As the war in Ukraine approaches its one-year mark, the European Union implemented a new product ban on Russian gas to cut off Russian funding for the war. The soaring gas prices are responsible for numerous countries and their poorest citizens navigating the challenges of extreme energy poverty. The energy battle left many Ukrainians without energy for days, weeks and even months. Ukraine’s energy coming from new sources is necessary to support citizens nationwide. In the coldest months, Ukraine continues to fight for heating for homes and businesses nationwide. In early February 2023, USAID promised a new mobile gas turbine power plant to provide energy to more than 100,000 businesses and homes.
Ukraine and Its Dependence on Russian Gas
Energy prices skyrocketed worldwide, effectively pushing millions of European Union members and Ukrainians into energy poverty. Energy poverty is when energy bills consist of such a high percentage of income that they have no option but to reduce their household’s energy consumption, which then negatively impacts health and well-being. In Ukraine, 42 million cubic tons of Russian gas flow through the country daily, acting as a major source of income for Russia.
Throughout the war, Ukrainian energy supplies have been a prime target both physically and financially. Russia is a primary supplier of Ukraine’s energy. In August 2022, Russia’s Nord Stream One pipeline, a dominant gas vessel in energy transportation, shut down due to leaks and prices rose exponentially overnight.
In November 2022, Russian forces attacked major providers of Ukrainian energy and cut energy supplies by at least 30%. The energy cuts are in addition to diminished Russian gas supplies already cutting into energy sources available for Ukraine. Energy prices across Europe have increased on average by about 73%. Natural gas alone has risen in price by 122% within a few months. The rise in energy prices is forcing more and more Ukrainians into poverty. The latest estimate of impoverished Ukrainians is approximately 25% of the nation, a dramatic increase from the much lower 2% one year ago.
Sanctions on Russian Gas
Governments worldwide implemented sanctions on Russian gas to decrease potential funding for the war in Ukraine. After a year of nations changing and renewing sanctions, in February 2023, the European Union and all G7 nations, United States, Britain, Germany, France, Italy, Japan and Canada agreed on new sanctions on Russian gas. The latest ban is on all Russian diesel exports, a critical export of Russia. Diesel is an import that nations worldwide depend on for powering cars, farming equipment, factory machinery, and more to earn income. With each sanction, gas and energy prices could continue rising and Ukraine could be among the first nations to feel the price impacts of the sanctions. Ukraine’s energy coming from a new source without sanctions could allow a window of opportunity for Ukrainians to regain economic footing.
USAID’s Energy Assistance to Ukraine
The mobile gas turbine power plant that USAID has brought to Ukraine is not the first instance of aid from the U.S. Since the beginning of the war in Ukraine, USAID has invested $55 million into energy supplies and assistance for Ukraine. The government organization has brought energy assistance in the form of generators and financial investments to lift the burden of energy poverty and traditional poverty off of Ukrainians.
The new mobile gas turbine could lessen the Ukrainian energy burden. Mechanics and engineers have rushed non-stop to bring new energy sources to Ukraine while fixing the ones the war destroyed. USAID’s efforts for Ukraine engage the public and private sectors. It is working to bring more relief and energy providers to Ukraine. One of USAID’s most promising partnerships is with G.E., a major energy conglomerate and USAID is hoping to bring more energy poverty relief efforts with G.E. energy poverty remains an issue in Ukraine, but Ukraine’s energy coming from a source where they will not be skirting sanctions could help stop or at least slow the rise of poverty rates.
– Clara Mulvihill