Coal Sector Casts Shadow on Ukraine Electricity Market

Posted by Eric Haun
Thursday, August 14, 2014

Intense fighting in eastern Ukraine has forced coal mines to cut production or close entirely, imperilling the country's electricity market and potentially forcing the government to cut exports or limit consumption.

Coal mining is centred in the industrial regions of Luhansk and Donetsk, where a months-long conflict between pro-Russian separatists and Ukrainian forces has seen infrastructure destroyed by artillery fire and supply networks disrupted.

Around half of the 115 coal mines in Ukraine, Europe's second-largest coal producer, have halted production entirely and output fell 22 percent year-on-year in July to 5.6 million tonnes, said Mykhailo Volynets, the chairman of the Independent Union of Miners.

"The remaining mines are operating chaotically, stopping and starting production depending on the electricity supply and the proximity of fighting," he told Reuters.

On Wednesday, the government declared a state of emergency in the electricity market due to difficulties transporting coal to thermal power plants (TPP), which provide around 40 percent of the country's electricity.

The government is discussing limiting exports, Volynets said.

Ukraine, a net exporter of thermal coal, which is used for power generation, may also begin to import the fuel, according to the director of Energy Resources Ukraine, Andrey Faforov.

"Imports from Poland, Russia, Indonesia, South Africa, Colombia and other countries will be boosted. The issue is the price," he said

The damaged state of supply routes is also a key problem.

"Access roads to the mines and power plants have been blown up, so even if you import coal it's not clear how it could be delivered," said Dragon Capital analyst Denys Savka.

A trader at Ukraine's largest private power and coal producer, DTEK told Reuters a number of Ukrainian TPP's had enough coal reserves for 16 days.

DTEK, part of the empire of Ukraine's richest businessman, Rinat Akhmetov, declined immediate comment. It accounts for about 29 percent of the country's thermal power generation and controls about 46 percent of Ukraine's coal production.

The coal shortage comes at an awkward time for Ukraine, which had been hoping to burn more thermal coal to fuel TPPs and reduce use of natural gas, due to the high price it has to pay to import Russian gas.

In 2013 Ukraine produced 83.7 million tonnes of coal, of which around 60 percent was thermal coal, according to energy ministry data.

Other Ukrainian industries have also been rocked by the violence in the country's east. Steel production, which accounts for around 15 percent of Ukraine's economy, fell 7 percent in the first half of 2014 because of damage to operations from artillery fire and supply disruptions.

(By Svetlana Burmistrova and Alessandra Prentice; Editing by Crispian Balmer)

Maritime Reporter August 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds


Finland Scraps LNG Terminal Plan

Finnish gas utility Gasum has abandoned its plans to build the Finngulf liquefied natural gas  (LNG) import terminal in Finland with an offshore pipeline connection

MARAD Backs Emissions Reduction Projects

The U.S. Department of Transportation’s Maritime Administration (MARAD) announced it will provide more than $1 million to support the development of two new emission-reducing maritime solutions.

Rolls-Royce to Cut More Staff of Marine Unit

Britain's Rolls-Royce said it would cut an additional 400 staff from its marine business by the end of next year, its latest move to make the unit more efficient


Weak Capesize Rates Depress Baltic Index

The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry bulk commodities, fell on Tuesday on weak demand for capesize vessels. The overall index,

U.S. Investigators Head to Florida to Probe Ship Lost in Hurricane

Federal safety investigators traveled to Florida on Tuesday to investigate the U.S. container ship lost at sea after being hit by powerful Hurricane Joaquin, leaving

USCG Search for Missing Crew of El Faro

Coast Guard search and rescue crews continue searching for possible survivors from the cargo ship El Faro Monday night, covering a total search area of more than 160,574 square nautical miles.

Government Update

Historic Pacific Trade Deal Faces Skeptics in US Congress

Twelve Pacific Rim countries on Monday reached the most ambitious trade pact in a generation, aiming to liberalize commerce in 40 percent of the world's economy in a deal that faces skepticism from U.

MARAD Backs Emissions Reduction Projects

The U.S. Department of Transportation’s Maritime Administration (MARAD) announced it will provide more than $1 million to support the development of two new emission-reducing maritime solutions.

Michelle Obama to Christen Navy's Newest Submarine

U.S. First Lady Michelle Obama will join builder General Dynamics Electric Boat, a wholly owned subsidiary of General Dynamics, in christening Illinois (SSN-786), the U.

Maritime Contracts Naval Architecture Navigation Pipelines Pod Propulsion Port Authority Ship Electronics Ship Repair Shipbuilding / Vessel Construction Sonar
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1362 sec (7 req/sec)