Centrenergo halts Zmiyiv power plant operations due to coal deficit

Power GenCo Centrenergo (CEEN UK) stated on Sept. 11 that it has decided to stop the operations of its Zmiyiv power plant till Oct. 1 in order to accumulate adequate coal stockpiles to better prepare to the upcoming heating season (starting in mid-October). The power plant’s Ukrainian coal supplies have plunged due to damaged infrastructure in the Donetsk and Luhansk regions and the company is currently trying to diversify its coal sources, considering opportunities to import from South Africa or South American countries.



The Zmiyiv power plant, located near Kharkiv, Ukraine’s second-biggest city, is the biggest of three assets of Centrenergo, accounting for 50% of the company’s total power production in 2013 and 45% in 7M14.



Alexander Paraschiy: This is the first evidence of Ukraine’s coal crisis that we outlined earlier, though hopefully coal imports will resolve the issue till the heating season starts. It’s now clear that the Donbas conflict is affecting directly or indirectly all of Centrenergo’s assets. The core problem of Zmiyiv is that it burns anthracitic coal, which in Ukraine is mined only in the war-afflicted region. Centrenergo’s Trypillia power plant located near Kyiv has the same problem. The company’s third power plant, Vuhlehirsk, burns another type of coal, though its problem is even worse – it’s located in the Donbas war zone and can be damaged any time.



Similar problems with anthracitic coal may emerge for two out of the three power plants of Dniproenergo (DNEN UK) soon, unless its parent DTEK secures alternative supplies soon. All of Donbasenergo’s (DOEN UK) power plants are also designed to burn anthracitic coal, though their location near coal deposits makes replenishing stockpiles an easy task. Though, such location is a problem in and of itself - recall that one of Donbasenergo’s two power plants (Sloviansk thermal power plant) was damaged during armed conflict and will be idle at least until the year end. Another power plant, Starobesheve, is located to the south of Donetsk city, in an area that has been recently occupied by the Russian army, which naturally increases the risk of damage.



Zakhidenergo (ZAEN UK) is the only power generation company that is unaffected by the Donbas crisis. All its assets are located far from the war zone, and coal they consume can be easily delivered from regions of Ukraine controlled by the Ukrainian government, or even from nearby Poland.

Источник: Конкорд Капитал