DTEK's Production Indicators for 2017

“Ukraine has begun transformation of the energy sector. This brings hope for restoration of the investment potential of the sector. Today, we have to take an opportunity to create a new Ukrainian energy sector – clean, efficient, competitive,” – says DTEK CEO Maxim Timchenko, when commenting on the company’s performance in 2017. “DTEK has always been an active supporter of reforms. We have begun the process of reorganisation of the distribution companies into a distribution system operator and a supplier to the consumers. These changes constitute an integral part of the energy reform, which is aimed at creating an electric power market according to the European model. We construct green energy power plants: this year we plan to put Phase 1 of Prymorska WPP and Nikopolska SPP into operation. We shall continue to work on converting our TPPs to burn high-volatile steam coal instead of anthracite, which enhances the country’s energy security. Today DTEK is focused on projects that create a new energy sector.”

Key Performance Indicators of DTEK Group

^{Since 1 September 2016, DTEK Energy has not been consolidating the indicators of Mine Office Obukhovskaya JSC into its statements as management of the company has been transferred to DTEK strategic holding company. This transaction was carried out as part of the restructuring of the DTEK Energy’s loan portfolio aimed at balancing the asset development capacity with loan servicing capabilities.}

DTEK Energy LLC

Coal production and processing

The company’s miners have produced 24.8 mn tonnes of coal for 2017. The company’s coal processing plants (CPPs) have processed 16.5 mn tonnes of ROM coal; coal concentrate production has amounted to 10.4 mn tonnes. Third-party CPPs have processed 2.6 mn tonnes, and concentrate production has amounted to 1.4 mn tonnes.

Main factors that have affected the performance indicators:

• The high-volatile steam coal production has grown by 8.2%, or 1,740.5 thou tonnes. The miners have produced a total of 22.9 mn tonnes of G grade coal, which is the company’s historic record at the year-end.
• Given that the development of mine workings is complicated due to the breakdown rate of tunnelling equipment and in-mine transportation caused by increased loads and deteriorating mining and geological conditions within the development area;
• a decrease in production of anthracite coal grades. Since March 2017, DTEK has had no control over DTEK Sverdlovanthracite LLC, DTEK Rovenkyanthracite LLC, DTEK Mine Komsomolets Donbassa PJSC and Mospino Coal Preparing Enterprise LLC as it considers the demand to re-register those companies on the temporarily uncontrolled territory of Donetsk and Luhansk regions unacceptable.

Key projects in 2017:

• supplying the required volume of fresh air to the mines to secure stable ventilation in the mine workings. The main fans of Dniprovska Mine have been commissioned, and construction works on the first start-up facility are at their closing stage. Yuvileina Mine continues the project of a new return air shaft: for in-mine transportation the tracks have been laid and works have been being performed for construction of the wagon unloading station, charging shed and warehouses; underground and surface power supply has been provided;
• The construction and installation of the filter-press section at Dobropilska CPP have been completed. In global coal-processing practice, belt filter-presses are one of the most widely applied solutions, allowing to reduce environmental footprint by switching the plant to a fully closed water-slurry cycle, which eliminates the storage of liquid wastes.

Electric power generation

DTEK Energy’s thermal power plants have supplied 36.5 bn kWh of electric power to the United Energy System of Ukraine in 2017. The supply dropped by 7.6%, or 3.0 bn kWh y-o-y.

Main factors that have affected the performance indicators:

• increased output by nuclear power plants (NPPs) and hydro power plants (HPPs) due to the emergency situation in the energy sector, which had been effective till mid-July. NPPs, HPPs and PSPPs have increased electric power production by 6.5%, or 5.9 bn kWh in 2017.
• have decreased electric power supply by 20.3%, or 4.7 bn kWh by DTEK Skhidenergo PJSC and DTEK Dniproenergo PJSC. The cause of the above is the loss of control over Zuivska TPP, and outage of Prydniprovska TPP and Kryvorizka TPP April through July due to law demand in UES of Ukraine;
• the increase of electric power supply by 11%, or 1.8 bn kWh by DTEK Zakhidenergo PJSC and Kyivenergo.

G-grade-coal fired units of DTEK Energy TPPs managed by the company have increased their electric power output to the United Energy System by 15.3%, or 3.6 bn kWh. DTEK’s TPPs have supplied a total of 27.1 bn kWh of electric power for the reporting period.

