Ukraine won the 2022 battle for heat and light, but the energy war is not over yet. Implications discussed for global energy markets and supply.

Preparations for the upcoming 2023 Ukraine heating season and implications for European and Global energy markets was the topic of the monthly online briefing session hosted by DTEK Group CEO Maxim Timchenko on Wednesday, 12 April 2023.

Despite the large-scale destruction attempt, as of today, the Ukrainian energy system has been operating for almost two months without consumer restrictions, generating a reserve of capacity and it also recommenced export into Europe.

Here are the key messages from the briefing:

Ukraine heating season 2022-2023

  • Over USD $10 billion is the estimated loss of Ukraine’s energy infrastructure
    The largest share falls on the electric power sector – totaling almost USD $6.5 billion
  • Our largest loss will always be the innocent Ukrainian lives senselessly killed by russians because missiles were sent into residential areas
  • Over 1,200 russian missiles and drones were fired at key energy installations and facilities across Ukraine. More than 250 of these units were hit
  • All thermal and hydroelectric generation power plants were shelled and suffered various degrees of damage. Some are unrepairable.
  • An estimated 43% of power lines across the country were damaged

DTEK’s contribution to the heating season 2022-2023

  • All DTEK’s Thermal Power Plants (TPP’s) have been repeatedly targeted by russia
  • DTEK Energy TPPs were attacked upwards of 30 times each. DTEK power plants have been shelled 228 times. Over 1,502 pieces of DTEK large scale power generating equipment were damaged. 10 297 pieces of DTEK power distribution equipment were damaged
  • As a result of these missile attacks on our plants, 3 DTEK employees were tragically killed on duty, and 28 were injured. To date, 165 employees have been killed since the start of 2022. We also have had casualties among workers from contracting organizations and rescue firms
  • DTEK is proud it managed to restore power supply on average in 24-48 hours after russian attacks, working 24/7
  • During the October-March, DTEK Grids restored electricity to 3.2 million families in Kyiv, Kyiv, Odesa, Dnipropetrovsk, and the Donetsk regions
  • 198 teams worked day and night to restore Kyiv grids (30 of which were additionally formed to strengthen emergency response)
  • 5 emergency repair crews work in the Mykolaiv and Dnipropetrovsk region, where shelling occurs on regular basis
  • DTEK was the first to develop power supply schedules that corresponded to the power system's current state and updated them per the situation.

Necessary investments & actions for the next heating season

  • DTEK has been warning the sector about preparations required for the 2023 heating season. Urgent repair of power units to carry the system over the winter period.
  • With such a large level of destruction, entering the 2023 heating season will be harder than winter 2022.
  • Grants of USD 150 mln are needed to restore the strategic equipment and operating machinery.
  • Despite the war, DTEK replaced or reconstructed about 230km of power lines, replaced 11 transformers and installed 34 unloading stations. Over 130,000 smart meters and 63,000 multi-zone meters have been replaced for our customers. In 2023, the company plans to repair 28 power units.
  • Additionally, up to USD 18 mln is needed for DTEK Grids equipment to be immediately replaced to restore the supply of electricity to end consumers
  • Private companies will play the leading role in the recovery of the Ukrainian energy sector. But only if a unified program for the recovery of Ukrain’s energy sector is forthcoming, particularly for new green renewable generation from international aid, state support, lending opportunities from international financial institutions, etc.
  • We have witnessed positive steps by Ukraine to continue market liberalization and reforms despite the war. This creates positive conditions for further development of the energy market and redesign of the current model of subsidies.

Resumption of electricity export

  • In 2022, Ukraine began exporting electricity to Europe and earned over EURO 125 mln for the Government.
  • As of the end of March, the energy system of Ukraine had a power surplus due to warm weather, continuous operation of 8 NPP units and high reservoir levels for Ukrhydroenergo.
  • Power surplus allows to export electricity at the level of 450-550 MW (baseload), or 351 GWh per month.
  • Electricity price difference between the Ukrainian market and the EU is 30 EUR/MWh in April due to artificial restrictions on the day-ahead market In Ukraine (price caps).
  • The maximum export capacity remains currently at 400MW. This could be higher
  • Ukraine has made all preparations for resuming exports with Romania. However, Romania does not allow exports due to the non-fulfillment of the signed roadmap with NPC Ukrenergo on the implementation of joint auctions for the section. Poland and Moldova granted electricity exports.

Role of renewable energy sources in energy security

  • Despite russia's ongoing full-scale war against Ukraine, DTEK Group has complete the construction of the first phase of Tyligulska wind power plant, with a capacity of 114 MW out of the total declared 500 MW.
  • In March 2023, 19 wind turbines have been erected. They are generating green electricity to support Ukraine’s energy balance.
  • The implementation of the project, in the Mykolaiv region in southern Ukraine, is another step towards achieving the ambition of the "30GW to 2030" initiative.
  • Construction of the Tylihulska WPP is DTEK’s sign to international partners about the commitment to ‘build back greener’ and be part of Europe’s future energy mix.