Ukrainian thermal power stations, a source of up to a half of domestically produced electricity, had only 1.4 million tons of coal in their storages as of Jan. 6, while they need around 3.5 million tons per month to cover the country's needs during winter.
Coal-rich Ukraine became an importer of coal due to Russia’s war in the Donbas, a core coal region that used to produce 18 percent of the electricity that Ukraine needs, soaking up to $50 in subsidies per year from each taxpayer to cover losses.
Ukraine bought 2.3 million tons from abroad during September-December 2014, while whole year’s coal imports cost stood at $1.6 billion, including such overpriced and poor-quality South African coal that a criminal investigation was launched.
“Until the end of the heating season, Ukraine will stay in extremely hard energy condition, on the edge,” Energy Minister Volodymyr Demchyshyn, whose position looks shaky, said on Jan.20.
Having produced 44.7 million tons of coal last year, 29 percent down year-on-year, a substantial part of it couldn’t be delivered from the Donbas. Demchyshyn believes that 2.5 million tons of the black fuel are in the Kremlin-occupied territories. The rebels will sell 100,000 tons monthly, according to The Insider, a news website.
Nataliya Slobodyan of International Center for Policy Studies in Kyiv believes doing business with the separatists will only bring them recognition. She thinks buying coal from Russia is a better plan.
And that is exactly what government wants to do. Around 600,000 tons are expected to come from Russia, where billionaire Rinat Akhmetov, who controls a big part of the Donbas mines, also owns coal-producing capacities. Ukraine is also considering imports from Kazakhstan.
The European Union is taking different approach in helping Ukraine out of the coal crisis. Poland will provide a 100 million euro loan to help switch to a cheaper form of coal.
Politicians’ indecisiveness hasn’t helped, says Yuriy Korolchuk of the Institute for Energy Strategies. “Demchyshyn is one of the tragic cases of an inexperienced person placed to rule the sector with a disastrous legacy,” Koroluchuk added.
Ukraine will also be buying ready-made electricity from Russia while, for its part, Ukraine will have to supply power to Russian-occuped Crimea, something that energy expert Valentyn Zemlyansky doesn’t think is a good idea.
Akhmetov’s DTEK produced 30 percent of electricity before the war and is buying coal not only from Russia, but also Australia and South Africa – up to 1.8 million tons projected for December-February.
Their power plants have enough anthracite coal to cover up to 10 days of production. Prydniprovska, Kryvorizka and Luhanska electricity stations are in most need. Unless the company manages to secure additional supplies, it will have to stop some production or switch to gas, a more expensive option.
Kyiv Post staff writer Olena Gordiienko can be reached at [email protected].
