Energy’s Role in Ukraine Peace Talks

Guest

Tim McDonnell

Climate and Energy Editor, Semafor

Transcript

Tim McDonnell: You blow up one coal plant, you can take two gigawatts off the system. I mean just with one strike. You can’t do that with a solar farm.

I think one of the big lessons from Ukraine definitely has been that the push for more decentralized distributed energy system using a lot more renewables has very much been a part of Ukraine’s national security strategy and energy security strategy.

Jason Bordoff: After more than three years of intense fighting following Russia’s invasion of Ukraine in February 2022, the path to end the war has been challenging. President Trump has been aggressively pushing both Ukraine’s President Volodymyr Zelenskyy and Russian President Vladimir Putin toward a peace deal, as part of Trump’s campaign promise to quickly end the war. Meanwhile, energy has emerged as a critical factor, functioning both as a weapon and target in this war.

The peace deal Trump envisions would reportedly include U.S. control of the Ukrainian electrical supply and its nuclear power plants. And separately, the Trump administration has been working on a mineral deal with Ukraine for months. But developing any of those resources would take time: Ukraine’s energy infrastructure has been severely crippled by war.

So what are the potential paths for peace ahead for Ukraine and how might sharing its mineral or energy resources with the U.S. play into those options? How has Ukraine’s energy infrastructure fared during the war? And what energy security lessons can other countries learn from this conflict?

This is Columbia Energy Exchange, a weekly podcast from the Center on Global Energy Policy at Columbia University. I’m Jason Bordoff.

Today on the show – Tim McDonnell.

Tim is the climate and energy editor for Semafor, where he writes the Net Zero newsletter, and is also a reporter for Quartz. He has covered the business and science of climate change for more than a decade and has written for The New York Times, The Washington Post, and The Economist, among other publications. Tim lives in and reports from Kyiv and is writing a book about the role of energy in the Ukraine conflict. He joined me to talk about the role energy plays in this conflict.

We covered the potential for an energy and minerals deal between the U.S. and Ukraine, and how that plays into larger geopolitical and energy policy questions in the region. And we talked about Ukraine’s renewable energy ambitions – and how they are linked to the conflict.

I hope you enjoy our conversation.

Tim McDonnell, welcome to Columbia Energy Exchange. It’s great to have you on, I think for the first time. Good to have you here.

Tim McDonnell: Yeah, thank you so much, Jason. Very happy to be here.

Jason Bordoff: It’s nice to turn the tables on you since you ask me questions often that I get to ask the questions now.

Tim McDonnell: Yeah, that’s great. Happy to do it.

Jason Bordoff: Just give our listeners a little bit of a sense of your background and what you’re doing now. I speak to you because you report on energy and climate issues, but you are living in Ukraine, which is very much in the news for several last several years. What are you doing there? Why are you living there? How long have you been living there and how does that relate to the energy and climate work you’re doing?

Tim McDonnell: Absolutely. Well thanks again, Jason. Very happy to be talking with you. And I’ve been covering energy markets and climate policy. The energy transition related issues for about a little more than 10 years now from different parts of the world, was in DC for a bit, lived in Sub-Saharan Africa for a few years. I was in Cairo for a few years, most recently, and then about two years ago, just coming up to two years ago, relocated to Kyiv. My wife is the Ukraine bureau chief for the Washington Post. So that was the reason for the move.

But it actually turned out to be a very insightful and interesting move for me as an energy reporter because of course energy is very deeply interconnected with a lot of what’s happening in the war in Ukraine, which we can talk about in more detail. But so I’m based there writing about what’s happening in Ukraine, still covering energy policy, energy markets in the US and Europe and everything that’s happening with the change in administration in the US. Yeah, I mean as Jason you and I have talked about many times, it’s just a very fascinating period and the sort of history of energy. And so I just try to find as many different angles on that as I can and bring that insight to our readers at Semafor in the newsletter that I put out twice a week on Tuesday and Thursday mornings Net Zero.

Jason Bordoff: Which everyone should read and gives a lot of good insights into what’s happening in the administration with the policy changes. And I suspect a lot of people listening will be familiar with Ukraine as it relates to energy because of the second order effects of Russia’s invasion of Ukraine and what that meant for the European energy crisis, the ripple effects that energy crisis had for much of the rest of the world. But I want to talk a little bit specifically about Ukraine. I think we sort of talk about Russia cutting off a significant amount of gas supply to Europe as part of the pressure strategy there, but talk about what Russia’s invasion has meant for the role energy plays in Ukraine’s defense and the war it’s having with Russia right now, and what the impact of Russia’s invasion has been on Ukraine’s energy infrastructure.

Tim McDonnell: Yeah, there’s a lot of different aspects to this and energy is very deeply interwoven into this conflict in a lot of different ways from being based in Ukraine. What we see most sort of viscerally on a daily basis is the way in which energy assets have really become a primary target for Russia’s hybrid war against Ukraine. And in the last three years, the Ministry of Energy just had a statistic a couple of weeks ago that they counted 63,000 individual energy facilities that have been destroyed or damaged in the last three years since the full-scale invasion started. So that includes everything from these enormous Soviet era coal-fired power plants. It includes transmission lines and substations. It includes gas storage, gas pipelines, gas production facilities. It includes solar farms, wind, I mean basically any type of energy asset you can think of has been targeted at some point by everything from small drones, big drones, missiles, artillery.

