Stocks of scarce coal grades in Ukraine at their lowest since June last year

Thursday, June 30, 2016 - 12:20 (EEST) Section: Latest news

Ukraine saw a reduction of anthracite coal stocks in warehouses of its thermal power plants (TPPs) by 17.5% during June 21-29 from 405,400 tonnes to 334,600 tonnes, state company Ukrenergo reported.
Current stocks of anthracite coal are at their lowest level since the beginning of June 2015 when stocks of scarce coal grades exceeded 300,000 tonnes.
According to the report, stocks of coal of all grades in TPPs` warehouses decreased by 13.1% during the reporting period from 1.484 million tonnes to 1.289 million tonnes.
The company informed coal stocks in TPPs` warehouses have started to rapidly shrink since mid-May. At that time, stocks were estimated at two million tonnes, of which about 870,000 tonnes was anthracite coal.
As UNIAN reported earlier, Ukraine began to experience an acute shortage of coal in the summer of 2014, when, as a result of hostilities, the government completely lost control of part of Donbas, where the majority of the coal mines were located. Nuclear power plants account for about 60% of power generation in the country, and the remaining share is generated by thermal power plants that use coal and gas, as well as hydropower plants and ”green” energy facilities.
In January 2015, Ukraine reduced coal production by half to 2.5 million tonnes as compared to the previous year amid continued fighting in Donbas. Kyiv-based authorities decided to start coal imports from Australia, South Africa and Russia.
Recently, Head of the National Energy and Utility Regulation Commission (NEURC) Dmytro Vovk stated that shipments of anthracite coal from the Anti-Terrorist Operation zone in eastern Ukraine were suspended on June 1, 2016.
To solve the problem with coal supplies for the needs of Ukraine`s TPPs, the NEURC introduced stock exchange linked price setting for the locally produced coal in Ukraine. The energy regulator has proposed a formula according to which the price of coal will be calculated based on the price of coal on stock exchanges, taking into account shipments to Ukraine.
Meanwhile, some experts have sharply criticised the proposed method, arguing that it will lead to the overstatement of coal prices, thus benefiting DTEK energy company that controls a number of TPPS in the country and coal mining enterprises. Besides, they note this could lead to further increase in electricity prices for industry and households.