On 25-27 February 2020 Ukrainian Energy Forum: Transforming the Ukrainian energy sector for an integrated, sustainable energy future in Europe was held.
Main themes in UEF 2020 there were:
– Energy policy strategy for 2020 onwards;
– Policy investment climate;
– The future of Ukraine’s gas transit system and the security of European supply;
– Technologies and skills that are going to help drive E&P success in Ukraine;
– Development electricity market maturity;
– Addressing the need for modernization: infrastructure, technologies, and innovation;
– The future of RE for electricity production in Ukraine;
– The transition from green tariffs to a renewable auction system in Ukraine.
Among EUEA speakers at the Forum were Adrien Fouchet, EUEA member, Country Director of Longwing/Eurocape; Andriy Garanin, EUEA member, General Director of Scatec Solar Ukraine; Magnus Johansen, EUEA Board Member, VP Business Development & General Manager of NBT (Ukraine); Sergiy Makhin, EUEA member, Portfolio Manager of VR Capital Group; Oleksandra Gumeniuk, EUEA Director; Philipp Leckebusch, EUEA member, CEO of DTEK Renewables; Yuri Kubrushko, EUEA Board Member, Managing Partner of IMEPOWER.
Investors show current stages of development of the projects, investments that they are already have made, their engagement with social responsibilities and local community development, and gave their proposals for the Ukrainian energy sector.
Among such proposals were Bankable Guaranteed Buyer, Industry acceptable tariff/regulatory solutions, Develop an Energy Strategy, Reduce costs of capital, Stimulate new technologies.
In particular, Adrien Fouchet, described, that their Wind Power Plant is finally “under construction”, which is a 500 MW project where the substation/infrastructure is being built for full capacity. Mr. Fouchet outlined, that the project is supported by a group of serious institutions like GE, Vitol, OPIC and that project will go forward with remaining 400 MW as financing is available, but cannot go for auctions due to its size and need to compensate for grid connection costs.
Ruta Baltause – a member of the expert group of European Commission made a presentation with speech, where she also mentioned, that on behalf of all energy reforms, which need to be implemented in Ukraine, the major principle is the development of clean energy. At the same time, it is impossible to make plans on the energy reforms and green deal, which requires a bunch of investments, if the GoU can’t guarantee return of investment in the renewable energy sector.
Oleksandra Gumeniuk outlined the process of mediation and the negotiation process, which had three keys lines:
1. Reliability and bankability of the SE “Guaranteed Buyer”, implementation of the legislation, in particular, to remove PSO and to leave only its main function – work with green energy.
2. Calculate the cost of RES curtailments by the Transmission System Operator and the mechanism of compensation for RES curtailments, as well as raise the tariff for electricity transmission – which will affect the final price for electricity for the commercial sector by approximately 3-5%, and possibly less, all depends on the market price on the day-ahead electricity market. This will be a direct implementation of the provisions of the Law on the Electricity Market, namely the compensation of the cost of RES by the transmission tariff, which should be sufficient for this purpose.
3. Restructuring, including change of green tariff, change of terms of implementation of RES projects, responsibility for imbalance. Thus, the presentation by the Deputy Minister of Energy of the restructuring package was only a third part of all the points in the mediation process, although not less important. However, the other 70 percent also need involvement and consideration.
At the end of the conference, during the Q&A session, the Advisor at German Embassy said that after analyzing the GDP and other macroeconomic indicators of Ukraine, it is obvious that the Ukrainian economy urgently needs direct investments. And if the Ministry of Energy and Government of Ukraine would not be able to solve the crisis in RES accurately, then the Government of Germany will not provide guarantees to German companies to do business and invest in Ukraine.