DTEK Group briefing: Wednesday 25 January

Energy facilities under massive missile attack

• Russia is changing its war tactics: it is now focusing on completely destroying power units. On 14 January, they switched from targeting TPPs’ transformers to targeting the power units. The devastation and destruction mean it will be impossible to restore electricity supply with equipment from Western partners quickly. Instead, it will require investment and a longer rebuild.
• DTEK Group is the major operator of TPPs in Ukraine and is under direct attack from the Russian war machine.
• As a result of the systematic damage to Ukrainian energy facilities, there is now a significant power deficit in the system of approximately 1.5 GW at night and up to 4.5 GW during the day.
• On average, six million Ukrainians are deprived of daily electricity supply.
• The heaviest price for Ukraine is the loss of life. Since the beginning of the war, 133 of DTEK’s employees have died, 24 are missing, four are in captivity, and 322 have been wounded. Our thoughts and prayers are for everyone impacted, especially the families of those who DTEK have lost.

The winter season

• Ukraine has 80 days left until the end of the 2022 - 2023 heating season.
• At the start of winter, Ukraine had enough reserves of coal and gas in storage. The subsequent damage has led DTEK to an urgent situation where they now do not have enough capacity to provide a 24/7 power supply.
• Conversely, due to the country's decline in consumption and the increase in gas production by private companies, Ukraine will have the potential to export gas to Europe upon completing the pipeline, and still have enough for the winter.
• In 2022, DTEK produced more than 2 billion m³ of gas, keeping private gas production at 2021 levels. The company is one of a few in Ukraine’s gas industry to keep production at pre-war levels for the year, despite the war.
• In 2022, DTEK Energy also managed to keep coal production at pre-war levels.
• The main challenge for Ukraine during the current heating season is the ability to supply electricity. Solutions discussed during the session included the following.

Preparation for the next winter season and model of future European security

• Ukrainian energy companies and the government need to start preparing for the next winter heating season. International partners are helping Ukraine restore its energy system. Unfortunately, only the public sector is financed so far: DTEK has not receive grants or loans. That means they are repairing damaged equipment at their own expense, which will become unviable very soon.
• Russia is not selective in hitting private or state energy assets, but international support is provided only to governments. State companies are receiving money to order transformers and other equipment to recover from the attacks. However, Ukrainian private sector companies are at the breaking point.
• Private business will necessarily play the key part in the restoration process. But DTEK gets a small amount of high-voltage equipment through the Ministry of Energy distribution process, which is not sufficient to meet all their needs.
• It is critically important to develop investment solutions for energy companies in Ukraine and to provide tools to invest in restoring energy facilities and, more importantly, to create new renewables capacities.
• Ukraine has huge potential in renewable energy. DTEK will help Europe decarbonise faster and reach its Green Deal goals.
• At Davos, DTEK announced the “Ukraine Coalition of the willing - build back greener”. Private companies will lead in providing expertise, skills, capacity and funding through various sector taskforces. The Energy taskforce has a target of building 30 GW of renewable energy in Ukraine by 2030, helping create a brand-new national economy with enough clean energy to export to Ukraine’s Western neighbours.

Read the article online at: https://www.worldpipelines.com/business-news/30012023/dtek-group-briefing-wednesday-25-january/