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In recent days, Hungary’s net exports of goods to Ukraine have reached an all-time high. Ukraine’s electricity production has been forced to rely on imports to cover the huge shortfall in energy production caused by the Russian attacks, while Ukrainian demand for electricity has also soared in the summer heat. The result was that in June, Hungary was by far the largest exporter of electricity to our eastern neighbor, and this is expected to continue for weeks in the heatwave.
Since the end of March, the Russians have again started to target Ukraine’s energy infrastructure, the country has been in need of emergency electricity imports, including from Hungary, Portfolio reports. Since then, the situation has got much worse. DTEK, a key player in the war-torn country’s energy supply, has wrote in recent weeks that it has suffered severe damage to its thermal and other capacities, with several of its staff killed, and that it has also experienced serious difficulties in supplying electricity.
The problems caused by the loss of power generation capacity are compounded by the fact that, meanwhile,
demand for electricity has also soared in the summer heat, with many areas of the country experiencing temperatures of 35-38 degrees Celsius.
More specifically, demand spikes when there is electricity available, as planned power cuts of several hours, up to 10-12 hours a day, continue to be a regular occurrence in large parts of the country, including Kyiv. This is because even with the surge in electricity imports, the system operator is unable to meet demand.
In recent days, Ukrenergo (electricity transmission system operator in Ukraine) has been importing around 35,000 MWh of electricity per day from neighboring countries, with a peak at the end of June of just over 35,600 MWh. According to the Kyiv-based Dixi Group research institute, focusing on energy research, Ukraine’s electricity imports more than doubled from May to June to over 850,000 MWh, which is 6% more than the total imports in 2023, Reuters noted. Based on Dixi Group data
Ukraine imported by far the most electricity from Hungary in June, bringing its share to 42%.
Slovak and Romanian imports accounted for 17-17%, Polish for 16% and Moldovan for 8%.
The severe electricity market situation in Ukraine, a drastic drop in production capacity and a surge in demand during the summer heatwave led Ukraine’s deputy energy minister to say the other day that Ukraine was in talks with neighboring countries to further increase Ukrainian electricity imports from the currently agreed level (1.7 GW), which is almost exhausted. This is clearly reflected in the time series of Hungarian-Ukrainian net electricity flows. Net electricity exports to Ukraine have jumped to over 1,000 MW in several quarters in recent weeks,
with a historic record of 1,278 MW in one quarter in late June, according to MAVIR data.
Since February 23, net commercial electricity flows in variable directions were around 200 MW, and then from the end of March, with the intensification of Russian attacks on Ukrainian energy infrastructure, net Hungarian commercial electricity exports to Ukraine surged. Since early June, Hungary has been in a virtually continuous net export position to Ukraine.
Many parts of Ukraine are experiencing a heatwave of 35-38 degrees Celsius these days, hence the increased demand for cooling will also push up daytime electricity imports, including from Hungary. In addition, there was an rise in Hungarian electricity imports from Austria and Slovakia, and that some of this may have been leaving the country for Ukraine (or Romania, from where some of the electricity probably also flowed on to Ukraine). Thus, through the interconnected European electricity market and the physical interoperability of border sections, Hungary has managed to achieve by far the largest outflow of electricity to Ukraine in recent weeks.
However, it is also important that the production of Hungarian solar power plants, peaking during the day, can be “managed” with the help of Ukrainian exports, and this also helps, for example, to prevent the Hungarian power exchange (HUPX DAM) wholesale electricity prices from falling even lower during the day. In other words:
the boost in Ukrainian electricity exports comes in handy during the summer Hungarian solar overcapacity period, because it keeps daytime electricity prices relatively higher
and allows owners of solar power plants that produce for the pure market to earn more money.
Via Portfolio; Featured image via Facebook/Mavir
