Centrenergo to be modernized to burn no anthracite coal, minister says

Ukraine’s Energy Minister Igor Nasalyk told journalists on Jan. 18 that the government has found the funds to finance the shifting of all the thermal power plants (TPPs) of power generator Centrenergo (CEEN UK) to burning hard steam coal, Interfax-Ukraine reported. He said the government will use a “Chinese loan” to finance the project, specifying no details on the parameters.

The project to convert power units #2 and #5 of Centrenergo’s Zmiyivska TPP will be completed in March and May 2017, respectively, Nasalyk said. The cost of converting each unit will amount to UAH 110-120 mln, he said. Earlier, Nasalyk said the conversion should last about seven months and will cost a total of UAH 175 mln.

Two of Centrenergo’s three TPPs were designed to burn anthracite and lean coal, which are not mined in Ukraine beyond the territory of occupied Donbas. The conversion of all the power plants to burn hard steam coal will make the company independent of coal supplies from the occupied territories or abroad.

Alexander Paraschiy: Centrenergo operates six anthracite-burning power units at 175 MW each (like the modernizing #2 and #5) and eight 300 MW power units burning anthracite and lean coal. Based on the parameters announced by Nasalyk, their total conversion to hard steam coal could take UAH 2.0-2.5 bln and 3-5 years. The decision to convert the units to hard steam coal looks logical and may even increase the investment attractiveness of Centrenergo, the only remaining coal-fired GenCo in state hands.

At the same time, the project itself could significantly postpone the company’s privatization. Or at least, the government could use the ongoing project as an excuse to not privatize the company soon. Recall, Centrenergo’s privatization was postponed many times, with the latest announced term of a possible tender being spring 2017.