Page 16 - FSUOGM Week 41 2021

FSUOGM NEWS IN BRIEF FSUOGM

After Nord Stream 2 Riabchyn, former deputy minister of energy need to surmount the massive skepticism
and current advisor to the CEO of Naftogaz,
that investors currently have for Ukrainian
promises, German fund lies Ukraine’s state-owned gas company. renewables.
The July joint statement promised an
Green energy investors in Ukraine are
dormant investment of “at least $1bn” into Ukraine’s currently owed more than $700mn by the
state.
clean energy sector, but with the caveat
In late July, the world understood that the that most of the money would come from The European Bank for Reconstruction
Nord Stream 2 pipeline was a fait accompli. private investors. and Development said in July 2020 that
A joint statement between the German “Germany will make an initial it was “seriously concerned” about the
and U.S. governments condoned the contribution of at least $175mn to the situation in Ukraine’s renewable energy
project’s construction, putting an end to fund. The federal government will also sector. According to Yuriy Kubrushko,
years of the West’s diplomatic pressure aim to mobilize further funding by other CEO of energy consultancy Imepower, the
against the $11bn, 1,230km line. states, companies and foundations,” a fund can go some way to protecting green
The pipeline will double the existing spokesperson from the German embassy investments.
Nord Stream route’s capacity to 110bn reported. “Germany, the U.S. and other countries
cubic meters a year, jeopardizing Ukraine’s Riabchyn expressed Ukraine’s can help a lot by providing additional
status as a gas transit country and leaving it disappointment. guarantees, risk insurance or mobilizing
vulnerable to energy blackmail. Outgoing “We’re losing $2bn annually and you’re bank financing,” he told the Kyiv Post.
German Chancellor Angela Merkel arrived promising us $1bn, of which you’re only Still, the already existing green energy
in Kyiv in late August to assuage Ukrainian putting up $175mn? This is not how things infrastructure leaves somewhat open the
fears about losing its status as a transit are done.” option of hydrogen: In August, Naftogaz
nation with limited success. According to Riabchyn, who also was and German energy company RWE signed
Natural gas transit is one of the few previously an advisor to the Deputy Prime a memorandum of cooperation on the
points of political leverage Ukraine has Minister for Euro-Atlantic Integration, Olha production of green hydrogen (which is
against Russia, which sent 55.8bn cubic Stefanyshyna, the Green Fund is a copy of produced using renewable energy sources),
metres of the fuel through Ukraine last earlier plans discussed by Stefanyshyna’s with a view to make Ukraine an exporter of
year while it illegally occupies the Crimean office with the European Union. green hydrogen to Europe.
peninsula and controls parts of the eastern Previously, the Ukrainian side had However, according to S&P Global
Donbas. lobbied for the creation of a jointly financed analytics, green hydrogen costs need to fall
The German-U.S. statement promised a fund of $20–30bn to pay for upgrades to “over 50% to be viable,” and this likely won’t
Green Fund for Ukraine. Ukraine’s energy efficiency and its transition be a profitable energy solution until at least
While not officially a reparation fund, to net-zero CO2 production. 2030.
it was widely regarded as a compensatory “For us it was a real surprise when we Meanwhile, Ukraine’s current $7bn gas
measure by the German government for were reading this statement that it would be transit contract with Gazprom ends in 2024,
imperiling Ukraine’s energy security, as well a Green Fund not from Brussels, but from and there is no guarantee that another will
as its gas transit fees from Russia, which Berlin, and with one billion instead of 20 be signed.
totaled $2.1bn last year. or 30. Nobody discussed it with us, it was a The Green Fund for Ukraine simply
However, nearly three months after the unilateral decision,” Riabchyn said. won’t be big enough to provide more than
announcement, despite the signing of a Potential investments minimal coverage of the transition costs.
“memorandum of understanding” on the The German embassy said that For its domestic hydrogen projects,
development of green hydrogen in Ukraine “hydrogen should be one of the focus areas Germany has announced a fund of $9bn
by Ukrainian state energy giant Naftogaz of the fund. Since hydrogen production of government money and a further
and German energy trading company RWE, requires a further promotion of renewable $38bn of private investment. Germany
there has been no movement on the fund. energies, renewable energies should also be has also earmarked $400mn for hydrogen
“Because of (September’s German a priority.” investments abroad, more than double its
federal) election, the talks were postponed While Ukraine needs fresh investment contribution to the Green Fund for Ukraine.
on the German side,” explained Alex into green energy, the German fund will “I don’t think it’s reasonable to fund

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