DTEK shuts down one of its power plants due to lack of coal

Обзоры по компаниям и отраслям 03.08.2015 Ukraine’s leading utility holding DTEK (DTEKUA) switched off Prydniprovska Thermal Power Plant (TPP) on August 1, the holding reported the same day. The power plant has no coal to burn, according to the report. As of July 31, the TPP had stockpiled 1.4 kt of coal, while its smallest power unit burns 1.5 kt per day. Prydniprovska TPP has installed capacity of 1.2 GW. It operates six power units of installed capacity 150 MW to 300 MW each. The station is designed to burn anthracitic coal which Ukraine does not produce outside the occupied Donbas. DTEK listed three preconditions (appealing to the government) to restart the power plant: 1) solving bottleneck for transporting coal from the occupied territory of Donbas; 2) repayment of UAH 232 mln in debt to Prydniprovska TPP (presumably owed by state operator of the wholesale market); and 3) setting fair rates for electricity that would fully cover costs of its generation. Meanwhile, the situation is similar at most of other TPPs that are designed to burn anthracitic coal. Out of six anthracite-burning TPPs located outside the occupied Donbas, two are currently idle and two could become idle any time. These four risky TPPs generated 10% of Ukraine’s total electricity in 2014. In particular, Sloviansk TPP of Donbasenergo (DOEN UK) has been stopped on July 31 due to lack of coal. As of end-July, stockpiles at Kryviy Rih TPP (of DTEK) and Zmiyiv TPP (of Centrenergo, CEEN UK) only were enough for a one-day operation of a single power unit. Alexander Paraschiy: As winter season is approaching, the problem of coal supply and coal pricing is becoming increasingly important for power sector regulators. We see the government has little choice but to agree on new operating conditions for thermal power plants of DTEK, whose role for securing stability of Ukraine’s energy system becomes critical in winter. This will clearly benefit DTEK. In particular, we expect the government will raise power rates for TPPs and partially repay the arrears of the state wholesale market operator. Some progress has been already made as the wholesale market operator took a UAH 2.0 bln loan from a state bank to finance coal accumulation by TPPs. Some more moves are expected in the near future.