Business news from Ukraine

UKRAINIAN RENEWABLE ENERGY CRISIS: WHERE ARE WE NOW; WHERE DO WE NEED TO BE?

Free Online Session dedicated to the Ukrainian renewable energy crisis will be held on 28th May within the framework of Energy Week Black Sea 2020.
Due to the lucrative feed-in tariffs introduced in 2009, Ukraine has achieved remarkable progress in mobilising sizable private sector investments in the energy sector and becoming one of the fastest–growing renewables markets in Europe. In 2019, renewable energy deployment saw a record growth to 4 250 MW compared to the installed capacity of only 743 MW in 2018.

However, the recent developments, and, in particular, the initiative of the government to cut the feed-in tariff for wind and solar energy producers can change the outlook and turn the Ukrainian renewables success story into an illustration of why the state is not ready for foreign investment.
In December 2019, bill No. 2543 on improving the investment climate in the renewable energy sector was registered in Ukraine’s parliament. The bill proposes a voluntary restructuring of FIT with a simultaneous extension of the terms for their payment and a reduction in the terms of preliminary power purchase agreements (pre-PPA).
The following negotiations which have now lasted for six months failed to produce a compromise solution acceptable to both Ukrainian authorities and domestic and foreign investors. The key issues are still open, namely restructuring of power purchase agreements and feed-in tariffs, the release of capacity for wind energy investors for the benefit of future auctions, balancing responsibility and compensation for curtailments of wind and solar producers.
Online Session “Ukrainian Renewable Energy Crisis: Where Are We Now; Where Do We Need To Be?” is organised to address the situation and discuss the following questions:
What should be the state’s immediate steps in resolving the renewable energy crisis?
What are the most practical solutions and stabilisation measures acceptable for foreign investors?
How will Ukraine continue attracting investors in global competition? Are “green” auctions attractive enough?
What will be the pace of renewable energy project commissioning post-FIT?
What are the possibilities for addressing intermittency and energy security? How does the transition meet the need for continuous supply in the absence of storage?  How should energy storage be supported?
Free Registration: https://www.bsenergyweek.com/online-session/
Open4business – media partner of Online Session «Ukrainian renewable energy crisis: Where are we now; where do we need to be?»

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UKRAINIAN MINISTRY OF ENERGY AND ENVIRONMENTAL PROTECTION TO BE DIVIDED

The Ministry of Energy and Environmental Protection of Ukraine will be divided into two relevant departments, Prime Minister of Ukraine Denys Shmyhal has said.
“The separation of the ministry and the creation of the post of the profile minister of ecology are on the agenda,” he said in an exclusive interview with Interfax-Ukraine, emphasizing that the previous merger of the ministries did not produce the expected effect.
“It was strange for me when I got to the first meetings of the Cabinet of Ministers, when the minister of energy first reported on the state of affairs in the nuclear energy industry, then the coal industry, and then on the Red Book plants and catch of bloodworms. Since then, I have been a supporter of the idea that a professional ecologist should be involved in ecology, to whom it is close and who lives with it,” Shmyhal said.
As reported, in August 2019, the Verkhovna Rada supported the candidatures for the posts of members of the new Cabinet of Ministers of Ukraine. By this decision, the Minister of Energy and Environmental Protection of Ukraine was appointed. Prior to this, the government had two separate ministries: the Ministry of Energy and the Ministry of Ecology.

