AGAINST THE WALL

Tomas  is  a  reasonably  good  gauge  of  the  reach of  radiant  heat  on  a  cold  winter  day  in  Bobritsya, Ukraine. Nestled against one of the cement brick walls enclosing the point at which the natural gas line enters Katerina Nykonyvna's  house,  his  butt  is  toasty  warm. Front  paws  tucked  under  his  chest,  he stretches his chin to rest on a woolen slipper – already looking for different ways to keep warm.

In short, it's warm for about 30 cm on either side of the main supporting wall in the house where Katja and her cat live. So this bedroom and the living room opposite are almost livable. But the rooms beyond – including two more bedrooms in one direction and the kitchen, entry and bathroom in the other – are unbearably cold.

Almost 75 years ago, Katja was born in the house to her right, which was built by her grandfather. At age 25, she married, moved to Donetsk and started a family of her own.  But over the years, she remained deeply connected to the house, the village, the river and the forest – and made the 1500 km round trip three or four times per year, with summer being her favourite time to be in Bobritsya.

When  Katja  retired  (unexpectedly  as  a  widow),  she  and  her  son  Stephan  (now  49)  began  building  the house on the left, planning to make it a comfortable summer dacha for themselves, Stephan's wife and their daughter Maria (Masha). They came when they had time, bought what materials they could afford, and relied on Stephan's training as an electrician to guide their progress. Once a gas line was in place, bit by  bit  the  foundation  went  down around  it, the  walls  went  up  and  the  roof  went  on.  Each  fall,  Katja returned with Stephan to Donetsk.

"I used to go  to Donetsk for the winters, to avoid paying for gas here,"  she says. "There we live on the third  floor  of a state  apartment,  so  it  is  always  warm.  The  boiler  house is  in  the  yard  just  behind,  so sometimes it is even too hot." 

The hard work of staying warm in Ukraine

Winters  in  Ukraine  are  cold  enough  to  make  most  people  shiver  at  the  thought:  the  average  daytime temperature  in  January  hovers  around  0°C,  dipping  down  to  -10°C  overnight.  When  the  strong  "Bora" wind whips in from the northeast, it can quickly plummet to -20°C or even colder.

Staying warm – or perhaps more accurately, trying to be "not cold" – is a constant challenge throughout much of Ukraine, regardless of whether one lives in the city or the country, but for different reasons.

While  42%  of  the  population  (mostly  in  cities)  has  the  benefit  of  district heating  systems  that  run  on natural gas, the heat they put out is as likely to be excessive as inadequate. Individual apartments have no thermostat controls to regulate the temperature. If it gets too cold, residents bundle up in sweaters or blankets and huddle around the radiator; too hot, and they simply remove layers and throw open the windows. 

Since  the  1990s,  the  government  has made substantial effort  to  connect  more towns  and  villages to  the gas network, which now serves  another 28% of the population, primarily near large cities. Being just 45 km from Kiev, Bobritsya residents  were among those who made the switch from chopping  wood to lighting the blue-gold flame  on  cold  winter  nights.  But  there's  a clear "disconnect"  at  the  household  level:  a remarkable number  of  homes, including Katja's dacha, lack  the indoor  piping  needed  to  distribute  gas heat throughout the house.

Around 30% of Ukrainian houses still rel on solid fuels – either just wood or a combination of wood and coal. As Ukraine is heavily forested, wood is  easy to acquire; much of the coal supply is imported from Russia and South Africa. 

A  carry-over  of  the  Soviet  era,  energy  has  largely  been  considered  a  public  good  that  should  be affordable to all. But poor construction standards during the period have created a chronic condition of, well, rather epic proportions: in the vast majority of dwellings, too much cold gets in and too much heat seeps out. 

Home to stay, for better or worse

When the conflict broke out in early 2014, Katja came back to Bobritsya permanently. Over the summer, she was up at 5:00 and spent many hours every day tending a large vegetable garden and the fruit trees in  her  back  yard. But the pleasure  of  summer  gardening  soon  became a means  of  self-preservation: anticipating  that  every  last  hryvnia (UAH)  of  her  pension  would  be  needed  for  gas  and  electricity  bills, Katja wanted to be sure she would still able to put food on the table.

