Month: December 2024

On 12 December 2024, at the “Interfax-Ukraine” media center, UWEA’s final press conference took place, based on the results of the development of the Ukrainian wind energy market in 2024. During the press conference, UWEA Board members and representatives of the Ukrainian wind energy business discussed the key trends that shaped the direction of the market’s development this year, including the investment climate, regulatory changes, innovative solutions and approaches.

At the beginning of the press conference, Andriy Konechenkov, Chairman of the UWEA Board, briefly outlined the current state of the wind energy market, noting that “compared to previous years, 2024 can be called a failure, as only 20 MW of new wind energy capacity was commissioned”. “Also, this year the market placed great hopes on the launch of new market support mechanisms, such as, for example, the market premium mechanism and “green” auctions. However, the first does not work properly, and the second was not crowned with success. Now, in a time of full-scale war, is not the best time to conduct experiments on business; on the contrary, business should be seen as a partner”, added Mr Konechenkov.

Complementing the introductory remarks of the UWEA Board Chairman, the invited speakers – representatives of leading wind energy companies – shared their own experience of doing business in 2024:

Ihor Retivov, Head of Regulatory Affairs at DTEK Renewables and a member of the UWEA Committee on Legal Affairs: “We still believe that this year became a preparatory one for future positive changes on the market, because reforms require time. At present, DTEK Renewables does not intend to stop at what has been achieved; we are continuing the construction of the second phase of the Tyligulska wind farm and are developing new wind farm projects in the Poltava and Vinnytsia regions. In total, our portfolio of future projects amounts to over 1 GW. However, we have also opened another direction, namely the construction of energy storage systems. The plans include the construction of 200 MW of such systems.”

Olha Rybachuk, Managing Director of Elementum Energy and a member of the UWEA Board: “We also continue to conduct our activity. At present, in particular, we have 200 MW of new wind energy capacity in development in various parts of the Odesa region, which will be ready for construction next year. However, we still need a number of decisive political decisions to support this energy segment, in particular regarding the unblocking of the Odesa seaports, namely Pivdennyi and Chornomorsk, since, due to difficulties with delivering equipment to the site, the project’s budget grows significantly”.

During her speech, Ms Rybachuk also made an important announcement, informing that on 11 December the company Elementum Energy successfully closed a deal to acquire a 200 MW wind energy project in the western part of Ukraine. The expected annual generation of the new wind farms will amount to about 700 GWh, which is equivalent to the annual electricity consumption of about 600,000 people.

Oleksandr Podpruhin, regional manager of Notus Energy and Deputy Chairman of the UWEA Board: “Our company entered Ukraine’s wind energy market in 2019, already having the idea for several projects. The construction of one of them was planned for 2022, but did not take place because of russia’s invasion. Now, we are working to launch this construction in 2025 after all. This will be a wind station with a capacity of 120 MW in the Odesa region. However, the main investment problem of the Ukrainian market is scaling, because all the projects that are being built or developed today are an exception. Business, in fact, feels a critical lack of full-fledged mechanisms for financing wind energy projects on the scale that the power system requires”.

Vladyslav Yeremenko, CEO of the MC “Wind Parks of Ukraine”: “The relocation of our production from the east to the west became an important step for its further sustainable operation. Although our company also faces the same problems as other market participants, we try to find unconventional solutions. So, for example, we created our own logistics company, LLC “Friendly Logistic”, and are developing an entire industrial park in Zakarpattia. Also, in this same region, we are building the first wind power plant: two wind turbines have already been commissioned, and a substation is being completed. We plan to fully finish the construction in May 2025. In total, our portfolio of future projects amounts to 1.5 GW”. During the press conference, Mr Yeremenko also shared the company’s unique experience of cooperation with the local communities of Zakarpattia, measures to preserve the valuable ecosystems of the Carpathians and the development of a network of social housing for IDPs.

The second part of the press conference concerned the discussion of the current regulatory challenges and barriers that are a significant obstacle for international and national investors. The discussion touched on “green” auctions, trading on the free market, and the market premium mechanism. In particular, regarding the latter, Olha Rybachuk, a representative of the company that bet on this mechanism, noted that “for 10 months now, across all the Elementum companies that are within this mechanism, not a single payment has been received. In addition, the companies that chose this mechanism for themselves are significantly discriminated against, because they receive 3–4 times more curtailment commands than those companies that are still in the “green” tariff system”.

Oleksandr Podpruhin, in turn, once again returning to the problem of attracting financing into new wind energy projects, emphasised that an effective solution to this could be the mechanism of corporate PPAs, the stability of which would be ensured by a special Fund for guaranteeing the minimum electricity price on the market.

The UWEA representatives ended their discussion with reflections on the creation at the state level of a separate institution that would deal with the issues of the development of “green” energy in Ukraine. “Such a body could really switch the focus of business from solving some regulatory problems to implementing projects and innovations”, emphasised Vladyslav Yeremenko.

