Ukrainian solar on the rise despite wary investors

Ukraine saw a 51.4% solar capacity hike in the first half-year of 2013, with 12 of the 23 solar power plants now in the country built during the period. Another seven solar PV facilities are due to go online at the end of the year, adding an extra 50 MW to the current solar capacity of 494 MW that has already cost investors more than US$480 million.

Even more impressive gains were evident over the last two years: Ukrainian solar parks’ generated 333.6 million kWh of energy last year, marking a whopping 11-fold increase year-over-year, according to the country’s National Commission for Energy Regulation (NCER).

"If Ukraine keeps up the pace, renewable energy sources may become the driving force of the Ukrainian economy," said Viktor Janovskij, vice president of Ukraine’s Trade and Industry Chamber, at a recent meeting with representatives of the country’s Alternative Fuel and Energy Producer Association (AFEPA), adding that the the active investment in the RES sector would allow the creation of competitive production.

"Indeed, this is not an exaggeration," AFEPA President Vitalij Davij told pv magazine. "Ukraine possesses a huge potential in mechanical engineering. We’d unleash it if we started producing in our own facilities for the sector, especially solar PV material and devices and wind power turbines."

According to Davij, a "certain development" in that direction is already underway and the wind turbine company Fuhrländer Wind Technology, a joint German and Ukrainian company operating in the Kramatorosk Machinery Factory, serves as an example. The company launched the assembly factory for 2.5 MW wind turbines in Kramatorsk in east Ukraine last year.

The good news about the rapid solar expansion in Ukraine comes amid the traditional energy sector’s troubles, which mostly stem from the exacerbating shortage of current assets, a result of the state’s socially oriented tariff policy.

The list of the five most powerful new solar plants built in Ukraine this year includes two facilities in the Odessa Region — a 54.8 MW plant and a 43.4 MW installation – as well as a 29.3 MW solar plant in the Nikolajev Region. All the three solar facilities were built by Activ Solar, a globally operating solar company.

The new capacity list also includes a 10 MW solar plant in the Zakarpatye Region, built by JSC Solnecnaya Energija Plius, and a 9.8 MW facility in the Kherson Region.

Davij, of AFEPA, attributes the solar capacity rise to the attractive feed-in tariff (FIT) for solar of €0.35 to €0.37 per kilowatt hour.

“I believe the tariffs will remain intact for a couple of years from now,” Davij said. “But then they will inevitably go down, like they did in Germany, where the solar FIT has shrunk from €0.46 in the beginning of solar development some 25 years ago to the current €0.11. Therefore, aware of that, the Ukrainian solar developers are trying to cash in on the current solar tariff as much as they can.”

The green energy facilities in Ukraine, Davij added, produce some 2.5% of the country’s total energy. That figure has to go up to 20% by 2020 in compliance with the Ukrainian and EU RES development agreement.

“This is possible. But the RES expansion, including solar, would have been even larger if Ukraine had not been plagued by the chronic shortage of investments. The problem also persists today. Despite the record investments, many local investors are still kind of wary about putting money into the sector. Meanwhile, many foreign solar developers are deterred from investments by Ukrainian politics. Especially, when it comes to the handling of the Yulia Tymoshenko case,” the AFEPA president emphasized to pv magazine.

The forthcoming September edition of pv magazine global edition features an exclusive interview with solar developer Activ Solar about their extensive activities in the Ukraine.