As of 1 January 2018, the company’s power plants have accumulated 950 thou tonnes of coal, which represents a 2.2% growth year-over-year. The stocks of G grade coal were 596 thou tonnes, whereas the A grade stocks totalled 354 thou tonnes.

Key projects in 2017:

• increased consumption of G grade coal by the energy sector. DTEK Prydniprovska TPP has converted its Unit 7 and Unit 8 to burn high-volatile steam coal instead of anthracite. Transfer to G grade coal will enable the company to cut down on its anthracite imports, thus, increasing consumption of domestic coal;
• DTEK Kryvorizka TPP has completed the second stage of the retrofit of Unit 1. The retrofit will help expand the unit’s installed capacity from 282 to 315 MW and increase its flexibility range by 58 MW to 158 MW, while reducing its specific fuel consumption;
• Kyivenergo PJSC has completed the first stage of construction of a condensing economiser on the water boilers of CHPP-6. The project is aimed to enhance the efficiency of natural gas combustion, while allowing for annual gas savings of up to 10.6 million cubic metres. The new equipment will also improve the plant’s environmental performance.
• DTEK Ladyzhynska TPP has begun construction of a solar power plant with the capacity of 1 MW. The plant will be located on the bank of the Southern Buh, at the TPP dam. The electric power generation is expected to be 0.6 mn kWh per year, and the payoff period is 8 years.
• The retrofit of Unit 10 at Burshtynska TPP is under way. The project is aiming to increase the unit’s installed capacity by 15 MW to 210 MW, expand its flexibility range by 30 MW to 105 MW, raise the boiler efficiency to 90% and enhance the unit’s reliability during peak hours.

While retrofitting each unit, the electrostatic precipitators are upgraded to achieve the dust emission targets set forth in Directive 2001/80/EC.

Electric power transmission over grids

For 2017, DTEK’s distribution companies have transmitted 43.2 bn kWh of electric power to their consumers. This is down 5.8%, or 2.7 bn kWh, y-o-y.

Main factors that have affected the performance indicators:

• recovery of demand by the industrial consumers in Ukraine – increase by 0.9 bn kWh to 50.9 bn kWh. Against reducing consumption by the public utility consumers and public by 1.1 bn kWh to 50.0 bn kWh due to more comfortable weather conditions in summer and autumn seasons;
• Kyivenergo PJSC has increased electric power transmission by 126.5 mn kWh and DTEK Dniprooblenergo PJSC has maintained the scope of electric power transmission at the previous year’s level;
• DTEK Donetskoblenergo PJSC, DTEK Power Grid LLC and DTEK Energougol ENE PJSC have reduced electric power transmission by 18.8%, or 2.7 bn kWh. Since March 2017, the company has no longer been in control of the grids of DTEK Energougol ENE, DTEK Power Grid and DTEK Donetskoblenergo located in the areas of Donetsk region temporarily not controlled by the Ukrainian government.

Key projects in 2017:

• DTEK Donetskoblenergo PJSC: the company has completed the technical re-equipment of Gorod-5 substation in Mariupol. During the upgrade, the equipment of the 35 kV switchgear was replaced, and a modern 6kV electrical module with vacuum circuit breakers was mounted. This has helped to enhance the reliability of power supply to consumers, reduce transmission losses and improve work conditions;
• The company has opened two modern Customer Service Centres in Mariupol and a 24/7 contact centre. The Customer Service Centres advise on electricity supply issues and perform the whole range of operations: from reconciliation of power metre readings to issuance of technical specifications for connections to the grid.The CISCO voice over IP complex has been installed in the contact centre enabling to serve customers using IVR automated attendant and to connect with operators on individual issues.
• DTEK Power Grid LLC: the company has completed an upgrade of two substations in Kramatorsk to improve the reliability of electric power supply to consumers. It has installed an automated substation control system integrated into the common information system of the high-voltage electric network dispatch centre. It will allow for the remote equipment control and fault identification.
• The company has completed construction of the double-circuit line “Ocheretyne – Avdiivka Coke Plant Branch Line”. The new lines provide reliable power supply to Avdiivka and the plant thanks to the power supply from the government-controlled territory.
• DTEK Dniprooblenergo PJSC: the first stage of construction of 150/10/6 kV Naddniprianska substation in Dnipro has been completed. The substation will provide an additional capacity for connecting new consumers and improve reliability of power supply to the existing and planned substations powering the city’s underground, and will allow to dismantle the obsolete system of overhead power lines.
• The upgraded Customer Service Centre has been opened in Nikopol. The centre provides the whole range of basic services: from reconciliation of power metre readings to issuance of technical specifications for connections to the grid.
  • It has expanded the tools for communicating with customers: the company is available in Viber; Payhub payment gateway and Android and IOS-based application – Energy24 (the “Personal Account” service) have been launched.
• Kyivenergo PJSC: retrofit of 110/10 kV Centre substation has been completed, allowing to overcome the power shortage in the central part of the city and enhance the reliability of power supply to consumers.
• It continues the technical re-equipment of 110/35/10 kV Solomenska substation. The project aims at ensuring power supply reliability and increasing the grids’ transmission capacity.
  • It has simplified the procedure for grid connection – the web-based service “Personal Account for grid connection” has been created, which serves legal entities and individuals. The programme using the cadastral number of the land lot determines the connection type automatically, forms the specifications, agreement, and calculates the distance from the declared facility to the power supply point and the cost of connection. 

