Business news from Ukraine

STATE-RUN UKRENERGO AND GERMANY’S DENA TO INTEGRATE RENEWABLE ENERGY SOURCES INTO UKRAINE’S ENERGY SECTOR

Ukrenergo and the German energy agency DENA will analyze the technical and regulatory problems associated with the integration of fast growing capacities of renewable energy sources and will develop necessary recommendations. According to a press release from Ukrenergo, the main instruments for effective integration are systems for accurate forecasting of generation from renewable energy sources, a developed market for auxiliary services and interconnectors.
Ukrenergo notes that at present the united energy system of Ukraine can accept 4.75 GW of renewable energy capacities without negative consequences, while by the end of 2019 this figure will amount to 3.965 GW.
“A further increase in the share of renewable energy generation without the urgent legislative settlement of the issue of their work in the energy market and their controlled construction pose risks of the system imbalance. And first of all, the problem lies in a lack of responsibility of “green” generation for imbalances, which, in turn, does not stimulate manufacturers to accurate forecasting of production,” the company said.
The project “Transformation of the Energy System to Optimize the Integration of Renewable Energy in Ukraine” is funded by a grant from the German Federal Ministry for Economic Affairs and Energy and will last until March 2020.

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UKRENERGO FOR FIRST TIME FORCED TO LIMIT ‘GREEN’ GENERATION IN UKRAINE

Ukrenergo last night for the first time was forced to limit “green” generation at Botiyevska, Prymorska-1 and Orlovska wind farms (all are within DTEK Group), Andriy Gerus, the head of the Verkhovna Rada committee on energy and housing and utilities services, has stated.
“Such a limitation was 300-400 MW at certain hours of the night. Nevertheless, according to the existing rules, DTEK will still receive the payment of a feed-in euro tariff of UAH 2.9 per kWh (EUR0.102), despite the fact that the energy system did not need but did not use the electricity produced by the corresponding wind farms (the price of the matter is millions of hryvnias). The corresponding payment will fall on state-owned Energoatom, Ukrhydroenergo and the Ukrenergo tariff, which all consumers will pay for,” he said on Facebook.
Gerus emphasized that in the future this situation will occur more and more often.
“The problem is growing, and in spring it will reach a large-scale character. I am convinced that investments necessary for the state are those that benefit the state and give investors the opportunity to earn profit. And the state’s interest must be taken into account in this structure,” he said.
As reported, on October 16 the Rada energy committee approved bill No. 2236-2 (the Servant of the People party), which allows, when dispatching, to give priority to operator-producers of alternative energy with an installed capacity of up to 150 MW. Compensation of the cost of electricity not sold at the feed-in tariff in connection with dispatching restrictions is also provided to the stations whose capacity does not exceed 150 MW.

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NATIONAL COMMISSION FOR ENERGY MAKES PRELIMINARY DECISION ON CERTIFICATION OF UKRENERGO

The National Commission for Energy and Housing Utilities Regulation (NCER) has approved a preliminary decision on certification of PrJSC Ukrenergo as an independent operator of the electricity transmission system.
The corresponding document was adopted at a meeting of the regulator on October 7.
According to the previously published draft resolution, Ukrenergo by October 20 should exclude from the charter of the enterprise provisions that do not comply with the requirements of the law on the electricity market, as well as other regulatory documents regulating the energy sector.
The final decision on certification of Ukrenergo is possible after the company completes all the necessary measures specified in the preliminary decision, as well as after the Energy Community evaluates the preliminary decision.
“This is only the first step towards the certification of an independent operator. The preliminary decision will be sent to the Energy Community Secretariat, worked out, and we will expect an assessment of the document for its compliance with European law,” Oleksandr Formahei, a member of the commission, said.
As reported, in late May the NCER allowed Ukrenergo to work in the new wholesale electricity market under the old license until the company passes certification. The certification deadline is October 30, 2019, while Ukrenergo’s license is valid until this date.

