Energy Ministry mulls Naftogaz purchasing coal for Centrenergo with subsequent sale of its electricity – Haluschenko

KYIV. Aug 27 (Energy Reform) – The Ministry of Energy, together with NJSC Naftogaz Ukrainy, is considering the option of purchasing coal for PJSC Centrenergo through Naftogaz with the subsequent sale of its electricity by the company, Energy Minister Herman Haluschenko said.

"We are working with Naftogaz to find certain forms of cooperation with Centrenergo in order to buy coal, transfer it to the generating company, receive electricity in return and sell it. These are normal, civilized things, because it is obvious: it is cheaper for Naftogaz to buy coal and then make money on it by reselling electricity than to supply gas to Centrenergo," he said at a briefing during his visit to the mines of Lviv region on Thursday.

According to Haluschenko, the work of Centrenergo on gas in the 2021/2022 heating season (this may require 1.2-1.4 billion cubic meters of gas) is economically unjustified.

"Last year, Centrenergo worked on gas and accumulated large debts to Naftogaz [about UAH 1 billion], and that was the price of that winter. If you look at the current price, about $600 per 1,000 cubic meters, then we do not see any forecasts that it will fall. If heated on gas, it will be just a golden passage of the season," the minister said.

At the same time, he pointed out that in order to avoid a shortage of coal, Centrenergo is already working out contracts for the supply of imported coal. "There are already contracts with Poland, partially signed ones with the United States. Perhaps there will be coal from the South African Republic. I don’t know about Kazakhstan: we can buy it, but the question is whether the Russian railway will give it to us," Haluschenko said.

As for the price of coal, then, according to him, it ranges from $100 per tonne and more. "There is also $140," he said.

At the same time, the minister noted that new price caps in the electricity market allow covering generation costs.

At the same time, he said that during the preparation for the heating season "there are many questions, but we are working on them." "There are already contracts for Centrenergo regarding imports. There are ideas on how to attract state banks and other state resources. We will work on this. It is important that we pass this winter calmly, moreover, we must work in an autonomous mode [within the framework of integration with ENTSO-E]," the minister said.

He explained the need to import coal to Ukraine by lagging behind the schedule of its accumulation at warehouses of thermal power plants and combined heat and power plants.

"Now the stocks are below the schedule, up to a million tonnes. We actually expected that by the beginning of the season there should be 2.8 million tonnes. Unfortunately, now we are lagging behind. Therefore, the question of import has arisen, we cannot do without it," Haluschenko said.