Commercial Activity

Coal supplies

In 2017, 748.2 thou tonnes of coal products were supplied to external markets, which is 43.9% down y-o-y. The coal has been shipped from the resources of Mine Office Obukhovskaya JSC. A decrease in export operations is conditioned by redirection of the coal resource – the company’s priority of supply to the Ukrainian market to minimise the anthracite deficit. 911 thou tonnes have been supplied to provide thermal power plants. For the reporting period, the company has also been importing coal from the Republic of South Africa, Poland and USA. DTEK Energy’s overall imports totalled 2,571.7 thou tonnes of coal.

Supplies of coal from the in-house resources to Ukrainian industrial consumers have decreased by 27% to 2 mn tonnes, which is related to the loss of control over the assets in the anti-terrorist operation (ATO) zone.

Electric power supplies

For 2017, the company has supplied 5 bn kWh under international contracts, which is 25.5% up y-o-y. The electric power has been supplied to Hungary, Moldova, and Poland.

DTEK RENEWABLES B.V.

637.8 bn kWh of green energy have been supplied to the United Energy System of Ukraine in 2017. That is 4.8% higher than in the same period of the last year.

Main factors that have affected the performance indicators:

• Botievo Wind Farm electricity supply has increased, by 4.2% or 25.7 mn kWh compared to previous year and made 634.1 mn kWh. The key growth factor is favourable weather conditions and well-coordinated repair campaign. The availability factors of the wind turbines and the plant infrastructure remain sustainably high: 98.33% and 99.23%, respectively.
• Construction and start of operation of Trifanivska solar power plant with the capacity of 10 MW from August 2017. For 5 months of operation the plant has produced 3.7 mn kWh. The availability factor of the equipment was 99.29%.

Key projects in 2017:

• DTEK RENEWABLES B.V. has started construction of the first stage of Prymorska wind farm with the capacity of 200 MW in Zaporizhzhia Region. In 2017 the company has started the construction of the administrative complex and a central power distribution station, where the key controlling and automation equipment, as well as a high-voltage equipment that ensures the power output into the grid will be placed. The territory of construction camp is already prepared. GE (General Electric) is scheduled to supply and install 26 wind turbines with a capacity of 3.8 MW per each turbine.
• DTEK RENEWABLES B.V. has started to form the target portfolio of projects in the solar power generation. In December 2017, the company agreed with the communities of Nikopol District of Dnipropetrovsk Region to construct the solar power plant with the capacity of 200 MW. The company prepares the necessary permission and project documentation for the project implementation. The plant is planned to be constructed in 2018.

DTEK Oil&Gas LLC

In 2017, Naftogazvydobuvannya PJSC has increased the production of natural gas by 1.5% to 1,655.3 bn cubic metres; gas condensate production amounted 54.8 thou tonnes.

Main factors that have affected the performance indicators:

• completion of drilling and commissioning of 5,600 metres deep well No. 34 at Semyrenkivske Field;
• intensification of flowrates and major repairs of active wells;
• retrofitting and upgrade of the surface infrastructure to ensure uninterrupted and safe operation of gas processing facilities.

Key projects in 2017:

• completion of upgrade of the gas processing facility at Machukhske Field;
• retrofitting of commercial metering units at Semyrenkivska complex gas treatment plant and Olefirivska preliminary gas treatment plant;
• start of drilling of 5,714 m deep well No. 25 at Semyrenkivske Field;
• increase of the flowrates of well No. 51 of Machukhske Field due to the stimulation activities.