UWEA extends its gratitude to the speakers of the press conference for the frank conversation, to all the participants of the wind energy market for their resilience and the continuation of their activity despite all the difficulties and challenges, and to the representatives of the national media for their support in covering the pressing issues of the sector and popularising all its achievements.

On 4–5 December 2024, the EoLIS seminar, organised by WindEurope, took place in the city of Gothenburg, Sweden. The event focused on the current challenges and strategies for the end of the operational life of wind turbines. One of the key sessions was a discussion on the topic of investment decisions and the motivation for purchasing second-hand wind turbines through the eyes of the buyer.

The invited speaker of this session was Kateryna Knysh, head of the analytical department of UWEA and business development director of MCL. She presented the prospects for the use of second-hand wind turbines in Ukraine, outlining the attractiveness of this segment for Ukrainian buyers. In her presentation, Kateryna shared the history of the development of the second-hand wind turbine market in Ukraine, defined the profile of the modern Ukrainian buyer and named the key advantages of choosing second-hand turbines instead of new ones. In particular, the example of one of MCL’s latest projects, developed specifically for the implementation of second-hand turbines, was given, and some potential locations for future such projects were presented.

“According to UWEA data, the total installed capacity of second-hand wind turbines in Ukraine amounts to 32 MW, and their average unit capacity is 1.24 MW. However, since 2024, Ukrainian buyers have been demonstrating an interest in turbines with a unit capacity of 2 MW and above, primarily because of the generation deficit in the power system”, noted Kateryna. She also emphasised that the use of second-hand turbines is a critical need for Ukraine dictated by wartime realities: “This is a fast and economically advantageous investment solution for small and medium-sized businesses, as well as for local critical infrastructure facilities, in particular water utilities”.

Answering a question from the audience about the challenges that Ukrainian buyers face, Kateryna singled out two main problems:

1. Operation and maintenance. The market lacks qualified personnel and service centers. “We are also interested in developing training programmes for Ukrainian personnel”, noted the speaker.
2. Equipment quality. Buyers are oriented towards refurbished turbines with a guarantee of 10 years of operation. “We now take a very serious approach to the quality of the equipment that is purchased. Our buyers are interested only in refurbished wind turbines that have a manufacturer’s guarantee for at least 10 years of further operation”, she added.

The moderator of the session was the CEO of Business in Wind, a company that recently joined UWEA. He emphasised the company’s potential to carry out high-quality repairs and guarantee the stable operation of turbines, which is especially valuable for Ukrainian buyers.

UWEA extends its gratitude to WindEurope for providing another platform to present the Ukrainian wind energy market and for supporting Ukraine.

On 5 December 2024, Andriy Konechenkov, Chairman of the UWEA Board, as well as two members of the UWEA Committee on Legal Affairs – Ihor Retivov, DTEK Renewables, and Olha Savchenko, Altelaw – shared their thoughts on the results of the first pilot “green” auctions in Ukraine, becoming speakers at a thematic online event organised by the UN Global Compact in Ukraine together with ExPro within the framework of the Ukraine Energy Initiative.

The event was organised with the aim of presenting the position of renewables business regarding the state’s approach to implementing “green” auctions in Ukraine and the effectiveness of interaction with market players during this process. “Investors have no trust in the state because of the accumulated and still unresolved problem of debt on the electricity market”, emphasised Andriy Konechenkov. “We will be able to talk about investors’ interest in participating in state “green” auctions if the state, for its part, fully settles with renewables producers for the consumed “green” electricity, approves draft law No. 11392, which will give one auction participant the opportunity to receive not 25%, but 50% of the total quota, and, in general, revises the proposed quotas, bringing them into line with the renewables development indicators announced and enshrined in the National Action Plan up to 2030. If we aspire to become part of the EU, then it would be fair to be guided by its auction policy, rather than spending time testing a model and correcting the mistakes made”, added the head of UWEA.

“I think that the problem with “green” auctions is ideological. “Green” auctions came to replace the “green” tariff, so the state’s attitude to this model is immediately biased”, suggested Ihor Retivov. “No one conducted a dialogue with business representatives regarding the opportunities and problems of the existing projects ready for construction in Ukraine, so the proposed quotas within the framework of the 2024 auction and the already announced auction for 2025, taking into account the current model of the auctions themselves, are unrealistic and unlikely to be of interest to large players”, he added.

In addition, the UWEA representatives suggested that, apart from resolving all the existing challenges on the market, a decision to involve low-capacity distributed generation in this process could also have a positive impact on the demand to participate in the auctions.

A separate issue that caused discussion and reflection among the invited speakers was the division of the 250 MW quota for wind energy, announced for 2025, into two separate iterations, of 100 and 150 MW respectively. “In my opinion, there is no critical need for such a division, because the larger the quota, the more participants and the higher the competition. In my view, the best solution would be to hold an auction for 250 MW at once, and then raise this quota in 2026 to at least 800 MW”, commented Andriy Konechenkov.

