This year, KSG Agro will build an energy complex in Dnipro region that will include a solar power plant, an energy storage system, and a gas cogeneration unit, the company’s press service reports.
“It is expected that the project of the energy complex will be implemented according to the zero investment concept proposed by EnergyInvest HUB. This means that KSG Agro will not spend significant equity capital on the construction of a solar station: the main investments will be made by external financial partners,” the agricultural holding said.
According to the company, thanks to this model, the agricultural holding will receive cheaper electricity and heat without the need for capital investment in the project.
According to the report, the capacity of the solar station will be 0.5 MW. A 1 MWh energy storage system will ensure the accumulation of excess solar generation during the day, and a 0.8 MW gas plant will generate the necessary energy in the evening and at night or work as a backup. The combined system will be centrally managed through an EMS (Energy Management System).
The construction of the complex is scheduled to be completed by the end of 2025.
The agricultural holding is convinced that the energy complex built according to this scheme will provide the company with the necessary margin of safety and predictability. Increasing the level of energy autonomy will help prevent the negative consequences associated with power outages.
An important aspect of energy independence is the ability to avoid a significant rise in electricity prices, which significantly affects the growth of agricultural production costs, KSG Agro explains. The economic effect of the construction of the energy complex is expected to allow it to reduce the price of electricity consumed by about 20% of the market price.
“The difficult situation in the Ukrainian energy market leads not only to interruptions in electricity supply but also to its rise in price, which significantly affects the growth of agricultural production costs. That is why financing renewable energy sources, in particular solar energy, is very important for farmers,” explained Sergiy Kasyanov, Chairman of the Board of Directors of the agricultural holding.
He noted that the construction of an energy complex with a solar power plant provides significant benefits in several business dimensions at once: energy autonomy, energy efficiency, increased profitability and greening of agricultural production.
“Add to this the fact that the cost of solar power plants has been decreasing in recent years, and their commissioning leads to minimal interference with the company’s power grid. In addition, such a station allows us to connect more load than the company’s usual load, which actually stabilizes the grid voltage,” Kasyanov said.
KSG Agro started implementing alternative power supply projects in the spring of 2022. So far, about 10 generators with a capacity of 100 to 250 kW each and a total capacity of 1.5 MW have been installed in its farms and headquarters. KSG Agro has also provided the local community with a generator, as its water supply system supplies water to both the community and the agricultural holding’s pig farm.
KSG Agro is a vertically integrated holding company engaged in pig farming, as well as the production, storage, processing and sale of grains and oilseeds. Its land bank in Dnipropetrovska and Khersonska oblasts is about 21 thousand hectares.
According to the agricultural holding, it is one of the top five pork producers in Ukraine. In 2023, it launched a “network-centric” strategy, which will shift from developing a large location to a number of smaller pig farms located in different regions of Ukraine.
In January-September 2023, KSG Agro received $1,336 million in net profit, which is almost 14 times more than in the same period in 2022. Its EBITDA for the three quarters increased by 67% to $4.5 million, and its profit from sales increased by 16% to $11.9 million.
In the first quarter of 2024, it decreased net profit by 37% to $0.96 million on a 2% decrease in revenue to $5.02 million. Its EBITDA decreased by 2% to $1.83 million.
