DTEK to connect more power units to Ukraine energy system

Ukraine’s leading coal & utility holding DTEK Energy (DTEKUA) announced on Oct. 10 that it has completed a technical study to connect three power units of Burshtyn Thermal Power Plant (BTPP) to Ukraine’s energy system. Initially, all 12 power units of BTPP (located in western Ukraine) were a part of the “Burshtyn Energy Island,” which is connected to the EU’s energy system. In mid-2014, two BTPP power units were disconnected from the Island and connected to Ukraine’s energy system, which was aimed at improving its stability amid a deficit of anthracite coal (the plants burn hard steam coal, which is available in Ukraine and neighboring Poland). The plan to connect three additional units to Ukraine’s energy system is currently being considered by the Energy Ministry, DTEK said.

Alexander Paraschiy: If the plan is approved, BTPP will have five of its 12 power units connected to Ukraine’s energy system, which will significantly decrease DTEK’s electricity export potential. Such a move looks well-grounded, taking into account that at the current electricity rates in Ukraine, the supply of power for export is loss-generating. The project will slightly improve the stability of Ukraine’s energy system during the peak season of winter, but won’t secure it from possible blackouts. As of Oct. 7, Ukrainian power plants have accumulated only 0.74 mmt of hard steam coal, which is 30% below last year’s level (and stockpiles of a scarce anthracite coal are 40% less yoy). This implies a risk that Ukraine’s energy system – with 35%-40% of its supplies dependent on coal-fired thermal power plants – is still under risk of a power deficit. The news looks neutral for DTEK Energy.