Donbasenergo loses control of its biggest power plant

Ukrainian private power generation company Donbasenergo (DOEN UK) reported on March 21 it has lost control over the Starobeshevska Thermal Power Plant, located in the occupied part of Donetsk region of Ukraine. “The inability to supply electricity to the companies of DTEK Group and to support the work of Starobeshevska TPP, as well as the company’s refusal to accept any actions that violate the legislation of Ukraine have led to the actual loss of control,” the company wrote in its press release.

Earlier the same day, leading coal and power holding DTEK (DTEKUA) reported it called upon Donbasenergo to not purchase coal from mines that DTEK lost on the occupied territory. Recall, DTEK reported it lost control over coal mines, a power plant and power distribution assets on the occupied territories on March 15.

Starobeshevska TPP, located on the occupied territory, is the biggest of Donbasenergo’s two power plants. It produced 5.06 TWh of electricity in 2016, or 63% of the company’s total. Another company power plant, Slovianska TPP, is located on the Ukrainian-controlled part of the Donetsk region. Both power plants are designed to burn anthracite coal, which is mined in Ukraine only on the occupied territory.

Alexander Paraschiy: From the press release, we understand that Donbasenergo’s “official” loss of control over Starobeshevska TPP means the plant cannot work under Ukrainian legislation. Namely, due to the loss of control by DTEK over its coal mines and power DisCos, Starobeshevska can neither buy coal nor sell its electricity without breaching Ukrainian legislation. Regardless of the actual ability of Donbasenergo management to control the plant, Starobeshevska won’t be accounted for in the company’s financials. These events are extremely negative for Donbasenergo.