Private GenCos refuse to buy coal from the state?

According to Oleh Pohodin, general director of the state wholesale coal trader Coal of Ukraine, private generation companies stopped buying coal from the state as of June 1. According to Pohodin, the coal storage at private Vostokenergo was filled “only” 63%, while state-owned but privately controlled Dniproenergo (DNEN)’s storage was at 67%. Today DTEK (which controls Vostokenergo and Dniproenergo) responded by saying it signed a contract to receive 25 mt of coal from state coal mines, and accused Coal of Ukraine of delays in shipments. Alexander Paraschiy: It looks like DTEK’s move to reduce coal orders from state coal mines in June is a reaction to last week’s regulation by the National Electricity Regulatory Commission that discriminated against Vostokenergo and Dniproenergo when repaying UAH 230 mln in overdue debt from the wholesale electricity market. The payment was only allocated amongst state-controlled GenCos (totally bypassing DTEK-controlled Vostokenergo and Dniproenergo). Support of the state coal sector is now a key priority for the government and the regulator is seeking to use any opportunity to finance the coal mines (including imposing obligations on GenCos to fill their coal reservoirs). DTEK’s decrease in orders will negatively affect the financing of the state coal sector, forcing regulators to find common ground with private generation companies.