In the case of the dam, the hydropower dam that was blown up a couple of years ago. I mean that was probably dynamite that was used there. So all forms of munitions have been deployed against all kinds of power systems and it’s led to the loss of about half, maybe more of Ukraine’s power generating capacity. Fortunately, Ukraine had a little bit of headroom in its generating capacity. Before the war, it was a net energy exporter, but nevertheless, so much has been damaged. I mean in the last few years that we’ve gone through several periods of very severe blackouts. Last summer we were having blackouts all across the country, including in Kyiv, on a daily basis. The winter two winters before that, it was also very bad. So this has just been this sort of cat and mouse game that’s been happening of energy infrastructure being targeted and destroyed, Ukraine’s rushing into repair as much as it can, building new stuff, fixing what it can, harvesting parts from one power plant to help rebuild another one.

And then things just get targeted again the next week and often with the loss of life of energy workers as well there. So this sort of blackouts and heating loss has become part of the fabric of life for Ukrainians during the war. And it’s affected everything from the way that people go to school, to the way people receive healthcare, to small businesses, factories, industrial activity, large businesses, just basically every aspect of life has really been affected here. And this is all part of a strategy on Russia’s part to grind morale down, to sort of push the Ukrainian population towards some kind of peace deal that’s going to be more favorable to Russia. And as we’ve seen that, that hasn’t happened yet, but certainly people do feel that pressure in a lot of ways. And then what I can also say is that there’s this other dimension to this, which is the role that Russia’s oil and gas exports have played in this conflict. And you alluded to the cutoff of gas earlier at the beginning of the full-scale invasion. I mean right now Russian gas, so before the war, Europe got more than half of its gas, about half of its gas from pipeline from Russia. That is down to about a third now of the level that it was before the war, which has caused all manner of disruption, especially in 2022-23, the price of gas in Europe went through the roof. And there were also just real severe impacts across the whole energy market then.

And you’ve sort of seen various countermeasures from the US and Europe in terms of sanctions on Russia’s energy sector, which have had mixed success. Those are some of the main ways in which this has all manifested. And it’s just been very interesting for me as an energy reporter to see what that all kind of looks like and then what the recovery period looks like as well. The pivot that Europe has gone through to try to replace that pipeline gas, whether it’s from LNG, from the US or from renewables or other things that they’re trying to do. Same within Ukraine. What do you do when you have a 50-year-old gigantic coal-fired power plant that gets hit by a bunch of rockets? No one is going to pay to rebuild something like that, but you need baseload power, so what do you do? And there’s a very difficult question that they’re facing. So I’m just trying to keep tabs on as much of this as I can.

Jason Bordoff: While you cover the changes in Trump administration policy and European as well. So you have your…

Tim McDonnell: Handful. There’s a lot going on.

Jason Bordoff: A lot going on. So it was a really helpful overview to just put a lot of things on the table. I want to come back to each of those. And in terms of the actual state of the energy system in Ukraine today, you talked about blackouts unable to heat your home. Is that what it was like a year or two ago or how are things today?

Tim McDonnell: Yeah, I mean we had a briefing, there was a press briefing kind of on background with one of the executives from DTEK, which is the sort of big private non-state owned energy company in Ukraine that does everything. They do generation and distribution and a lot of different stuff, and they are the owners of many of the big assets that have been destroyed. So we went in before the winter, probably in October, I think it was just to kind of get their point of view on what this most recently past winter would hold. And the picture was not great. We were bracing for five up to 20 hours of power cuts a day. And it is a little bit hard. It’s very impossible to predict what that’s going to look like in advance because it depends on the weather, it depends on what gets attacked. There’s all these variables.

And so we were sort of bracing for a worst case scenario. What ended up happening was that the situation was better than I think a lot of people feared, at least in the major cities in Kyiv. And in more rural places it’s a little bit more difficult because they have fewer flexibility options. But why was it better than people expected? We didn’t have that many blackouts this winter. I mean, what’s behind that? There’s a few things. Ukraine has been pushing to expand its capacity to import power from Europe so that there’s more power imports happening, which is great. They’ve been slowly but surely deploying a kind of new generation of small gas turbine generation. So we are getting from GE Vernova and other companies like that that build these turbines. Mitsubishi, some of them have been set up through private companies or through aid organizations from the US and Japan and others that have been setting those up.

