Publication: Monitor Volume: 3 Issue: 181

The appointment of Boris Brevnov, chairman of Russia’s United Energy Systems (UES), as president of the CIS Electrical Energy Council last week may presage an attempt to increase Russian control over the electrical energy systems of other CIS countries. On the other hand, such control could lead to closer integration of the region’s electrical energy grid and improve the availability and reliability of electrical supplies.

Brevnov called for the integration of all CIS countries’ electrical energy systems shortly after his appointment. (Russian agencies, September 25) The potential benefits of integration were illustrated by the loss of electricity in much of Ukraine on September 12, due to fuel shortages that shut down a number of key Ukrainian power plants. (Ukrainian agencies, September 23) Although Russia’s UES was able to provide Ukraine with additional electricity for a time, it was unable to compensate fully for the loss. Nur Nigmatullin, president of Ukraine’s "Energoatom" power company, argues that because "a larger system is better able to stabilize fluctuating loads," closer integration with Russia’s UES would have prevented Ukraine’s loss of electricity in the first place.

Russian proposals for closer electrical energy integration will also be presented in Kazakhstan, where Russian prime minister Viktor Chernomyrdin is to discuss unifying the Russian and Kazakh systems during his visit to Almaty on October 4. (Russian agencies, September 26) The Russian and Kazakh energy systems are highly interdependent. Some 1,500 kilometers of the grid that connects European Russia with Siberia runs through northern Kazakhstan, while Kazakhstan’s own system is not thoroughly integrated and relies heavily on electricity imported from Russia. The weaknesses of this system have been apparent since early 1996 when, as a result of the growing indebtedness of power users in Kazakhstan and shortfalls in Kazakh coal exports to Russian power firms, the flow of electricity from Russia to Kazakhstan was significantly reduced. UES at that time lost the ability to wheel electricity through the 1,500 stretch of its grid that runs through Kazakstan.

Closer coordination between the two systems could help both countries to solve their electricity problems. Brevnov apparently hopes to promote this coordination through the purchase by UES of an equity stake in Kazakstan’s electricity industry. (Itar-Tass, September 26) UES has made a similar offer to the Moldovan government, whose electricity industry (like Kazakhstan’s) is deeply in debt to Russia. However, such purchases also raise the specter of political control, especially since UES — one of Russia’s largest firms and one in which the federal government is a large minority shareholder — is using the institutions of the CIS to promote its attempts at gaining influence in neighboring countries. Kazakhstan, Moldova, and Ukraine have generally resisted such efforts thus far, even at the cost of energy shortfalls and slower economic growth. It remains to be seen whether Kyiv, Chisinau, and Almaty are still willing to pay that cost.

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