OREANDA-NEWS.  January 31, 2012. DTEK companies substantially increased their production compared to the previous year. Output increased at DTEK’s mines[1] to 22.9 million tonnes of coal, while electricity output[2] rose to 33.0 TWh and electricity sales grew to 14.1 TWh[3].
 
The production indicators of all DTEK operated companies increased as they introduced operational improvements and benefited from a large-scale equipment upgrade programme. The company also grew via the purchase of new assets.
Coal Mining and Processing
 
Coal output increased by 19.7% YoY in 2011, mainly due to an increase at DTEK Dobropolyeugol LLC being the new asset to join DTEK last year. DTEK’s investment in this enterprise in 2011 was more than UAH 450 mln, which resulted in DTEK Dobropolyeugol LLC’s annual coal output increasing by 250.6 thousand tonnes (+7.7 %).
 
In 2011, coal output growth was stable at both DTEK Pavlogradugol PJSC and DTEK Komsomolets Donbassa Mine PJSC (+2.4% and +3.1% respectively). DTEK Pavlogradugol’s annual coal output was a record high of 15,414,000 tonnes.
 
In December 2011, DTEK signed concession agreements to take control of DTEK Sverdlovanthracite LLC and DTEK Rovenkianthracite LLC.
 
At DTEK’s coal enterprises in 2011, output increased while industrial injuries decreased due to the implementation of programmes to modernize integrated production facilities and replace outdated mining equipment.
 
DTEK’s largest 2011 investment programmes included: the construction of an air supply well at the Dobropolskaya mine at DTEK Dobropolyeugol LLC (project cost amounted to almost UAH 96 mln); and the introduction of an automated operator dispatch control system at DTEK Komsomolets Donbassa Mine, which enhances safety by controlling technical processes on a real-time basis (project cost was UAH 37.5 mln).
 
In 2011, an underground monorail suspension transport was put into service at DTEK’s mines, which allowed for decreasing time for assembly and dismantling works, cargo and passenger transportation, and improved mine workers’ occupational safety and working conditions. In 2011, more than UAH 40.3 mln was invested into implementation of these projects at DTEK Pavlogradugol and DTEK Komsomolets Donbassa Mine.
 
DTEK’s coal processing enterprises maintained production at the same level as in 2010. In 2011, the programme to modernize and technically re-equip DTEK’s coal-processing enterprises continued. The largest projects were implemented at Pavlogradskaya CPP (launch of a primary sludge processing unit), DTEK Oktyabrskaya CPP (installation of dry screening equipment) and DTEK Dobropolskaya CPP (replacement of two jigging machines). In 2011, DTEK spent more than UAH 29 mln on the replacement and overhaul of equipment at its coal processing enterprises.
 
Electricity Generation
 
In 2011, Vostokenergo generated 17.1 TWh (+4.8% YoY) and Dneproenergo generated 15.8 TWh (+10.6%). The installed capacity utilization rate (ICUR) of Vostokenergo grew to 51.9% compared to 50.0% in 2010 and was still the highest among Ukrainian thermal power plants. Dneproenergo’s ICUR reached 42.4% (+4 pp YoY)[6].
 
In 2011, DTEK’s power generating companies continued a large-scale equipment upgrade programme.
 
In 2011, Vostokenergo’s Luganskaya TPP unit #10 and Kurakhovskaya TPP unit #8 were retrofitted. The retrofit included all the unit’s main components: boiler, turbine and generator. A full–scale automated process control system (APCS) is also being introduced. The retrofit is expected to increase the installed capacity of Luganskaya TPP unit #10 by 35 MW, reduce fuel consumption by 63 g/kWh, and increase its operational range from 45 MW to 80 MW. Kurakhovskaya TPP unit #8 will be DTEK’s first unit to be equipped with an electric precipitator that will clean flue gas to 50 mg/nm3, which complies with the requirements of Directive 2001/80 EC. The retrofit will extend the lifespan of the units by 15-20 years. The total investment into the retrofitting of Vostokenergo’s units was about UAH 1.1bln.
 
In 2011, Dneproenergo continued to upgrade Pridneprovskaya TPP unit #9, Krivorozhskaya TPP unit #3 and started to upgrade Zaporozhskaya TPP unit #1. In addition, new electric precipitators were installed at Pridneprovskaya TPP unit #11.The upgrades are planned to increase installed capacity of the Krivorozhskaya TPP by 18 MW and of the Zaporozhskaya TPP by 20 MW, increase these units’ operational range to 75–180 MW, reduce fuel consumption, extend the lifespan of the equipment by 15-20 years and drastically reduce emissions to 50 mg/nm3, which complies with the requirements of Directive 2001/80 EC. The works are planned to be completed in H1 2012. The total investment into these projects was about UAH 1.5 billion. 
 
Electricity Sales
 
In 2011, the total amount of electricity purchased by Service-Invest and DTEK Energougol ENE companies from Energorynok SE was 14.1 TWh, which was 5.9% more than the previous year.
 
During 2011, DTEK’s power-supply companies continued upgrading their equipment. In particular, a large-scale retrofit of the Druzhkovka, Davydovka-Severnaya, Zuevka, Ugolno-Rtutnaya, Novomakeyevka and Shvernik (Service-Invest), as well as Skif and Oktyabrskaya (DTEK Energougol ENE) substations was carried out. Upgrades to power transmission lines continued. Service-Invest also completed the construction of two new substations, one of which will supply electricity to the Donetsk airport.
 
The new 110 kV substation for the Donetsk airport for Euro-2012 was completed on time. It marked the first in the Donbass region that a power-supply company installed new generation 110 kV electrical equipment manufactured by ABB (Sweden). DTEK invested UAH 96 m in the project.
 
An Automated Electricity Commercial Metering System (AECMS) is being introduced at Service-Invest and DTEK Energougol ENE. In February 2011, as a part of its customer-centric development strategy, DTEK Energougol ENE launched a service for household consumers (a year before it became available to legal entities): an Internet portal for utility services, which made cooperation between consumers and the company much easier and smoother.
 
Labor Safety
In 2011, DTEK continued to implement the PPE Corporate Standards Project, the goal of which is to provide all industrial personnel of the company with modern, reliable and quality personal protection equipment. This will help reduce the impact of the difficult production conditions on employees and make operations as safe as possible. The total investment into the project in 2011 amounted to about UAH 18 m.
 
Exports
 
In 2011, DTEK’s exports of surplus coal increased by 73% YoY to 3.4 mln tonnes and reduced the dependence of its generation business on coal imports by 57% to 0.6 mln tonnes. The company expanded its client base in Western Europe, entered markets in South-East Asia and reinforced its positions in markets where it has ongoing operations.
 
In 2011, DTEK's electricity exports to Eastern Europe reached 5.1 bln kWh (+319% YoY) as the company commenced supplies to Belarus in February and to Moldova in April and renewed electricity exports to Poland in October. In December 2011, DTEK concluded framework agreements with EDF Trading (France) and CEZ Slovensko (Czech Republic) for electricity supplies to Europe in 2012.
 
“Last year was particularly important for the company. It was a time of growth and systematic development. Major enterprises such as Dobropolyeugol, Rovenkianthracite, Sverdlovanthracite and Kievenergo became part of the DTEK family in 2011. We face an important task of learning to work together, carrying out successfully all the integration processes and optimizing production at different enterprises. The sustainable growth of DTEK is an evidence of the efficiency of its business model and sets the foundation for future success,” said Yuriy Ryzhenkov, DTEK's COO.