Those have been helpful for some urban areas. There’s been, I mentioned these big coal-fired power plants and how difficult it’s to find financing to rebuild them, but they actually have done work continually on standing up at least some measure of rebuilding those plants, which involves harvesting parts from other plants that have been destroyed. They’re searching for parts all across Europe and in Poland and Bulgaria trying to find parts and pieces for things as much as they can. We also just got lucky I think this winter because the weather was relatively warm, so that helped. So it was better than we expected, but still when we get into the summer period and people start to turn on the air conditioning again, I think we’re going to definitely be back into probably a power deficit. And again, it depends a little bit on what gets targeted and there’s supposed to be an energy ceasefire in place now that should have been in place for the last several weeks. I think what we’ve seen on the Ukrainian side, at least…

Jason Bordoff: For listeners, you mean as part of the ceasefire agreement, Russia not attacking Ukrainian energy assets and vice versa?

Tim McDonnell: Exactly. Yeah. So it was supposed to be a step towards a broader peace deal that the US has been trying to broker that there would be a ceasefire on energy objects and in the Black Sea separately. The energy side has not proven very effective. I mean, there were attacks again on energy infrastructure in Ukraine within a day of that deal being announced. And Russia has also claimed that Ukraine has kept up its long distance drone attacks on oil refineries and other energy infrastructure inside Russia, which Ukraine has pushed back on a lot of those claims. It’s a little bit hard to, this is, it’s a fog of war kind of situation. It’s a little bit hard to always know exactly who hit what when. But anyway, so this ceasefire has not really changed the situation that much. So I don’t know what will happen in the future. But suffice to say, the situation with blackouts was a bit better than we feared, but we’re definitely not out of the woods with all of this quite yet.

Jason Bordoff: And who is financing things like repairing a 50-year-old coal plant? Is this because companies are choosing to do it, it makes commercial sense? Or is this international aid and assistance from international organizations and countries?

Tim McDonnell: It’s kind of both. So European Union, they have something called the energy support fund that’s large pot of money that European countries contribute to that specifically for energy aid for Ukraine that they have been drawing on for lots of different types of projects. And there’s been a nuanced conversation within that corner of the aid world about how to deploy capital for coal projects. And I think there have been some European countries that see a conflict between that and their climate targets and ESG goals and don’t want to be putting money into coal. But I think there’s been an openness to relax that policy a little bit for Ukraine. So there is aid money that’s going to help rebuilding some of those coal assets. And then DTEK itself, I think it helps that DTEK is owned by Rinat Akhmetov, he’s a Ukrainian billionaire who owns the company. So they have some deep pockets there that they can draw on.

I don’t know that it’s really seen as a great investment in sort of conventional terms, but it’s a necessity. And so that’s what they’re doing now. I think that, so Ukraine was one of the countries that at COP 27, the one in Scotland, there were a lot of countries that got together and sort of talked about their coal phase out plans. Ukraine was one of those that set a sort of sunset period for coal. And as far as I know, that has not changed. If anything, they’ve probably moved forward the date from 2030 to something earlier to phase these out. So I think these coal plants are on kind of life support right now and until some other baseload gets built, but I don’t think we’re going to see a big resurgence of coal there.

Jason Bordoff: Yeah, and it’s interesting to hear about coal and although the question wasn’t just about coal, it was just kind of more broadly what the international response has been and how important that international assistance is to help Ukraine weather the energy crisis. And again, we talk a lot about the European crisis, but the Ukrainian energy crisis. Can you talk a little bit about the new Trump administration and the posture toward these negotiations and ceasefire and Zelenskyy in the Oval Office, and what impact, if any, has that had on the support that Ukraine is getting to cope with this?

Tim McDonnell: Well, so first of all, just to close the loop on this sort of aid question, the funding for energy aid to Ukraine had been split basically equally between Europe and the US during the Biden administration. I think something like $800 million between $800 million and a $1 billion from the US mostly through USAID that was put into every possible kind of equipment that you can think of for supporting energy in Ukraine. And of course, because of everything that has been happening around USAID being effectively shut down, that is all halted. And in the days after the immediate days after USAID was closed, I was talking to some people and there were transformers and everything from hard hats for energy workers to armored vehicles and generators, lots of stuff that was kind of stuck in limbo in Poland or other places that was kind of meant for Ukraine that probably never got there.

So anyway, just to say that that aid has basically stopped, which I think puts more weight on Europeans shoulders to deal with that now and try to figure out how to move forward there without more US assistance. That of course, separately from that, there’s been this conversation around a critical mineral deal between the US and Ukraine. It’s not in a form of immediate aid for Ukraine’s energy sector, but in theory could at some point in the future be kind of deployed in that way. So the idea with this mineral deal is that the US would get some portion of royalties from future critical mineral and oil and gas, a development in Ukraine would go into this fund that would be jointly controlled by the US and Ukraine with the idea of that money being reinvested back into Ukraine’s recovery, that deal has been sort of moving forward very fitfully over the last month or so. And every time there’s a new draft, it’s a little bit different than what they were talking about before. There were some rumors going around that…

Jason Bordoff: Is the way to think about that. A fund for Ukraine’s assistance or a way to pay the US back for US support of Ukraine.

