Electric power

Maxim Timchenko,Chief Executive Officer, DTEK

«We believe that our business will soon be an equal competitor to the leading European power companies, and its strong development will guarantee the energy security of our country. Our confidence comes not from simple ambitions, but from calculations and a deep analysis of realities and outlooks of the fuel and energy industry in Ukraine, neighbouring nations and other countries.»

Established in 2005, DTEK is the largest private vertically integrated power generating company in Ukraine managing electric power businesses of the SCM Group.

DTEK companies build an efficient production chain from coal production and enrichment to electric power generation and distribution. DTEK is the leader of Ukraine’s coal and thermal power sectors. Also, the company realizes a range of promising alternative energy projects. DTEK is a member of international professional organisations and associations and promotes interests in the domestic business and Ukraine internationally. The company cooperates with the central and local governments as part of its sustainability projects in the regions of operations and is involved in reforming and liberalizing the Ukrainian energy market. DTEK companies employ over 100,000 people in Donetsk, Dnipropetrovsk, Lugansk, Zaporizhzha, Lviv, Ivano-Frankivsk oblasts and in Kyiv.

DTEK competitive advantages

Vertical integration:

• Well-balanced portfolio of coal – power generation – sales assets;
• Power generating companies demand is covered with DTEK’s own coal;
• Direct contracts between power generating and selling companies in the process of power market liberalization.

The best management expertise at the markets where we operate:

• The best management team in the Ukrainian coal production and power generation;
• Appointment and development of the best managers on new markets.

Expertise in coal companies development:

• DTEK has unique expertise in development of coal companies operating small thickness coal seams, which allows to reduce the coal production cost;
• The lowest coal production cost in Ukraine creates competitive resource base for expansion of the power generation business.

Unique geographical position:

• Ukraine is the key power transportation corridor between Russia and Europe. DTEK has access to the resource base in Ukraine and Russia as well as the access to the European electric power markets.

DTEK plans to develop the thermal power industry and diversify its business portfolio with renewable energy generation, in particular the wind energy.

The company's key strategic goal is to become a link connecting Ukraine, the European Union and Russia in one power generation and distribution chain.

DTEK's three key production divisions include:

• Coal production and enrichment;
• Electric power generation (including alternative sources);
• Electric power sales.

Longwall operations at Komsomolets Donbassa mine

DTEK is a key player in Ukraine's coal industry, with five large mining divisions:

• DTEK Pavlogradugol (10 mines)
• DTEK Dobropolyeugol (5 mines)
• DTEK Rovenkianthracite (6 mines)
• DTEK Sverdlovanthracite (5 mines)
• DTEK Komsomolets Donbassa Mine (1 mine)

In addition, this division controls eleven preparation plants.

The company produces thermal and coking coal upgraded at the coal preparation plants. DTEK has an extensive product line consisting of coal concentrates for electricity generation, coking coal for industrial use and fuel for household needs.

The company's coal production and preparation business, compared to its peers, has higher operational efficiency, higher labor productivity, and lower cost of production and preparation.

In 2011, DTEK:

• mined 22.9 m tons of coal;
• prepared 12.5 m tons of ROM coal;
• produced 7.9 m tons of coal concentrate.

The company’s mineable coal reserves  amount to 1.2 bln tons.

A thermal power plant of Vostokenergo

DTEK is one of Ukraine's power generation market leaders and operates the following generation companies:

• Vostokenergo
• Zapadenergo
• Dneproenergo
• Kievenergo

All generated electricity is supplied to the Wholesale Electricity Market of Ukraine. The total installed capacity of Vostokenergo, Dneproenergo, Kievenergo and Zapadenergo is 18.2 GW.

DTEK's coal mining companies completely satisfy the needs of the company's power generation business.

Vostokenergo is the biggest private electricity generation company in Ukraine. Vostokenergo plays an important role in the Ukrainian energy market because of its low cost of production. The company operates three thermal power plants in Donetsk and Lugansk regions, with installed capacity of 4,157 MW.

Electricity generated by Zapadenergo is supplied to Ukrainian consumers and exported to Europe. The Burshtynskaya TPP operates on ENTSO-E, the European Network of Transmission System Operators for Electricity, satisfying domestic consumption needs and exporting 550 MW of electricity. The company operates three power plants in Lvov, Ivano-Frankovsk and Vinnitsa regions. Installed capacity is 4,707.5 MW.

Kievenergo provides a comprehensive range of electricity services to the Ukrainian capital, Kiev, including generation, transmission, distribution and sales of electricity and heating to end consumers. Electricity is generated by two combined heating and power plants, with installed capacity of 1,200 MW.

Dneproenergo is a leading producer of electricity and heating in Ukraine (DTEK currently owns a 47.55% stake in the company). The company operates three power plants in Zaporozhye and Dnepropetrovsk regions, with installed capacity of 8,185 MW. 

In 2011, DTEK's total electricity output increased to 33.0 bln kWh.

Electric power line operated by Service-Invest

DTEK’s electricity distribution division consists of:

• Service-Invest
• DTEK Energougol ENE
• Donetskoblenergo
• Kievenergo

Service-Invest, DTEK Energougol ENE and Donetskoblenergo provide electricity to two of Ukraine’s largest industrial regions, Donetsk and Dnepropetrovsk; and Kievenergo to Ukraine’s capital, Kiev. The total length of DTEK's distribution grid is 84,700 km; total transformer capacity is over 11,300 MVA.

Service-Invest, DTEK Energougol ENE, Donetskoblenergo and Kievenergo purchase electricity from the Wholesale Electricity Market of Ukraine and supply it to end consumers, both industrial users (steel, coal, and heavy engineering plants) and to residential users.

The company's electricity distribution businesses test, install and repair electrical equipment, design engineering networks, and construct and commission facilities.

DTEK’s electricity distribution companies are committed to an efficiency improvement strategy via which they are making efforts to cut electricity distribution losses and improve the quality of their services.

DTEK sees alternative energy development as a strategic area that helps to diversify the business portfolio and increase market share through fast-growing new types of energy. In 2008 the company approved its wind industry development concept and established Wind Power a company responsible for DTEK's wind energy business. At the end of 2009 the company's project portfolio was around 1,200 MW, an unprecedented case both for DTEK and Ukraine’s power industry as a whole.

In 2009 the company launched the first stage of the project. It identified potentially productive sites for wind monitoring, acquired wind measurement equipment and started measuring wind potential power. DTEK invested UAH 10.4million in the project in 2009.

In 2010-2015 DTEK plans to implement a pilot alternative energy project. Under the project DTEK will build 200MW Botievo Wind Power Plant in Priazovskiy District, Zaporozhye Region. Investment in the project will be at least UAH 6.4million over the period.