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Ukraine

Official Name:
Ukraine

National Designated Entity

Type of organisation:
Government/Ministry
Name:
Mr. Anatolii Shmurak
Position:
Senior Expert, Climate Policy and Reporting Division
Phone:
+38044 2454718
Emails:
a.shmurak@menr.gov.ua, shmurak@i.ua

Energy profile

Ukraine (2012)

Type: 
Energy profile
Energy profile
Extent of network

Ukraine’s unified transmission system (UTS) is one of the largest power systems in Europe. The EU is interested in integrating power grids and establishing a single electricity market, since Ukraine has surplus power generating capacities left from soviet times. Today, electricity from Ukraine is being imported by Poland, Hungary, Romania and Slovakia.

Renewable energy potential

While the Ukraine has the highest potential for renewable energy production in Europe, it probably has the smallest share of bioenergy use compared to any other European country.HydropowerThe estimated total potential of the Ukrainian hydropower generation is close to 20 billion kWh of electricity per year. For small hydro alone, the estimated potential is about 2,500 million kWh of which only 170 million kWh is currently being utilized.Ukraine has a current operating capacity of approximately 4,880 MW. About 3,170 MW of capacity has been delayed after construction, and another 675 MW is planned.Major equipment of many of the hydroelectric power plants (HPPs) has been operating for about 40 years and needs upgrading.  The majority of the hydro resources (including small HPPs) is concentrated in the Central and Western Ukraine on the Dnieper, Dniester, Yuzhny Bug and Tisa Rivers. The Dnieper river basin is the most developed. The main trends of further development of power sector with the leading role of hydro are stated in the National Power Program of Ukraine.Programs of small hydropower development in Ukraine include reconstruction and renovation of previously constructed small HPPs, adding small HPPs to water management projects with already existing water-retaining structures with the aim of utilizing waste releases.WindThe greatest wind energy potential is located in the vast areas adjacent to the Black Sea and the Azov Sea, as well as the Carpathian, Transcarpathian and Lower Carpathian areas. Additionally, there are areas with elevated wind potentials in the Donbass terrain and Dnepropetrovsk Region. If all of these areas were brought on-line, wind farms can account for 20% to 30% of Ukraine’s demand for electric power. The total installed capacity of Ukrainian wind farms is approximately 89 MW. BiomassUkraine currently gets under 0.5% of its energy from biomass resources and biofuels; however, it is estimated that Ukraine could produce more than ten times its current level. The government is committed to focusing on biomass as a renewable energy. In fact, a number of biofuel facilities and stations that sell biofuels have been established in the country in the past few years.The total potential for biomass was estimated at 86,300 GWh per year in 2003. A majority of the potential came from cereal crops straw (wheat, barley, oat, etc.) at 29,500 GWh annually. Approximately 12,800 GWh per year came from animal manure, and another 29,500 GWh per year came from wood wastes. There are a few modern wood-fired boilers in operation in Ukraine. A number of boilers originally designed for coal and oil combustion have also been converted for wood combustion.SolarSolar radiation in Ukraine is of middling intensity. The average amount of solar energy received annually in Ukraine is about 1,200 kWh/m2 (4300 MJ/m2). Even so, the current use of solar energy in Ukraine is minimal. The southern and southeast regions of Ukraine, especially Crimea, possess the largest potential for solar energy. In times of the former USSR, Crimea was the all-Union test ground for solar energy. In the 1980s several projects were created in Crimea, including a solar steam-turbine power plant with a 5 MW capacity, and a large experimental complex of buildings with solar hot water and a heating and air-conditioning system.Additionally, Crimea—especially its southern coast—is the largest resort zone in Ukraine, and the conservation of the unique natural environment is important. Therefore the use of solar energy for generation of electricity and heat has in Crimea the largest prospects in the country.GeothermalUkraine has considerable geothermal resources that can be used mainly for heat supply. There are also prospects for binary geothermal power plant creation based on existing wells at abandoned oil and gas fields. At present thermal water is used for municipal heat supply and in agriculture in the western and central part of Crimea. Separate wells are used in the Transcarpathian region to supply thermal water in swimming pools or as an additional source of heat for the local boiler houses. The total thermal installed capacity of Ukraine is 10.9 MWt, which generates 119 TJ of energy per year. Currently, the geothermal energy is supplied to nine different systems. Two of the systems are associated with power plant co-generation producing 0.16 MWe and 1.8 MWe.

