OREANDA-NEWS. April 28, 2009. A 48.2 % y-o-y reduction in electricity exports upon the results of the 1st quarter 2009 results in direct losses for the energy market of Ukraine, says Vitaly Butenko, Chief Strategy Officer of DTEK.

According to him, a decrease in exports has led to the generating capacities of the so-called Burshtyn energy island standing idle. This has already affected the revenue of the energy market from electricity export, which dropped by 44.5% in the 1st quarter compared to the previous year.

To lose external electricity markets will mean a drastic shrink in proceeds of the Ukrainian energy market. Ukraine will face the risk of ultimate loss of its export potential and a significant weakening of the energy sector as a whole. This will entail a further deterioration of the country’s energy security’, thinks Vitaly Butenko.

Furthermore, the Chief Strategy Officer of DTEK believes that the drop in exports makes the situation in the coal sector of Ukraine even more complicated: ‘Thus, today Burshtynskaya TPP has accumulated over 300 thousand tons of gaseous coals being not in demand. This means that either miners are not fully paid to, or Zakhidenergo is to pay using borrowed funds. If the Ukrainian electricity exports are not resumed in the near future the state-owned Zakhidenergo Company may find itself unable to meet its obligations to the creditors’.

According to Vitaly Butenko, the fact that the Ministry of Fuel and Energy blocks export opportunities for DTEK in such a complicated situation for Ukrainian energy sector is rather perplexing. ‘Let me recall you that for the last three months the Ministry of Fuel and Energy has been fully ignoring the requests of Vostokenergo Ltd. to give an approval for the Company to use its technical capacities for electricity exports’, says the representative of DTEK.

Vitaly Butenko also underlines that even with the current decline in electricity prices in Europe DTEK is ready to export up to 200 MW of Ukrainian electricity at WEM prices for consumers in Hungary. ‘The Ministry takes such a position, which leads to a further decrease in load for generating capacities, at the time when complete shut-down of some thermal power plants is under serious discussions due to a considerable fall in electricity consumption’, he points out.

According to Mr. Butenko, such approaches of the government in regulating the energy sector look the most paradoxical in view of statements made by the western partners of Ukrinterenergo that the contracts for Ukrainian electricity purchase are loss-making and that they will fully reject Ukrainian electricity imports to Europe.

As reported earlier, in the first quarter of this year Ukraine reduced its electricity exports by 48.2% against the same period of 2008 – to 897.3 million kWh.

In the first quarter of 2009, Ukraine’s revenues from electricity exports plunged by 44.5% – to USD 50.8m, including revenues from electricity supplies to European countries – by 24.7%, to USD 50.7 m.

As of the 1st of April 2009, unclaimed coal stocks at Ukrainian TPPs are 2 million tons of steam coal produced by state-run and private mines.