Coal reserves at some TPPs in Ukraine will only last for a week

No one wants to put in coal for Ukraine

Photo: Reuters

Coal import from Russia was interrupted at the end of last week, but so far there are no comprehensible explanations for this. Furthermore, Russian and Ukrainian authorities and Russian coal companies refuse to comment on the situation. Meanwhile, coal stocks at Ukrainian thermal power plants (TPPs) will allow them to operate up to a month and some of them will be forced to shut down operations within a week.

Nobody knows

The day before yesterday Minister of the Energy and Coal Industry of Ukraine Yuriy Prodan confirmed that the deliveries of coal were indeed cut off. However, the ministry did not report on the reasons for interruption of coal imports and its press service did not reply to Capital’s inquiry. Russia’s Ministry of Energy also did not answer questions of Capital and its press officer said there will be no comments on the issue.

Russians do not want to communicate with Ukrainian contractors either. Chairman of the Board of Directors of the Prodaks Coal Company (importer of Russian coal) Serhiy Kuzyara confirmed that coal supplies from Russia were fully suspended. At the same time, his company has not received any comments either from the authorities of Russia or Russian coal miners. “All suppliers hope to resolve the problem in a matter of days, as there are certain contracted volumes that are open to transportation by rail and December contracts and specifications were signed. We are putting everything on hold and making all efforts to resolve the situation,” he said.

At the same time, Kuzyara believes that the problem with the interruption of the supply of coal has nothing to do with the economic plane. “It needs to be addressed at the level of governments or presidents. This is not the level of private coal companies. They will not resolve the problem,” he said.

Running out of time

As of November 17, 2014, coal reserves at Ukrainian TPPs amounted to a mere 1.78 mn t, which is 2.5 times less than on the same date last year, according to UkrEnergo. During November coal reserves were slightly replenished thanks to imports from the Republic of South Africa under the contract with Steel Mont, but after the beginning of prosecutor’s investigation of the transaction Steel Mont decided to limit the supply to 0.5 mn t of coal instead of the planned 1 mn t.

Nevertheless, even the supply of coal from the RSA could not fully cover the shortage of fuel in Ukraine. One ship from the RSA delivers up to 90,000 t of coal and so far Ukrainian ports have received only three of the vessels and another one is currently off the harbor of the Illichivsk sea port. This amount is enough for approximately 3 days of operation.

Kuzyara estimated that DTEK’s TPPs will have enough anthracite for about a month (if it comes to full exhaustion of reserves), one of Centerenergo’s stations has enough coal for a week of operation and the other – for two or three weeks, depending on the total amount of generated energy. After that the TPPs running on anthracite coal will be forced to shut down if their stocks are not replenished.

Kuzyara says coal supplies from Russia would be sufficient to ensure the operation of Ukrainian plants during the heating season. He also noted that Prodaks planned to supply Centernergo with 150,000 t of coal from Russia by the end of the year through an affiliated offshore company.

Uneven work

Head of the Independent Miners Union Mykhailo Volynets says at the moment the daily consumption of all brands of coal at TPPs and CHPPs is approximately 86,000 t. But in December the consumption rate will increase to 96,000 t per day, in January – up to 102,000 t, in February – up to 104,000 t and in March it will drop to 102,000 t. At the same time, he noted that at present there are 1.6 t of coal in warehouses, but such an amount is not balanced by brands – there is enough coal from the gas group, but reserves of A and P brands of anthracite coal are limited. Volynets also noted that half of the 14 Ukrainian TPPs operate on anthracite.

The shortage of A and P brands of coal has already caused irregular operation of TPPs. Representatives of DTEK, with reference to Director of Commercial Operations of DTEK Energo Vitaliy Butenko, reported last week that the available capacity of TPPs working on scarce A and P coal brands dropped by an average of 64% compared with last year. Therefore, to maintain stable operation of the power system those stations which consume the G brand of coal (which is in good supply) are currently working under conditions of increased loads.

Analyst at Ukrpromzovnishekspertyza Oleksandr Krainikov says the only available sources of supply of anthracite to Ukraine are the RSA and Russia. At the same time, he noted that information on the possible supply of coal equivalent to A and P brands from Australia and the U.S. is ungrounded, as those countries do not mine such coal.