Energy framework

The Energy Strategy of Ukraine to 2030 as enacted by Cabinet Resolution №145 dated 15 March 2006. The adoption of an Energy Strategy was the first attempt by Ukraine to resolve part of the legislative problems and to bring the domestic energy sector to a new level.This Strategy aims to:- Increasing per capita consumption of energy in Ukraine and reducing per unit GDP consumption. Today, Ukraine’s indicator for energy consumption per unit of GDP is 3.9 times that of the EU;- Taking advantage of location and attractive conditions for transporting oil and gas to European markets;- Selling power to Europe, as Ukraine is capable of supplying a population two to three times larger than Slovakia’s;- Strengthening state oversight to protect the interests of energy consumers;- Instituting organizational and legislative changes to regulation, to prevent abuse of rates policy and to oversee the operations of natural monopolies;- Reducing Ukraine’s energy dependence by:increasing extraction of oil and gas;constructing new facilities and modernization of old ones to increase extraction of lignite (brown coal) and its burning;exploiting transport capacities;expanding the Bohorodchany-Uzhhorod gas pipeline from 120bn cu m per annum to 140 cu m;reducing gas consumption to 45-48bn cu m “by 2020-2030;”expanding electricity consumption;manufacturing nuclear fuel elements other than enrichment;upgrading atomic energy stations (AESs).In 1996, the GoU developed an Energy Efficiency Program, where it outlined its strategy of decreasing energy consumption in industrial, energy and housing. However, this program was not strictly enforced as it was not accompanied by an enforceable energy efficiency action plan. In its 2006 Energy Strategy looking out until 2030, the GoU set a target of improving Ukraine’s energy intensity by 50% by 2030.In 2010, the National Agency of Ukraine for the Effective Use of Energy Resources (NAER) developed a Targeted Energy Efficiency Program, which was approved by the Cabinet of Ministers. The Program sets a target of decreasing energy intensity of Ukraine’s economy by 20% by year 2015.Tax incentivesUnder a Decree of the Cabinet of Ministers, 14 May 2008, “On importing onto the customs territory of Ukraine of energy-conserving materials, equipment and spare parts”, imports of high quality equipment are exempt from both import duty (10%) and value-added tax (20%). The Cabinet of Ministers has defined a list of equipment categories, the manufacturers of which can claim an exemption on income tax for 80% of the income they earn. The list includes energy saving and energy efficient materials and products, fuel and energy measurement control and management equipment, and equipment for the production of alternative fuels.Enterprises that implement energy efficiency initiatives can claim tax exemption on 50% of the additional profits made from such measures. However, enterprises wishing to access these tax exemptions must enter their company onto the State Register, a procedure that is slow and cumbersome, and has deterred some enterprises from taking advantage of the benefits offered.The law “On Energy Conservation” makes provision for the introduction of accelerated depreciation on certain types of energy saving equipment. There is a current proposal to include specified items of energy efficiency equipment in the category of assets that attract a depreciation rate of 15%, but the necessary secondary legislation has to be implemented.Tax holiday for biofuel producersProducers of biofuel are given a tax incentive under the law “On Incorporation of Changes to Some Laws of Ukraine Concerning the Promotion of Production and Use of Biological Types of Fuel” (2009).This law, which entered into force on 1 January 2010, provides for a 9-year grace period on the taxation of income obtained from the sale of biofuel of own production, on import duty and value added tax for equipment and vehicles for biofuel production, that use biofuel and are not produced in Ukraine. The law also cancels the state monopoly of distilleries for bioethanol production.State Target Economic Program on Energy Efficiency 2010-2015This programme was adopted in March 2010 to implement the goals of the Energy Strategy, and supersedes the State Complex Program of Energy Saving, which comes to an end in 2010. It has the goal of reducing the energy intensity of GDP by 20% relative to 2008, reducing dependence on imported energy sources (particularly natural gas, where substitution to the tune of 15 billion m3 is the expectation) and increasing the use of renewable resources by a factor of five. Other expected outcomes from the programme are a reduction of 15%-20% in the level of harmful emissions to the environment, and a reduction by 50% in heat losses from residential and public buildings.Under this programme, NAER have led ministries and regional administration in the process of drawing up regional and sectoral development programmes for EE – many of these are already adopted, or are close to being finalised. About UAH 45 billion has been allocated from national and local budgets for the implementation of the programme, out of a total programme cost of UAH 250 billion the balance of which is expected to be mobilised from other sources.NAER is following this up with the preparation of a complementary National Energy Efficiency Action Plan (NEEAP). The NEEAP is designed to identify energy efficiency investments, barriers to implementation and agencies responsible for implementation.Green Tariff LawThe new Green Tariff Law is in effect since 22 April 2009. It is established for wind, solar, biomass, small hydro (<10 MW) and geothermal power plants. Green Tariff is fixed until 2030 with guaranteed electricity off-take by the Wholesale Electricity Market Operator. It is revised on monthly basis to follow changes in UAH/EUR currency exchange rate (with guaranteed “minimum floor” in EUR). It applies to new construction as well as existing renewable energy producers.Ukraine Energy Efficiency Programme (UKEEP) The Ukraine Energy Efficiency Programme will provide loans to Ukrainian Participating Banks, which will on-lend the funds to end-users for industrial energy efficiency and renewable energy projects. The objective of the project is to assist individual prospective sub-borrowers identify sustainable energy opportunities, conduct energy audits and assess technical and economical feasibility of the identified projects.

Source
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