Tim McDonnell: Well, I think that’s a great question that has not been, people have different views on the answer to that question, which is probably part of the root of why it hasn’t been signed yet. And Ukrainians certainly feel that it should not be viewed as payback or any kind of retroactive application of that money, but that it should be thought of as sort of more forward thinking. I don’t think there’s a lot of opposition among Ukrainians to the idea that some portion of royalties would be reinvested in the country if that means that it sort of helps to clear the path for greater foreign investment from the US into these sectors into mining or oil and gas development. It’s just sort of the details of what goes into that. And I think it’s fair to say that this mineral deal is very substantially a signal of trust between Trump and Zelenskyy that is sort of in a way the most important part of this deal.

Can we just get something signed so that we feel like we are understanding each other rather than the nitty gritty details of what does this deal actually do for developing these new industries? Because the fact is that there’s a long, long road ahead for any kind of new greenfield critical mineral development to happen in Ukraine or even oil and gas, which security and ending the war would have to be a prerequisite for anything like that. And that’s kind of far from where we are now. So I’m not sure what the outcome of that deal will be, but it’s something that we’re watching closely and I think will be interesting to see where that goes from here.

Jason Bordoff: And just help people listening understand what the deal actually is or what the terms are. If it’s a fund for rebuilding Ukraine after the conflict, why does Ukraine need the US for that? Ukraine has a lot of resources. They go and let companies come in and explore those resources. They take a royalty. That tends to be how countries with natural resources get wealthy. Why is this a US-Ukraine thing?

Tim McDonnell: Yeah, I mean, like I said, I think part of it is just as a trust building exercise between the two presidents. I think there’s a sense as well that…

Jason Bordoff: Would it be US firms that are coming to do the mining and development?

Tim McDonnell: I think that’s what that’s envisioning that would be, would kind of open, it would give sort of express access to US firms to be the ones to come in and do this kind of resource development. And that it would be also a signal for other types of aid if we’re going to continue military assistance, intelligence sharing or even just humanitarian assistance for Ukraine or whatever the case may be, that having a deal in place that gives the US VIP status for these natural resources or gives the US a measure of a degree of control over how that money is deployed back into the country. This would be a jointly controlled fund would just sort of create a smoother playing field. It might make it a little bit easier politically to then also come in and say, okay, we’re going to also continue the intelligence sharing.

We’re going to continue providing you with patriot missile batteries and all this other stuff that Ukraine still needs to have. And I think there’s still a question as part of these negotiations about how exactly would this money get deployed and who would exactly get to choose how it’s deployed. Would it be for rebuilding energy infrastructure exclusively? Would it be for broader reconstruction purposes? Could the money itself be used for doing exploration and due diligence for the mineral projects for future mineral projects? Because there’s a lot of uncertainty about what exactly is under the ground in Ukraine still too. And as you know, starting a new mine, you need millions and millions of dollars just to do the basic background research before you even make a final investment decision. So I think that those are different ways the money could be used, but it’s a little unclear.

Jason Bordoff: You mentioned part of the way Ukraine has coped is importing more power, and I know that Ukraine wants to integrate into Europe’s energy market. Can you talk about what progress is being made so far to improve the connectivity between Ukraine’s energy sector and the EU? Which countries in Europe are supplying that power? Is there disagreement about whether to do that or does that affect European electricity supply prices, reliability? Is that an issue?

Tim McDonnell: I mean, I won’t pretend to know all the details of the answer to that question, but I think that what they’ve been focusing on at the moment, as far as I know, is making greater use of the existing transmission network that exists between, I think primarily between Poland and Ukraine. I’m not aware of big transmission construction projects that are underway yet. So I think it’s kind of just about what can we get with the existing infrastructure, which it’s not a huge volume, but it’s just been helpful as a sort of bandaid. Does that affect energy prices, electricity prices in Europe? Again, it’s relatively small volume. I don’t know. I haven’t heard too much about that, but it’ll be an interesting thing to see. I mean, I know longer term that Ukraine would definitely like to get back to a position of just having more of its own domestic generating capacity back. That’s the place that they want to get back to.

Jason Bordoff: Got it. And I’m curious, when we just had the UK government and the International Energy Agency do a summit on energy security in London a few days ago, when you think about the concept of energy security, and you look at it from the standpoint of Ukraine, we talk a lot about traditional energy security. You’re dependent on many European countries dependent on imports of oil and gas. A lot of people responded to the crisis that hit Europe in 2022 by saying, look, if you have a faster shift to a electrified system and renewables and you don’t depend on these global volatile oil and gas markets that are exposed to geopolitical risk, you increase energy security and the sense that if you move in a greener direction, you are more secure. You’re talking about risks to physical infrastructure that seemed to apply maybe even more so to the grid and above ground power lines and stuff. And I’m just wondering, when you look at the mix of sources of electricity out there from oil and gas to coal to nuclear to renewables for a conflict like this as opposed to someone cutting off supply halfway around the world, how do you think about energy security? What should countries that are worried about physical conflict, maybe because of the neighborhoods they live in, what should they be doing to increase the energy security of the security of their energy system?

