The downward trend in non-renewable energy sources is very strong and it will progress, but the demand for natural gas will remain or even grow in the next decade, Mikhail Fridman, founder of LetterOne, shareholder of Alfa Group Consortium, has said.
“Gas is likely to rise rather than fall in the next decade,” he said at the Kyiv International Economic Forum on Thursday.
Fridman added that the share of alternative energy will also grow, helped by government incentives and worsening conditions for carbon sources.
At the same time, according to his forecasts, despite the strong trend against non-renewable energy sources, the change in the structure of energy generation will not be very rapid.
“It is frivolous to say that everything will happen very quickly – it is irresponsible,” the businessman said.
In such an environment, Fridman believes, oil and gas companies will not be popular, but they will exist for a long time and actively invest in carbon neutrality.
“They will be arranged like a tobacco industry,” the shareholder of Alfa Group said.
Similar to other European countries, Ukraine has declared its strive to complete shift to clean energy use. But on the way of the so-called “energy transition” natural gas will continue playing an important role for more than one decade – as a “transitional fuel”. In order not to be dependent on gas supplies, Ukraine has to increase its production, especially considering that the country has one of the largest gas reserves in Europe.
This and other important topics will be discussed at the Ukraine Gas Investment Congress, which starts on October, 20 in Kiev, involving business leaders from all around the world. On the eve of the Congress, Roman Abramovsky, Minister of Environmental Protection and Natural Resources of Ukraine, is telling about the situation in the industry and prospects in a blitz interview.
“The State is ready not only to support, but also to act as a guarantor of complex risky projects. And I would like our international partners and investors to hear this message,” emphasizes Mr.Abramovsky.
Roman Abramovsky, the Minister of Environmental Protection and Natural Resources of Ukraine
Our intention to reduce the environmental impact is in line with the European Green Deal. We consider Ukraine as a member of the European community. Therefore, we share its aspirations, values and standards.
Our ministry acts as an engine and mouthpiece of changes in the ecosystem. This year, we have prepared proposals to reduce national greenhouse gas emissions by 65% compared with 1990 by 2030. The green course will have an impact on all economy sectors, including energy, manufacturing, transport, utilities, agriculture, forestry and waste management.
In particular, for the energy sector, there is a goal to increase power generation from renewable sources (solar and wind). Their share in power generation should grow to 17% in 2030 and up to 25% in 2035, which is provided for in the energy strategy of Ukraine. Ukraine is already one of the European leaders in the development of green energy generation and potential for further growth is far from exhausted.
Now we are also actively discussing the huge prospects of Ukraine in the area of hydrogen production and transmission. Namely, Naftogaz of Ukraine is already planning the first pilot projects in cooperation with Germany’s RWE.
Along with the development of green capabilities, we will decommission heat generating units with expired service life and provide for the gradual abandonment of coal mines. Of course, this will be accompanied by coal regions transformation programmes.
The energy transition cannot take place in an instant, especially in such a large, industrialised country with a high level of energy consumption. We will not be able to stop using fossil fuel completely, so like the rest of the world, we consider gas as a transitional energy carrier. In the next 10-15 years, its role will remain essential. First, as a replacement for coal that is significantly more harmful to the environment, and secondly, to provide room for manoeuvre.
Ukraine is lucky to have some of the largest gas fields in Europe, however at the same time, their potential was not fully utilised, and the country was losing both hydrocarbons and money. Since my appointment in 2020, I have initiated the development of large oil and gas bearing areas, where no exploration was previously carried out. In particular, I managed to restart the large Black Sea exploration project. At the end of 2020, Naftogaz of Ukraine obtained licenses for exploration of several dozen blocks. They have great potential and can open a new chapter for Ukraine’s oil and gas industry. This is evidenced by the success of our neighbours – Romania and Turkey, which have explored significant reserves in the Black Sea.
We have also started developing large onshore oil and gas fields that were previously inaccessible to investors, including the Yuzivske field, which is unique in size and potential.
The climate goals that we set for ourselves are ambitious and require huge resources. Therefore, over the next 10 years, Ukraine will need Euro102 billion of capital investment to finance decarbonisation projects.
Some of them will be provided by businesses. Companies should adjust their development plans to adapt to the Green Deal and decarbonisation. They need to understand that this is no longer a nice to have, but a mandatory requirement for their further sustainable development.
Part of the costs will be covered by the State. For example, by direct loans to businesses at acceptable interest rates so that businesses can introduce decarbonisation measures.
At the same time, we are very limited with our in-house resources, and I constantly emphasise this during meetings with foreign stakeholders, in particular, with the ambassadors of the G7 countries. Therefore, we count on external investment and are actively working to inform investors about the opportunities that await them in Ukraine. Compared to other European countries, the Ukrainian economy requires almost the largest investment. To attract attention of investors, we must offer almost turnkey projects with a guarantee of mutual benefit.
Today, Ukraine is improving the investment climate not with words, but with concrete actions. The State is ready not only to support, but also to act as a guarantor of complex risky projects. And I would like our international partners and investors to hear this message.
Without a doubt, it will be an outstanding event. Perhaps for the first time in many years, important issues of the energy industry and the energy transition will be considered with the involvement of the country’s leaders, international stakeholders and business representatives from more than 15 countries. This will be an opportunity to look at and assess risks and opportunities from different angles and from different perspectives.
