Business news from Ukraine

CHP modernization is one of key priorities for 2024 – Naftogaz

The modernization of CHP plants is one of the key priorities for 2024, which the management of Naftogaz Group discussed with the company’s Supervisory Board at an offsite meeting on March 20, 2024.

“The thermal generation facilities transferred to Naftogaz are in an extremely poor condition. They have not been modernized for years, and the war has also had a negative impact on their operation. In today’s environment, they cannot operate efficiently and ensure the proper level of reliability. Therefore, we need to find funds to modernize these facilities,” the Naftogaz Group website said on Thursday, citing its head Oleksiy Chernyshev.

Among the key priorities of the group this year, Naftogaz also highlighted the growth of gas and oil production, an increase in the volume of gas from foreign energy companies in Ukrainian underground storage facilities, the development of customer services for household consumers and the protection of facilities in times of war.

In particular, the group plans to increase natural gas production by 0.5 bcm this year and attract about 4 bcm of gas from foreign traders for storage in Ukrainian underground storage facilities, up from 2.5 bcm in 2023.

“As in the previous year, our top priority remains to increase our own Ukrainian gas and oil production. Our plan for 2024 is to increase natural gas production by at least half a billion cubic meters. We are increasing the pace of drilling new wells, using modern technologies for both subsoil exploration and direct gas production,” Chernyshov said.

As reported with reference to the head of Naftogaz, the group plans to produce 15 billion cubic meters of natural gas in 2024 at the expense of PJSC Ukrgasvydobuvannya (UGV) and PJSC Ukrnafta.

According to Chernyshev, in 2023, UGV produced 13.5 billion cubic meters of gas.

For his part, according to UGV CEO Oleh Tolmachov, in 2023, the company increased gas production by about 700 million cubic meters compared to 2022. In 2022, the company produced 12.5 billion cubic meters of natural gas (commercial).

“In 2023, Ukrnafta increased oil and condensate production by 3% (by 39.9 thousand tons) compared to 2022, to 1 million 409.9 thousand tons, and gas production by 5.8% (by 60.4 million cubic meters), to 1 billion 97.4 million cubic meters.

The Cabinet of Ministers of Ukraine decided to transfer six CHPPs from the State Property Fund to Naftogaz of Ukraine (Dniprovska in Kamianske, Mykolaivska, Kryvorizka, Khersonska, Odesa, and Centralized Metallurgical Plant of Sievierodonetska CHPP) in early August 2021. Later, the government decided to increase the authorized capital of the NJSC by UAH 646.248 million through an additional share issue by contributing additional stakes in these CHP plants.

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Naftogaz of Ukraine rejects construction of Lviv’s first CHP plant on wood chips

NJSC Naftogaz of Ukraine has refused to implement the UAH 1 billion project to build the first powerful biofuel CHP in Lviv that was launched when Yuri Vitrenko was in charge of the company, Lviv mayor Andriy Sadovoy said.
“Unfortunately, we have not found the support of “Naftogaz” in the implementation of this project, so now the process is suspended. We are directing all our energy, in particular, to the construction of a waste recycling plant,” he told Energoreform correspondent on the sidelines of the high-level meeting “Agreement of Mayors in Ukraine: Planning Sustainable Development Together” in Lviv on Wednesday.
At the same time, Sadovy noted that no money was allocated from the city budget for the CHP construction project. “It was an initiative of the former head of Naftogaz (Yuriy Vitrenko – ER), but today the management of the company has a different opinion regarding such projects in Ukraine,” the Lviv mayor explained.
At the same time, he pointed out that among other things there is a waste composting station in Lviv, and other eco-projects aimed at reducing CO2 emissions are implemented.
As Ukrainian News earlier reported, in September 2022, the Naftogaz of Ukraine jointly with the Lviv City Council launched a project to construct a combined heat and power plant on wood chips, which was planned to be put into operation by February 2023.
As Vitrenko said then, the cost of the project for the company will cost approximately UAH 1 billion.
Sadovaya, in turn, noted that for the city it will be the first powerful CHP plant on alternative fuel, which will cover about a quarter of its needs in heat. “We have planned such a project with the EBRD for a long time, but according to their classical procedures we could start it only next year. But Russian aggression has so activated the thought process that we came to agreements with Naftogaz,” he explained.
Similar projects were planned in other cities: under Vitrenko, Naftogaz announced its intention to build at least nine combined heat and power plants in eight regions of Ukraine with a total capacity of 250 MW of thermal energy and 52 MW of electrical energy.
According to Sadovyy, the construction of a waste processing plant in Lviv is planned to be completed by the end of this year. The works are 25% completed.
“Covenant of Mayors in Ukraine: planning sustainable development together” is the biggest movement in the world concerning climate and energy, which started in the European Union in 2008. Now the initiative unites 11 thousand local and regional authorities in 55 countries of the world. For today almost 300 Ukrainian communities have joined the climate movement. They have developed 180 action plans aimed at solving energy and climate problems. Signatories of the agreement in Ukraine have pledged to reduce CO2 emissions by more than 25 million tons per year.

