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  • COST OF THE CONTRACT FOR CONSTRUCTION OF 500KV SS KREMINSKA IN EURO UNCHANGED

    Recently, a media Nashi Hroshi published an article How to Siphon Off the Budget of Luhansk Energy Island, accusing Ukrenergo of unreasonably raising the price of the contract for the construction of a 500kV SS Kreminska, which could secure energy supply for the northern part of the Luhansk oblast, and in delaying the construction itself. 

    These accusations are groundless and the calculations on which they are based are erroneous.

    Significance of construction of 500kV SS Kreminska

    Consumers in the northern part of the Luhansk oblast are only supplied by coal-fired Luhanska TPP. Previously, the fuel was delivered to the station by rail through Russia, but today deliveries have ceased completely being blocked by the Russian Federation.

    Now the station runs on gas, which is much more expensive than coal. This is economically disadvantageous. In addition, the station is located in close proximity to the war zone, and its continued operation is constantly under threat. These factors pose significant risks of complete shutdown of the Luhanska TPP. At the same time, due to damage to power grids as a result of hostilities, only two 110kV transmission lines now connect the Luhanska power unit with the power grid of Ukraine. Their capacity, with no generation at the Luhansk TPP, is only 110MW. At the same time, the power unit’s consumption is from 140MW at night to 220MW in the evening peak.

    The solution to the problem of energy supply in the north of the Luhansk oblast is the construction of a new 500/220kV SS Kreminska near Kremin with connections to the OHL 500kV Donbaska – Donska and OHL 220kV Kreminska – Yuvileina. This will allow synchronisation of the power supply system of the north of Donbas with the power grid of Ukraine and significantly increase the reliability of energy supply in the Luhansk region.

    Progress of construction of 500kV SS Kreminska

    The construction began in 2017 and was scheduled to be completed in December 2018. However, these terms had to be postponed due to 17-month delay in the approval  by the Cabinet of Ministers of the design documentation and settling the issues with land acquisition, i.e. the documents required before the start of construction. At the same time, acknowledging the urgent need for the construction of the substation, NPC Ukrenergo was also procuring necessary equipment and machinery, which helped speed up the construction process.

    The new scheduled completion date is May 31, 2020. The work is proceeding at an extremely fast pace, with over 100 employees working on the site. To date, 99% of the main electrical and auxiliary equipment has been delivered to the site, 96 supports of the OHL 220kV Kreminska – Yuvileina have been installed.

    Regarding the cost of construction

    The cost of construction is 1.3 billion UAH, while the Cabinet of Ministers of Ukraine approved the total amount of 1.7 billion UAH. It should be noted that in the publication of Nashi Hroshi, the contract price calculations were given in dollars, which is not correct, because the contract amount in terms of the cost of imported equipment is linked to the euro. In addition, Nashi Hroshi took incorrect dates to recalculate the hryvnia contract price. In May 2019, an additional agreement was made to match the cost of imported equipment (complete switchgear with gas insulation) in connection with the change in the UAH-EUR exchange rate. The prices of equipment in euros have not changed.

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