DTEK's production indicators for 2016

Key performance indicators of DTEK Group

Indicators	Unit	2016	2015	Change, (+/-)	Change, (+/-)
Coal production	ths tonnes	31 250,6	28 692,0	2 558,6	8,9
Coal processing:
ROM coal processing	ths tonnes	23 731,0	19,965.8	3 765,2	18,9
Coal concentrate production	ths tonnes	15 006,5	12,279.4	2 727,1	+22,2
Electricity generation (net output )	mln kWh	40 071,0	38,284.1	1 786,9	4,7
including DTEK RENEWABLES	mln kWh	608,4	634,0	-25,6	-4,0
Electricity transmission by networks*	mln kWh	45 809,2	45 086,4	722,8	1,6
Electricity exports	mln kWh	3 983,9	3 555,1	+428,8	12,1
Coal exports**	ths tonnes	1 333,1	1 387,1	-54,0	-3,9
Coal imports	ths tonnes	222,2	404,1	-181,9	-45,0
Gas imports	mcm	15,4	23,7	-8,3	-35,0
Natural gas production	mcm	1 630,9	1 304,6	326,2	25,0
Gas condensate production	ths tonnes	56,1	45,3	10,8	23,8

including Mine Office Obukhovskaya *

Coal production	thousand tons	513.2
Run-of-mine coal preparation	thousand tons	523.5
Coal concentrate production	thousand tons	315.5

^{* In September 2016 operating company DTEK Energy transferred Mine Office Obukhovskaya under the direct control of DTEK strategic holding company. This transaction was carried out as part of the restructuring of the DTEK Energy's loan portfolio aimed at balancing the opportunities for the development of enterprises and servicing of loans.  The production indicators of Mine Office Obukhovskaya since 1st of September 2016 have not consolidated in the financial statements of DTEK Energy.
** Including trading operations outside of Ukraine.}

DTEK Energy

Coal Production and Preparation

In 2016 the Company miners produced 30.7 million tons of coal, which is 7.1% more than in 2015. This allowed the coal-preparation plants to increase the volumes of run-of-mine coal enrichment and concentrate production to 23.2 and 14.7 million tons respectively.

Main factors that affected the performance indicators:

• extraction of gas coal grades at the level of 21.2 million tons. 
  From January to May 2016, the United Energy System of Ukraine (UES) saw a surplus of the generating capacities, which caused the thermal generation to reduce the demand for high-volatile steam coal grades. In the second half year, due to a decreased output by the nuclear power plants on the back of the growing energy consumption, the UES experienced a shortage of the capacities. Since June DTEK Pavlogradugol and DTEK Dobropolyeugol have increased production of gas coal grades. In the second half of the year its growth amounted to 17.6%, or 1.7 million tons, compared with the first half. In turn, from June, the DTEK Energy's TPPs have worked at increased load. This, in particular, helped offset the decline in nuclear power generation and prevent electricity shortages in the consolidated power system of Ukraine. The miners of DTEK Pavlogradugol made a significant contribution to the coal production output growth, as their performance in 2016 was as high as 100.3 tons/person per month.

• extraction of anthracite and lean coal at the Company mines situated in Ukraine amounted to 8.0 million tons, that is 74.0%, or 3.4 million tons more than the output in 2015. 
  Increased production at DTEK Komsomolets Donbassa, DTEK Rovenkyanthracite and DTEK Sverdlovanthracite Mines brought about the growth of power generation by DTEK Dniproenergo stations, where the coal sorts from those mines are used.
  In 2016, these enterprises supplied 4.8 million tons of anthracite and lean coal to the Company thermal stations that was 49%, or 1.7 million tons more than in 2015. 

Key projects in 2016:

• The company has completed a number of projects aimed at enhancing the Dnepropetrovsk Region capacities for extraction and enrichment of coal, such as upgrading of Central Concentrating Mill Pavlograds’ka, commissioning of a ventilation hole at the Yuvileina Mine and completion of tunnelling works at Bogdanovsky Fault by Samarska Mine workers. 
  

  The production capacity of the plant for preparation of run-of-mine coal increased to 7 million tons per year. Implementation of the project allowed us to stop using a sludge pit, and this will have a positive impact on the environmental situation in the region.

  The ventilation hole commissioning has opened an access to industrial reserves of coal equal to 19 million tons. This hole will also be used to transport people and materials, thus reducing the time of miners' stay underground by 2 hours per shift.