Tim McDonnell: Yeah, that’s such a great question. I mean, I think one of the big lessons from Ukraine definitely has been just if you look within Ukraine that the push for a more decentralized distributed energy system using a lot more renewables has very much been a part of Ukraine’s national security strategy and energy security strategy. I mean, it’s a wind farm or a solar farm. It’s a pretty tough call. I think for an attacking enemy to think about sending a $10 million missile to hit one or two solar panels is not a very good deal. I think that the more that you have the stuff spread out and using assets that in a way are sort of harder to take out large volumes of gigawatts of capacity with one strike because that’s what you can do if you hit a big coal plant, you blow up one coal plant, you can take two gigawatts off the system, I mean just with one strike.

So you can’t do that with a solar farm or even with something like these smaller gas turbines that they’ve been kind of putting in different places around the country. So I think there’s been a real lesson here about the security value of decentralizing the system and for Europe as well. I think that what this war has shown is that there was this sort of presumption of security that came with oil and gas trade as it had existed in Europe for the last few decades. And building this pipeline network with Russia was seen as a kind of security and also a sort of form of … You know, that gas appeared to be cheap. I mean, there’s a sort of economic…

Jason Bordoff: Yeah, I don’t know if it was viewed as security. I think the security risk was probably placed as quite minor and small compared to the benefit…

Tim McDonnell: Right. Yeah, no, of course. I mean, yeah, it was cheap and it was there, and I think now there’s a question of really challenging that notion that how cheap was that? I mean, look, now Russia’s having severed that tie now, I think there’s some concern still about what happens if you just replace the Russian pipeline gas with US LNG, are you creating some kind of similar dependency that in the future could also become problematic for Europe? I mean, I think it’s probably fair to say that the US is a better partner to do that kind of deal with a more reliable partner than Russia, but who knows? It could change in the future.

Jason Bordoff: But again, the risk that is being highlighted, I think by Ukraine we tend to talk about energy security in the context of will Qatar or I guess the United States or use exports as a coercive tool. We obviously saw that in the Arab oil embargo. But even if that answer to that is no, or the answer to that comes from diversification, you’re better off if you’re part of an integrated LNG market and you can get supply from a lot of places then if you depend on pipelines to Russia and that’s all you have going on. Even if that gap… you’re talking about drones and missiles…

Tim McDonnell: Physical attacks…

Jason Bordoff: Hitting storage units and power plants…

Tim McDonnell: And look at what happened with the sabotage of Nord Stream 2 as well. So I mean all these things are subject to physical attacks that Ukraine has been very much living through.

Jason Bordoff: And when you’re talking about physical risk, do you think, because building a lot of renewables right now, do you have a sense that solar and wind delivers a security benefit or it’s all just physical infrastructure so it’s all vulnerable?

Tim McDonnell: Well, I mean I think it does deliver a security benefit in the sense, again, because these decisions about what to strike are in a way, there’s a big economic factor there as well. Military hardware, these missiles are really expensive. Drones are expensive. You don’t want to send something over that’s going to just be completely wasted. I think they want to get, it’s a crude metaphor, but bang for their buck in what they choose to target. And just because renewables are just cheaper, the infrastructure is just cheaper than, you can’t take out as many megawatts with one hit as you can with other things. So I think that’s part of it. And they may actually be easier to defend as well from a military point of view. Because right now, I mean part of the problem with these coal plants that Ukraine has had is that they’re very difficult to defend. I mean, it’s this huge thing. You can build a kind of a concrete wall, which they’ve done a little bit of this like building walls around substations or putting nets above them that are meant to catch drones that are coming in. And so you can take some steps to physically defend them, but they don’t always work that well. And something like a coal plant, how many different patriot batteries do you need to defend? I mean, these coal plants are the size of a city or a small town.

Jason Bordoff: And then of course, the other way we’ve seen to hit the power plants in Ukraine elsewhere too is cyber attack too. And not just now, but a decade ago. That’s another vulnerability in the power system, not just the power system. We saw it with the colonial pipeline in the US too. So energy system generally. We’ve talked about solar and wind and coal plants and gas, and Ukraine’s pretty reliant on nuclear power. Can you talk about that reliance and how the Russians have targeted that nuclear infrastructure and what the risks and dangers there are?

Tim McDonnell: And of course everyone remembers Chernobyl, and that’s Ukraine. I think for Ukrainians who work in this sector, in the nuclear sector, this memory of Chernobyl is very fresh in people’s minds and it’s a very visceral memory of what can potentially go wrong in that sector. And the Zaporizhzhia nuclear power plant, which was the biggest in Europe, was one of the very first pieces of infrastructure that was occupied by Russia at the beginning of the full scale invasion. Within a week or two after that started, they had gone there. There’s a lot of concern about safety of that facility right now. It’s not turned on. It’s kind of at a low, it’s sort of at the bare minimum level of functionality. It’s not sending power back into Russia or into Ukraine, I think because there’s a deficit of, oh, they have a lot of problems. There’s a deficit of electricity needed to run the plant. They have a deficit of water.