As  the  produce  reached  its  peak,  Katja  moved  indoors,  spending  long  days  in the  kitchen,  chopping, boiling and canning. And when winter set in, she followed the long-held practice of shrinking her living space to match her heating capacity and her pension. With the door closed, the radiating wall kept her room comfortably warm.

In  February  2015,  the  family  agreed  that  Masha  should  leave  Donetsk  and  join  Katja.  With  doors  left open in a bid to draw some heat into her bedroom, the gas bill began to rise. Winter won, for the most part: the thermometer on Masha's make-up table rarely rose above 15°C. For the rest of the winter, she was sick almost constantly. And then the really bad news arrived.

April  1,  2015  seems  likely  to  be  etched  in  the  national  psyche –  and  perhaps  written  into  Ukrainian history books –  as  the  day  the  government  drove  the  entire  population  into  severe  fuel  poverty. Overnight, the price of natural gas increased sevenfold.

The  alternative  was  to  teeter  on  the  brink  of  national  bankruptcy.  Recognising  that  Ukraine  was stretched to its limits by a severe economic crisis (the economy slumped by 8% in 2014 alone) and the ongoing  war  with  Russia over the  Donbass  region,  the  International  Monetary Fund  (IMF)  and  other donor  organisations  were  prepared to step  in  with  low-cost  loans  or  outright  support.  But  one  of  the conditions was that Ukraine get its own energy budget in order.

For  decades,  Naftogaz,  which  is  owned  by  the  state,  has  been  the  maingas  supplier  to  household consumers. It  sourced  about  40%  (15  billion cubic  metres  or  bcm)  of  gas  from  its  domestic  subsidiary Ukrgazvy-dobuvannya (UGV), paying USD 30 per trillion cubic metre (/tcm). The rest (22 bcm) it acquired through import sources, paying   an average   of   USD 350/tcm.  Naftogaz  offered  varying  tariffs  to customers,  ranging  from  UAH  1  089  to  UAH 4 011 (USD 70  to  USD 235)  for  1 000  cubic  metres  (cm)  of gas..

Do the math and the problem is obvious: Naftogaz was selling to consumers for only about 20% of what it cost to import the gas, leaving the government to cover a ballooning deficit.

In  effect,  the  IMF  was  demanding  that  Ukraine  stop  giving  away  gas.  In 2014  alone,  the  subsidy  was estimated to  have  carried  a  price  tag  of  UAH  70  bln  (USD  4.1  bln)  or  4%  of  Ukraine's  gross  domestic product (GDP). While the 280% price hike would hit consumers hard, the IMF argued that bringing prices up  to  market rates  was  a necessary  step  towards  energy  reform  and  would  bring  a  range  of  benefits. Personal pain for national gain.

Ukraine complied and got an IMF top-up of USD 15.1 bln, bringing to total assistance in recent years to USD 40  bln.  If government  revenues  remain  stable  (admittedly  a  rather  big  'if'  at  present),  it  could redirect the gas subsidy savings to improving healthcare and education, or boost its defence budget in this time of crisis. Additionally, with Naftogaz and UGV moving towards turning a profit, Ukraine should be able to kick-start new gas exploration, and possibly start attracting foreign investors.

Katja explains how the international negotiations played out her gas bill (for reference, UAH 1.00 = USD 0.04). "Previously, gas  was  very  cheap:  24  kopiykas  (UAH  0.24) per  cubic  meter  (/m3),  then  around  40 kopiykas  (UAH 0.40) – that  came  to  about  UAH  2 500  per  year  (USD 95).  Later  the  price  rose  to  UAH 1.05/m3– and then, on   1 April 2015, it jumped overnight to UAH 7.20 UAH/m3 (USD 0.27)."

