OREANDA-NEWS. Difficulties for thermal generation in Ukraine in the first half of the year affected DTEK’s production. The volume of coal mining and processing by the company effectively remained the same as last year.

“The issue was that there was a surplus of coal because of the fire at the Uglegorskaya TPP,” said DTEK Chief Operating Officer Yuriy Ryzhenkov, of the company’s first half performance. “This resulted in a reduction in the sales market for state-owned mines that produce G grade coal. DTEK commited to buy more than 3 million tons of coal from state-owned mines this year to help mitigate the crisis. Obviously, this puts pressure on DTEK’s coal mining enterprises. Increasing coal exports will make it possible to balance coal mining and consumption by the company’s TPPs.”

The difficult situation in the coal mining sector is being exacerbated by the overall decline in electricity consumption in Ukraine (down 4.1%), caused by slowed growth in key economic sectors.

“A partial solution would be to significantly increase exports, noting that for us electricity export transactions are loss-making, but they make it possible to load our facilities to the maximum and consume coal,” said Ryzhenkov. “In the first half of the year, exports grew by 15.4%, but this still did not cover the decline in consumption in Ukraine. At the same time, the debts of water supply utilities and state-owned mines for consumed electricity, which has reached UAH 7 billion, remains a major problem for electricity distributors. We see that the crisis is not improving yet.”