Centrenergo, Donbasenergo stops some power plants

Обзоры по компаниям и отраслям 26.05.2015 Power generating company Centrenergo (CEEN UK) shifted its Zmiyiv Thermal Power Plant (TPP) into idle mode the night of May 23, Interfax-Ukraine reported on May 25, citing information from Energorynok, the wholesale electricity market operator. The GenCo did not comment on the event. The website of power dispatcher Ukrenergo attributed the stoppage to a coal deficit. In other news, power GenCo Donbasenergo (DOEN UK) has shut down its Sloviansk TPP, one of its two operational assets, according to a company report on May 25. The company referred to a lack of funds to procure coal for the power plant. The total debt of the wholesale electricity market to Donbasenergo is UAH 1.5 bln, according to the company. Based on data from Energorynok, both the Sloviansk and Zmiyiv TPPs have been idle since 2 a.m., May 23. Both power plants are located in eastern Ukraine, on the territory controlled by the Ukrainian government, but are consuming anthracite coal, which is only mined in the occupied regions of Ukraine. In Ukraine, as of May 24, only eight power units that burn anthracitic coal were operational (or only 14% of the total available units) and 28 power units designed to burn bituminous coal (65% of the total available). As of May 22, stockpiles of anthracite coal at Ukrainian power plants were 151 kt (15 times less yoy), while stockpiles of bituminous coal were 736 kt (39% less yoy). Alexander Paraschiy: Centrenergo’s coal shortage clearly works against the investment attractiveness of this company, whose 78% stake is slated for privatization in 2015. Given that two of its three power plants are designed to burn scarce anthracite coal, and the third TPP is located dangerously close to the war front in Donbas, Centrenergo is not an investable story right now. The reason for the stoppage at Donbasenergo’s Sloviansk TPP is different. For some reason, the company chose to stop its only power plant located outside the occupied territory of Donbas. Its other plant, Starobesheve TPP, located on the occupied territory, is exploiting two power units now. Unlike Sloviansk TPP, Starobesheve does not receive any payments from the Ukrainian wholesale market. Therefore, Donbasenergo’s stoppage of Sloviansk looks more like a blackmail attempt to force the government to restart payments. The poor availability of anthracite coal for Ukrainian power plants is not an issue in the summer period, when demand for electricity from TPPs is relatively low. Though, the situation will pose big trouble as soon as winter approaches. If the government is not able to find any solution to the coal deficit issue, this winter will be even more troublesome for the Ukrainian power system than the last one, when power regulators had to implement rotational blackouts to keep the system safe. The core problem of last winter was a deficit of anthracite coal, which is burned by 7 of 14 Ukrainian TPPs. There is a high risk this winter that Ukraine will also have a deficit of bituminous coal: firstly, stockpiles of this coal are already smaller yoy; secondly, output of this coal is decreasing in Ukraine; thirdly, TPPs designed to burn bituminous coal are currently working close to their full capacity load (which is very unusual for summer period), which does not allow them to accumulate coal stockpiles for winter. On top of that, the need to work at high capacity load may prevent power units from doing needed seasonal repairs, which would increase the risk of power-unit failure in the winter season.