Another anticipated benefit of removing the subsidy is that paying market prices will prompt Ukrainians as  a  whole  to become  more  energy  conscious  and  to make  their  homes  more  energy efficient. Substantial potential exists to dramatically reduce overall gas consumption. 

Hard times now, but perhaps an easier future

On a grey morning in January 2016, Katja watches out the window as Masha leaves to catch the bus for Kiev,  clearly proud  of  her  granddaughter  but  also deeply  concerned.  With  her  job  at  the  supermarket, Masha earns UAH 21 per hour, or about UAH 3 500 per month (USD 134). Bus fare is UAH 22 each way, so two hours of every shift goes to just getting there. On top of helping put food on the table, Masha is on her own to come up with university tuition of UAH 8000 per year (USD 306).

Stephan is already hard at work. He's been at it non-stop since the day he arrived for good in November 2015, says Katja;  plugging  insulation  (including  old rags)  into the cracks  in  the  ceiling,  spraying  foam insulation  around windows,  extending  the  electrical wiring into the kitchen and  installing  a  hot  water tank in the bathroom. 

Slowly, the house is becoming more comfortable, but with all the doors are open, the gas bills have shot up sharply.

"Alone, I would consume about 170 m3 to 180 m3 of gas per month, maybe even less," says Katja. "Our bill for December is close to 300 m3– almost UAH 1 400 (USD 53). Part of the problem is that we cannot regulate the gas. It's not a boiler, it's automatic – meaning it's either 'on' or 'off'. But even when it runs at full power, it's not enough to heat the whole house."

With  two  electric  space  heaters,  two  computers,  a  hot  water  tank  and  Stephan's  power  tools,  the electricity bill jumped to around UAH 380 (USD 15). Against her husband's pension of UAH 1 902 (USD 73),  that  leaves  only about UAH  200  (USD 8)  for  other  necessities.  With the  average  pension  being between UAH 1 200 and UAH 1 500 per month, Katja knows that many of her friends and neighbours are much worse off – particularly those who live alone and have no means of upgrading their homes or their heating systems.

Katja reflects on what would be different if their energy bills were less overwhelming. "If we had money, we would be able to buy some clothes, to visit our friends and neighbors, to give them some presents," she  says.  "But  we  cannot do  that.  As  our  Prime  Minister  Yatsenyuk  says,  we  have to  tighten  our  belts. We have to eat less. And we have to insulate our houses... somehow."

It's clear that families who were thrifty in the past are in a better position now: those who didn't throw out their wood stoves when the gas lines came in 20 years ago have simply gone back to their old ways. Wood  stacks  butt  up against  gas  boilers  and  electric  heaters  as  people  prepare to  choose  their  heat source according to what is affordable on a given day.

Rather than scrap gas subsidies altogether, social agencies argue, the government would do well to shift to  needs-based  assistance,  which  would  be  more  efficient  and  less  costly  for  the  national  budget  than the past practice of a blanket payment to all home, rich and poor alike. Unless the government reforms either  gas  subsidies  or pensions,  thousands  of  retirees  like  Katja  seem  destined  to  live  out  the  rest  of their days in severe fuel poverty. Multiple studies show that would have the effect of driving up  health care costs, and even lead to an earlier death for some people.

For now,  the Nykonyvna family is pinning its hopes on being able to afford  either a gas or wood stove (possibly both?) before  next  winter.  The  grinding  of  the  cement  mixer  in  the  yard  reflects  Stephan's methodical efforts to make such dreams come true; today, he's pouring a concrete floor in the room set up to house the hoped-for stoves and Katja has some reason to be optimistic.

"There was wood in the old house, so we collected that and Stephan also cut some old trees. Altogether, we  have firewood  for  two  winters.  I  think  it  will  be  easier.  Everybody  will  be  happier  if  the  house  is warmer."

Come Inside

Click on the arrow in the red box below the floor plan to follow videographers Poul Madsen and Simon Sticker on a 360° tour of the Nykonyvna family home. It may take a moment to activate...maybe you'll want to go get a sweater?