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22 I Companies & Markets bne July 2021
coal power plants together with its notorious lignite in the top positions. ZETES III (28th) and ZETES III (32nd) were commissioned in 2016 and 2010 respectively.
Eight power plants from Ukraine exist in all of the top thirty rankings: Kurakhivska, Burshtynska, Trypilska, Luhanska, Vuhlehirska, Slovyanska, Ladyzhynska and Zaporizka. Soma B and Çayırhan from Turkey find a place in all top 30 plant-based pollution rankings, likewise Nikola Tesla A and Nikola Tesla B from Serbia.
Ukraine
Ukraine remains heavily dependent on coal to power the country, although in the last few years it has been working hard to switch to renewable energy sources.
The country produces 34% of its electricity consumption from 20 coal power plants built before 1976, none of which have desulphurisation equipment other than the second unit of Trypilska (300 MW of the 1,800-MW power plant) which was installed with FGD as a pilot project in the country.
The coal plants have become even more important thanks to the de facto war with Russia that has seen the country cease Russian imports of cleaner-burning natural gas for more than three years. With abundant supplies of coal in the Donbas coal basin the government has little alternative to burning coal in the short term, but under former President Petro Poroshenko Ukraine introduced extremely generous green tariffs that led to a boom in investment into renewable energy sources.
More than $5bn has been invested into thousands of projects, big and small, by domestic and international investors. The oligarch-controlled power companies, with DTEK Energy owned by Ukraine’s richest man Rinat Akhmetov leading the pack, have also invested heavily in the business, but still only control about 20% of the total green capacity.
Ukraine has enormous solar (55 GW) and wind (319 GW) power potential, which could allow for coal to be phased out by 2030. Ukraine could generate its total energy demand from solar by using less than 5% of its land.
However, the boom in renewables ran into problems as Poroshenko’s government promised more than it could afford, and the Zelenskiy administration reneged on the promises and has changed the tariffs retroactively. As bne IntelliNews reported in August 2020, the law cut tariffs by 15% for solar and 7.5% for wind.
Currently the government owes renewable power companies around $1.1bn in unpaid fees and has been talking about issuing a green bond to pay off its debt, but several of the companies are unhappy and have started arbitration actions against the government. What should have been a welcome transformation of Ukraine’s power generating profile has turned into an imbroglio that has hurt what little investor confidence there was.
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Ukraine also has extensive gas resources in two sizable gas basins in the east and west of the country and currently produces about 20 bcm a year that covers just over half of
its domestic needs. More could be produced, but the process of awarding exploration and production tenders has only just got going and although Ukraine could become entirely self-sufficient in natural gas, it is still many years aware from increasing production to that level.
The companies are also responding to the changes.
Ukraine’s leading utility DTEK announced a new corporate strategy on December 22 that will dramatically increase the share of green energy it produces and puts environmental, social and governance (ESG) principles at the core of its business operations, the company said in an emailed press release.
“For the first time in DTEK’s history, CEO Maxim Timchenko yesterday presented the company’s 2030 corporate strategy at its partly public annual senior management conference. DTEK has committed itself to transforming into a greener, more efficient and technologically advanced business. Implementing the strategy will contribute significantly to the decarbonisation of both the Ukrainian and European economy,” DTEK said in the press release.
Turkey
Turkey was responsible for 33% of annual SO2 emissions originating from the energy sector among OECD countries in 2018, placing Turkey on the top of the list. It is likely this is due to many coal power plants in Turkey still lacking proper flue gas desulphurisation (FGD) systems. The old lignite plants commissioned without any desulphurisation continued to run until the end of 2019 without any challenge.
In Turkey it is difficult to determine which coal power plants comply with the emission standards. The Turkish government does not provide plant-level emissions data, as this is deemed to be commercially sensitive information. It is also unknown
if emissions are monitored at all. From old studies by the state-owned energy company, it is known that unfiltered SO2 emission concentrations of old Turkish coal plants are between 25-60 times higher than the current limits; even the ones
with desulphurisation do not comply with the new emission concentration limits. This gap between regulation and practice is reflected in total SO2 emission statistics of the country.
Turkey closed down some of its coal power plants at the beginning of 2020 due to being non-compliant with the emission limits. However, just a couple of months after this decision, these power plants received temporary permission to operate following the Ministry of Environment and Urbanisation announcement. Currently they are all operational and included in the official installed capacity statistics.
Recently in Turkey only the Çan 18 Mart lignite power plant was upgraded with a proper FGD. The 300-MW lignite power plant paid for desulphurisation.