Because once they blew up the Kakhovka hydroelectric dam, that also took away the water reservoir that they were using for cooling the nuclear power plant. So they have a water problem, they have a worker shortage there. And so there’s a lot of reasons why that plant is not working. And there’s been some tensions with the international inspectors from the IAEA. They have inspectors that go into this plant on a kind of rotating basis. And in December, there was a group that was stuck inside for a number of weeks or maybe even more than a month because of how much military activity was taking place in the immediate vicinity. And Ukraine has accused Russia of using the plant as a staging ground for attacks or using it as a place to park military vehicles and all of that, which is just, it’s scary to think about if you have attacks.

So far there haven’t been any strikes on that plant or on other nuclear power plants within Ukraine, exactly. But there have been strikes on substations that serve nuclear power plants, which this is how you get to a kind of meltdown situation. If you can’t keep the core cooled, then it becomes dangerous very quickly. That’s the biggest concern I think that people have right now. And so I think that what’s going to be the fate of this Zaporizhzhia plant is unknown. It’s still kind of a bargaining chip. I think it could be something that gets traded as part of a negotiation, even in that case, it’s going to take several years to stand back up again. And the meantime, Ukraine has, the energy ministry in Ukraine has been pushing to expand some of the other nuclear power plants, existing ones in the country trying to source some hardware from Bulgaria.

They passed…I think the parliament agreed to do that, but then they got snagged in some detail. So I’m not sure that that deal has really gone all the way through yet. But they are looking to expand that power plant, which is controversial in Ukraine because on the one hand, people see the need for more baseload power. On the other hand, the nuclear sector in Ukraine has historically been very opaque and a source of corruption and kind of a black hole. It’s a sort of all national security secrets. It’s very hard to tell what is really happening there. And this is obviously a lot of money that’s involved in building a plant like that. So I think there’s some kind of transparency and governance related risks that are entailed with a project like that that have generated some pushback from some lawmakers in the country.

And then last thing I’ll say here is that I think there’s a growing interest. This came up at the last COP in Azerbaijan. There was a whole session on this about what’s the opportunity for SMRs in Ukraine. This obviously is not going to be a solution for the immediate term power crisis, but within the next decade or so, is there an opportunity to invest in some really interesting new nuclear technology, maybe even using the facility or the footprint of these old coal plants? Could you demolish some of that old destroyed stuff and use the same interconnection network and the location and the workers that are on site there to start up a new kind of nuclear industry in Ukraine? There’s a lot of interest around that now. So that’s one to watch for the future.

Jason Bordoff: So I mean, the bottom line is just so people understand it is still a quite precarious situation, the potential for a real catastrophic nuclear accident when you have military activity and compromised infrastructure and maintenance issues that may not be being attended to for sure. This is all still pretty serious issue right now.

Tim McDonnell: It’s very tenuous there. Definitely there’s a lot of concern about the safety, that stability of that Zaporizhzhia plant for sure.

Jason Bordoff: We’ve talked a lot about how Russia targeted has used energy as a target as one of the ways to impose pain and weaken the will of the Ukrainian people. Ukraine is targeting Russian energy infrastructure as well. And talk a little bit about what Ukraine has done to the energy assets in Russia.

Tim McDonnell: Yeah, I mean, so Ukraine, especially in the last, I would say in the last six months or so, had definitely stepped up its efforts on using relatively long range drones. So drones that can go about a hundred kilometers, 120 kilometers or so, inside Russia to target oil refineries to target some power plants. The idea being that hitting these objects is useful for cutting off the supply of fuel that can be used by the military, but also the revenue from refined products that Russia is able to export or crude or power or the other things that were being targeted. Again, the statistics are a little bit murky. I think Reuters had done an analysis that at a certain point in the last, about a month ago, that according to their assessment and talking to traders within Russia, they thought that it was about 10% of Russian refining capacity that had been taken offline because of these attacks.

So it’s significant. And there was one Ukrainian lawmaker that I spoke to when this energy ceasefire was first being deliberated or discussed, who was kind of against the idea actually, because as much as painful as the energy attacks on Ukraine have been in a way, like I said, we didn’t have very significant blackouts this winter in a lot of parts of Ukraine. And on the flip side, these attacks on oil refining capacity in Russia have been fairly effective at cutting off that revenue stream. So I think there’s some sense that maybe this energy ceasefire in a way is actually a better deal for Russia than it is for Ukraine, especially if one or both sides are not actually abiding by the ceasefire that also complicates it. So yeah, I mean those attacks have definitely been, I think, deployed quite effectively by Ukraine. It’s been interesting to see how that sort of gets used as a countermeasure here. And then of course there’s been this reporting around what exactly happened with the Nord Stream pipeline sabotage, who was responsible there, and I think there’s a lot of indication at this point that it was most likely Ukrainian nationals that carried that operation out. So anyway, so they’ve been effective in targeting energy infrastructure as well.

Jason Bordoff: And whether it’s the gas transport system or Zaporizhzhia, there’s been talk of the US taking control of these assets. Is that an idea that is really under consideration?

