Coal production, stockpiles at Ukraine power plants plunge in August

The production of steam coal in Ukraine decreased 1.8x yoy to 2.85 mmt in August because of ongoing warfare in a part of coal-rich Donbas region, the Interfax-Ukrayina news agency reported, citing its sources in the Energy Ministry. Coal production fell 3.9x yoy in the Luhansk region (to 0.54 mmt) and 2.5x yoy in the Donetsk region (to 1.20 mmt). Production in another coal-bearing region, Dnipropetrovsk, remained flat yoy at 1.57 mmt.



Coal stockpiles at Ukraine’s thermal power plants (supplying 40% of the country’s electricity) will be exhausted by mid-November, according to Mykhaylo Volynets, the head of the Independent Trade Union of Miners of Ukraine. Current stockpiles are about 1.7 mmt (the monthly use of coal by Ukraine’s thermal power plants is about 3.0 mmt currently), Volynets said on Sept. 2, as reported by the UNIAN news agency. Volynets stressed that the situation is critical with supplies of anthracitic coal, as the whole area of its production in Ukraine is currently controlled by the Russian army and pro-Russian separatists. He estimates that Ukraine will have to import about 10 mmt of coal for the upcoming heating season to run smoothly.



Volynets also told journalists that combatants are stealing coal from the occupied territories and delivering it to Russian territory. About 15,000 tons of coal has been stolen, according to him.



Alexander Paraschiy: The situation in the coal sector is developing under the worst-case scenario that we outlined three weeks ago. Indeed we believe that Volynets’s forecast of exhausted coal reserves is rather optimistic. According to the latest official information, Coal stockpiles at power plants were 2.16 mmt as of Aug. 25, a 30% decrease month-to-date, or 0.92 mmt, according to Ukrenergo, the dispatcher of Ukraine’s electricity sector. At such a depletion rate, the stockpiles will be exhausted much earlier than mid-November, or probably this month.



Out of eight thermal power plants that are located outside the war-afflicted regions of Donbas (the collective term for Donetsk and Luhansk), four are using the currently scarce anthracitic coal and risk stoppage already in the next few days. With no supply of anthracitic coal, Ukraine’s largest cities of Kyiv, Kharkiv, Dnipropetrovsk and Kryviy Rih will feel a power deficit soon.



At the same time, the four power plants located outside Donbas that are designed to burn non-anthracitic coal look relatively safe as two-thirds of this type of steam coal is mined outside Donbas. The relatively safe power stations include all the three plants of Zakhidenergo (ZAEN UK) and the Zaporizhia Power Plant of Dniproenergo (DNEN UK).

Источник: Конкорд Капитал