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Bioenergy International no 7 December 2015

EVENT BIOENERGY RISING IN THE UKRAINE Given recent geo-political events it is hardly surprising that increasing energy independence is one of the top priorities for the Ukraine. According to Dr Georgiy Dr Lesya Matiyuk, expert for EU and International Cooperation at the Agency for Renewable Resources, is coordinating the green business and policy consulting project ”BIO-PROM”, which is promoting sustainable production and use of bioenergy in Bioenergy International No 83, 7-2015 49 Geletukha, chairman of the Bioenergy Association of Ukraine (UABio), biomass can contribute significantly to this process as it can directly displace imported fossil gas used for thermal energy. IN HIS OPENING ADDRESS Dr Georgiy Geletukha highlighted the crucial role of biomass in Ukraine at the 11th International Conference on Biomass for Energy held in Kiev at the end of September. These and other issues for Ukraine’s bioenergy sector along with possible solutions to them were discussed very actively by the some 200 national and foreign experts that attended. – Such substitution of natural gas by biomass, around 2 billion m³ per year, was achieved already in 2013 and the goal of the new National Renewable Energy Action Plan is to almost quadruple this to 7.2 billion m³ annually by 2020, Geletukha explained. Substantial progress and potential According to Geletukha there has been substantial progress in the development of bioenergy in the country recently. From 2012 to 2013 the contribution of biomass to the total primary energy supply increased from 1.54 Mtoe to 1.84 Mtoe. – Growth was 23 percent in one year. An even greater increase in the bioenergy sector is forecasted in the coming years. Ukraine’s renewable energy market becomes ever more essential, especially with the high gas price and the adoption of green-tariff price incentives in 2009 for electricity from renewable energy sources, said Geletukha. The Ukrainian government recently set a green tariff for power produced from renewable sources that is two times higher than the wholesale price for power produced from traditional sources. However, at the moment the government seems to be ready to adjust its earlier energy strategy. Geletukha referred to Ukraine’s energy strategy target, a level of 10 percent renewables by 2030. The potential, he said, is much higher. – Ukraine is at the very beginning stages of its alternative energy development. Biomass represents more than two-thirds of Ukraine’s total estimated renewable potential thanks to the country’s traditional agriculture focus. It currently produces less than 1 percent of its energy from biomass, but it is estimated it could produce 10 times more. US$1-2 billion is needed to install 12 GW of wood and straw combustion capacity, Georgiy Geletukha explained. He also said that it is important to stress the importance of energy efficiency projects in Ukraine. Businesses and households are not yet efficient in terms of energy consumption. Several conference presentations mentioned the fact that Ukraine is still at the beginning of rebuilding its sectors and making them energy efficient, but there are already numerous promising biomass projects. Investors are ready One domestic investor KSG Agro, has plans to build a 2.5 MW biogas plant in 2017 for US$7 million (≈EUR 6.15 million) using pig manure. This will come from a new EUR 5 million piggery project planned for 2016. This will be a modern breeding plant for 1 280 sows of Danish origin. At present, KSG Agro has a difficult task to restructure debts and sell 28 000 hectares of land in the Crimea, which is one third of the total area of the company. EcoEnergy Scandinavia, a Swedish renewables developer, has signed a memorandum of understanding (MoU) to construct a 100 MW biofuel plant in Ukraine. The development and initial phase of construction will require an investment of US$120 million (≈EUR 106 million), according to the Dnipropetrovsk Regional State Administration (DRSA). The Investment Centre at the DRSA has proposed three sites for the plant, at which EcoEnergy will eliminate all landfill in Dnipropetrovsk, according to its contract. EcoEnergy has several projects across Eastern Europe and Russia, including a 8 MW biomass heat plant in operation in Kaliningrad. Beet pulp, a residue from the sugar industry, is also gaining increasing interest as a feedstock and this year’s sugarbeet season will see the first biogas plant in the country using beet pulp. According to Peter Kucheruk a member of the Expert Council of the Ukrainian Bioenergy Association, Ukrainian sugar plants have a capacity to produce up to 3.5 million tonnes of sugar. An important pilot project was Globinskiy sugar refinery in the Poltava region, by company Astarta-Kiev. A number of Ukrainian sugar factory owners have now announced plans to build such facilities. EBRD largest investor The European Neighbourhood Instrument (ENI) is awaiting bioheat projects for the period 2015-2020. There is a budget based on the current price for energy for public buildings, including hospitals and schools of EUR 55 per megawatt of heat. The aim is to install biomass boilers in villages and cities and to ensure the supply chain. The European Bank for Reconstruction and Development (EBRD) is the largest investor in the energy and environmental sectors of Ukraine. The Bank has already financed a project in Lviv, western Ukraine, where large biodigesters will be built at the wastewater treatment plant (WWTP). Other international agencies have funding programmes that are applicable in Ukraine. The United Nations Development Programme (UNDP) has initiated the recovery of biogas at municipal landfills including the production of electricity; the US Agency for International Development (USAID) has launched a programme for the financing of local energy supply projects based on biomass; and the Nordic Environment Finance Corporation (NEFCO) from Scandinavia offers financing for small-scale investments up to several hundred thousand EUR. Ukraine also has a vital market of sunflower husk pellets. Two processing plants are due to be put into operation during this year alone, with a processing capacity of 5 000 tonnes per day. Dutch know-how A special seminar on Ukraine-Netherlands Bioenergy Cooperation took place during the conference. Efficient bioenergy implementation in Ukraine was debated and Dutch companies presented their experience in the development of bioenergy in anaerobic digestion, combustion, co-firing and energy from waste, biofuel production and the biobased economy both from research and industrial points of view. Several foreign participants criticised the confusing signals the present Ukrainian government has sent by increasing taxation on domestic gas production, only to follow by stating its intent to provide incentives to increase investment in domestic production. This leads to an unstable investment climate that favours political insiders who can seize depressed assets for their own use. The seminar also focussed on exploring cooperation possibilities for developing joint projects in bioenergy. All things considered this year’s biomass conference was thoroughly hopeful despite many as-of-yet unresolved problems. Text & photo: Markku Björkman BI83/5040/AS the Russian Federation and Ukraine.


Bioenergy International no 7 December 2015
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