Energy Ministry to offer special conditions for use of gas by coal-fired power plants

Ukraine’s Energy Ministry has initiated a Cabinet
resolution to offer coal-fired power plants special power prices in case they
have to burn natural gas, according to its Dec. 14 announcement. The ministry
highlights that special conditions will be only applied in case of an
emergency, or if power plants have insufficient coal stockpiles to offer
generating capacities that could be needed for the energy system. No deeper
details of the ministry’s initiative have been offered.

As of Dec. 14, Ukrainian thermal power plants had coal
stockpiles of 0.46 mmt, which only cover 8 days of power generation. The
ministry estimates that the total supply of coal to power plants will be 1.95 mmt
(or 63 kt/day) in December, while coal use will be about 1.70 mmt (or 55
kt/day). In the first 13 days of December, average daily coal supply was 60 kt
and average use was 54 kt.

Alexander Paraschiy: The
ministry’s initiative, if approved, could benefit DTEK Energy’s (DTEKUA)
Luhanska Power Plant, which has not been able to receive any coal since Nov. 11
(it can only get coal from the territory of Russia), so it had to partially use
alternative fuel to produce electricity (mostly furnace oil). In late November,
DTEK called the government to assist the power plant in securing natural gas
supplies “at an acceptable price,” taking into account the power plant’s
“social role in the region.”

The role of Luhanska Power Plant in DTEK’s P&L
is insignificant, but still the ministry’s initiative looks encouraging. At
least, it shows that, despite apparent tensions between the Ukrainian president
and DTEK’s ultimate owner, the government remains “constructive” in resolving
issues in the electricity sector.