This year, Ukraine ranked among the world's top 20 countries with the largest solar energy fleet, with a total installed capacity of 7.7 GW. Large ground-mounted solar power plants took a large share with 6.2 GW of installed capacity, while installations on commercial and residential buildings reached 1.5 GW.
Ukrainian companies had planned to build 400-500 MW worth of facilities in 2022; however, nearly all projectshave been frozen. This year, the industry can implement just a few commercial and residential self-consumption projects in the West of Ukraine. This raises questions about the future of the sector and its possible repercussions across Europe's energy landscape. Here I share my thoughts on some of these questions.
How has the Russian invasion affected Ukraine's renewable energy industry?
Russia's attack on Ukraine is a vast social and economic shock for Ukrainians and Europe. At the same time, it was a turning point for the further development of the energy sector. In March, the whole world watched as a Russian tank shelled Europe's largest nuclear power plant in Zaporizhzhya. Miraculously, a man-made nuclear catastrophe did not occur. Russian troops disrupted the shelter at the Chernobyl nuclear power plant for nearly a month. Thanks only to the efforts of the station's staff and Ukrainian repair crews was it possible to prevent another Chernobyl disaster.
What would happen if a shell or an aerial bomb hit the reactor? Where are the guarantees that such a tragedy cannot occur in the future anywhere in Europe where there are nuclear power plants? There are no guarantees. And no matter how much we talk today about the benefits and strategic importance of developing nuclear energy in Europe, it is clear that every such facility is a time bomb.
Most people see the atomic war as a direct strike using ballistic missiles with a nuclear warhead. But in reality every nuclear power plant is a vast nuclear warhead that could be blown up. Let us remember this when we want to express support for atomic energy in Europe. The same is true of Europe's dependence on Russian gas and oil. This is a vast geopolitical time bomb.
Today in Ukraine, more than 60% of industrial enterprises have been destroyed or shut down, and more than 80% of businesses have closed or reduced their activities to a minimum. In the eastern part of Ukraine, entire cities have turned into ruins. As a result, the country has a massive surplus of electricity, 72% of which is produced by nuclear power plants.
Ukraine sells surplus electricity to European consumers. In early March, Ukraine joined the ENTSO-E. Accordingly, the operator of electricity purchases in the country is the Guaranteed Buyer company. According to the Ministry of Energy of Ukraine, it distributes almost all received financial resources in favor of Energoatom. Due to the war, unfortunately, green energy is not a priority in Ukraine today. At best, renewable energy companies are expected to receive no more than 15% of their earnings from electricity sales. Of course, there can be no question of any investment in this area during the war.
I would also like to point out that many European companies that own solar power plants in Ukraine have abandoned their operating facilities at random, ceasing to pay Ukrainian companies that provide service and protection of stations.
What is the situation in Ukraine's solar energy industry after two months of war?
According to my estimates, during two months of war in Ukraine, about 30-40% of solar power plants have been destroyed, and this figure may increase as the fighting continues. Most of the facilities are located in the southern and central parts of Ukraine, in the Dnipropetrovsk, Zaporizhia, Mykolaiv, Kherson, and Odesa regions, which today are at the epicenter of heavy fighting and shelling.
But I want to emphasize one crucial fact: home solar power plants are the basis of energy security in war conditions. Due to shell damage, many Ukrainian settlements have been without electricity for several weeks. The only energy source was home solar power, which helped sustain life and save many lives.
What will the rest of 2022 look like for the Ukrainian solar sector?
I am certain that in 2022, the segment of solar power plants for self consumption will continue to develop in Ukraine. We are talking about small facilities between 10-20 kW.
We estimate that about 50-100 MW of these types of systems could be installed by year-end. Most of these projects will be implemented in the Western region of Ukraine. In addition to active hostilities in the south and east of Ukraine, a significant deterrent to solar energy development is a substantial reduction in investment opportunities, as resources aim to support the army and humanitarian projects.
I see several scenarios for the development of solar energy in Ukraine. But first, I will note that we will obviously have to say goodbye to the green tariff in Ukraine soon. The country's economy is ruined, and grants will be redirected to other industries and projects. But this will not hinder the development of solar energy.
The first scenario is optimistic. After the end of the war in Ukraine, the energy development strategy in favor of green energy, including distributed generation, will be revised, and new construction standards will be developed, including mandatory bomb shelters and independent electricity sources, solar electricity sources stations, and storage facilities.
The second scenario is moderately optimistic. The government will not support renewable energy development, but it will develop itself as an energy security tool for businesses and households. However, the government will realize that renewable energy needs to be supported over time.
Is there a pessimistic scenario? No. The future of Ukraine and Europe will be based on reducing the consumption of traditional energy resources.
SEF will be held in Poland
Fancy a little more insights on the Ukrainian and Eastern European energy prospects? This year's Sustainable Energy Forum will take place, albeit not in Kyiv, as usual. Renewable energy experts and stakeholders from across Eastern Europe will meet for the two day conference and trade show event, in Krakow instead.
How is the war affecting energy policy in neighboring countries?
Polish energy is based on coal-fired power plants. The coal lobby in the country is vast. However, Poland has made a massive leap in developing renewable energy, including solar. In just two years, between 2019-2021, the installed capacity of solar power plants in Poland increased 10 times, from 0.6 GW to 6.1 GW.
Such a quantum leap in development was made possible by an effective support mechanism, the Moj Prad program, which offered households a subsidy of up to PLN 5,000 (almost US$1,200) to purchase a solar power plant. This mechanism persuaded hundreds of thousands of Poles to spend money on home solar power plants.
In December, the Polish government made legislative changes that introduced a new algorithm for calculating electricity for households, which significantly increased the payback period of stations from five to six years to 10-11. But the war in Ukraine has forced Europe to rethink its energy strategy, giving renewable energy a vital role in the new model.
I think that Poland will also reconsider its attitude to the green generation. In March, Poland abandoned Russian coal and plans to ban the purchase of Russian gas and oil soon. So, I expect a new boom in renewable energy in Poland. This will happen in 2023.
What can the EU do to support Ukrainian cleantech companies?
First, I urge European companies to continue to meet their contractual obligations to Ukrainian companies, which continue to operate and fulfil their responsibilities. This will be significant support for Ukrainians fighting on military and economic fronts.
It is essential to provide special conditions for lending and grants for Ukrainian companies that plan to develop green business in the European Union. It can also be programs that cover the participation of Ukrainians in exhibitions, conferences, and educational projects. Europe will only benefit from this because Ukrainian specialists are experienced high-class pros. Simplifying the conditions for Ukrainian companies to participate in various tenders in renewable energy can also be significant support from European partners.
About the author
For more than seven years, Daviy was the president of the Ukrainian renewable energy association (APEU) and an advisor of The State Agency for Energy Efficiency and Energy Saving of Ukraine. In 2006, he founded IB Centre, commencing his roll as CEO there from 2018. The cleantech think-tank, hosts renewable energy trade shows and industry conferences in Europe and Central Asia, including the Sustainable Energy Forum (SEF), CISWIND, IBES and CISOLAR, as well as, developing Solar Academy. IB Centre’s events – SEF – in 2022 changed it's location from Kyiv to Krakow.
The views and opinions expressed in this article are the author’s own, and do not necessarily reflect those held by pv magazine.
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