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MHP TO START BUILDING MW BATTERY ENERGY STORAGE SYSTEM

Myronivsky Hliboproduct (MHP) has announced the start of construction of a 25 MW Battery Energy Storage System (BESS) in Ladyzhyn, Vinnytsia region, this year.
According to a press release by MHP, the agricultural holding began implementing a conceptual project for the construction of the Energy Storage in Vinnytsia region as part of the creation of the energy cluster MHP Energy Hub. The implementation of energy projects of the agricultural holding is carried out by PrJSC MHP Eco Energy, which is an electricity supplier and a management company of the largest biogas energy producers in Ukraine.
“The first step of MHP Eco Energy is announcing a tender for the development of a feasibility study for connecting BESS to power grids, with the possibility of using Smart Grid Technologies in the future,” MHP said.
According to MHP, the implementation of the project for the construction of BESS with a capacity of 25 MW in Ladyzhyn will begin in 2020 and will take place in four stages: the first one of 5 MW/5MWh, the second of 5 MW/5 MWh (the total capacity of 10 MW/10 MWh), the third of 5 MW/5 MWh (the total capacity of 15 MW/15 MWh), the fourth one of 10 MW/10 MWh (the total capacity of 25 MW/25 MWh).
“Ukraine needs to reduce its dependence on “dirty” energy and very quickly upgrade its energy infrastructure through the use of Energy Storage and Smart Grid in order to remain economically competitive and energy independent. The accumulation of energy will allow us to have a power supply that will be available 24/7. Energy storage plays an important role in creating a more flexible and reliable system of operation of power grids,” MHP noted.

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UKRAINE MAY SAVE UP TO $6 BLN ON ENERGY IMPORTS IN 2020

Ukraine may save $5-6 billion on energy imports in 2020 due to a 50-60% reduction in prices for energy products, which account for 20% of the country’s imports, NBU Deputy Governor Dmytro Sologub has said.
“Our balance of payments shows that there are both positive and negative influence factors in our current account. First of all, this is a fall in oil prices, energy products, which account for 20% of our imports, compared to $12 billion in 2019. A fall in oil prices, a decrease in gas demand may lead to the fact that this year we will save $5-6 billion,” he said at an online briefing on Friday.
Sologub said that the epidemiological situation has led to a reduction in tourist travel.
“Last year, tourist trips of Ukrainian citizens amounted to $8 billion, and we can also expect a significant reduction,” Sologub said.
According to him, the National Bank expects a slight decrease in food prices, which account for more than 50% in Ukrainian exports. To date, the fall in food prices is much lower than for energy.
“As we understand it, even in a crisis, especially when sitting at home, people will consume food and this is the last thing they will refuse. Therefore, we expect that the demand for our export products will preserve, and if it decreases, then insignificantly,” the banker said.
He said that now there is a decrease in money transfers to the country from Ukrainian citizens working abroad. The National Bank expects that the reduction in the indicator will also be less than in energy products.
“Most likely, this influence will be temporary, as economic recovery in Poland, the Czech Republic, Italy will lead to the resumption of remittances,” he said.

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EU4ENERGY TO PROVIDE ASSISTANCE TO UKRAINE TO IMPLEMENT EU ENERGY INFRASTRUCTURE REGULATIONS

EU4Energy has launched a project of technical assistance for Ukraine to implement EU Regulation 347/2013 for the development of energy infrastructure, according to the website of the Energy Community Secretariat.
“On March 10, EU4Energy launched a technical assistance project to assist Ukraine in the transposition of Regulation (EU) 347/2013, which aims to facilitate investments in energy infrastructure,” the report on the website of the agency reads.
“Representatives of the Ministry of Energy and Environment Protection of Ukraine and Energy Community Secretariat experts discussed ways to put the new project in motion. The draft legislation will be developed with EU4Energy assistance by the end of April 2020 and is to rely on the findings of the legal analysis of the current regulatory framework of Ukraine developed by the Secretariat’s experts in 2019,” according to the document.
“The Regulation prescribes establishing a national competent authority, setting procedures for the permitting process and defining the methodology and criteria to be used for evaluating investment in electricity and gas projects and the risks incurred by them,” it says.

