Economy 2022-11-15T05:05:28+02:00
Ukrainian news
Kyivteploenergo States Possible Limitation Of Electricity Supplies In 2021/22 Heating Season

Kyivteploenergo States Possible Limitation Of Electricity Supplies In 2021/22 Heating Season

natural gas, electricity, heating season, electricity supplies, Kyivteploenergo, natural gas price, electricity supplies limitation

The Kyivteploenergo utility company states a possible limitation of electricity supplies in the heating season of 2021/22.

Kyivteploenergo has said this in a statement, Ukrainian News Agency reports.

"Due to the rise in the cost of natural gas, the production of electricity for combined heat and power plants (CHPP) has become unprofitable. At the same time, gas-operated CHPPs provide up to 10% of the total electricity volume during the energy-deficient winter period and are largely responsible for balancing the market, which has a direct impact on stable operation of the entire energy system of Ukraine," the statement reads.

It is noted that due to the rapid rise in prices for natural gas, gas-operated combined heat and power plants have become uncompetitive.

Kyivteploenergo stressed that the market price of electricity does not cover the cost of fuel for generating electricity at gas-operated CHPPs.

"The ratio of the cost of coal and natural gas, which are the main raw materials for electricity generation, is now 1 to 5. Even taking into account the high efficiency of gas-operated CHPPs, the cost of ‘gas’ electricity is still three times higher than the cost of coal," the company noted.

Kyivteploenergo believes that the situation of very low prices on the electricity market is due to an imperfect mechanism for setting price caps.

Besides, the company emphasized that in conditions of low coal reserves at Ukrainian power plants, threats to use electricity consumption restriction schedules in winter become possible.

Also, the loss of competitiveness of CHPPs in the electricity market jeopardizes the fulfillment of Ukraine's obligations to the European Union regarding integration into the European Network of Transmission System Operators for Electricity (ENTSO-E, network participants are 43 system operators from 36 countries), because in such conditions the successful implementation by Ukrenergo special tests looks unlikely.

"For its part, Kyivteploenergo during the inter-heating season has repeatedly appealed to the National Commission for State Regulation of Energy and Utilities (Energy Commission) regarding the intensification of the crisis and provided its recommendations to stabilize the situation. Resolving the issue of adjusting price restrictions on the electricity market is becoming a critical prerequisite to ensure the uninterrupted operation of gas-operated CHPPs," the company summed up.

As Ukrainian News Agency earlier reported, the Energy Ministry is not considering the issue of importing electricity from Russia and Belarus for the heating season.

Also, the Ministry of Energy expects to import 2 million tons of coal during the heating season.