Moscow Cuts Off Coal Deliveries – Deepening Ukraine’s Energy Crisis

First it was a cutoff of Russian natural gas, now Ukraine faces Moscow’s suspension of coal deliveries as winter approaches. As a result, Kiev has been forced to declare a state of emergency in its electricity market as it faces the onset of a dark, frigid winter.

Historically, Ukraine has been self-sufficient in coal, but fighting between government forces and pro-Russian separatists in eastern Ukraine’s Donetsk and Luhansk regions has closed more than half the coal mines there and shut down rail lines needed to ship coal to power plants, according to Europe’s coal association, Eurocoal.

Because of the fighting, Ukraine had been relying on coal from Russia, but on Nov. 24 its largest energy company, DTEK, said Moscow had suspended those imports three days earlier. Ukraine has imported about 1.3 million tons of Russian coal since August.

DTEK said in a statement that the suspension came without warning and that Ukraine had made advance payments to its Russian suppliers under the terms of their contract. “We hope the situation will be clarified soon and supplies will be resumed in regular regime,” the statement added.

Until then, Ukraine will need to import between 1 million and 2 million metric tons of coal to compensate for the loss before the spring thaw in 2015. Meanwhile, the country’s hydro and nuclear power plants also are working hard to satisfy its energy needs, but Ukraine’s aging power infrastructure is old and probably not up to the task.

In an interview with the television channel 112 Ukraine, Dmitry Marunich, a co-chairman of the Ukrainian Energy Strategies Fund, said Russia’s suspension of coal deliveries comes at the worst possible time because Kiev has “little chance to find other sources to substitute for it.”

Ukraine has some gas in storage, but the amount it now holds would meet the country’s needs for only about three-and-a-half months.

Full article: State Of Emergency In Ukraine As Russia Cuts Off Coal (Oil Price)

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