Ukraine entered winter without coal
The country, which produced power generating coal in the amount of 40% higher than the needs of its energy system, due to the war in Donets has become a hostage of imports of this kind of raw material.
November 27, Minister of Energy and Coal Industry of Ukraine, Volodymyr Demchyshyn, reported that coal exports of anthracite from the Russian Federation (RF) to Ukraine was stopped as a result of blocking the supply of electricity from Ukraine in Crimea. Along with this, he said, it had been suspended receipt of anthracite in Ukraine from the ATO area. "Now, the volume of coal reserves in this group in warehouses of Ukrainian thermal power plants and Heating Electrical Stations exceeds 1 million tons, and in the first half of December, there will be delivered another 250 thousand tons from South Africa to Ukraine. This is enough only for 45-50 days, that is - until the second half January and during this time the authorities will have to find a solution to the problem of ensuring the country's energy coal in the winter period, "- he stressed.
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Let’s recall that the minimum amount of thermal coal, including anthracite, necessary for the normal operation of thermal power plants and Heating Electrical Stations in Ukraine for the month is 3.1 million tons. And, as you know, almost the entire volume of thermal coal concentrated in the territory of Ukraine, is mined in the Donbas, whose share in the total volume of coal mining country until spring 2014 reached 85%.
"The entire volume of coal anthracite concentrated in the region of Shahtersk, Snezhnoye, Rovenki, Sverdlovsk, Anthracite, Krasnyy Luch etc., that is in the area of the ATO or on the territory of the self-proclaimed "Donetsk and Luhansk People's Republic "(D/LPR). At the end of 2013 the share of enterprises that belonged to Rinat Akhmetov "Donbass Fuel-Energy Company" (DFEC) - mines "Komsomolets Donbass", as well as holdings of "Rovenkianthracite" and "Sverdlovantratsit", - in total production of anthracite coal in Ukraine amounted to 59%. And along with the other companies of Donbas, that mine anthracite, they are the only suppliers of raw materials for 7 of the 14 thermal power plants of the country ", - says head of the analytical department of the IR Concorde Capital Alexander Paraschyy.
Before the war in the Donbas average monthly production of steam coal in Ukraine amounted to more than 5 million tons that is more than the average volume of demand for this kind of material for countries’ Heating Electrical Stations by almost 40%. However, because of the war in August 2014 almost 50% of the Donbass coal resources were simply not available. Accordingly, in August of last year, compared with August 2013, the volume of steam coal in Ukraine fell by 1.8 times, or up to 2.82 million tons, and it is compared to the average monthly amount needed for normal operation of thermal power plants of the country, already about 10% less.
Despite the decrease in the war intensity in 2015, the situation in the sphere of production of thermal coal is not only not improved, but, on the contrary, became even more aggravated. Thus, in January-October 2015 compared with the same last year period, Ukrainian companies have reduced the volume of production of this raw material by 38%, or an average of 2.64 million tons a month. Thus, if the autumn of last year the average monthly deficit of steam coal in Ukraine amounted to 300 thousand tons by the beginning of the heating season, this year it has increased to 500 thousand tons. That is why in September 2014 and until now Ukraine was forced to import steam coal and, of course, mainly - anthracite.
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Whatever it is, but the November 6 Demchyshyn reported that Ukraine has accumulated a sufficient amount of coal for thermal power plants in the warehouses for the heating season and that there will not be disconnections for consumers from supply during this period. In addition, the press service of the NEC Ukrenergo clarified that from 9 to 15 November the volume of coal stocks in warehouses of thermal power plants has increased from 2,063 to 2.119 million tons. The volume of coal reserves amounted to 971.5 anthracite thousand tons, and other power-generating coal - 1.148 million tons. And on November 27th, for obvious reasons, Prime Minister Arseniy Yatsenyuk said that it is necessary to pass the winter period, the volume of coal reserves in the warehouses of Ukrainian thermal power plants is absent, and by creating Anti-crisis energy headquarters, asked him to accept the plan of emergency measures to prevent the so-called rolling blackouts.
By this time, the situation was complicated by, firstly, because of the suspension of the supply of coal from the D/LPR. As explained in the press service of DTEK, the export of anthracite from the D/LPR is not carried out from 20 November. "This is not the only case in recent years. For some reason it occasionally pauses and then starts again," - added in the press-service. Demchyshyn also confirmed that the irregular supply of coal from the area of the ATO to Ukrainian Heating Electrical Stations are solely for technical reasons, mainly - due to the poor functioning of the infrastructure, but not politically.
Secondly, at the same flow it was terminated and coal from Russia. Since November 24, Russian Energy Minister Alexander Novak said that in response to the blocking power of the Crimea, Russia may refuse to sale to Ukraine of steam coal. And on this very day, South Oil Company (SOC) (Rostov region), along with other suppliers actually stopped the export of this raw material to Ukraine. As explained by the Deputy General Director of SOC Roman Kryukov, it also happened because, far from politics - "Railway just does not accept wagons to be sent ...".
And, nevertheless, November 27 already and Demchyshyn by himself said that the resumption of supplies of Russian coal to Ukraine will be possible only when restoring and connecting at least one of the transmission lines (TML) to Crimea - Kakhovka Titan. Two days later, on November 29 Interims Director of Ukrenergo, Vsevolod Kovalchuk, said that the leadership of Ministry of Energy and Coal Industry finally managed to agree with the initiators of the blockade of the Crimea for the restoration of the transmission line, which will take no more than 4-5 hours. "However, the question of its connection is still under discussion," - he added. And it means that by itself the completion of the repair of line Kakhovka Titan will not lead to the resumption of energy related facilities...
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Meanwhile, some experts believe that the termination of deliveries of coal from Russia does not become a factor that destabilizes the energy system of Ukraine. "First of all, blocking the supply of electricity to the Crimea freed at least 500 MW of power united energy system of Ukraine. In addition, the Ukrainian government has time and resources to find other sources of procurement of thermal coal. Finally, in the future Ukraine can build power nuclear and hydropower stations, "- said the expert of the International Centre for Policy Studies Vadim Perebyinis. However, a year ago, the Ukrainian authorities fully convinced that there is no alternative to Russian suppliers of energy coal quality, which also would be willing to sell it country at a reasonable price. And it means that in the near future, there is no solution to anthracite deficit but through import from Russia.
However Ministry of Energy and Coal Industry’s management expects that in winter 2016-2017, the country will be able to manage without Russian coal. At the same time, it does not specify exactly how this will be achieved. "Due to lack of development of port infrastructure in Ukraine's shipments of coal from abroad, carried out by sea, the volumes can cover only 40% of the average monthly deficit of raw material, and the question of how to make up for the shortage in the amount of the remaining 60% is still open", - states CEO of DTEK Maxym Tymchenko.
It follows, first, that in the current heating season Ukraine has no choice but to resume the import of coal from Russia, for which it will have to find a way to restore the full power of the Crimea. And, secondly, that in the future it will either have to strongly promote the growth of volumes of coal mining in the area of the ATO to the prewar level, or import coal, again from Russia.
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