Business news from Ukraine

UKRENERGO AND HUNGARY’S MAVIR SIGN EMERGENCY POWER EXCHANGE AGREEMENT

NPC Ukrenergo and Hungary’s power transmission system operator Mavir ZRt first signed an emergency power exchange agreement.
The press service of Ukrenergo reported that the agreement would allow the two operators to supply electricity to their areas of power supply and frequency regulation to prevent emergency or remove its consequences in power systems.
“The largest capacity of emergency assistance is up to 200 MW. The amount of emergency assistance can be increased to more than 200 MW by mutual agreement of the parties, if there are adequate technical capabilities, available reserves and available inter-zone capacity. The capacity for emergency assistance is not reserved in advance,” the company said.
The company said that agreements on emergency energy exchanges with neighboring countries are prescribed by ENTSO-E’s general rules to create additional reserve mechanisms to enhance the reliability of power systems during synchronous operation of the Burshtyn TPP Island and ENTSO-E.
As reported, in August 2019, Ukrenergo and Poland’s Polskie Sieci Elektroenergetyczne (PSE) signed the emergency power exchange agreement.

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STATE-RUN UKRENERGO SEES UAH 18 BLN IN NET LOSS IN H1

PrJSC Ukrenergo saw a net loss of UAH 18.31 billion in January-June 2020 compared to UAH 1.765 billion of net profit over the same period in 2019.
According to a report presented by the national energy company, its net income increased by seven times (by UAH 21.698 billion), to UAH 25.299 billion, in H1, 2020. Its gross loss amounted to UAH 16.756 billion in January-June 2020 against UAH 2.93 billion of gross profit over the same time in 2019.
As reported, Ukrenergo in 2019 reduced its net profit by 28.4% (by UAH 738.63 million) compared to 2018, to UAH 1.864 billion. Its net income over the past year increased by 4.4 times, to UAH 26.326 billion, gross profit doubled to UAH 6.245 billion, EBIDTA rose by 20.4%, to UAH 4.062 billion.
Ukrenergo operates trunk and interstate power grids, as well as performs the centralized dispatching of the country’s combined energy system. It is subordinate to the Ministry of Finance.

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EBRD AND UKRENERGO DEVELOPING 200 MW ENERGY STORAGE PROJECT

The European Bank for Reconstruction and Development (EBRD), together with Ukrenergo, is developing a project of building a 200 MW energy storage system to regulate frequency in the energy system, Olga Yeriomina, the EBRD senior banker for power and energy projects, said.
“The EBRD, together with Ukrenergo, is really working on a project to build an energy storage facility that would not need a feed-in tariff and that could solve the issue of regulatory capacities and reduce the price of electricity in the market. We are considering the possibility of financing a 200 MW construction,” she said at an online meeting at the Energy Club.
She clarified that the matter concerns a project, which is to be financed through an EBRD loan under state guarantees.
“With regard to regulation, Ukrenergo is obliged to provide system services, and these 200 MW will not participate in trading in the market, this will be a system service. An increase in the current tariff of the operator will not be required,” she added.
At the same time, she noted the growing need of the Ukrainian energy system for balancing capacities, which causes the need for the fastest government decisions in this direction.
“We see the situation with the shutdown of nuclear power plants. It’s hard for us now to figure out where the technical necessity is, where repairs are needed, and where administrative intervention is. But the faster the Ukrainian government structures would support our project idea, the faster the issue of flexible generating capacities would be resolved. There are a lot of distortions in the market, and we need to make up for time, take quick and decisive steps,” the banker said.

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STATE-RUN UKRENERGO PLANS TO PRESENT DEVELOPMENTS ON CREATING R&D OFFICE

NEC Ukrenergo is working on a project to create its own research and development (R&D) office and expects to present its own vision of the office’s activities and tasks by the end of 2020.
“Ukrenergo has a consultation project with RTE International, and one of the cases of this project is to support us in creating R&D office of Ukrenergo. Now we are working on writing a roadmap, developing a structure, creating human resources, and formulating office’s tasks. I think that we will be able to present some specific developments by the end of the year,” Head of Strategic Planning and Analysis Division of NEC Ukrenergo Natalia Slobodian said during an online meeting at Energy Club on Thursday, April 30.
She said that R&D office will focus on solving the main problems in the energy system, optimizing the work taking into account changes in the economy, and quickly responding to challenges like those created now due to the coronavirus disease (COVID-19) pandemic.
“Ukrenergo has rather ambitious plans to follow national and global trends in creating leading and innovational products,” Slobodian said.
In her opinion, the benefits of state-owned companies from the creation of R&D offices are obvious, as concern for innovation increases the financial and investment attractiveness of enterprises, allows them to create highly intelligent jobs, and also makes the enterprises attractive to young professionals.
She also said that there is an opportunity to involve grant support for the work of such offices, and additional financial resources are not required for the commercialization of the products they create.
“There is no need to spend money on the commercialization of all the products that R&D offices make. They immediately test the products in market conditions and at once bring them to the market, creating demand in this way,” Slobodian said.
Ultimately, in her opinion, all efforts to introduce innovative technologies are aimed at improving the quality of customer service and providing them with additional opportunities. “The beneficial owner is a consumer by 100%. He gets a stable energy supply, cheap electricity and the opportunity to get market benefits via innovation,” Slobodian said.

UKRENERGO SAVES 15% ON PROCUREMENT

National energy company Ukrenergo during procurement of goods, labor and services in 2019 saved 15% (UAH 219 million) of their expected cost, the company’s press service has reported. According to the company, the total volume of more than 5,000 procurement tenders last year was UAH 1.25 billion. The share of construction, reconstruction, repair and design services was 27% (UAH 342.9 million), economic goods – 21% (UAH 263 million) and basic equipment – 20% (UAH 243.2 million).
“Since 2016, we have reviewed almost all estimates and project decisions, thanks to which we have received two-digit figure savings. However, such a high indicator is positive only at the initial stages of the procurement system reform, when the expected prices are too high. Today, we have switched to careful procurement planning, when the savings depends only on competition at the auction,” Head of Ukrenergo Vsevolod Kovalchuk said.

UKRENERGO SAVES 15% ON PROCUREMENT

National energy company Ukrenergo during procurement of goods, labor and services in 2019 saved 15% (UAH 219 million) of their expected cost, the company’s press service has reported. According to the company, the total volume of more than 5,000 procurement tenders last year was UAH 1.25 billion. The share of construction, reconstruction, repair and design services was 27% (UAH 342.9 million), economic goods – 21% (UAH 263 million) and basic equipment – 20% (UAH 243.2 million).
“Since 2016, we have reviewed almost all estimates and project decisions, thanks to which we have received two-digit figure savings. However, such a high indicator is positive only at the initial stages of the procurement system reform, when the expected prices are too high. Today, we have switched to careful procurement planning, when the savings depends only on competition at the auction,” Head of Ukrenergo Vsevolod Kovalchuk said.