In turn, Olha Savchenko structured the issues behind the refusal to participate in the auctions according to the following criteria: military risks and the insufficient development of their insurance; the uncertainty of the situation with the procedure for financing the PSO, which consists in the underdevelopment of guarantees when separating the cost of the service of increasing electricity production from alternative sources from the transmission tariff; the non-implementation of any payment since February 2024 under the market premium mechanism, under which support will be provided after an investor wins an auction; and the total distrust of the state, which consists in the conviction that the state may retrospectively apply the extremely negative auction conditions that are set out in secondary legislation. Additionally, Olha noted that the timeframes for checking the land plot or real estate object that will in the future be offered for investment and development in the auctions should be increased.

Based on the results of the discussion, the organisers will prepare a White Paper with recommendations on improving the auction model in Ukraine and increasing investors’ interest in participating in subsequent auctions.

From 22 to 29 November 2024, representatives of the UWEA Board and Secretariat, as well as NPC Ukrenergo, made a working visit to the Kingdom of the Netherlands. The main purpose of the visit was to strengthen the partnership ties between Ukrainian and Dutch wind energy business, to exchange views on the recovery of Ukraine’s energy sector and to develop ideas for the implementation of joint projects. In particular, the possibilities for the development of onshore and offshore wind energy, the introduction of new wind turbines with a capacity of up to 1 MW and refurbished wind turbines to provide for the self-consumption of small and medium-sized businesses were discussed.

This initiative became possible thanks to the organisation of the visit by the Dutch wind energy association NedZero, with the support of the Embassy of the Kingdom of the Netherlands in Ukraine and the financing of the Netherlands Enterprise Agency (RVO) of the Ministry of Economy and Climate Policy of the Netherlands. The event was a continuation of the project to develop legislative changes to stimulate the development of wind energy in Ukraine.

In addition to B2B meetings, the week-long visit also included the delegation’s participation in industry events, among which, in particular, the international conference “Decentralised energy solutions for Ukraine’s security”, which took place on 25 November 2024 in The Hague, and a two-day offshore wind energy exhibition and conference, which was successfully held in Amsterdam. Moreover, within the framework of the second event, UWEA representatives received the opportunity to present the current state of the onshore wind energy sector and the technical potential of Ukraine’s offshore wind energy, speaking at a separate thematic session “Onshore and offshore wind energy solutions for Ukraine’s economic resilience”, which took place on 26 November 2024. The speakers of the session were UWEA Board members Halyna Shmidt and Ivan Bondarchuk, partner of the law firm LCF, as well as the head of the UWEA analytical department and business development director of LLC “MCL” Kateryna Knysh. Thanks to the activity and interest of the audience, the session covered not just the current conditions and prospects for the development of Ukraine’s wind energy market, but also the legislative and regulatory framework for the development of wind projects in Ukraine, the key trends in building a decentralised energy system in a country at war, and the investment advantages of the Ukrainian market.

The first step towards strengthening cooperation between Dutch and Ukrainian wind energy businesses was the official signing of the Memorandum of Partnership and Cooperation between NedZero and UWEA at the end of the aforementioned session. The signatories of the Memorandum were the heads of the national associations – Andriy Konechenkov (on the part of Ukraine) and Jan Vos (on the part of the Kingdom of the Netherlands).

Jan Vos: “We need to defend Europe and we need to defend Ukraine together. And part of the defence is not only military might, but also energy might, because if there is no energy, then there is no army either. Energy is the fundamental basis of any war. Therefore, it is very important that we support Ukraine much more than we are doing now”.

Andriy Konechenkov: “I want to express my gratitude to NedZero and the entire Dutch people for their dedication and partnership. This cooperation symbolises a powerful synergy between Ukraine and the Netherlands, two countries united by the goal of using clean, renewable energy for a resilient, green and safe future”.

An important part of the visit was the Ukrainian delegation’s visit to the production facilities of such Dutch companies as Business in Wind, one of UWEA’s new members, which specialises in the repair of second-hand turbines and the commissioning of refurbished wind turbines, and EWT – a national manufacturer of wind turbines with a capacity of up to 1 MW inclusive. Both companies demonstrated clear intentions to conduct business on Ukraine’s wind energy market. The delegation from Ukraine was also invited to the Port of Eemshaven – a key industrial and energy hub of the Netherlands, in which large energy facilities are located – gas, coal, solar, bioenergy and wind power plants – as well as bases for the installation and maintenance of offshore wind farms in the North Sea. While in the port, the Ukrainian group also visited the production of submarine electrical cables of the company TKF. Separately, for the representative of NPC Ukrenergo, namely Roman Hrabchak, head of the Balance Reliability Department, a meeting was organised with the Dutch TSO TenneT.

Finally, the UWEA representatives invited the leadership of NedZero to a meeting with the company DRI, which develops wind energy projects in European countries.

UWEA extends its gratitude to all the partners who contributed to the organisation and conduct of this important visit, in particular NedZero, the Embassy of the Kingdom of the Netherlands in Ukraine and the Netherlands Enterprise Agency (RVO), as well as all the companies that opened the doors of their offices and production facilities to the Ukrainian delegation.