Power GenCos boost 11M11 production 11% yoy

Five thermal electricity generation companies (GenCos) increased aggregate 11M11 power production 10.7% yoy to 67.4TWh, Interfax reported. The increase came on the back of 3.9% yoy growth in demand for Ukrainian power, a modest 1.1% yoy growth of nuclear output, and a 15.7% drop in hydro output. The most rapid growth rates were reported by GenCos from DTEK’s circle of interest: Zakhidenergo (ZAEN UK) at +25.7% yoy and Dniproenergo (DNEN UK)at +14.1% yoy. Donbasenergo (DOEN UK) and Centrenergo (CEEN UK) reported 10.9% and 1.2% yoy growth rates, respectively. Alexander Paraschiy: As expected, thermal power plants were the main drivers of growing electricity production, on the back of nuclear plants’ high capacity loads (74% in 11M11) and a lack of spare hydro capacities. The decline in hydro output was caused solely by a high comparison base – their output in 2010 was above-average due to an extremely wet year. We expect GenCos – with ample spare capacity (38% capacity load in 11M11) – to post double-digit growth in production in the coming years, which will correspondingly boost domestic coal demand.