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In two cities of Ukraine, they plan to build new thermal power plants using alternative fuel within a year

In Zhytomyr and Lvov, they plan to build new thermal power plants on biofuel in a short time to save and reduce the use of natural gas, the press service of NJSC Naftogaz of Ukraine reported.

Naftogaz has begun preparatory work for the construction of thermal power plants that will operate on biomass (wood cod) and solid secondary fuel (RDF) in Lvov and Zhytomyr. The total capacity of the facilities will be 90 MW of thermal energy and 11 MW of electricity. The planned period for putting objects into operation in Lviv is the 1st quarter of 2023, in Zhytomyr – the 4th quarter of 2023,” the text of the release published on the company’s website on Saturday says.

As noted, Naftogaz intends to build at least 9 thermal power plants and bio-boiler houses in 8 regions of Ukraine with a total capacity of 250 MW of thermal energy and 52 MW of electricity.

“The company has an ambitious goal of becoming the largest biomass heat generator by 2027 and replacing about 2 billion cubic meters of natural gas. Ukraine can almost completely abandon the use of natural gas for central heating, replacing it, in particular, with bioenergy,” the statement said. release.

It is reported that during his working trip on September 30 and October 1 to Lviv and Zhytomyr, the head of the board, Yuriy Vitrenko, noted that the NAC helps Ukrainian cities to transfer their CHPPs from gas to biofuel (we are talking about projects in Zhytomyr, Lvov, Akhtyrka) and is ready to support and other cities in this direction.

“We are interested in investing in such projects in order to import less gas at enormous prices. The implementation of such projects is also economically beneficial, and for the environment, such investments quickly pay off, while tax money goes to local budgets, and the number of jobs grows” , Vitrenko stressed.

According to him, a comprehensive approach is needed for a smooth passage of the heating season. In particular, sufficient gas reserves in storage (currently 13.9 billion cubic meters) and stabilization of its own production (gas – IF-U) are the most important tasks for Naftogaz, and the transition of heat generating enterprises to modern technologies and the use of biofuels, and the modernization of networks to reduce heat loss.

In turn, the mayors of Lviv and Zhytomyr Sergey Sukhomlin and Andrey Sadovy noted the successful implementation of this project, which will be able to provide the production of 50 MW of energy generated from alternative fuels and reduce the dependence of cities on natural gas, Naftogaz stressed.

Thus, in Zhytomyr in 2023 they plan to use 10% of the consumed gas, in particular, in 2015, 93 million cubic meters of gas, and in 2022 there should be about 45 million cubic meters. The authorities plan to implement three projects in the city to save gas and turn household waste into heat and electricity.

And in Lvov Novoyavorivsk plans to build a modern thermal power plant in a short time. Sadovyi noted that it will cover about a quarter of the city’s heat needs. The project also includes the construction of a sorting complex for municipal solid waste.

“Cod trees and the organic component of MSW will be used as fuel for the thermal power plant – this is paper, cardboard, food waste, wood, leather, fabric. By implementing this project, we will be able to save $ 24 million that we spent on gas. And the residents of Novoyavorivsk will receive cheaper heat and hot water throughout the year,” the NAC said.

According to the project, the required volume of MSW collection is 70,000 tons per year, which includes 30-35% secondary resources, as well as biodegradable and combustible (65%), namely about 45,000 tons per year. Another fuel component is planned to use wood chips with a volume of 39,000 tons per year.