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Progress within the face of battle: Constructing photo voltaic in Ukraine

Although the precise installed capacity of solar and other technologies in Ukraine is now considered restricted information, the country’s renewables sector is growing, as memorably illustrated by The Guardian last May, which revealed that Ukraine had built more onshore wind turbines since Russia invaded Ukraine in February 2022 than the UK. Addressing the Energy Security

Progress within the face of battle: Constructing photo voltaic in Ukraine

Though the exact put in capability of photo voltaic and different applied sciences in Ukraine is now thought-about restricted data, the nation’s renewables sector is rising, as memorably illustrated by The Guardian final Might, which revealed that Ukraine had constructed extra onshore wind generators since Russia invaded Ukraine in February 2022 than the UK.

Addressing the Vitality Safety Discussion board 2024 in February, Andrii Gerus, the chairman of the committee on vitality, housing and utilities, revealed that Ukraine commissioned roughly 500MW of solar energy crops over the 12 months, noting that renewable technology “considerably helps to make sure the secure operation of the facility system”.

“I additionally consider that 2024 will likely be a 12 months of funding and launch of vitality storage amenities. I believe we is not going to see remoted circumstances, because it was earlier than, however various attention-grabbing and helpful initiatives for the vitality system,” added Gerus.

Facilitating this “12 months of funding” would require demonstrations of safety and stability to entice traders, a troublesome demand for a rustic amid battle. However Ukraine refuses to be held again, amending and creating inexperienced insurance policies to incentivise worldwide traders to fund Ukrainian renewables, not just for vitality safety in Ukraine however for the opportunity of export.

As Sysoiev’s fellow panellist, Kyryll Kostyria, head of authorized division at UDP Renewables, famous, “60% of [Ukraine’s] renewables are photo voltaic, so the likelihood to construct large-scale photo voltaic for export is nice.”

‘Inexperienced tariff’ vs service provider market

Most photo voltaic initiatives presently working in Ukraine are below the nation’s feed-in tariff (FiT) scheme, says Narek Harutyunyan, CEO and founding father of impartial energy producer (IPP), Rengy Improvement, a fellow Ukraine panellist at LSS CEE who later spoke to PV Tech Energy.

Referred to as ‘the inexperienced tariff’ this coverage was launched in 2009, offering a assured tariff and off-take value (set by the regulator Nationwide Vitality and Utilities Fee (NEURC)) for vitality generated by renewable property till 2030.

In brief, vitality produced by renewable property below the inexperienced tariff will likely be offered to the state enterprise Assured Purchaser who will then promote electrical energy in the marketplace by way of electrical energy auctions.

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In keeping with Ukrainian legislation agency DLF, nevertheless, the arrears from the inexperienced tariff, brought on by an accumulation of money owed between market members, threaten the Ukrainian renewable vitality sector.

Because the final efficiency report for the Assured Purchaser dates again to 2019 (and the final monetary statements to 2021), DLF says it’s tough to estimate the exact quantity of debt presently owed to producers below the tariff however the organisation estimates that it accumulates to roughly UAH30 billion (US$79 million).

Alongside market and regulatory elements, Harutyunyan attributes this debt to a “vital lower” in electrical energy consumption in jap areas, inflicting provide and demand economics to turn into “skewed”.

“This is without doubt one of the causes many solar energy plant traders (outdated or new) are planning to change to both merchant-based schemes and even discover choices for company energy buy agreements (CPPAs),” continues Harutyunyan. “Each routes are very new for Ukraine, so it could take a while for them to be bankable.”

Nevertheless, Harutyunyan notes that Rengy is presently within the means of launching a CPPA-based mission to “tick the bins from each regulatory in addition to bankability factors of view and be capable of supply and increase this route going ahead”.

July 2023 noticed Ukraine signal into legislation a groundbreaking piece of inexperienced laws: ‘On Amendments to Some Legal guidelines of Ukraine Concerning the Restoration and Inexperienced Transformation of the Vitality System of Ukraine (Regulation No. 3220).’

This legislation implements various useful devices for renewable vitality bankability, together with confirming the preservation of the inexperienced tariff to supply stability for property already below the scheme, in addition to introducing a contracts for distinction (CfD)-like scheme that enables producers to minimise their susceptibility to cost volatility within the electrical energy market.

Harutyunyan says the legislation can have a “vital affect”, permitting “many points to be resolved and new alternatives to be launched”.

For instance, Harutyunyan factors out that the legislation permits energy crops to exit the FiT scheme and promote electrical energy to the market, both independently or by way of different merchants, just by needing to bill the distinction between the market value and preliminary FiT to the Assured Purchaser.

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The legislation additionally proposes the introduction of ensures of origin for electrical energy which Harutyunyan hopes will likely be a catalyst to constructing a market to commerce these certificates both domestically or in Europe.

Throughout the LSS CEE panel Kostyria identified that though this market could not make a major affect domestically, it will likely be useful for vitality buying and selling internationally.

“What we see now after we discuss to worldwide firms is that they ask us to supply certificates of origin, as they should present this for his or her inner audit to indicate that they’re carbon impartial,” stated Kostyria, including: “In fact, for exporting electrical energy, these certificates of origin are crucial as a result of, so far as I perceive, the EU is anticipating [Ukraine] to solely export renewable vitality and to verify this, these certificates are crucial.”

