Dear anthracite from the USA: what are the alternatives Ukraine

Ukraine moving away from anthracite coal, which is mined only in the temporarily occupied territories of Donbass. Missing volumes of scarce anthracite country purchases abroad, particularly in the US, which is more expensive than domestic fuel. There is another option — to convert thermal power plant to run on coal other brand.

In Ukraine ended the regime of extraordinary measures in the energy sector, introduced in mid-February of 2017 because of the blockade ORDO, where supplies of coal of the anthracite group. Anthracite is mined only on the temporarily uncontrolled territories of Donbass, it works half of all thermal power plants (TPPs) in the country.

Emergency measures in the energy sector several times renewed, the last time this happened in June, and they operated until July 17. This month, the head of the NPC Ukrenergo Vsevolod Kovalchuk said that the validity of emergency measures in the energy sector was completed, and now the grounds for their renewal no. And the Minister of energy and coal industry Igor Nasaliki declared that one and a half years Ukraine will no longer need scarce anthracite. Or rather, lacking it will not be TES, whereas combined heat and power (CHP) will continue to use it, but the needs of the CHPP the coal is substantially less than that of thermal power plants.

Who is who in the Ukrainian power system

In Ukraine the share of thermal power plants accounts for about 30% of total electricity generation. The country has 14 thermal power plants (excluding small MHP TPP which operates in CHP mode and stops regularly, as it is located in a firing zone), 12 of which are on the territory controlled by Kiev. Six power plants on the territory controlled by work on anthracite, six — coal and gas group. With the latter, unlike anthracite coal, on the territory there are no problems.

A major player in the market of thermal energy is Rinat Akhmetov’s DTEK, which accounts for more than 70% of all thermal generation. Under the control of DTEK’s nine power plants (excluding MHP) — Zaporizhia, Burshtyn, Ladyzhyn, Kurakhovskaya, Dobrotvorsky, Zuevskaya (ORDA), Krivoy Rog, Lugansk and Dnieper. The last three are working on anthracite coal, and the rest on coal of gas group.

The second largest manufacturer of thermal energy — the state of PJSC “Centrenergo”. Its share in thermal generation is about 25%. The structure of “Centrenergo” includes vuglegirska, zmiivska and trypilska TPP. The last two work in the anthracite.

The remaining part of the generated thermal power accounts for the company “Donbassenergo”, the beneficiaries of which are individuals — American Robert Binche and Greek Andreas CERN (the media called the real owner of the “Donbassenergo” son of ex-President Viktor Yanukovych Alexander). Under the supervision of two TES — Slavic and Starobeshevo (ORDA), both use anthracite coal.

The Ministry of energy and coal industry at the end of last year laid the forecasted balance of coal to the thermal generation of Ukraine for the current year at the level of 24.5 million tons, of which 9.5 million tons of anthracite coal.

According to the Ministry, over the past month, stocks of anthracite coal on Ukrainian thermal power plants increased by 7% (47.4 thousand tons) and as at 31 July amounted to 725,2 thousand tons. During the same period, the reserves of coal of the gas group decreased by 23.7% (432 tons) to 1.39 million tons. The coal reserves of anthracite in the CHP for the last month increased 2.3 times (by 76.8 thousand tons) — up to 134,4 million tons, coal reserves of gas group — 0.8% (0.9 thousand tons) — to 111.4 thousand tons.

For comparison, for the daily work Zmiev or Prydniprovska TPP should be about 1.5 thousand tons of coal, while the daily operation of a generating unit one of Ukraine’s largest thermal power plants — Krivoy Rog — requires the use of more than 2 thousand tons of fuel.

Ukraine refuses anthracite

According to Igor Nasalik, reduction in the consumption of anthracite coal is due, primarily, to the fact that thermal power plants have started to convert their units to use of coal of gas group. So, he said, is the refurbishment of the second and fifth units zmiivska TPP of the fourth block Tripolskaya TPP. In addition, DTEK is planning to convert its thermal power plants — Pridneprovskaya and Krivorozhskaya — to run on coal gas group. The decision on transition to the gas group, according to Natalika, and took the company “Donbassenergo”.

In late may of PJSC “Centrenergo” reported that on the second power unit of zmiivska TPP “completed construction and Assembly works technical re-equipment of the systems of feed preparation and combustion of anthracite fuel with the transfer of boilers to coal of marks G and DG”. After commissioning the station will be comprehensive tests.

