Donetsk Region Wants To Utilize More Thermal Power.

Head of the Donetsk region’s industrial department, Vladimir Zhukov, said that electricity regulators intentionally limit the work of thermal power plants (TPPs) in the Donetsk region. He proposes changing the rules governing the electricity market in order to allow the coal mines to receive electricity directly from the power plants, avoiding the wholesale market. This would, in turn, allow TPPs to be utilized more intensively and reduce their costs and electricity tariffs for coal mines. As a result, coal mining and coal prices would be reduced. Concorde Capital: The energy producers located in the region, Donbasenergo (DOEN:BUY) and theprivately owned Vostokenergo, sell their electricity for USD 34-35 per MWh to the wholesale market, while coal mines obtain electricity for USD 43-44 per MWh. Thus, selling electricity directly from the TPPs to coal mines could substantially reduce coal mining costs, which in turn could reduce the costs of energy coal, and consequently the costs of thermal electricity, as most Ukrainian coal is produced in the Donetsk and Luhansk regions. However, as the coal market is far from transparent, we doubt coal prices will be reduced this way. These statements appear to be lobbying on behalf of the Donbass Fuel and Energy Company ? which is controlled by several Donetsk tycoons ? and controls the thermal power producer Vostokenergo, as well as several coal mines.