The regions where coal companies operate will not be the only ones affected by changes: the changes will have considerable impact on the entire economy of Ukraine. This is a difficult and costly task faced by our country. Those were the highlights of the presentation made by Dmytro Sakharuk, CEO of DTEK Energy, during a discussion dedicated to a fair transformation of coal regions at the Energy Club.
“We are talking about hundreds of billions of euros required to complete a green transition. Germany has been transforming its energy sector for 60 years and invested over 200 billion euros. If we want to move in this direction, Ukraine has to fully realize the complexity of this task and the amount of money that has to be invested on the macro level, on the level of the country, to complete the fair coal transformation,” commented D. Sakharuk.
Today, Ukraine has 65 monotowns that completely depend on the thermal generation industry. It means 1.5 million residents. Coal companies account for 60 % of payments made to the budgets, and the entire public sector of these towns depends on these payments.
“We cannot afford simply shutting down these mines. The impact of this decision will be felt not only by the energy sector but by the entire economy. It is a chain. Each power company has three partners. These are those who supply spare parts, fuel, etc. This is why talking about a green transition means talking about a macro transformation of the Ukrainian economy. Let’s talk about Turboatom (Kharkiv) by way of illustration. This company is a major manufacturer of turbines that supplies its products to the thermal generation sector. 100 % of the equipment used by Dobropillya mines is manufactured in Ukraine, and 80 % of the equipment operated by Pavlograd mines is also made in Ukraine. These manufacturers are Druzhkivska Machine Building Plant and Svitlo Shakhtarya. These companies have four thousand employees each. Electrovazhmash manufactures generators supplied to thermal power plants. This is a really large share of Ukraine’s GDP, so when we talk about a transformation and changes, we have to look at a macro level what could be done and how fast,” noted DTEK Energy’s CEO.
Dmytro Sakharuk underlined that although the thermal generation would remain the balancing backbone of the energy system for the next 20 years and guarantee the energy independence of Ukraine, a transformation of coal regions has to start right now anyway on a micro level.
“A transformation does not happen in offices but in localities where thousands of jobs in mines or hundreds of jobs in workshops servicing equipment have to be replaced with the same or even bigger number of new jobs. Coal regions have their own special demography. We cannot transform a mining region into a Silicon Valley in one day. This year, DTEK decided to launch a pilot project on the basis of Velyke Dobropillya. We have been dealing with this task for almost five months, and it is not a walk in the park to incorporate new types of business both in a region of this kind and in the Ukrainian economy. We hope that our efforts will be successful, and we will implement this program. But to do this, the engagement of all the parties including the state, local administrations, companies, and local residents is essential,” summarized Dmytro Sakharuk.