Ukraine

Business

Journal

22:04 PM Monday, April 24, 2017
Energy
​Fearing Power Blackouts, Ukraine Declares Energy Emergency
War veterans block anthracite coal shipments from separatist Luhansk -- shortages to spread through the country by end of February
image/svg+xml Kyiv Lutsk Rivne Zhytomyr Lviv Ternopil Khmelnytskyi Uzhgorod Chernivtsi Vinnytsia Chernigiv Sumy Kharkiv Poltava Cherkasy Kirovohrad Lugansk Dnipropetrovsk Donetsk Zaporizhzhia Mykolaiv Odesa Kherson Simferopol Sevastopol Ivano- Frankivsk

KYIV – With sporadic power blackouts looming as early as next week, Ukraine’s Cabinet of Ministers declared a state of emergency in Ukraine’s energy sector on Wednesday night.

Starting in late January, veterans of the Donbas war have blockaded rail lines in and out of separatist-controlled areas of Lugansk Oblast. These areas have the only mines in Ukraine that produce the kind of anthracite coal used in nation’s thermal power plants. The veterans argue that the coal sales keep the separatist region financially alive.

Photo: Coal handling equipment at the Darnitsa thermal power plant, a major source of electricity for Kyiv. (Credit: Unian/Andrey Skakodub)

Prime Minister Volodymyr Groysman criticized the blockade as a “crime.” But he did not say he would send police or soldiers to break up the blockades.

With the tracks blocked, Ukraine only has enough coal to get through the end of March, Vsevolod Kovalchuk, acting director Ukrenergo, the national energy company, warned Monday.

But, by the end of this month, regional shortages are predicted to crop up here in the capital and in these oblasts: Kharkiv, Dnipro, Chernihiv, Zaporizhzhia, Sumy and Cherkasy.

The state of emergency empowers the government to impose rationing and power conservation measures.

Buy 1 million tons from US?

Distributed unevenly across the nation, anthracite reserves are around 997,000 tons, according to Ukrainian Energy Minister Ihor Nasalyk. Unian news agency reports that Ukrainian companies are discussing purchasing 1 million tons of coal from the United States.

Minister Nasalyk said the easiest alternative would be import coal or electricity from Russia. Ukraine prides itself on not having imported gas directly from Russia in over one year.

“Talk of potential for blackouts comes as macro data out of Ukraine has been looking up, with stronger activity data,” Timothy Ash, Ukraine analyst for BlueBay Asset Management wrote Wednesday night from London.

On Monday, Ukraine’s government reported that the economy expanded by a surprising 4.7 percent in the last quarter, compared to the last quarter of 2015.


For comments or story tips, please email Ukraine Business Journal Editor in Chief James Brooke at james.brooke@ubj.com


Ukraine Has Coal Deficit Because of Blockade: Premier Hroisman

By Volodymyr Verbyany
(Bloomberg) -- Ukrainian Prime Minister Volodymyr Hroisman
says people are blocking supplies of coal from areas controlled
by Russian-backed separatists.

* Govt approves decree aimed at cutting consumption of energy-
producing coal; Hroisman says blackouts will be only in case
of emergency
* Energy Minister Ihor Nasalyk says country has surplus of
electricity produced by nuclear plants
* Nasalyk says Ukraine may save up to 350,000 tons of coal a
month
* People have been blocking railway roads in Eastern
Ukraine to prevent trade with rebel-held areas; Ukraine has
energy-producing coal only in those areas
To contact the reporter on this story: Volodymyr Verbyany in Kiev at vverbyany1@bloomberg.ne

All Comments (0)
No Comments
We recommend
Law ends control of market by single industry oper...
Vitalii Dubenskyi Apr 21, 2017
Ukrgasbank starts to issue interest-free loans for...
andrew Apr 19, 2017
Ukraine to launch big blockchain deal with tech fi...
Apr 14, 2017