ukraine who are members of the trade unions in Ukraine. I, just minutes before this meeting, got a message from the workers who live in Slavutych outside Chernobyl, who work for Chernobyl, and they said to us that they haven’t had energy in their city for three days, they haven’t had food supply for 10 days. So I mean, this has also an incredible impact on the security of these plants. I mean, as the previous speaker said, if you don’t get energy to the plant itself and where you keep the remains of the nuclear waste, then you can foresee a terrible tragedy. So I think we also need to have the perspective of those who are doing the work in the plants here, and they’re also living through a terrible situation which impacts the security of these plants.

Robin Pomeroy: Sobering comments about the nuclear plants in Ukraine. Let’s move on, Kristen, to what we touched on a little bit before: sanctions and oil embargoes on Russia. Let’s hear again from the minister about what Ukraine wants from the West and the rest of the world.

Sanctions

Yaroslav Demchenkov: We urge the international community to find a way to force Russia to withdraw troops from nuclear power plants, to establish at least a 30-km demilitarised zone around our nuclear power plants, to establish no fly zone over Ukraine, Ukrainian nuclear stations, ensure normal work of the staff, giving them the opportunity to have a rest. Please make sure that you use all the tools available to you to urge the decision-makers to act. Act swiftly and strongly. Every day of delay is increasing the risk of an accident and potential nuclear catastrophe. We must continue and increase pressure through sanctions. A strong package of sanctions should be directed against the oil and gas revenues of Russia. They must include: one – full ban of import of crude oil and petroleum products from Russia produced from it. We are convinced that the price of [oil in the] world market will fall and Europe will be able to get it from other sources. Two – an embargo of the supply of Russian LNG [liquefied natural gas] to the EU and the United States. Three – restrictions of pipeline gas supply similar to the Iran sanctions. Four – winding up of joint projects with Russian energy companies, preventing financial institutions from providing funding for such projects. And five – freezing Russian energy assets in the EU until Russia fulfils de-escalation conditions. We also ask European and American companies and communities: stand in supporting the energy independence of Ukraine. We are very dedicated to complete emergency synchronisation of our electricity grid with the Association of European Energy Networks, ENTSO-E. We are working 24/7 to make it happen. One of these days we expect a final decision of our emergency connection.

Robin Pomeroy: He was talking at the end there about connecting Ukraine’s grid to that of Western Europe. Kristen, can you tell us any more about that?

Kristen Panerali: Yes, plans have been under way for some time to synchronise with the European grid, but this timeline needs to be accelerated. We’re hearing from Volodymyr Kudrytskyi who is the chairman of the transmission operator, UkrEnergo, in Ukraine.

Linking the grid

Voldymyr Kudrytski, Chairman UkrEnergo: We started this project of interconnection with European continental grids in 2017, the active phase of it. And since then we’ve managed to do a lot of things. Specifically, we have invested as a country, as a grid operator as well. We invested hundreds of millions of euros to refurbish our grid, our generation facilities, and we passed a lot of technical steps and tests before we had to start one of the final and most complicated tests, which is disconnection from Russia and Belarus, and to operate for a few days in so-called ‘island mode’. It was scheduled for 24 February and just three hours before the war started we disconnected from Russia and Belarus and started operating in island mode. There were a lot of reservations that we would not be able to operate safely and stay in a stable way. But this base, this more than two weeks now, they demonstrate that the Ukrainian power system is resilient, is very stable. We’ve had our hard times when, for example, Russians have taken over Zaporizhzhia nuclear power plant and we had to disconnect two nuclear units in 10 minutes. But again, we’ve managed to perform in a stable way and to balance the grid. So now we are progressing with our partners from ENTSO-E on so-called emergency synchronisation that we requested at the end of February. We requested it because of course, in this situation, these unpredictable circumstances, we really need to have a possibility of power supplies from a big system, which is the European continental grid.

Robin Pomeroy: Those last two speakers mentioned an organisation called ENTSO-E, which is the European Association for the Cooperation of Transmission System Operators for Electricity. The head of that organisation was on the call. Let’s hear from Hervé Laffaye,

Hervé Laffaye: We are accelerating emergency synchronisation – all the steps that were supposed to happen [by] 2023. So this is why we are calling that an emergency synchronisation. And this synchronisation, it will improve the resilience of the Ukrainian and Moldavian systems in terms of stability and also provide the possibility to some backups of energy delivery to the systems.

Robin Pomeroy: And Kristen, we also heard from Fatih Birol during this session, he’s the head of the International Energy Agency, the IEA.

Kristen Panerali: The IEA has been very active over the past couple of weeks, and they came out recently with a 10-point plan for the European Union to reduce their reliance on Russian gas supplies. What he what he has to say is is taking it a step further from the 10-point plan.

With these events, I believe we may well be entering a period of a major energy shock which could be compared to what we saw in the 1970s.—Fatih Birol, Executive Director, International Energy Agency

‘Freedom fuels’

Fatih Birol, Executive Director, International Energy Agency: Globally, I believe we have two main immediate challenges: how to maintain global energy security, but at the same time how to minimise, if not nullify, Russian energy revenues. How to bring these two together. The issue is, dear colleagues, Russia is today the number one top oil exporter of the world and the top natural gas exporter of the world. And with these events, I believe we may well be entering a period of a major energy shock which could be compared to what we have seen in the 1970s, which could have impact on the global economy and pushing inflation significantly up.

Robin Pomeroy: Fatih Birol, head of the International Energy Agency, and he’s someone who’s talked about the energy transition as well, and that’s something will be coming back to on a future episode of Radio Davos: will the crisis in Ukraine slow down or speed up the transition away from fossil fuels? This, Kristen, if you’ll allow me to draw a conclusion here, let’s go back to the person we started with, which is Børge Brende, president of the World Economic Forum. This is what he had to say about a chat he had with Ukraine a year ago.

Børge Brende: In 2021, we had an energy roundtable on Ukraine with the prime minister, and we discussed Ukraine’s efforts on the development of renewables. I think the prime minister called it ‘freedom fuels’. That was the renewables. I kind of liked that way of putting it: modernisation of the power grid and also to increase energy efficiency – but independence through, also, ‘freedom fuels’, as the prime minister coined it. Today, we really live in a different world and we know that we will have to also now discuss how can we also use this as an impetus to also support Ukraine’s population, but also, how can we become more energy and gas and fossil fuel independent in Europe.

Robin Pomeroy: Borge Brende. Kristen, if people are listening to this and want to know where to get more information, where should they go?

Kristen Panerali: They can come to our website. We have contact information on there so that you can reach directly out to DTEK or to Naftogaz and to the other stakeholders and respond to their requests for very specific materials and supplies that are needed in order to keep the lights and the heat on for the people of Ukraine.