Strategies into Actions: Decentralised Energy Projects in Ukraine

Strategies into Actions: Decentralised Energy Projects in Ukraine

On Monday, June 10, the Green Deal Ukraina Project opened the #URC2024 week with an event on “Strategies into Actions: Decentralised Energy Projects in Ukraine”. This closed-door roundtable, co-organised with NPC UKRENERGO and the Ukraine Facility Platform, featured a very dynamic discussion, especially between businesses and IFIs but also representatives from government, local authorities and NGOs.

A new, sustainable, decentralised generation in Ukraine effectively answers Ukraine's challenges. Small and medium facilities can secure energy independence, attract international investors, and build the capacity of local communities and small and medium businesses.

Volodymyr Kudrytskyi, CEO of Ukrenergo, outlines the urgent need to address Ukraine's energy deficit. Key priorities are a new biofuel TPP, new wind and solar generation capacities, and energy storage. With $2 billion raised to repair Ukraine’s energy infrastructure, Ukrenergo actively seeks partners to build these facilities.

Valeriy Tarasyuk, the National Energy and Utilities Regulatory Commission (NEURC) chairman, highlights reforms designed to attract potential investors to Ukraine’s energy sector. These include revising the price caps, simplifying DSO grid connections procedures, and further developing the Balancing and Ancillary Services Markets.

Georg Zachmann introduced a new study with IMEPOWER “Encouraging private investments into flexibility”.

Conclusions:

  • Private investments will be crucial for the efficient restoration, development and operation of Ukraine’s electricity system going forward
  • In principle, investments in batteries and flexible generation can be profitable in the Ukrainian electricity market, while the bankability of such projects remains an issue - Substantial economic and political risks, as well as regulatory barriers, still discourage private investments
  • Donors, Ukrainian authorities and investors should jointly develop mechanisms to address key bottlenecks, including off-take risks.

While businesses and local authorities highlighted their keen interest in quickly investing in a large number of very different concrete projects, the bankability of such projects and access to IFI financing were highlighted as the main challenges during the discussions.

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Photo: Download photos from the event using the link