DTEK’s CEO updates status of Ukraine’s energy/electricity sector
KYIV (WO) — In an online briefing Thursday, DTEK CEO Maxim Timchenko discussed the progress made in rebuilding Ukraine’s energy and electricity infrastructure. He provided an update on energy sector operations and restoration of electricity supply amid the Russian invasion, in addition to other initiatives.
On July 30, ENTSO-E allowed a 2.5-fold increase in the export of Ukrainian electricity to Europe, only up to 250 MW. This gives Ukraine a revenue stream for supporting its energy sector. So, Ukraine is expecting to increase capacity to 800 MW by the end of this year. Further grid integration with ENTSO-E can provide an additional 7.7 GW of electricity capacity for the EU.
The main technical issues for increasing electricity export are new powerlines and installation of STATCOM or battery storage systems. DTEK Group is already in active discussion with its international partner, Honeywell, to expand the capacity of battery storage to 20 MW by the end of the first quarter of 2023. In May 2021, DTEK Group and Honeywell successfully installed a pilot battery storage project. They have unique expertise and can scale this technology. Also, DTEK Group is in discussion with Ukrainian TSO regarding installation of STATCOMs on existing solar power plants and on a wind power plant that will resume construction.
Preparation for the winter season
Ukraine has 1.7 million tons of coal in stock. According to the government's vision, the state must accumulate at least two million tons of coal. DTEK Energy, as a coal producer, is making a significant effort to achieve this goal.
Ukraine has 12.7 Bcm of gas in storage. According to the government's vision, the state must accumulate 19 Bcm before Oct. 1. This is a stretch goal and not considered attainable. However, due to a drop in consumption to approximately 15 Bcm, the stored gas could be enough to get Ukraine through the winter season. So, basically Ukraine can be self-sufficient and buy gas from domestic producers.
Energodar is the "capital city” of the Ukrainian energy industry. Before the invasion of the Russian army, the city housed approximately 50,000 people. They are primarily employees of Ukraine's largest power plants, DTEK's Zaporizhzhya TPP (thermal power plant) and the state-owned Zaporizhzhya NPP (nuclear power plant), which is the largest NPP in Europe.
On March 4, the city was occupied by the Russians. Now, about half of the residents have left the city.
Since the beginning of August, the Russians have been shelling Energodar actively, with dozens of bombings every day. The Russians are attacking civilians, and the Zaporizhzhya NPP. In addition, the Russians mined part of the land around ZNPP, and have driven military equipment into the two power units of the station and fired from it at the neighboring cities of Nikopol and Marganets.
All calculations of Ukrainian energy system operation are based on an expectation that Zaporizhzhya NPP will produce 2 GWt (maximum capacity is 6 GWt). If Ukraine loses this capacity, the next several months will be a challenge for the energy system. However, if Ukraine loses Zaporizhzhya NPP, there will still be enough capacity for internal needs. If this happens, Ukraine will be forced to reduce the volume of exported electricity and need to consume more gas for electricity production.
DTEK Group operations
DTEK Group does everything to ensure the stability of Ukraine's energy system, so that Ukrainians have light and heat in their homes now, and during the winter season. DTEK Oil & Gas is keeping production at the pre-war level and expects 2 Bcm of gas production. All gas from private domestic producers goes into gas storage. Private producers are in discussion with the government and are willing to sell this gas to NAC Naftogaz for the winter season.
Approximately 842 Ukrainian cities and towns are deprived of electricity supply. That accounts for around 1.5 million people. The most challenging situation is in the Donetsk region. The price of maintained electricity supply is too high—another one of DTEK’s employees was killed during restoration works. In total, approximately 69 DTEK employees have been killed, another nine are missing, and 144 were injured. Since the start of the Russian invasion, DTEK Group has allocated UAH 572 million in humanitarian aid and support to the Armed Forces and the Territorial Defense Forces.
DTEK Group is still a target of cyber-attacks. Although the attacks were aimed at the corporate infrastructure, they were unsuccessful, and no failures occurred. The energy system continued without interruption. DTEK's IT team is working in close cooperation with our partners and services providers to explore such attacks and prevent them in the future. Significant support in this process is provided to DTEK by Microsoft.
DTEK Group has received humanitarian and technical aid from different donors. The donors came from different countries, including the United Kingdom, Poland, France, Spain, Portugal, Romania, Czech Republic and Estonia. DTEK Group has made all necessary efforts to effectively distribute and use the received humanitarian (technical) aid, in order to restore the electricity supply in regions of operations and to support local communities and defenders of Ukraine.
Substantially, the provided humanitarian (technical) aid was directed to restore the electricity supply in liberated regions of Ukraine (Kyiv region). However, the amount of received humanitarian aid was only enough for temporary restoration of the electricity supply and is not suitable for long-time use. In current situation, long-time use will lead to accidents and power outages, especially during the winter period.
The Kyiv region suffered the most significant damage, due to the shelling. Therefore, DTEK Grids is the main recipient of humanitarian and technical aid. Some part of humanitarian aid (non-technical), provided by Schneider Electric was allocated to Mykolaiv and Donetsk Regions, to support residents and internally displaced persons, and Ministry of Energy to distribute to other energy companies in Ukraine.