Statement from Ildar Saleev, DTEK Energy CEO, on the situation in the energy system and the heating season
DTEK Energy, as a reliable and responsible company, prepares for the cold season in advance: we produce coal and perform necessary repairs. And we were ready for the heating season according to our projected balance. As of October 1, 2020, coal reserves at DTEK Energy TPPs amounted to 2,105.8 thousand tons.
On the reasons for low coal reserves and over-fulfilment of DTEK Energy's TPP schedule
To date, the situation in the energy system is critical. In response to the needs of the energy system for manoeuvring capacity, for several months now, the heat generation by DTEK Energy has been operating with a full set of equipment. In December 2020, heat generation by DTEK Energy's TPPs exceeded the forecasted balance approved by the Ministry of Energy by 48.5%. DTEK's TPPs generated 1,142 billion kWh of electricity above the approved plan. It was the key reason for a significant reduction of coal reserves at TPPs in January. As of January 12, reserves dropped to 467.5 thousand tons.
Low coal reserves are primarily due to the untimely launch of nuclear units after repairs. Since nuclear power plants could not satisfy the energy system in time, this additional burden fell on heat generation facilities. This is the main reason for the current crisis.
The results of coal production and, consequently, the filling of TPP reserves were also negatively affected by the temporary downtime of mines in the first half of the year due to the lack of demand for Ukrainian coal and the systemic crisis in the industry. DTEK was forced to stop mines of Dobropilliacoal, which is approximately 700 thousand tons of coal shortfall that would have been enough for the stable operation of the energy system and the entire 20/21 heating season.
Also, in the midst of the heating season, we supplied 400 thousand tons of coal for the state-owned Centrenergo to keep the energy system running and prevent the shutdown of these TPPs. The combination of all these factors led to a decrease in coal reserves of the energy system.
On the forecast for the heating season and the role of heat generation in maintaining the energy system
Due to the repairs of Zaporizhzhia NPP and Rivne NPP, the energy system will lose another 1 GW of capacity in late January. This is an additional load that will fall on the heat generation, amounting to 600–650 million kWh, which is equivalent to 300 thousand tons of coal.
Given the level of reserves and the Energoatom's repair campaign, the energy system may experience a shortage of generating capacities. As for fuel, there is always an alternative to using gas to cover peak loads, although it is not justified economically and we need to look for other ways to address this problem.
On DTEK Energy's initiatives to maintain stable operation of the energy system
DTEK Energy's coal mines continue producing coal for heat generation at full capacities. As of January 1, 2021, DTEK Energy's mines produced 660,000 tons of coal gas.
The increased load on heat generation has forced DTEK Energy to start an active search for additional fuel sources.
The company will initiate coal imports from Kazakhstan to make up for the shortage of gas coal and ensure the stable operation of the energy system. DTEK will supply coal from our Obukhovskaya mine (Russia, Rostov Region) to ensure the stable operation of anthracite plants.
Coal import is an extreme and temporary measure to stabilize the energy system. Ukrainian coal was and is the key to our country's energy independence. Since 2005, DTEK has invested more than USD 3.3 billion in coal production.
On the support for state-owned heat generation in the current situation
Along with providing our TPPs with coal, at the request of Centrenergo, we also delivered 400 thousand tons of coal to their thermal power plants in November and December to prevent the shutdown of the state generating company and support the energy system. And we keep supplying coal: another 50,000 tons are to be supplied in January. Coal supplies to Centrenergo TPP are ahead of schedule approved in the contract. We are 100,000 tons ahead of schedule.