I hope that that Ukraine Gas Investment Congress will become a platform for making important decisions, launching new projects and areas of cooperation.
Moreover, I hope that the Congress will help numerous investors and partners learn about the business opportunities that exist today in Ukraine, as well as what is being done to implement these opportunities as easily and quickly as possible.
Ukraine Gas Investment Congress received support from our Ministry and other government representatives. We will be happy to meet with all interested parties and will be open to discussions on topical issues.
Energy Minister of Ukraine Herman Halushchenko and U.S. Secretary of Energy Jennifer Granholm have signed a joint statement on strategic dialogue in the field of energy and climate, Ukrainian President Volodymyr Zelensky said.
“A strategic dialogue in the field of energy and climate has been initiated between Ukraine and the United States. The corresponding joint statement was signed by Ukraine’s Minister of Energy Herman Halushchenko and U.S. Secretary of Energy Jennifer Granholm,” Zelensky wrote on Twitter on Tuesday.
The Cabinet of Ministers of Ukraine has approved the energy security strategy, which was developed on the basis of the national security strategy approved by decree No. 392 of President Volodymyr Zelensky dated September 14, 2020.
Energy Minister Herman Haluschenko said during a presentation of the document at a government session on Wednesday that the strategy identifies, in particular, 29 threats to energy security, the key of which are cyber threats, ongoing Russian aggression, wear of fixed assets, lack of energy reserves, the impact of climate change on the structure and energy consumption regimes, as well as issues of competition in the markets, staffing of the industry and development of scientific and technical potential.
“In accordance with this, three key scenarios have been identified, according to which the energy sector can develop, depending on the threats,” the minister said.
These are “no change,” “unfriendly influence” and “positive transformation” scenarios.
The “no change” scenario envisages, in particular, the preservation of the current trends in the formation and implementation of energy policy, as well as the principles of the functioning of energy markets.
The second scenario “unfriendly influence” is envisaged in the event of an increase in the external influence of Russia in order to gain control over the energy policy of Ukraine.
The third scenario “positive transformation” is aimed at the priority development of the country in terms of the irreversibility of its European and Euro-Atlantic course.
Haluschenko said the main goals of the strategy are, in particular, the availability of energy resources for consumers, the sustainability of the energy sector and its economic efficiency, the environmentally acceptable impact of energy on the environment, as well as the integration of the sector into the EU space.
The Energy Ministry of kraine intends to carry out annual monitoring of threats to the country’s energy security.
ENERGY, ENERGY SECURITY, ENERGY SECURITY STRATEGY, PRESIDENT ZELENSKY
Ukraine and Denmark have signed a cooperation agreement that opens up opportunities for companies working with green energy, among other things, the press service of the Ministry of Energy said.
“The agreement between the Ministry of Energy of Ukraine and the Ministry of Foreign Affairs of the Kingdom of Denmark will mark a new stage in deepening intergovernmental cooperation, which will focus on strengthening the environment for sustainable energy solutions and technologies based on Danish experience and technical assistance, as well as opportunities for companies working with ‘green’ energy,” the message says.
According to Minister of Energy of Ukraine Herman Haluschenko, “Denmark is one of the European leaders in the implementation of the transition to ‘green’ energy. Ukraine, in turn, shares the goals of the European Green Deal. Therefore, I see significant potential for deepening cooperation between our states in the development of renewable sources of energy and enhancing energy security.”
The press service of the Ministry of Energy noted that Ukraine is making significant efforts to implement projects aimed at reducing traditional energy consumption, increasing energy efficiency and introducing energy-saving technologies. The draft National Energy Efficiency Action Plan developed by the Ministry of Energy provides for a decrease in final energy consumption by more than 17% by 2030.
In its turn, the Danish Energy Agency will contribute in the form of consultations, technical assistance and mutual training of specialists from the Ukrainian energy sector.
“The energy partnership with Denmark will help improve conditions for the introduction of the latest environmentally friendly energy technologies and attracting investments in sustainable energy,” Haluschenko said.
The Ministry of Energy of Ukraine and Qatar Petroleum, the state-owned oil and gas company of Qatar, have signed a memorandum of understanding on energy cooperation, the press service of the Ministry of Energy said.
On the part of Ukraine, the document was signed by acting Minister of Energy Yuriy Vitrenko, for Qatar – President and CEO of Qatar Petroleum, Minister of State for Energy Affairs Saad Sherida Al-Kaabi.
“Cooperation in the oil and gas sector of Ukraine and Qatar is promising and important for our country. Qatar is one of the largest gas producers in the world and has valuable experience and significant financial resources for investments in the exploration and production of gas in Ukraine,” Vitrenko, who is currently on a visit to the capital of Qatar, Doha, as part of the Ukrainian delegation led by the president of Ukraine, said.
In addition, according to him, cooperation with Qatar is of fundamental importance for Kyiv from the point of view of diversifying sources of gas supplies to Ukraine.
In accordance with the memorandum, the states intend to develop cooperation, in particular in the areas of investments from Qatar in the exploration and production of gas in Ukraine, as well as gas supplies (liquefied natural gas) from Qatar to Ukraine.
The memorandum will be valid for three years and can be automatically renewed for the same period.