  Samarska Mine shaftmen have developed Bogdanovsky Fault, the largest geological disturbance in the Western Donbass. This crack "tore up" coal seams such that their depth difference reaches about 300 m in vertical plane. In the future, another three holes will be developed at Bogdanovsky Fault which will allow to exploit a mine field with coal reserves of 10 million tons.

• A new generation of tunnelling equipment, such as a front-type stable-hole machine, was put into operation at Stashkova Mine. This machine is used to bore rectangular tunnels, wherein mining equipment is then installed. The machine performance is 30% higher compared with the similar technique of older models.

• Design works has started for the construction of filter-press department at Dobropil's'ka CEP. This will allow the enterprise to completely avoid the need for liquid waste storage. The application of belt filter presses allows to produce pure water which returns to the enrichment process, and solid waste. 

Electricity Generation

In 2016, DTEK Energy's thermal power plants generated 39.5 billion kWh of electricity, which is 4.8% higher than the output in 2015.

Main factors that affected the performance indicators:

• nuclear electricity production decline by 7.8%, or 6,457.0 billion kWh, caused, among other things, by the change and extension of repair campaign periods.
• the increase in power generation by DTEK Dniproenergo, DTEK Skhidenergo and Kyivenergo in 2016 constituted 18.5%, or 4 billion kWh.

From October 2015 to May 2016, the Consolidated Power System of Ukraine demonstrated a power surplus. However, from June through September baseload power generation decreased considerably, on the background of an increase in consumption. Therefore, in the second half of the year, DTEK Dniproenergo, DTEK Skhidenergo and DTEK Zakhidenergo increased electricity production by 27%, or 4.4 billion kWh, compared to the first half-year. DTEK Dniproenergo contributed most in the power supply growth by increasing the electricity output in July-December by 53.6%, or 2.5 billion kWh.

• a drop in electricity production by DTEK Zakhidenergo by 14.5%, or 2.3 billion kWh. The impact on performance indicators was caused by negative results of the 1st half-year, when the power generation was reduced with due allowance for a surplus power that emerged back then in the CPS of Ukraine.

Key projects in 2016:

• TPP repair campaign was carried out by DTEK Energy to prepare for the 2016/2017 heating season. The cost of the repair campaign amounted to 2 billion UAH. 

• Reconstruction of No. 5 Power Unit at DTEK Burshtynska TPP was completed. The majority of works on its modernization took place in 2012-2013. In 2016, medium repairs coupled with partial reconstruction were carried out. Expected results: an increase in capacity from 208 MW to 215 MW, improvement of the equipment efficiency and reliability.

• The implementation of a two-year project to replace the generator for No. 1 Unit at CHP-5 of Kyivenergo's Independent Structural Subdivision "Kievskiye TETs".

• The second phase of No. 1 Power Unit reconstruction at DTEK Kryvorizka TPP is under way. It is planned to increase the power output of this Unit from 282 to 315 MW, to expand the range of its maneuverability, as well as to reduce coal ash emissions in the atmosphere 16 times to 50 mg/m³, to meet the environmental standards of the European Union.

Since 2012, during the modernization of any Company's power units their electrostatic precipitators were upgraded so as to achieve dust emission levels required in accordance with Directive 2001/80/EC.

Power transmission over grids

In 2016, 45.8 billion kWh of electricity were transmitted over grids by the Company's distribution enterprises, which is 1.6% more than in 2015.

Main factors that affected the performance indicators:

• increase in electricity consumption (excluding the Crimea). The rate of actual consumption grew by 3%, or 1.2 billion kWh, due to the recovery of industrial production and deviation from average temperatures in the summer and winter months. The industrial demand rose by 4%, or 0.8 billion kWh, while that from the population and municipal services by about 2.8%, or 0.3 billion kWh.

• increase by 3.8%, or 1.1 billion kWh in the volume of electricity transmission by DTEK Dniprooblenergo and Kyivenergo;

• decrease by 2.9%, or 426 million kWh in electricity transmission volume by DTEK Donetskoblenergo, DTEK Power Grid and DTEK Energougol ENE, due to the hostilities and unstable socio-economic life in the region.