Tim McDonnell: I think the nuclear plant, no, I don’t really know where that idea came from and nobody likes that idea. I mean, Ukrainians are super opposed to that. Russians are totally opposed to that. The idea that the US would control that plant, I mean in a world where that plant came back under Ukrainian control and there was some stabilization of the security situation there, could you see Westinghouse or someone like that going and investing in that plant or contributing to the restart of it in some way? I think so. Although I was kind of talking about this transparency and governance issue before. I think for a US company to be deeply involved in Ukraine’s nuclear sector in that way, I think it would probably require some level of corporate governance reform or privatization of what is currently a state owned enterprise to make that a little bit easier for a Western company with shareholders and that kind of accountability to be involved with.

So keep watching there. I think on pipelines, it’s very interesting and a live debate right now in Europe about whether to turn back the clock and resume Russian pipeline gas if there’s as part of a peace deal, or could we go back? Certainly there’s a lot of, especially in Germany where industrial interests in Germany have a real need for cheap electricity, and I think there’s plenty in that sphere who would like to see cheap Russian gas come back online. I think the tide is still, politically, quite against that. And then we’ve even heard more recently that the Trump administration is considering revisiting or even lifting some of the sanctions that exist on Russian LNG and Nord Stream 2 and other parts of their shadow fleet, other parts of the Russian energy system export system that have been sanctioned. And I’m not very sure what the benefit is of that. I mean, at the beginning of Biden’s term, the Biden administration walked back sanctions on Nord Stream, which I think in Ukrainian for Ukrainians was seen as a major strategic mistake. I had a funny conversation with one Ukrainian official who had been involved in that, who said, if you’re dealing with a bully on the playground at school, you don’t try to make peace with first you have to punch him in the nose, break his nose, then you can talk about making up a peace with him later. And rather than the other way around.

Jason Bordoff: I mean, that might be a message the Ukrainians would’ve delivered to the Germans more than to the Biden administration.

Tim McDonnell: Yeah, well, I think they’re trying to make the case anywhere that they could. So I don’t know. I think going back on those sanctions now, it’d be a risky move for the US.

Jason Bordoff: And again, for listeners, as you know that there have been some parts of the Russian energy sector that have been sanctioned, but actually most hasn’t, right? Because doing so would be painful for all of us. So that’s why Russian oil exports were not sanctioned the same way Iranian exports were where they tried to let them export the oil, but force them to take a lower price for it, which wasn’t really that effective for very long. And the same with gas. Europe obviously is getting more Russian LNG today than it did when the conflict started because they depend very much on that energy. Do you think whether Europe goes back to Russian gas, Ukraine will have a little bit, at least to say about, particularly because of a transit deal through Ukraine, Ukraine makes money from that, but obviously Russia does too, and that transit deal expired. Is there any discussion in Ukraine about restarting that or that’s off the table while this conflict is going on?

Tim McDonnell: I don’t, and by the way, people who are interested in this sanctions question with Russia and with Iran should definitely read Edward Fishman’s amazing book on this. TO give your fellows a shout out for Columbia here because that book is really, really…

Jason Bordoff: Amazing. And Richard Nephew who designed a lot of the Iran sanctions.

Tim McDonnell: Yeah, definitely, definitely.

Jason Bordoff: Definitely. I’ll give both of them a shout out.

Tim McDonnell: So definitely a great read, which has really helped my understanding of a lot of these issues. I think that Ukraine reopening to some kind of pipe, a gas transit deal through Ukraine. Again with Russia. I haven’t heard any enthusiasm for that on the Ukrainian side yet. I mean, it was a source of income, a not insignificant source of income for Ukraine. But unless this situation, the military situation changes a lot. I mean, you could imagine a scenario where there’s an exchange of territory, a moving of the front line, and as part of that deal, a discussion is reopened on gas transit through Ukraine. It’s possible. But I think the attitude in Ukraine is so they’ve been getting hammered for so long and this conflict has just been dragging on. They don’t want to throw any bones to Russia in any way and the benefit that they might get from gas transit, I think it would be kind of near the bottom of the list of things that they would probably want to do in their energy system moving forward. So to me, that seems unlikely, but we’ll see.

Jason Bordoff: Yeah. Well, we’re just about out of time. You could tell me if there’s anything we should have touched on. We didn’t. And just to your last point about thinking, having rational conversations, using logic to think about the things the way you and I are, and it reminded me a little bit of that kind of infamous meeting in the Oval Office and how Zelenskyy got worked up and some of the way people responded to that, and you’re living there, and I just remind people of that. I think it is important to remember when I saw what Zelenskyy engaged in the Oval Office, you have to remember what it would be like to be leading a people that was for three years now under military assault, watching attacks your citizens being killed, sexual violence being used as a tool of war. I mean, I dunno, maybe you just want to conclude by giving people a little bit of a flavor of what you see on the ground there, day to day energy or otherwise. Yeah.