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ENVIRONMENTALLY INTERESTED PUBLIC DEMANDS FROM UKRAINIAN GOVT DIVISION OF ENERGY AND ENVIRONMENTAL PROTECTION MINISTRY

The Ministry of Energy and Environmental Protection should be divided and the Ministry of Environmental Policy and Sustainable Development should be created, Chairwoman of the NGO All-Ukrainian Ecological League Tetiana Tymochko.
“The merger of the Environmental Protection ministry with the Energy Ministry, the enterprises under management of which are biggest polluters of environment, initially put the conflict of interest behind this and created the basis for abuse,” Tymochko said at a press conference at Interfax-Ukraine on Tuesday.
She said that since the merger of the Ministry of Ecology and Natural Resources in September last year with the Ministry of Energy and Coal Industry, very little attention has been paid to environmental issues.
“Only 10% of the employees of the merged ministry have their functional responsibilities of being involved in preserving wildlife,” the expert said.
At the same time, she drew attention to the fact that since the merger, most of the nearly three dozen directives on environmental obligations to the European Union were not considered by the ministry, and no draft legislative act was proposed regarding the preservation of the environment.
According to Tymochko, it is also alarming that in the report of the government on its activities submitted to the Parliament, in the Ministry of Energy and Environmental Protection section, only six out of 28 pages relate to environmental issues, the rest concern energy.
“The activities of the ministry in the direction of environmental protection are paralyzed,” Tymochko said.
The head of the environmental league pointed out the need to adopt a project to reform the environmental industry, developed by the environmentally interested public.
“This project was developed back in 2014, and is transferred to each new minister, prime minister and president. But the environmental sector is not being reformed at all, although the issue of its reform is very urgent. The basis for reform should be the separation of functions in all public bodies that are represented in the industry,” Tymochko said.
At the same time, according to another participant in the press conference, Chairman of the National Ecological Council of Ukraine Oleksandr Chystiakov, the environmental situation in the country is disastrous, and Ukraine currently occupies the fourth place in the world in terms of mortality from poor ecology.
According to him, for example, only a third of the effluents discharged into the water bodies of Ukraine last year were treated.
“Given the level of pollution of water bodies, the World Bank put Ukraine in 125th place in the world in terms of freshwater per capita,” Chystiakov said, quoting the data.
At the same time, he criticized the imposition of a moratorium on environmental audits of the business, which, he believes, contributes to the pollution of water by industrial effluents and the appearance of unauthorized landfills.
“There are already 35,000 illegal landfills in Ukraine, covering an area of over 14,000 square kilometers. This is more than the territory of Zakarpattia region,” the expert said.
Mykhailo Zakharchenko, the head of the public council at the State Environmental Inspectorate of Ukraine participating in the press conference, for his part drew attention to the inadmissibility of the fact that the head of the State Environmental Inspectorate has not been appointed based on the results of the competition for several months.
“The State Environmental Inspectorate has not been fulfilling its functions for more than four months, five candidates were selected for the post of head of the inspectorate at the competition, but so far no one has been appointed,” Zakharchenko said.
Mykhailo Romanyshyn, who entered into the Guinness Book of Records as a swimmer-record holder of the #Vplavdnipro project, who sailed 985 km along the Ukrainian part of the Dnipro River from the border with Belarus to the Black Sea, in particular, to draw attention to the state of the Dnipro River waters, believes that the issue of this river pollution requires very quick and competent response, otherwise the consequences will be devastating.
In addition, the participants in the press conference criticized the E-40 project (the project to create a shipping lane of more than 2,000 km long along the Vistula, Pripyat and Dnipro rivers to connect the Baltic and Black seas), as well as the fact that the Ministry of Energy and Environmental Protection did not oppose the government’s implementation of these plans. According to Chystiakov, the dredging of Prypiat will raise large volumes of radioactive substances, which are buried under a 60-80 cm layer of mud in the riverbed, and will entail serious pollution.
Tymochko also drew attention to the fact that the Ministry of Energy and Environmental Protection does not monitor the impact of military operations on the environment in the Donbas and does not state any position regarding the flooding of coalmines closed in Ukrainian areas that are not under the control of the Ukrainian government and the consequences of this for the country’s underground waters.

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