DTEK Energy suspends DTEK Pavlohradcoal enterprises and three CPP due to the worsening situation in Ukraine’s energy sector

DTEK Energy suspends DTEK Pavlohradcoal enterprises and three CPP due to the worsening situation in Ukraine’s energy sector

DTEK14 April 2020

Due to the ongoing systemic crisis in the energy sector of Ukraine, ten mines and auxiliary enterprises of the DTEK Pavlohradcoal, processing plants Pavlohradska, Dobropil’s’ka, Kurahivs’ka CPP, as well as the Pershotravenskyi Repair Plant and DTEK Research and Design Centre will suspended coal mining and processing, in addition to, the repair of mining equipment from April 20. Enterprises will be temporarily inactive, and employees, which will be withdrawn from production, will receive remuneration in accordance with a collective agreement.

A systemic crisis in the energy sector of Ukraine, ongoing since last year, has led to an imbalance of Ukrainian energy system. Manual regulation of the market, ill-conceived decisions, lack of coordination of the industry have together completely destabilized the work of all coal manufacturing enterprises. Due to the uncontrolled importation of electricity from Russia and Belarus, the demand for domestic electricity has decreased and, as a result, the amount in 
coal needs of thermal power plants has fallen. More than 2.9 million tons of excess coal has been accumulated in the warehouses of TPPs and mines. Work at approximately 30 coal mines have been suspended in the country and more than 40 thousand people 
were withdrawn from production. The loss of thermal generation over the past six months equates to 3.1 billion UAH. All TPPs are currently operating with minimum number of power units, with roughly 50% of employees withdrawn from production.

The negative situation is aggravated by the coronavirus pandemic, which caused the general economic decline. As a result of quarantine, electricity consumption in the country has been reduced: respectively electricity production and payments for it have been decreased.

Due to the lack of demand for domestic electricity, earlier DTEK Energy had to suspend 5 mines DTEK Dobropilliacoal, DTEK Bilozerska Mine and DTEK Zhovtneva CPP. But, as the situation becomes more and more critical, it was decided to suspend the work of DTEK Pavlohradcoal, three CPP, the Pershotravenskyi Repair Plant and the DTEK Research and Design Centre.

From April 20, about 18,700 employees across mines, auxiliary enterprises of factories and plants will be withdrawn from production. The remaining employees will provide maintenance services for enterprises – ventilation of mine workings, the pumping of water and maintenance of production. This will allow to quickly resume the work of enterprises when the situation in the industry will change.

In accordance with the Sectoral Agreement and collective agreements, all employees, which will be withdrawn from production, will continue to receive income commensurate with the amount of the tariff rate, while retaining their seniority.

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DТЕК is the largest private investor in Ukraine’s energy sector.

DTEK Group produces coal and natural gas, generates electricity at thermal, solar and wind power plants, distributes electricity, supplies electricity to end consumers, provides energy efficient solutions and develops a network of EV charging stations.
In 2019, DTEK’s capital investments totalled UAH 23 bln. Moreover, the company paid UAH 23.4 bln of taxes. DTEK employs 70 thousand people.

The company is 100% owned by SCM Limited. Ultimate beneficial owner – Rinat Akhmetov.

 

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