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STATE-RUN UKRENERGO PLANS TO FINISH CONSTRUCTION OF SUBSTATION WITH A POWER CAPACITY OF 500/220 KV

Ukrenergo National Energy Company will finish construction of the Kreminska substation with a power capacity of 500/220 kV (Kreminna town in Luhansk region) by the end of May 2020, Ukrenergo operations director Volodymyr Kudrytsky said at a press conference in Kyiv.
“Kyiv Energy Construction Company in Ivano-Frankivsk, one of the biggest companies Ukrenergo is working with, won the bids in 2017. At present moment, it is building the facility. May 2020 is an expected date of completion of the building works,” he said.
Kudrytsky reminded that the term for completion of the works was scheduled for December 2018. However, these terms have been shifted over the Cabinet of Ministers’ delay to approve the design documentation and settling the issues with land acquisition. Kyiv Energy Construction Company in order not to waste time started to buy necessary equipment and machinery before the government approved the documentation.
According to company’s operation director, the cost of construction now totals UAH 1.3 billion, while the Cabinet of Ministers initially appraised it at UAH 1.7 billion.
He also reported that Ukrenergo was working over the project on increase of the capacities of Luhansk thermal power plant (TPP).
“To provide distribution of Luhansk TPP in full, at a moment we initiated building of another facility, it is on the stage of design. This is a 220 kV transmission line from Luhansk TPP to Yuvileina power substation,” he said.
As reported, construction of Kreminska substation launched two years ago.
The Kreminska substation will make it possible to synchronize the electricity supply system in the northern Donbas with Ukraine’s Integrated Power System (IPS) and provide a stable link to that system.
Consumers in the northern part of the Luhansk region 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 110 kV 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. Meanwhile, the power unit’s consumption is from 140 MW at night to 220MW in the evening peak. Thus, if the operation of the Luhansk TPP stops in any reasons, the region won’t be provided with electricity as strongly as required.

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UKRENERGO PLANS TO ATTRACT EUR 24.5 MLN FROM KFW

National Energy Company Ukrenergo plans to attract another EUR 24.5 million from Kreditanstalt Fuer Wiederaufbau (KfW, Germany) to implement a project to increase effectiveness of electricity transmission, which is the third phase of reconstruction and automation of the company’s substations.
According to a company’s press release, the relevant intentions were recorded in the protocol on the results of the intergovernmental negotiations held on May 20 in Kyiv with the participation of the company.
“This will significantly improve the reliability of power transmission and ensure the technical compliance of equipment and network operation with the standards and requirements of ENTSO-E [the European Network of Transmission System Operators for Electricity],” the press service reported, citing Ukrenergo Deputy Director for investment Volodymyr Kudritsky as saying.
In general, KfW announced its readiness to provide more than EUR 80 million for the implementation of reforms in a number of sectors of the Ukrainian economy.
During the meeting, Ukrenergo spoke about the implementation of a roadmap for the integration of the Ukrainian power grid with ENTSO-E. In this direction, the company cooperates with the German transmission system operator 50 Hertz, which is now a key partner of Ukrenergo in the process of integrating networks.

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UKRENERGO AND SLOVAKIA TO UPDATE CONTRACT ON OPERATION OF POWER LINE

National energy company Ukrenergo and the electricity transmission system operator SEPS (Slovakia) will sign a new agreement of cooperation and joint operation of the 400 kV overhead power line Mukachevo-Velke Kapusany, connecting the Burshtyn thermal power plant island and the Slovakian power grid, by the end of 2019, the press service of Ukrenergo has reported.
The need to update the agreement, which sets out the rules and requirements regarding the operation of the line, the order of interaction between operators during joint operation of the interstate section is due to changes in the rules and requirements of ENTSO-E (the European Network of System Operators of Electricity System).
The new document will be developed on the basis of the principles that most of the European operators of the electricity transmission system apply, the company said.
As reported, in October 2018, the Ukrainian and Slovakian operators agreed on building a new power line as an optimal solution for boosting power transmission between Ukraine and Slovakia. According to the agreements, a new 400 kV overhead line will be built, which will connect the existing 400 kV substations Mukachevo and Velke Kapusany in the single-circuit version with the possibility of further upgrading it to double-circuit in case of an increase in the volume of interstate flows. Considering the condition of the existing 400 kV overhead line Mukachevo-Velke Kapusany, which has been operating since 1963, its modernization was recognized as inexpedient. The line will work until the launch of the new line.
This project is a candidate for projects of mutual interest (PMI).