Page 23 - bne_November 2018_20181105

bne November 2018 Cover Story I 23
Acold autumn wind is sweeping same time, it is set to become the biggest solar power plant in the Kherson region.
player in Ukraine’s renewables sector.
Rush into renewables
Renewables is still in its infancy in Ukraine, but it has seen a flurry of proj- ects in the last two years. The number of licenses for producing renewable energy delivered in Ukraine grew from 131 in 2015 to 163 and 230 in the following years, according to the Ukrainian Asso- ciation of Renewable Energy (UARE). State-run power company Ukrenergo expects the country’s renewable energy capacity to go from the current 1.5GW to 3GW in 2019.
Renewables have benefited from so- called “green tariffs”, state subsidies designed to boost investment in clean energy. “The green tariff is set in euro, which is important to make it attractive to investors,” Iryna Krymus, an expert at the UARE, told bne IntelliNews.
Launched in the country in 2008, the green tariffs jumpstarted the renewable sector in Ukraine: 12 licenses for renew-
through the roughly 400 hectares
of dirt that will soon host the big- gest solar plant in Ukraine. 350 workers started laying 750,000 solar panels in this former ore quarry near the city of Nikopol, in southern Ukraine. DTEK, the Ukrainian energy giant which will operate the plant, says it is set to start running in early 2019. To keep to the schedule, the number of workers will soon rise to a thousand, most of them Chinese employees from the China Machinery Engineering Corporation.
“We’re ambitious,” DTEK CEO Maxim Timchenko told bne IntelliNews. “Our goal is to set up 1GW of capacity in renewables by the end of 2019.”
40 kilometres south, on the bank of the Azov Sea, the company is also getting ready to operate 26 wind turbines cur- rently being built by General Electric.
Sunny weather and the steady breezes blowing from the Azov Sea have put
the southern regions of Zaporozhe and Dnipropetrovsk at the heart of Ukraine’s recent rush into renewables. Its sup- porters hope the increasing number of projects could translate into major for- eign investments and bolster Ukraine’s energy independence. At the same time, uncertainties over the energy reform mean the sustainability of this growth
is still unclear.
Ukraine still relies on soviet-era nuclear power plants as well as gas and coal- powered thermal plants for its electric- ity. Nuclear, natural gas, oil and coal make up 96% of the country’s energy mix, with renewables estimated at somewhere between 1 and 2%. Several of these traditional facilities are also located in southern Ukraine: a 20 kilo- metres radius around the Nikopol solar plant includes both the most powerful nuclear plant and coal-powered ther- mal plant in Ukraine. The latter is also owned by DTEK.
DTEK is owned by Ukrainian oligarch Rinat Akhmetov, Ukraine’s wealthiest man. The conglomerate controls 70% of the country’s thermal plants, which provide most of the electricity. At the
DTEK has also signed a second contract with US General Electric to supply equipment for Prymorska wind farm in the Zaporizhia region in October. Media also extensively reported on the con- struction of a 1MW solar plant in Cher- nobyl’s “exclusion zone”, which was the result of a partnership between Ukrai- nian company Rodina and Germany’s Enerparc AG.
Ukraine’s incentives to switch to renew- ables include the fact that “most of the existing power generation facilities in Ukraine are worn out and inefficient” Igor Dykunskyy says. As they will need to either be overhauled or replaced in the coming decades, renewables might prove a viable alternative.
But the most powerful argument could be the issue of energetic independence: the seizure of Donbas by Russia-backed separatist groups has forced the country to increase its imports of anthracite coal, mostly from Russia, to keep thermal plants running.
“We’re ambitious. Our goal is to set up 1GW of capacity in renewables by the end of 2019”
ables projects were delivered in 2009, and 107 in 2013. “We started investing in renewables in 2010, with a pilot proj- ect, 200MW of wind power” DTEK CEO Maxim Timchenko says. “It was very successful, but the 2014 political and economic crisis forced us to suspend all our expansion projects. Now however, we’re back on the market.”
Foreign investors have also shown inter- est in renewables. In Nikopol, where DTEK has set up its 200MW solar plant, Canadian company TIU Canada is plan- ning to start operating a 10.7MW solar power plant in January. Norway's Scatec Solar announced in June it would soon begin construction of two solar parks in the Cherkasy region with a total capacity of 83MW. Ukrainian businessman Vasyl Khmelnytsky has completed a 18MW
The shadow of the energy reform
The attractiveness of the green tariffs, reforms and the gradual recovery of
the Ukrainian economy are generally credited for the growth of Ukraine’s renewables sector. “A key reason for
the development of renewables in Ukraine is a good regulatory regime and guarantees from the state to investors,” Maxim Timchenko said. Oleh Savitskyi, an energy policy expert for the NGO “Ekodia”, also pointed out the support of state power company Ukrenergo as a major factor: “They’re pro-renewables. They are not restricting access to the grid and they created a very transparent and clear procedures for grid connec- tions,” he says.
But analysts also see behind the rush a desire to take advantage of beneficial
www.bne.eu