Innovative Energy. Issue 1

Innovative Energy. Issue 1

DTEK26 March 2018

We present you a new rubric "Innovative Energy". It will be devoted to the most bright and original articles from the world of energy: new business models of energy companies, the transition from one type of fuel to another, technologies, ecology, transport, etc. The head of the rubric is Danil Babkov, Manager of the Analytical Department of the Directorate for Commercial Activities of DTEK Energo.

In the book "Energy Myths and Realities" Václav Smil reveals several popular myths, now dominating the energy sphere. Summarizing the book material, TIME magazine correspondent Michael Grünwald prepared his critical view of the problem, reflecting this in his article( The translation of its main points is following:

Myth #1 «Nuclear Power Is the Cure for Our Addiction to Coal»

Nope. Atomic energy is emissions free, so a slew of politicians and even some environmentalists have embraced it as a clean alternative to coal and natural gas that can generate power when there’s no sun or wind. France gets nearly 80 percent of its electricity from nukes, and Russia, China, and India are now gearing up for nuclear renaissances of their own. But nuclear power cannot fix the climate crisis. Elsewhere in the developed world, most of the talk about a nuclear revival has remained just talk; there is no Western country with more than one nuclear plant under construction, and scores of existing plants will be scheduled for decommissioning in the coming decades, so there’s no way nuclear could make even a tiny dent in electricity emissions before 2020. The bigger problem is cost. Nuke plants are supposed to be expensive to build but cheap to operate. Unfortunately, they’re turning out to be really, really expensive to build; their cost estimates have quadrupled in less than a decade. This is why plans for new plants were recently shelved in Canada and several U.S. states, why Moody’s just warned utilities they’ll risk ratings downgrades if they seek new reactors, and why renewables attracted $71 billion in worldwide private capital in 2007 — while nukes attracted zero.


Myth №2 “Renewable Fuels Are the Cure for Our Addiction to Oil.”

Unfortunately not. “Renewable fuels” sound great in theory, and agricultural lobbyists have persuaded European countries and the United States to enact remarkably ambitious biofuels mandates to promote farm-grown alternatives to gasoline. But so far in the real world, the cures — mostly ethanol derived from corn in the United States or biodiesel derived from palm oil, soybeans, and rapeseed in Europe — have been significantly worse than the disease.

Indonesia, for example, destroyed so many of its lush forests and peat lands to grow palm oil for the European biodiesel market that it ranks third rather than 21st among the world’s top carbon emitters. One study found that it would take more than 400 years of biodiesel use to “pay back” the carbon emitted by directly clearing peat for palm oil. Indirect damage can be equally devastating because on a hungry planet, food crops that get diverted to fuel usually end up getting replaced somewhere. For example, ethanol profits are prompting U.S. soybean farmers to switch to corn, so Brazilian soybean farmers are expanding into cattle pastures to pick up the slack and Brazilian ranchers are invading the Amazon rain forest, which is why another study pegged corn ethanol’s payback period at 167 years. It’s simple economics: The mandates increase demand for grain, which boosts prices, which makes it lucrative to ravage the wilderness.

Deforestation accounts for 20 percent of global emissions, so unless the world can eliminate emissions from all other sources — cars, coal, factories, cows — it needs to back off forests. That means limiting agriculture’s footprint, a daunting task as the world’s population grows — and an impossible task if vast expanses of cropland are converted to grow middling amounts of fuel. Even if the United States switched its entire grain crop to ethanol, it would only replace one fifth of U.S. gasoline consumption.

Myth №3 “If Today’s Biofuels Aren’t the Answer, Tomorrow’s Biofuels Will Be.”

Doubtful. The latest U.S. rules, while continuing lavish support for corn ethanol, include enormous new mandates to jump-start “second-generation” biofuels such as cellulosic ethanol derived from switchgrass. In theory, they would be less destructive than corn ethanol, which relies on tractors, petroleum-based fertilizers, and distilleries that emit way too much carbon. Even first-generation ethanol derived from sugar cane — which already provides half of Brazil’s transportation fuel — is considerably greener than corn ethanol. But recent studies suggest that any biofuels requiring good agricultural land would still be worse than gasoline for global warming. Less of a disaster than corn ethanol is still a disaster.

Back in the theoretical world, biofuels derived from algae, trash, agricultural waste, or other sources could help because they require no land or at least unspecific “degraded lands,” but they always seem to be “several” years away from large-scale commercial development. And some scientists remain hopeful that fast-growing perennial grasses such as miscanthus can convert sunlight into energy efficiently enough to overcome the land-use dilemmas — someday. But for today, farmland happens to be very good at producing the food we need to feed us and storing the carbon we need to save us, and not so good at generating fuel. In fact, new studies suggest that if we really want to convert biomass into energy, we’re better off turning it into electricity.


Myth №4 “There Is No Silver Bullet to the Energy Crisis.”

Probably not. But some bullets are a lot better than others; we ought to give them our best shot before we commit to evidently inferior bullets. And one renewable energy resource is the cleanest, cheapest, and most abundant of them all. It doesn’t induce deforestation or require elaborate security. It doesn’t depend on the weather. And it won’t take years to build or bring to market; it’s already universally available. It’s called “efficiency.” It means wasting less energy — or more precisely, using less energy to get your beer just as cold, your shower just as hot, and your factory just as productive. Yet more efficient appliances, lighting, factories, and buildings, as well as vehicles, could wipe out one fifth to one third of the world’s energy consumption without any real deprivation.

Myth №5 “Ultimately, We’ll Need to Change Our Behaviors to Save the World.”

Probably. These days, it’s politically incorrect to suggest that going green will require even the slightest adjustment to our way of life, but let’s face it: It wouldn’t kill you to turn down the heat and put on a sweater. Efficiency is a miracle drug, but conservation is even better; a Prius saves gas, but a Prius sitting in the driveway while you ride your bike uses no gas. Even energy-efficient dryers use more power than clotheslines. More with less will be a great start, but to get to 80 percent less emissions, the developed world might occasionally have to do less with less. We might have to unplug a few digital picture frames, substitute teleconferencing for some business travel, and take it easy on the air conditioner. If that’s an inconvenient truth, well, it’s less inconvenient than trillions of dollars’ worth of new reactors, perpetual dependence on hostile petrostates, or a fricasseed planet. After all, the developing world is entitled to develop. Its people are understandably eager to eat more meat, drive more cars, and live in nicer houses. It doesn’t seem fair for the developed world to say: Do as we say, not as we did. But if the developing world follows the developed world’s wasteful path to prosperity, the Earth we all share won’t be able to accommodate us. So we’re going to have to change our ways. Then we can at least say: Do as we’re doing, not as we did.


DTEK is a strategic holding company that develops four business streams in the energy sector. DTEK's companies employ 75 thousand people. Maxim Timchenko is the Chief Executive Officer of DTEK. 

DTEK companies produce coal and natural gas, generate electricity at the fossil-fuelled power plants and renewable energy power plants, supply heating and electricity to end consumers, and provide energy services. Four operating companies—DTEK ENERGY, DTEK Renewables, DTEK Oil&Gas, DTEK ESCO— directly manage production companies in each of the business streams.

DTEK's production indicators for 2016: the company produced 31.3 mln tonnes of coal, 1.6 bcm of natural gas, generated (supplied) 40.1 bln kWh of electricity, out of which 608.4 mln kWh came from the Botievo wind farm;   and transmitted 45.8 bln kWh of electricity via the networks.

DTEK is part of the financial and industrial group System Capital Management (SCM). The shareholder of the group is Rinat Akhmetov.

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