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UPDATE 1-Ukraine tells power stations to switch to gas to conserve coal, says DTEK CEO

by Sylvia Quarles
February 26, 2022
in Finance
UPDATE 1-Ukraine tells power stations to switch to gas to conserve coal, says DTEK CEO

(details, adds context)

by Julia Payne

LONDON, Feb 26 (Reuters) – The Ukrainian government has directed power stations to switch to natural gas to preserve strategic coal reserves, the head of the country’s largest private power producer said on Saturday.

DTEK chief executive Maxim Timchenko said the country had 15 to 20 days of coal reserves left, or 730,000 tonnes. DTEK is involved in energy sectors ranging from renewable energy to coal and oil, and accounts for a quarter of the country’s electricity generation facilities.

Most of Ukraine’s coal production, some produced by the DTEK, is located in the east of the country, in or near the two separatist states that Russia has declared independent. Timchenko said it was “only a matter of time” before coal production or distribution was disrupted.

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“The Ukrainian government has asked DTEK to switch to gas instead of coal in order to preserve strategic reserves,” Timchenko told reporters on a conference call. The DTEK has eight thermal power stations, one in the separatist province of Luhansk now under Russian control.

The gas is produced in Ukraine and also comes via pipeline from Russia to the European market. Timchenko said Ukraine could transport Russian gas to the rest of Europe.

Timchenko said Ukrainian electricity demand had dwindled since the invasion and the country now had more capacity. He said Ukraine has 11 nuclear power reactors out of 15.

“Our military forces have strengthened their positions around nuclear power plants, but no one can say whether we keep them under our control or not,” Timchenko said.

For the time being, Russia is not targeting critical infrastructure, he said, but 40% of DTEK’s renewable energy was cut because of downed transmission lines.

“There is no major supply problem to consumers in all areas. Just minor local problems but nothing is settled right now,” he said.

He said Ukraine has been cut off from the Belarusian and Russian power grids.

According to the US Energy Information Administration, natural gas accounts for about a third of Ukraine’s energy consumption, followed by coal at 30% and nuclear power at 21%. Oil and renewables account for the remainder. (Reporting by Julia Payne; Editing by Alison Williams and Christina Fincher)

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