DTEK is going until November this year transferred to the coal gas group two blocks Prydniprovska TPP, and by 2019 — the whole station (total of seven units). As for the kryvorizka TPP, while the company plans to transfer half of the station coal gas group, the beginning of the project scheduled for 2018.

After the introduction of emergency measures in the energy sector anthracite coal started to save. In April, it was stopped from five thermal power plants operating on anthracite — Slavic Tripolye, Dnieper Zmievskaya and Krivoy Rog. Work continued only at Luganskaya TPP, which is in the area of ATO in the city of Happiness, as the station operates separately from the United energy system of Ukraine. In may the Minister Nasaliki declared that stopped TPP will resume in September. However, while the country was still operating the emergency measures. While Tripoli TPP, serving, in particular, Kyiv region, was partially resumed during in Kyiv in may international song contest Eurovision.

However, in July, before lifting the state of emergency regime in the energy sector, work has resumed Slavic TPP, a little later, Pridneprovskaya and Krivorozhskaya TPP power.

Import — export

Pridneprovskaya and Krivorozhskaya TPP owned by DTEK, continue to accumulate anthracite coal at the expense of imports. In may, Ukraine received the first consignment of coal for South Africa in the amount of 75 thousand tonnes in the same month began shipments of anthracite coal for this station owned by DTEK mines in the Rostov region of Russia. According to DTEK, the price of South African coal is about $ 100 per ton, while shipments from Russia cost the company $ 95.

Other Ukrainian thermal power plants, cogeneration power plants, imported coal, at least in the next year and a half also need. However, how realistic are the plans of the Ministry on the refusal of anthracite coal? “Six months ago this would have three years. I don’t think something has changed in the last six months. In addition, just pick up and abandon anthracite — this means that Ukraine is not going to return to certain areas of the Donetsk and Lugansk regions”, — said in comments “Apostrophe” leading researcher of the National Institute for strategic studies Gennady Ryabtsev.

Indeed, in March, Igor Nasalik said that Ukraine will “through 2,5-3 years to completely abandon the use of anthracite coal”.

However, a year and a half is quite a realistic period of transition from anthracite to gas group of coal in thermal power generation, said the President of the Center for global studies “Strategy XXI” Michael Gonchar. “If they had done this starting in 2015, during this season of 2017, it would have been already done. In principle, it takes two full summer season to be carried out necessary replacement of equipment,” he told the publication.

While the TPP will not be equipped to use gaseous coal, anthracite will buy in world markets, where the lack of such fuel there. “There are many sources — from South Africa to the United States,” — says Gennady Ryabtsev.

Michael Potter also sees no problems with the procurement of imported coal. “Buy already in South Africa, the United States small volumes possible, it is also possible to Australia. The world coal market is sufficiently developed”, — he said.

Of course, the imported coal will be more expensive that previously came from ORDO. “Now it is (on the world market — approx. “Apostrophe”) of the order of 110-120 dollars per ton, sometimes drops to $ 90 per ton, but is unlikely to be cheaper,” — said Gennady Ryabtsev.

According to Mykhailo Honchar, the real price of coal will increase by about 1.5 times, “but for security you need to pay.” In February, Prime Minister Vladimir Groisman said that if the price of coal supplied from the occupied territories amounted to 1730 UAH ($66.5) per tonne, the imported one will cost almost 3 thousand UAH ($115) — the difference is about 1.7 times.

Supplies of coal to Ukraine from South Africa commenced in 2014. At the end of June this year, President Petro Poroshenko said an agreement on the supply of about 2 million tons of coal from the US. On July 31 the head of “Centrenergo” Oleg Kosenko said that the American miner Xcoal Energy & Resources signed a contract for the supply of 700 thousand tons of coal of anthracite to the end of 2017. The cost of coal in the first delivery (85 tons) will be 113 dollars per ton. Prices will continue to vary depending on market conditions.

In connection with the plans of the authorities eventually to abandon the use of anthracite coal, the question arises: what to do with this coal, when the temporarily occupied territory of Donbas back under control of Kiev. “Goes to export,” says Michael Potter. According to him, Ukraine used to export coal, including anthracite, and small amounts were exported abroad even after the beginning of the ATO.

The expert believes that Ukraine needs to gradually move away from coal and to develop alternative energy. “This is a global trend, and the current situation encourages us to do so”, he concluded.