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8:22 AM Friday, December 15, 2017
Energy
Needed: EUR5 Billion in Green Energy Investments
Ambitious goals wind, solar and biogas; 11% of Ukraine's power in 2020 and 25% in 2035.
image/svg+xml Kyiv Lutsk Rivne Zhytomyr Lviv Ternopil Khmelnytskyi Uzhgorod Chernivtsi Vinnytsia Chernigiv Sumy Kharkiv Poltava Cherkasy Kirovohrad Lugansk Dnipropetrovsk Donetsk Zaporizhzhia Mykolaiv Odesa Kherson Simferopol Sevastopol Ivano- Frankivsk

by Noah Fulton Beale

KYIV – With one the world’s highest ‘green tariffs’ and billions of dollars in investments, Ukraine’s renewable energy business looks bright, investors said Thursday at the second Renewable Energy Forum here.

“We’ve never seen so much interest in any segment,” said Sevki Acuner, who as Ukraine director of the European Bank of Reconstruction and Development has a bird’s eye view of the national economy.

Olga Yeriomina, EBRD Banker for Power and Energy, says more foreign investors should act on Ukraine's green energy opportunities. (Noah Fulton Beale)

Big Leap Needed

But, with a national target of obtaining 11 percent of its power from renewable sources by 2020, Ukraine has a long way to go – and fast. Last August, the government drew up an even more ambitious goal -- 25% by 2035.

Last year, only 1.3 percent of the country’s power came from renewable sources. Foreign investors study opportunities. But, for now, most initiative come from within.

“We have mostly Ukrainian investors,” said Olga Yeriomina, Senior Banker in Power and Energy at the EBRD. “Although we have discussions with numerous foreign investors, their projects still need to materialize.”

Needed: EUR5 billion

To meet the 2020 target, big investments need to flow, said Ms. Yeriomina. "I saw an estimate that EUR 5 billion would have to be invested by 2020.”

One major source of investment is the EBRD. Ms. Yeriomina said the EBRD has 20 projects in the pipeline for renewable energy development, and the bank is expanding its billion-Euro portfolio in Ukraine’s energy sector.

Mr. Acuner said the EBRD has already invested EUR 2.5 billion in private and public energy projects in Ukraine.

Ukraine: World’s Highest Green Tariff?

Several panelists argued that Ukraine’s feed-in tariff is the highest in the world. This guarantees above-market prices for electricity generated from wind, solar and biogas. It reaches 16 Euro cents per kilowatt hour for solar installations, far above rates paid for gas, coal or oil generated electricity.

The tariff is to decrease in 2020 and 2025 and finally expire in 2030. Before this happens, investors still have a few years to commission projects and get a guaranteed rate through a Power Purchase Agreement.

A solar array is inaugurated last April in Lviv region (UNIAN)

NERC Blocked

While feed-in tariffs might promise profits, the past few weeks have seen Ukraine’s regulatory body for power paralyzed for lack of a commission quorum. The National Energy Regulatory Commission is unable to approve electricity rate changes or feed-in tariff payments. These are ‘take to the bank’ documents that unlock bank financing.

Next week, the Rada will adopt emergency legislation to unblock the commission, conference attendees were assured by Oleksandr Dombrovskiy, a parliamentary ally of President Poroshenko and first deputy head of the Rada’s Committee on Fuel and Energy Complex, Nuclear Policy and Nuclear Safety.


For comments and story tips, please contact UBJ Contributor Noah Fulton Beale at: fultonbeale@gmail.com

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