Business news from Ukraine


Germany has confirmed its intention to provide financial assistance for green energy initiatives in Ukraine, President of Ukraine Volodymyr Zelensky has said.
“The German Chancellor confirmed Germany’s intention to fill with specifics and financial assistance initiatives for green transformation, decarbonization and development of renewable energy in Ukraine. Our state is ready to offer great prospects for mutually beneficial cooperation in the field of green energy,” he said at a joint briefing with German Chancellor Olaf Scholz in Kyiv on Monday.

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The share of energy from renewable sources in Ukraine should grow to 27% by 2030, including in the electric power industry – to 25%, heating and cooling – to 35%, transport – 14%.Achieving these goals provides for the draft National Action Plan for the Development of Renewable Energy for the period up to 2030 developed by the State Agency on Energy Efficiency and Energy Saving of Ukraine and published for discussion on its website.
According to the draft document, it was developed, in particular, taking into account the results of the implementation of the National Action Plan 2020, according to which it was supposed to achieve indicators of the use of green energy in the electric power industry of 11%, heating and cooling – 12.4%, and transport – 10%. At the same time, upon fulfillment of the plan, these figures were 13.9%, 9.3% and 2.5%, respectively.
With this in mind, the agency proposes to ensure the further development of renewable energy on a competitive and market basis, including within the framework of an auction support system, namely, according to the Feed-in-Premium model.
According to the agency, the use of corporate power purchase agreements (PPA) will increase the share of renewable energy sources in the energy balance without additional financial burden on the state and consumers.
The agency also focuses on the need to introduce a system for issuing guarantees of the origin of electricity from alternative sources, including consumers who build green power plants for their own consumption.
“In the future, the Ukrainian system for issuing guarantees of origin of electric energy should be connected to the European hub of the Association of Issuing Bodies (AIB) and the regional register of guarantees of origin of the Energy Community,” the agency said.
In addition, it proposes to give priority to the development of renewable energy in the next 10 years to the regions with underdeveloped renewable energy capacities and energy-deficient regions, mainly northern ones, since by 2021 approximately 55% of renewable energy facilities have been built in five southern regions (Dnipropetrovsk, Zaporizhia, Kherson, Mykolaiv and Odesa).
“This will be facilitated by holding auctions with certain regions,” the authors of the draft document said.
According to it, special attention in terms of the development of RES will be paid to Donetsk and Luhansk regions, the exclusion zone of the Chornobyl nuclear power plant is called a favorable territory for the development of RES.
According to the document, further government incentives for the development of solar power will be minimal, since the indicators of its development in accordance with the National Action Plan 2020 have been more than tripled.
It is planned that the capacity of solar power plants can be increased to 10 GW (currently it is 6.3 GW).
At the same time, National Action Plan 2030 provides for the intensive development of generation using wind energy, biomass and biogas, since their development is significantly behind the previous plan. As for bioenergy, one of the options is the conversion of coal and gas thermal power plants to work on alternative fuels, including biomethane.
Electricity production from wind energy in Ukraine can be increased by using more powerful wind turbines and commissioning new capacities of onshore wind farms. It is planned to increase such capacities up to 4.7 GW by 2030, offshore wind farm capacities to 300 MW (now it is 1.53 GW).
According to the plan, the bio-generation capacity should increase to 1.5 GW (currently 244 MW).
In addition, the plan provides for the development of hydroelectric power through, in particular, small hydroelectric power plants, as well as geothermal installations.
Regarding prosumers, it is noted that a potential model for their support instead of the feed-in tariff may be the use of the Net billing system, which provides for the use of netting for the supplied and consumed electricity between the supplier and the consumer in monetary units.
Another important market participant should be virtual aggregators – intermediaries between small players and the market, allowing consumers to sell their controlled loads and electricity that they generate and/or accumulate.
To ensure the technical integration of RES into the energy system, the plan provides for the commissioning of new highly flexible capacities with the ability to quickly start up in the amount of 1,350 MW and energy storage systems in the amount of 640 MW in 2030.
As for the consumption of green energy in heating and cooling systems, the plan indicates the need to create conditions for providing thermal power facilities with fuel.
“The mechanism for organizing the biofuel market in Ukraine should be the use of an electronic platform where all interested producers and consumers will trade it, as is the case in Lithuania on the Baltpool exchange,” the authors of the document said.
In addition to the available woody biomass, energy plants grown on marginal lands, as well as biomethane, are a promising renewable source for the production of thermal energy.
“It is advisable to increase the production of renewable thermal energy through the introduction of solar collectors, especially in the southern regions of Ukraine, where the amount of total solar radiation is 1,300-1,400 kWh per m2. The technically achievable potential of solar energy for heat production is, according to various estimates, 14.5-17 billion kWh per year,” the agency also said.
With regard to transport, according to the plan, the use of green energy in the transport sector is proposed at the expense of electricity produced from renewable energy sources, liquid and gaseous derivatives of biomass, and green hydrogen.
“The transformation of the industry will also be facilitated by changes to the Tax and Customs Codes of Ukraine to stimulate the development of the eco-transport industry in Ukraine, which will come into force on January 1, 2022,” the authors of the draft said.



