As a result of unscheduled inspections, NEURC reported non-compliance by DTEK Skhidenergo, DTEK Dniproenergo and DTEK Zakhidenergo with the requirements to ensure the required stocks of coal at the TPP warehouses.
DTEK Energy does not agree with these conclusions of NEURC, which has been repeatedly communicated to the Regulator. According to the procedure, the company gave its justifications to the Inspection Statements, where it pointed to the objective circumstances behind the situation. These circumstances were also confirmed by PJSC NPC Ukrenergo — direct initiator of the inspection. Abnormal burning of coal stocks is caused by unpredictable growth of electricity consumption and reduction of electricity production by NPPs in December 2020.
Please note that DTEK Energy TPPs were ready to undergo autumn and winter season within the framework of the Forecast Balance, approved by the Ministry of Energy. As of 1 October 2020, 2,105.8 thousand tons of coal at DTEK Energy’s warehouses were available to its TPPs.
- The volume of electricity production, equipment set-up, forecast fuel structure and, accordingly, the calculation of guaranteed coal stocks is determined on the basis of the approved Forecast Electricity Balance of the UES of Ukraine. And the Forecast Balance did not provide for an increase in the load on thermal generation until November 2020.
- An unpredictable change in the forecast balance as of December 2020 did not provide the generation with the opportunity to quickly increase coal stocks. On the contrary, thermal generation worked in full force for several months to compensate for the shortage of the energy system, which arose due to the fact that nuclear power units did not return from overhauls. In particular, DTEK Energy TPPs compensated the capacities of other thermal generation enterprises. During the period from November till December 2020, DTEK Energy TPPs burned 1 mln tons more coal than indicated in the Forecast Balance and, accordingly, more than last year. This was the key reason for considerable reduction in coal storage at TPPs in January 2021.
- As a result, in the 2020/2021 heating season, the load on DTEK’s thermal generation is 50% higher than in the previous one.
- The results of coal production and, accordingly, the stocks of warehouses at TPPs were also negatively affected by the temporary downtime of mines in the first half of 2020 due to unclaimed Ukrainian coal due to the replacement of domestic generation by electricity imports from Russia and Belarus.
- Despite these circumstances, from November till January 2021, DTEK supplied 450,000 tons of coal to the state-owned Centerenergo to support operations of the state generation and prevent it from shut-down.
- Even in the crisis industry conditions, DTEK Energy mines continue to produce coal for thermal generation at full capacity. From 1 January 2021, DTEK Energy’s miners have extracted 3.8 mln tons of gas-grade coal, and DTEK’s anthracite TPPs have received 338,000 tons of this coal brand.
- Due to the high demand for thermal generation during the cold season, the company organized a search for additional supply sources for coal-fired power plants. To compensate for shortage of gas coal and ensure stable operation of the energy system, the company began importing coal from Kazakhstan and Poland.
NEURC, on its part, did not provide a proper objective assessment of the above facts, which exclude the liability of thermal generation for the situation that is a consequence of systemic problems in the industry.
The company would like to point out the fact that the current crisis on the electricity market is a consequence of the regulator’s incompetence, market manipulation, selective application of European standards and direct administrative intervention into the market.
Unfortunately, NEURC chose the path of finding the culprits and, ignoring all these facts, unreasonably decided to impose the maximum possible financial sanctions based on the results of the inspection. DTEK shall appeal against this decision of NEURC in accordance with the established procedure. The company shall also address the AMCU with a statement regarding the need to eliminate market distortions by the Regulator and to the National Security and Defence Council with a request to assess the threat to the country’s national energy security due to incompetent actions of NEURC.