One of Ukraine’s priorities is energy independence. To achieve this goal, it is critical to reduce and replace gas consumption, improve energy efficiency in various areas of activity, and develop renewable energy.
Reducing dependence on Russian gas is a step towards energy independence. The possibility of supplying liquefied gas to Ukraine through Poland opens up new prospects. Of course, investments are needed to build a gas pipeline section on the Ukrainian side. Within one and a half to two years, our partners promise to supply 6 billion cubic meters of gas. Today our country imports a third of its gas from Europe (10.6 billion in 2018), from a total 32.3 billion cubic meters of gas consumed.
Given that natural gas and oil make up around 40 percent of total energy consumption in Ukraine, the problem of finding new sources of energy will remain relevant for a while.
Energy independence of a country can only be ensured by comprehensive measures that are aligned to the overall vision of the state’s development.
A global trend of “energy of the future” is the de-carbonisation of the energy system – meaning the gradual abandonment of traditional sources of energy (oil, coal, gas, peat, etc.). It is becoming increasingly influential in terms of climate change prevention, which is affecting the balance of energy generation.
The adoption in 2015 of the Paris Climate Agreement, which will replace the Kyoto Protocol in 2020, challenges the international community to implement climate change measures. Ukraine is also in the list of these countries.
Nuclear power, hydropower, wind power and other renewable energy sources that will generate the least greenhouse gas emissions will play an important role in this task. Ukraine’s consistent position on the use of nuclear energy will help to resolve the problem of de-carbonisation of the energy sector.
During the first 9 months of 2019, renewable energy plants with a total capacity of 2.5 gigawatts were installed in Ukraine. As a result, the total capacity of green power plants has doubled – up to 5 gigawatts.
The updated Memorandum of Understanding between Ukraine and the EU on energy co-operation on November 24, 2016, reinforces Ukraine’s strategic role as a transit country. The extension of European energy standards to Ukrainian legislation can significantly increase Ukraine’s resistance to attempts to politicize interstate relations in the energy sector and joining the pan-European market to liberalize and de-monopolize internal energy markets, making them more transparent and competitive.
Transformation and integration of markets is possible only if one of the main players becomes a consumer and the protection of his rights is reliable. The strategic task is to maximize energy independence. At the same time, by 2025, the focus should be energy conservation, retention of achieved hydrocarbon production and maximum diversification of primary energy supplies. For the period up to 2035 we should concentrate on implementation of projects for the development of natural gas deposits, including from non-traditional sources.
As a result of the systemic transformation, energy infrastructure has to become a flexible part of Ukraine’s energy security system, a basis for reliable energy supply for consumers and a link to the security system of supplies to the EU from the east.
Among the potential areas for attracting investment are the following:
• construction of renewable energy facilities (SES, WPP, small HPPs, bio-thermal power plants, biomass boilers, biogas plants, etc.);
• construction of facilities to produce equipment for renewable energy facilities;
• construction of facilities to produce solid and liquid biofuels;
• cultivation of energy crops.
It is worth mentioning that since July 1, a second stage of transition to the new electricity market took place in Ukraine. Under the new model, electricity produced by green power plants will be purchased by a newly created state-owned company under the conditional name of “guaranteed buyer”. At the same time, the payment for energy produced from alternative sources comes at a “green tariff”, which is one of the highest in Europe.
The Green Tariff will be valid until 2030, and the contract for the sale of electricity will be made at the auction price for 20 years. This is an incentive for investors to abandon the high fixed rate instead of giving a lower price, but for a longer period.
While alternative energy is in the development stage, uninterrupted power grids require electricity and balancing facilities. In the EU alone, the capacity of energy storage facilities increased by 47% in 2017 and reached 1 600 MWh.
According to experts of the International Energy Agency, renewable energy technologies will be leaders in investment attractiveness by 2035. Thus, according to experts, the total investment in electricity from renewables by 2035 will be about $1.2 trillion –equivalent to 75% of all investments in the US energy sector. Of these, $629 billion is expected to go to wind power, $273 billion to photovoltaic systems, $178 billion to bioenergy, and $107 billion for hydroelectric power. Investors will be able to bring to the Ukrainian market the latest industry technologies that develop R&D units of the global energy giants – Engie, Total, EDF, Nissan, Tesla, E.On.
This is confirmed by the fact that Ukraine has launched a global energy transition for future economic growth, renewable energy is bringing additional investment into the Ukrainian economy and opening up new horizons for development. According to the National Renewable Energy Action Plan, by 2020 11% of the state’s energy needs will be met by renewable energy in 2020. In addition, in 2035 the share of green energy in total primary supply should be 25%.
