OREANDA-NEWS. In January to September 2016, DTEK Group companies produced 22.3 million tonnes of coal (+4.1% YoY), generated 28.6 billion kWh of electricity (+1.7%), transmitted 33.6 bln kWh (-0.1%) of electricity via networks, and produced 1.2 billion cubic meters of natural gas (+33.1%).

DTEK Energy

Coal production and processing

In January to September 2016, DTEK's miners produced 22.3 million tonnes of coal, which is 4.1% up YoY.  Our processing plants increased the processing of run-of-mine (ROM) coal and the output of coal concentrate to 17.1 mln tonnes and 10.8 mln tonnes, respectively.

The main factors influencing the production performance are:

  • an increased output of anthracite and lean coal by DTEK's Ukrainian mines by 6%, or 2.1 mln tonnes;

DTEK Mine Komsomolets Donbassa, DTEK Rovenkyanthracite and DTEK Sverdlovanthracite have been increasing coal production since the start of the year to secure the balanced operation of the United Energy System of Ukraine (UES of Ukraine).

In January to September 2016, the mining companies supplied 3.4 mln tonnes of coal to DTEK Energy's thermal power plants (TPPs), which is by 33%, or 0.9 mln tonnes, more than in the similar period last year.

  • a decreased production of high volatile steam coals by 9 %, or 1.5 mln tonnes.

In the third quarter, DTEK Pavlogradugol and DTEK Dobropolyeugol increased coal production by 22.3%, or 1 mln tonnes, q-o-q. This allowed DTEK Energy's TPPs to bear an increased load since June to compensate for the decreased power production by the nuclear generators and prevent the capacity shortage in the UES of Ukraine.

The Company has found some reserves to allocate additional funds to support the coal production growth. Yet, the financial capability to buy spare parts and conduct repairs of the mining equipment remains limited, as a result of which we have to divert our teams of tunnellers to perform ancillary works during the preparation of the production faces.

Key projects in progress in the reporting period:

  • Completion of the upgrade of the Pavlogradska coal processing plant: the processing volume of run-of-mine coal has increased to 7 mln tonnes per year. After the re-equipment the plant has the highest processing capacity among DTEK Energy’s plants. The project implementation has made it possible to stop using the sludge pond, which is vital for the region’s environmental situation.
  • We have commissioned a new ventilation shaft at the Yuvileina Mine, which provides access to 19 mln tonnes of commercial coal reserves. Apart from its main function, the shaft will also be used for man-riding and cargo transportation. Thus, workers' time underground will be reduced by two travelling hours each shift.
  • Tunnellers of the Samarska Mine successfully drove through the largest West Donbas geological fault — the Bohdanivskyi fault. This fracture discontinues the coal seams: the depth difference between the parts is about 300 meters vertically. It was the unique successful experience of driving through such a large tectonic fault. Later, three more workings will be driven through the Bohdanivskyi fault, which will develop a mine field with reserves of 10 million tonnes of coal.

Electricity generation

In January to September 2016, DTEK Energy supplied 28.2 billion kWh of electricity, which is 1.9%, or 518 mln kWh, up YoY.

The main factors influencing the production performance are:

  • a decreased electricity production by the nuclear power plants by 10.4%, or 6.7 bln kWh;
  • an increase in the electricity consumption (exclusive of the Autonomous Republic of Crimea). The real consumption growth rate is 0.9%, or 0.8 bln kWh, due to the recovered demand by the households and public utilities;
  • an increased electricity production by DTEK Dniproenergo, DTEK Skhidenergo and Kyivenergo by 17.9%, or 2.8 bln kWh; and
  • a declined electricity production by DTEK Zakhidenergo by 19%, or 2.3 bln kWh.

From October 2015 to May 2016, the UES of Ukraine experienced a surplus of capacity. Then, in June, the electricity production in the base-load regime decreased while the consumption grew.  DTEK Energy's TPPs increased their output to make up for the shortage of capacity in Ukraine's UES. In the third quarter, DTEK Dniproenergo, DTEK Skhidenergo, DTEK Zakhidenergo and Kyivenergo scaled up their electricity generation by 34.4%, or 2.7 bln kWh, q-o-q. DTEK Dniproenergo made the biggest contribution to the production growth by increasing its supply to 67%, or 1.5 bln kWh, in July to September.