Key projects in 2016:

• DTEK Dniprooblenergo: opened a modern customer service center in the town of Solyonoye, designed to receive up to 300 customers a day. Customers will be able to obtain advice on electricity supply and perform any other operations, from payment settlement to receipt of technical specifications for connection to the grid;
• put into operation a new control center in Krivoy Rog. The information about the city energy supply, from the general plan to individual facilities, is displayed on the Mitsubishi video wall. This helps reduce the time from discovery to elimination of a failure, and prevent emergencies on the whole. This modern control center is a part of a general program for SMART Grids application in the enterprise power networks;
• the implementation of an automated electric power accounting systems is in progress in Dnieper, Krivoy Rog, Kamenskoye, Novomoskovsk and Nikopol. More than 130 thousand of household metering points have been already covered by that system;
• a new 150/10/6kV substation "Naddnepryanskaya" is now designed, its additional capacity will facilitate connecting new consumers and would-be built substations, as well as enhancing the reliability of power supply to existing substations providing electricity to the local Dnipro`s Underground.
• Kyivenergo:  110 kV cable line "Oktyabrskaya-Mototsikletnaya" have been put into operation. The project helps improve the reliability and throughput of the transmission line;
• the reconstruction of utility networks for the new Kiev airport terminal (Juliani) is under way. In the course of the project implementation, 35 kV cable line "Nikolskaya-Ganizonnaya", and 10 kV cable line "Garnizonnaya-RP-267" have been already constructed, subsequently, it is planned to carry out a technical upgrade of substations "Nikolskaya" and "Garnizonnaya";
• reconstruction works on substation "Voskresenskaya" are under way, which include the replacement of VMT-110 oil circuit breakers with SF6.
• DTEK Donetskoblenergo: works have resumed on the reconstruction of substation "Gorod-5", located in the center of Mariupol. It is planned to install there a modern electrical module on the basis of D-12P cells with 10 kV vacuum switches.

Commercial activity

Coal and energy supplies
1.3 million tons of coal products were shipped to foreign markets, which is actually the same amount as in 2015. Shipments are made mainly from Obukhivska Mine Group reserve, including 0.3 million tons were shipped by mine in Ukraine. The company has increased the shipment of the coal by consumers of Europe, Canada and India.

The coal deliveries to industrial consumers in Ukraine have grown 2.8 times - up to 2.6 million tons. This is due to the increase in production of anthracite and lean coal, and stabilization of shipments from the ATO zone at the level of 17 thousand tons a day, which allowed the Company to provide its thermal power plants with fuel and create a free reserve for sale. The Company supplied 4 billion kWh of electricity to foreign markets, which is 12.1% higher than in 2015.

 

DTEK RENEWABLES

In 2016, Botievo Wind Farm supplied 608.4 mln kWh of green electricity. It helped save 152.7 mcm of natural gas, which the thermal generation would have consumed to generate the same amount of electricity. Furthermore, the wind park helped reduce carbon dioxide emissions by 646 thousand tonnes.

The availability factor of the wind turbines was 98.71% and of the infrastructure - 99.15%. These indicators are above the plan (98% and 98%, respectively), which proves that the operations of the wind farm have been properly organized and are reliable.

During the year DTEK RENEWABLES was purposefully working on making the wind farm operations even more reliable. In 2016, WindTech company was established to provide the wind park maintenance services together with the turbines manufacturer. The task WindTech is entrusted with is to develop the in-house expertise in technical maintenance. Furthermore, last year a contract for the wind farm infrastructure's maintenance was concluded with ABB, the global leader in the energy and automation technologies, that guarantees a high availability factor.

 

DTEK Oil&Gus

In 2016 PrJSC Naftogazvydobuvannya produced 1.6 bcm of natural gas and 56.1 thousand tonnes of gas concentrate, which exceeds YoY indicators by 25% and 24% respectively.

Main factors influencing the production performance:

• completed drilling of wells 71, 73 and 52, which are 5,700 to 5,770 meters deep; workovers of wells 10, 70, 68, 17 in the Semyrenkivske gas condensate field;

• well flow rate stimulation measures taken at the operating well stock.

Main investment projects:

• introduction of an automated dispatch control system (ADCS), which provides on-line control of the production process; 

• modernisation of the natural gas metering systems in accordance with the new requirements established by the Code of the Gas Transmission System of Ukraine at the Machukhske gas processing plant;

• retrofit of the Semyrenkyvske gas processing plant equipment;

• start of the Machukhske gas processing facility's retrofit.