Tim McDonnell: I mean that Oval Office meeting, so it was interesting. I was watching that unfold on my phone while I was at dinner at a restaurant in Dnipro, in the eastern part of Ukraine. I had spent a couple of days interviewing soldiers that were in a unit that is primarily composed of former coal miners. Very interesting kind of just transition type experience that they have. They’re transitioning their coal mining workforce. Many of them have become soldiers and now are defending the coal mining territory that they used to work in. So I had just come from doing a lot of that work, and I was sitting in the restaurant watching this meeting on my phone, just kind of in a state of shock. I was with some Ukrainian colleagues. We were very shocked to see what was happening. I mean, right. Zelenskyy’s frustration in that meeting, I think super understandable.

He’s dealing with a really difficult situation. I think then you also come into a meeting where I think from his point of view, there’s a lot of things that are being said in that meeting that just intentionally or not sound a lot like Russian talking points. And I think he’s just really sick of hearing what he would perceive to be kind of Russian propaganda filtering through into a conversation like that. And then the reaction within Ukraine to that meeting. I think a lot of people were pretty supportive of him actually. I mean, and nobody likes to be pushed around or talked down to in that way. So I think a lot of Ukrainians were happy with how he held himself up in that meeting. At the same time, I did talk to many as well, especially people in government who felt that that might’ve been a moment to swallow your pride a little bit.

And that when you’re dealing with President Trump, the worst thing you can do is feed into some kind of personal animosity between you and him. I mean, because he’s not going to forget something like that. So I don’t think that really helps his cause, probably in the end, in the bigger picture. So I guess the last thing I would just say here about the general mood in Ukraine is people want this war to end. They’re very frustrated by and just worn down by having to, they’ve been fighting for 10 plus years back before the full scale invasion to what happened starting in Donbas in 2014 in Crimea and have seen their brothers and sisters and fathers and mothers killed and drafted and losing their jobs and losing their homes time and time and time again, living in a state of constant fear and terror and uncertainty. And that’s no way that anyone in a free modern society should have to live.

So the idea that anyone there wants this war to go on is totally wrong. They’re looking for a solution. And I think, but at the same time, there’s no silver bullet answer here. So hopefully they can find some way to have a package that there’s probably going to have to be some territorial concessions that happen. I think people are relatively open to that idea as long as it comes with some additional security guarantees, and the right package of those things has just not really been put on the table yet in a way that can be acceptable. So I think we’re in for a bit more of this war going forward, unfortunately.

Jason Bordoff: Tim McDonnell, thank you for making time to explain all of this to us. We need to have a whole separate podcast, talk about everything else happening and energy and climate policy and the Trump administration, the broad remit of everything else you covered so well for Semafor. But I thought it was particularly important because we’ve talked so much about the Russia, Ukraine conflict and the energy impacts as it relates to everywhere, but Ukraine. I wanted to talk about what you’re seeing on the ground and should tell people you’re working on a book about all of this, which really excited to read, and you’ve spent a lot of time really looking and studying this as well as the things that are in the news, like a critical minerals deal and things people will have read about and would be interested in. So thanks for making time from a busy schedule to explain it to us and for all the work you’re doing and be safe there.

Tim McDonnell: Thank you so much, Jason. My pleasure. And thank you also as well for all of your insights on these issues, which I draw on continuously. So thank you and happy to talk again anytime.

Jason Bordoff: I appreciate it. Thanks.

Thank you again, Tim McDonnell, and thank you for listening to this week’s episode of Columbia Energy Exchange. The show is brought to you by the Center on Global Energy Policy at Columbia University. The show is hosted by me, Jason Bordoff, and by Bill Loveless.

The show is produced by Mary Catherine O’Connor from Latitude Studios. Additional support from Caroline Pitman, Tatiana Mitrova, and Kyu Lee. Sean Marquand engineered the show. For more information about the podcast or the Center on Global Energy Policy, please visit us online at energypolicy.columbia.edu or follow us on social media @ColumbiaUEnergy.

And please, if you feel inclined, give us a rating on Apple Podcasts, it really helps us out. Thanks again for listening. We’ll see you next week.

After more than three years of intense fighting following Russia’s invasion of Ukraine in February 2022, the path to end the war has been challenging. President Trump has been aggressively pushing both Ukraine’s President Volodymyr Zelenskyy and Russian President Vladimir Putin toward a peace deal as part of Trump’s campaign promise to quickly end the war. Meanwhile, energy has emerged as a critical factor, functioning both as a weapon and target in this war.

The peace deal Trump envisions would reportedly include U.S. control of the Ukrainian electrical supply and its nuclear power plants. And separately, the Trump administration has been working on a mineral deal with Ukraine for months. But developing any of those resources would take time because Ukraine’s energy infrastructure has been severely crippled by war. In parts of Ukraine blackouts have become the norm.

This week, Jason Bordoff talks with Kyiv-based climate and energy reporter Tim McDonnell about the role that energy has played in the war in Ukraine and how it could factor into its resolution.

Tim is the climate and energy editor for Semafor, where he writes the Net Zero newsletter, and is also a reporter for Quartz. He has covered the business and science of climate change for more than 10 years and has written for The New York Times, The Washington Post and The Economist, among other publications. Tim lives in and reports from Kyiv and is writing a book about the role of energy in the Ukraine conflict. He joined the podcast to talk about the role energy plays in this conflict.

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