Prime Minister of Ukraine Denys Shmyhal has said that integration with the European Network of Transmission System Operators for Electricity (ENTSO-E) will open up additional prospects for the development of “green energy” in Ukraine.
“Ukraine seeks to adapt the best policies of the European Union, and for this, over the past one and a half years, the government has been actively introducing and developing the gas and electricity market, and is also actively preparing for integration with ENTSO-E in 2023,” the government’s press service said, citing Shmyhal.
The prime minister said that Ukraine is integrating the System Value approach of the World Economic Forum (WEF) into economic planning, in particular, within the framework of this approach, energy efficiency improvements, modernization of distribution networks and an increase in the share of renewable energy sources will become important factors.
“The System Value approach, developed by the WEF, defines a set of solutions that contribute to the sustainable development of economic and power systems. It allows for a better and more complete assessment of the economic, environmental, social and technological results of implementing solutions in the power sector. This tool will also be used for “green” modernization of the economy,” the head of government said.
Shmyhal said that Ukraine has one of the most energy-intensive economies in Europe, and energy efficiency measures will help decarbonize Ukraine’s economy, increase investment in the technology sector and create new jobs.
According to the head of government, integration with the ENTSO-E, which is scheduled for 2023, will open up broad prospects for the development of renewable energy sources in Ukraine, while increasing the stability of the Ukrainian and European power systems.
The prime minister expressed confidence that in the next report of the WEF Energy Transition Index, Ukraine will rank higher thanks to the active development of smart grids, hydrogen economy and power storage systems.

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UDP Renewables, an investment and development company in the field of renewable energy, in a consortium with the Qatari energy company Nebras Power, plans to invest about $ 250 million in “green” energy in Ukraine in 2021-2022, UDP Renewables CEO Serhiy Yevtushenko said.
“he next big step in the life of UDP Renewables and UFuture is the conclusion of an investment agreement with the largest energy company in Qatar, Nebras Power. At the first stage of our strategic partnership, Qataris together with us become shareholders of a large portfolio of operating solar power plants, and then the formation of a consortium for the construction of a whole portfolio of projects in wind energy,” Yevtushenko said on Facebook.
“He noted that the planned volume of investments of the consortium in 2021-2022 could reach $ 250 million, calling it “a good start for a long-term partnership.”
According to him, the signing of contracts by UDP Renewables and Nebras Power during the official visit of Ukrainian President Volodymyr Zelensky to the State of Qatar is proof of the intentions of both states to develop long-term cooperation.
In addition, Yevtushenko noted that with the conclusion of the investment agreement with Nebras Power, the Ukrainian team received another unique experience in structuring and closing a complex international transaction, which had been working on for two years. Everlegal law firm acted as a legal advisor to UDP Renewables.

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Director-General of the International Renewable Energy Agency (IRENA) Francesco La Camera said at the opening of the tenth International Renewable Energy Investment Forum that IRENA is committed to support Ukraine in this sphere, the press service of the State Agency on Energy Efficiency and Energy Saving of Ukraine has reported.
“To diversify energy is quite realistic. We are ready to continue supporting Ukraine along this path,” La Camera said.
According to him, in particular, IRENA experts advised Ukraine in developing the legislative framework for auctions. As the experience of various countries of the world shows, auctions are an effective tool to reduce the cost of electricity generated by renewable facilities.
La Camera said that the world is increasing the pace of transition to “clean” energy: “Over the past seven years, we have seen an annual increase in the volume of new clean energy capacities that exceed the capacities of conventional energy. In 2018, 170 GW of new “green” energy projects were introduced in the world,” he said.
“At the same time, clean technologies are becoming cheaper. According to experts, in the future, solar power plants and wind farms will become more profitable sources of electricity than conventional energy facilities,” La Camera added.
In addition, IRENA experts analyzed the development status of renewable energy in the countries of Southeast Europe. It is reported that the region operates 127 GW of capacities that generate “clean” energy. By 2030, these figures can be increased by almost five times and reach 620 GW.
During the forum, the IRENA director-general met with Prime Minister of Ukraine Oleksiy Honcharuk. The parties discussed the investment attractiveness of renewable energy and plans for further development in the country.
La Camera recalled that “green” projects have many advantages and simultaneously address the energy, environmental, economic and social issues of communities.



Ukrainian Parliament passes law on green auctions for investors in green energy
KYIV. April 25 (Interfax-Ukraine) – The Verkhovna Rada at a plenary session on Thursday passed bill No. 8449-d on green auctions for investors in renewable energy. A total of 251 lawmakers baked the bill amending some Ukrainian laws regarding ensuring competitive conditions for production of electricity from alternative energy facilities.
The document proposes the introduction of auctions from 2020 and the obligatory participation for investors in solar power plants with a capacity of more than 1 MW and wind farms with a capacity of more than 5 MW (or one turbine).
The pilot auction should be held no later than December 31, 2019, and the ProZorro electronic trading system is proposed to be the platform for the auctions. The period of granting a guaranteed tariff for transmission of electricity by the winner of the auction is 20 years.
The project assumes that the size of quotas to be put up for auction, according to the Cabinet of Ministers, is approved by the Ministry of Energy and Coal Industry. During the first three years it is planned to provide wind farms and solar power plants with 30% of quotas, after this period – at least 15%.
Responsibility of producers of renewable energy facilities for misbalances is proposed to be introduced after the intra-day market is recognized as liquid, but no later than 2024.
It is proposed to reduce the current feed-in tariff for solar power plants in 2020 by 25%, and in 2021-2023 – by 2.5% annually.
For wind farms with a capacity of more than 2 MW, the tariff is proposed to be reduced in 2020 by 10% without further annual reductions.
The tariff for energy generated from biomass and biogas is proposed to be maintained at the current level.
For household solar power plants, the tariff is planned to be reduced by 10% from 2020 (currently it is EUR 0.18 per kWh). Before the start of the voting, the deputies returned the amendment, which introduces the condition for its receipt, the installation of a solar power plant up to 50 kW on roofs, facades of buildings and other hard-wall facilities.

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