DTEK's strategy built on synchronization and participation in European market – CEO

KYIV. Sept 10 (Interfax-Ukraine) – DTEK Energy Holding is building a strategy for its activities with a focus on synchronization with the European power system and participation in the European market, CEO of the company Maksym Timchenko has said.

"We are aiming at 2023 [the year of the planned integration with ENTSO-E], and in general, the company’s entire strategy is built on synchronization and participation in the European market," he told Interfax-Ukraine on the sidelines of the YES Brainstorming forum 2021 held in Kyiv on Friday.

At the same time, he said that the company has always been an active supporter of "market reform, its liberalization, and the synchronization of the power system," and DTEK Energy is fulfilling all the prescriptions necessary in preparation for synchronization.

"Technically, we have complied with all the protocols at our units. As far as I am informed, there are no complaints against us in terms of technical readiness," the head of DTEK said, noting the system operator NPC Ukrenergo and the government need to further advance the process.

"Now the ball is on the side of Ukrenergo from the technical side and on the side of the government with the issues that I said about: to complete the reform of the power market, to put things in order with debts, to make the real market as a market really liberalized, and not managed through price caps or other mechanisms," Timchenko said, drawing attention also to the importance of certification of Ukrenergo.

"And then it is possible to believe in this [synchronization]," the head of DTEK expressed his opinion, noting that this would be the best indicator that Ukraine is really moving towards Europe.

"I see that there is serious attention to this issue from the state: the president, the prime minister and the minister of energy," he added.

At the same time, he drew attention to the fact that Ukraine may have geopolitical difficulties in the issue of synchronization. "We have not so technically potential difficulties as difficulties associated with geopolitics: disconnection from the Russian Federation and Belarus," Timchenko said.

Asked about the consequences of joining the Burshtyn TPP energy island to the integrated power system (IPS) of Ukraine within the framework of synchronization for the company, the head of DTEK drew attention to a significant difference [approximately two times] in the price caps set for these trade zones.

"The price caps were increased in the IPS, but for some reason they were left in Burshtyn TPP. This is also a question for both the Antimonopoly Committee of Ukraine [Antimonopoly Committee of Ukraine] and the regulator: how can this be? How this situation could happen when price caps are left for Burshtyn TPP, which is connected with Europe, although, it would seem, they should be removed here first of all, while they are lower than in the IPS," Timchenko said.

He said that the current situation with price caps at Burshtyn TPP does not allow DTEK to import electricity from Slovakia.

"This is also a question for the AMCU. I do not want to return to endless discussions about the monopoly of the Burshtyn TPP and so on, but this is a bias when we artificially create conditions so that there are no power flows to Burshtyn TPP, and amid this we are talking about synchronization. These movements should be somehow logically connected," the head of DTEK said, expressing his opinion.

As for the previously announced plans of the company to participate in foreign markets for green energy, then, according to him, DTEK is considering the possibility of building wind farms and solar power plants in two European countries, but "so far they are at the stage of study, due diligence, and project development."

"There will be no loud announcements of deals. As soon as we are ready, we will announce. By the end of the year, we will have more clarity on our plans to expand renewables outside of Ukraine," Timchenko said.

Regarding the planned purchase of shares of the distribution system operator Kirovohradoblenergo by DTEK, the head of the company expressed hope for a positive decision of the Antimonopoly Committee on this issue in the near future.

"I hope the decision will be positive, because we have answered all the questions. Obviously, this is a regional monopoly. And, of course, it will be under the control of both the regulator and the AMCU," Timchenko said.

Regarding the monthly base load electricity price index, published today by the Ukrainian Energy Exchange (UEEX) for the first time, based on the market of bilateral agreements, Timchenko said that he does not know about the index yet, but he is sure that such instruments should appear for the development of civilized trading.

"After the regulator’s decision to buy electricity within the framework of vertical integration, the lion’s share of trading goes to the exchange… this is what we said that the entire market cannot work in on a spot market. We need to move into long contracts, have tools for forward sales. Now, the message has been finally heard… But it takes time and confidence that it will work, that UEEX is actually doing its job, because there is also a lot of work to be done there," the CEO of DTEK said.