Furthermore, Harutyunyan notes that the legislation permits lively shoppers to develop renewable energy crops for their very own use with the choice to promote surplus electrical energy to the market or grid.

Sysoiev additionally praised the introduction of the “lively shopper in Ukraine” in the course of the panel final November. Though this mechanism would require secondary laws earlier than it may be used, it will enable 50% of bought electrical energy to be offered to the grid while the remaining quantity is consumed. “I can affirm that my shoppers are contemplating this mechanism,” Sysoiev revealed.

Different advantages embrace an exemption from the requirement for a licence to provide electrical energy for property below 5MW capability and no distribution or transmission expenses associated to inner consumption. “We see the curiosity is there and lively shoppers will develop in Ukraine,” added Sysoiev.

Occupation and destruction

The promise of progress in photo voltaic doesn’t diminish Ukraine’s standing as a rustic at battle.

A stark reminder of this got here throughout LSS CEE when Dr Stanislav Ignatiev, head of the council on the Ukrainian Affiliation of Renewable Vitality, was compelled to exit the Ukraine panel early, (which he was becoming a member of remotely from Kyiv) resulting from an air raid siren.

The battle has inevitably affected Ukraine’s present and deliberate photo voltaic capability as builders face the specter of having their property occupied or destroyed.

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Talking at LSS CEE, Kostyria revealed that roughly half of UDP Renewables’ operational PV crops are presently occupied, while fellow panellist Harutyunyan estimated that Ukraine presently has 6GW of nuclear and 2GW of renewables occupied, making up roughly 25% of the nation’s complete capability.

Elaborating on this, Harutyunyan tells PV Tech Energy that Rengy is presently re-building its 13MW photo voltaic plant situated near a battle zone that was beforehand occupied and “virtually destroyed” by the Russian military.

“It has been reoccupied since, and we determined to revive it not solely to get better a few of our earnings move (it’s below the FiT scheme till 2030) but in addition to assist take care of the shortage of electrical energy within the nation, particularly in distant areas,” provides Harutyunyan.

Rengy’s Afanasiivka PV plant in March 2020 (left) and February 2024 (proper), following Russia’s invasion of Ukraine. Photos: Rengy Improvement.

Destruction isn’t an unique menace to renewable and low-carbon property nevertheless, because the central producing capability in Ukraine has additionally turn into a goal. This makes the flexibility for industrial clients to arrange particular person producing capacities – set out within the inexperienced tariff – much more important for the nation’s vitality safety.

Why construct in Ukraine?

With the specter of destruction looming over renewable property and community infrastructure, it’s price contemplating the reasoning behind constructing new photo voltaic capability in Ukraine.

“I consider there are completely different causes for constructing new crops,” Harutyunyan says earlier than continuing to offer PV Tech Energy 4 break up into two classes: vitality safety and export alternatives.

Harutyunyan’s first three causes for constructing photo voltaic in Ukraine relate to vitality safety:

  • Serving to the nation deal with electrical energy deficits brought on by asset destruction.
  • Decentralise technology by constructing a number of smaller/medium-scale initiatives which might be safer to function and tougher to assault.
  • Supplying particular massive industrial shoppers with a secure provide of electrical energy at predictable costs.

Assembly future demand can also be a consideration; as talked about in the course of the Ukraine panel, demand in Ukraine has decreased by 20% as residents depart the nation.

Nevertheless, this demand will return and must be met, requiring the “vital” quantity of destroyed or incapacitated fossil fuel-based electrical energy capability to get replaced, Harutyunyan informed LSS CEE.

“The nation plans to construct new nuclear and predominantly renewable capability, and throughout the renewable phase, the quickest and best to deploy capability can be photo voltaic,” continued Harutyunyan.

One other incentive to construct photo voltaic in Ukraine comes within the type of export alternatives. This was realised in December 2023 when the European Community of Transmission System Operators for Electrical energy (ENTSO-E) agreed that as of 1 January 2024 the Ukrainian energy system operator will turn into its fortieth member.

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Harutyunyan tells PV Tech Energy that neighbouring international locations could also be inclined to “wager” on this current integration as “grid infrastructure and land are extra obtainable in Ukraine than in bordering EU international locations, [so] traders could wish to put money into solar-export oriented initiatives”.

Kostyria echoed the advantages of the chance to export vitality from Ukraine in the course of the LSS CEE panel: “We see the necessity for Ukrainian vitality to be exported to allow worldwide traders to come back into Ukraine and supply extra stability,” stated Kostyria, including that cross-border PPAs can be a implausible manner of enabling this.

Photo voltaic is a horny candidate for exporting vitality, continued Kostyria; other than 60% of the nation’s renewable capability being photo voltaic, Ukraine, as a big nation geographically, has loads of land on which to construct massive photo voltaic crops.

The introduction of the EU Carbon Border Adjustment Mechanism may additionally stimulate photo voltaic progress in Ukraine, as extra Ukrainian items producers will likely be taking a look at growing a cleaner, consumed electrical energy combine to keep away from greater carbon taxes.

As Kostyria concludes: “The likelihood to construct photo voltaic for export [in Ukraine] is a extremely nice alternative.”

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