A maternity hospital employee carries to patients meals provided by the NGO World Central Kitchen, during an electricity power cut, in Mykolaiv, Ukraine on October 22. Reuters
A maternity hospital employee carries to patients meals provided by the NGO World Central Kitchen, during an electricity power cut, in Mykolaiv, Ukraine on October 22. Reuters
A maternity hospital employee carries to patients meals provided by the NGO World Central Kitchen, during an electricity power cut, in Mykolaiv, Ukraine on October 22. Reuters
A maternity hospital employee carries to patients meals provided by the NGO World Central Kitchen, during an electricity power cut, in Mykolaiv, Ukraine on October 22. Reuters


Hospitals, banks, schools, petrol pumps – what happens when the electricity is cut off?


Paul Sullivan
Paul Sullivan
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October 25, 2022

In ancient times, energy wars often involved scorched-earth efforts and siege warfare. Back then, the primary energy sources were grain, meat and other food for people and livestock. Sometimes wind energy was used to mill the grain. Solar power was used to ignite fires. Wood and charcoal were used for cooking, heating, or making weapons and other implements.

Energy systems were often internal to or near villages, towns and cities. Creating a siege for a small town or city was easy. An enemy surrounded the area long enough that stores were worn down, and those under siege gave up or died.

As trading networks became more distant, attacking armies realised that one of the most effective ways to reach their targets was through sea and land traffic over trading routes.

The remains of a cluster missile on a sunflower field in the Kharkiv region of Ukraine on October 2. EPA
The remains of a cluster missile on a sunflower field in the Kharkiv region of Ukraine on October 2. EPA

Today, the world is seeing new forms of regional and globalised siege warfare. Huge amounts of wheat, sunflower oil and fertilisers used to be exported from Russia, Ukraine and Belarus. Many of these exports were closed off at the critical ports on the Black Sea until a deal between Russia, Ukraine, Turkey, the UN, and others allowed them through.

Grain and other food prices skyrocketed worldwide, and many significant importers of wheat, such as Egypt, got foreign exchange and debt shocks and had to turn to other grain sources. The food siege shock from the Russia-Ukraine war rocketed worldwide. It increased food insecurity in Indonesia, Lebanon, Mongolia, Syria and several sub-Saharan African countries. Grain such as corn is used to feed animals to be eaten. When corn prices go up, meat prices follow. The poor of the world use much more of their income for food than others. They were shocked and hurt the most.

The use of energy now is far more complex and globalised than during ancient times. It is one reason why electricity-generating stations in Ukraine are being targeted, as winter approaches.

Wheat loaded onto trucks during harvest near a village in the Omsk region, Russia, on September 8. Reuters
Wheat loaded onto trucks during harvest near a village in the Omsk region, Russia, on September 8. Reuters

Electricity is used for lighting, heating, cooking and other household activities, as well as hospital and school use. Without electricity, many banking systems can seize up. Cheque clearing and payroll systems can stop. One cannot go to an ATM and get money with no electricity.

Without electricity, petrol pumps don’t work. Oil and gas pipelines need it for their pumping and pressure stations. Modern communications systems depend on it, and not just to charge cell phones. Emergency systems often do not work without it. Government services too break down without electricity. The police, fire and other first responders are disabled without it. The treatment and transport of water can become dysfunctional in its absence.

In case of even a limited nuclear war, much of the food and fertiliser that may have been exported from Ukraine, Russia and Belarus could end up being poisoned with radiation

Hospitals will lose lighting, sanitation, heating and more. Think of newborns in incubators and you get the picture. A country’s health could decline rapidly. It is more challenging to fix and cure those injured from war when there is no energy. Schools will have to shut down due to a lack of lighting. Education could stagnate.

What happens when oil and gas are cut off and refineries are damaged or taken over? That one seems a bit more obvious to most than the effects of siege electricity warfare. How does one get around without petrol and diesel? Also, how do the electricity stations work when the oil, gas and coal cannot get to them?

The Russian seizure of the Zaporizhzhia Nuclear Power Plant has more ominous overtones. Moscow has, in recent weeks, threatened nuclear strikes in areas it has annexed in eastern Ukraine. But with shells falling close to the site in Zaporizhzhia, visiting experts from the International Atomic Energy Agency worry about a lack of political commitment by any power “to exercise restraint”.

Zaporizhzhia nuclear power plant is seen from 20 kilometres away, in Dnipropetrovsk, Ukraine, on October 17. AP
Zaporizhzhia nuclear power plant is seen from 20 kilometres away, in Dnipropetrovsk, Ukraine, on October 17. AP

A nuclear disaster, or a limited nuclear war – if it comes to that – could cost millions of lives. If this happens, the Mena region's economic, military and political fallout will be incalculable, particularly as much of the food and fertiliser that may have been exported from Ukraine, Russia and Belarus could end up being poisoned with radiation.

A significant amount of electricity in Ukraine comes from nuclear power. The rest is mostly from gas, oil and coal, with small but increasing amounts coming from renewables such as solar and wind.

Hydropower is also an essential source. When the Russians took over Crimea, they also took over a large number of offshore oil fields. With the recent annexations, they took away 15 per cent of the GDP of the country and significant coal and gas fields. Much of Ukraine’s coal, after all, is found in the east. They also took control of essential hydropower facilities as well as rivers sending water to other hydropower facilities.

By taking over agricultural machines, crops, livestock and more, and with the destruction of fields and logistical networks for food and other agricultural goods, Moscow has essentially co-opted energy resources, facilities and energy logistical networks.

Which is probably more devastating in the context of the war than the drones and missile strikes that have rained on Ukraine's cities over the past week.

These may be tactics to win battles, but the political and strategic fallout can last much longer. Winning a war also means winning strategically.

And this applies to all countries that use such tactics. It is worth asking if the past siege wars in the Mena region, including in Iraq, brought peace and security? The answer is a resounding no. The same will hold for this nightmare in Ukraine, particularly with nuclear threat thrown into the mix.

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Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

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Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

At a glance

Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.

 

Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year

 

Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month

 

Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30 

 

Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse

 

Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth

 

Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances

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December 14-16 The Gulf 12 Hours Endurance race

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Nazanin Zaghari-Ratcliffe was born and raised in Tehran and studied English literature before working as a translator in the relief effort for the Japanese International Co-operation Agency in 2003.

She moved to the International Federation of Red Cross and Red Crescent Societies before moving to the World Health Organisation as a communications officer.

She came to the UK in 2007 after securing a scholarship at London Metropolitan University to study a master's in communication management and met her future husband through mutual friends a month later.

The couple were married in August 2009 in Winchester and their daughter was born in June 2014.

She was held in her native country a year later.

Updated: October 25, 2022, 1:04 PM