Due to the increased coal consumption, from July to September, the company's plants operating on high-volatile steam coal combusted 29%, or 864 ths tonnes, more of coal; the anthracite-fired plants increased their coal combustion by 41%, or 411 ths tonnes, q-o-q.  The accelerated coal combustion affected the TPPs' coal stocks: as of 1 November 2016, the TPPs had 1.014 mln tonnes of coal in storages, which is 37% less YoY.

Furthermore, the TPPs of DTEK Energy have been operating with the continuous outstanding debt of state enterprise Energorynok for the electricity they supplied. As of 1 November 2016, the debt to DTEK Energy's thermal generators amounted to UAH 7.3 bln.

Key projects in progress in the reporting period:

  • DTEK Energy continues the repair campaign of its TPPs to get prepared to the 2016/2017 heating season. We completed 46 generating unit repairs, and 14 generating units are still under repair. Ten generating units were taken out of service on schedule, and repairs at the remaining four units were postponed due to the shortage of capacity in the UES of Ukraine, caused by the shutdowns of the nuclear generating units.
  • We continued the second retrofit stage of generating unit 1 at DTEK Kryvorizka TPP. The retrofit is intended to increase the unit's capacity from 282 MW to 315 MW, expand the flexibility range to enable smooth regulation of electricity consumption peaks and drops, and reduce fly ash emissions in the air by 16 times to 50 mg/m3 in compliance with the European Union’s environmental norms.
  • We have completed a retrofit of generating unit 5 of DTEK Burshtynska TPP. Majority of unit upgrades were done in 2012-13. This year, we have conducted a middle-life repair with some retrofit elements. The following results are expected: an increase in capacity from 208 MW to 215 MW and an improvement of the equipment efficiency and reliability.
  • We completed a two-year project on the replacement of the generator at generating unit 1of Combined Heat Power Plant No. 5 of Kyivenergo's stand-alone division 'Kyiv CHPPs'.

Since 2012, as part of the modernisation, electrostatic precipitators at all our generating units are upgraded to comply with the dust emission level stipulated by Directive 2001/80/ЕС.

Electricity transmission by networks

Our distribution companies transmitted 33.6 bln kWh for nine months 2016, which matches the level of the same period of the last year.

The main factors influencing the production performance are:

  • an increased electricity transmission by DTEK Dniprooblenergo and Kyivenergo by 1.7%, or 389.2 mln kWh;
  • a decreased electricity transmission by DTEK Donetskoblenergo, DTEK Power Grid, and DTEK Energougol ENE by 3.7%, or 408 mln kWh, due to the military hostilities and unstable social and economic situation in the region.

Key projects in progress in the reporting period:

  • DTEK Dniprooblenergo. The company opened a modern Client Service Centre in the settlement of Solone, designed to service 300 clients per day. There clients can consult about their power supply issues and conduct all the required transactions: from reconciliation of bills to obtaining technical specifications for new connections.
  • A new dispatching control office was opened in the city of Kryvyi Rih, where a Mitsubishi Display Wall shows all the data about power supply to the city: from the general power supply layout to individual power facilities. This allows reducing maintenance time from malfunction identification to its remedy and, in general, preventing emergencies. The modern control office is part of the general SMART Grids implementation programme for the company's electricity networks.
  • We continued the implementation of an automated commercial electricity metering system in the cities of Dnipro, Kryvyi Rih, Kamianske, Novomoskovsk, and Nikopol. The system already covers over 130 households' metering points.
  • A new 150/10/6 kV Naddniprianska substation is being designed to provide an additional capacity for connecting new consumers and substations to be built and for improving the reliability of the current substations feeding the underground railway.
  • Kyivenergo. The company continues the retrofit of the 110 kV Zhovtneva-Mototsykletna cable line. This year, it is planned to complete the replacement of the oil-filled cable with the cable with cross-linked polyethylene (XLPE) insulation. The project will enhance the line's reliability and transmitting capacity.
  • We continue the utility network retrofit project for the new terminal of the Kyiv Zhuliany airport. In the course of the project, we plan to conduct a technical renovation of the Nikolska and Harnizonna substations, to build the 35 kV Nikolska-Harnizonna cable line and the 10 kV Harnizonna-RP-267 cable line.
  • We started a retrofit of the Voskresenska substation, including the replacement of VMT-110 oil circuit-breakers with SF 6 circuit-breakers, and a section of the 110 kV Obolon-Severna 1, 2 overhead transmission line, including the replacement of the wire and reinforcing the towers.