SUSTAINABLE DEVELOPMENT OF UKRAINIAN ENERGY SECTOR

By OLEG UDOVYK - National Institute for Strategic Studies, Kyiv Ukraine
This paper describes the estimation of prospects for sustainable development of energy sector of Ukraine. It builds upon the report of the INFORSE and incorporates results from more resent our research. For the analysis we used existing prognoses for the development of Ukraine's economy and data from the Energy strategy of Ukraine for the period till 2030. The second part of the paper highlights Ukrainiane’s legislation in energy field.
Introduction
To estimate possibility for the transition to sustainable development in energy field, international organization INFORSE (international network for sustainable energy) worked out scenarios for the development of energy sector in different countries – “Vision 2050”. The scenarios are based on prognosed data of the World development. Predicting further development of economy and energetic on the basis of modern and the most effective technologies, experts came to a conclusion about possibility to replace nuclear and fossil fuel (totally or partly depending on a region) by renewable energy sources. For example, scenario worked out for Denmark demonstrates that transition to sustainable energy system will not exceed expenditures necessary for supporting traditional energetic, at least during the nearest 30 years. At the same time emission of CO2 can be reduced by 70%. Will Ukraine's energetic be able to develop in accordance with a similar scenario? This paper describes a such estimation. For the analysis we used existing prognoses for the development of Ukraine's economy and data from the last draft Energy strategy of Ukraine for the period till 2030.

1. Renewable energy sources in Ukraine
1.1 Wind energy.
Ukraine has favorable conditions for the development of wind energy. In many regions average annual wind velocity is 5-5.5 m/sec at a standardized height of 10 m above ground level. It is considered that installed capacity of wind power plant (WPP) that can be achieved as a part of centralized energy system of Ukraine may come up to 16000 MW, and power generation may come up to 25-30 TWh/year. This figure is often accepted as a potential of wind power. The area necessary for the construction of such a WPP capacity is 2500-3000 km2 that is quite real taking into account shoal of the Azov Sea and the Black Sea. According to other estimations 7000 km2 of Ukraine's territory can be used for the construction of WPP of 35000 MW total capacity. It is accepted that WPP of 16000 MW total capacity can be potentially built in Ukraine. Accepted capacity factor is 30% (2630 hr/yr) that may be quite achieved in Ukraine's climatic conditions when using modern wind turbines. With such assumptions the potential of wind energy is 42 TWh/year. Currently total capacity of WPP is 50 MWe. For the period till 2030 it is predicted the construction of WPP of 11290 MW total capacity with annual power generation of nearly 25 TWh/year. Prognosis for increasing capacity of WPP for the period till 2030 is accepted with slowing down rate in 2030-2050. Based on these prerequisites power generation by WPP may come to 42 TWh by 2050.

1.2 Solar energy.
Period of sun shining at the territory of Ukraine is 1900-2400 hr/yr, and total average annual solar radiation varies from 1070 kWh/m2 in northern part of Ukraine to 1400 kWh/m2 in southern part. Existing programmers for energy development envisages increasing use of solar energy mainly for local hot water supply in summer season. Potential of solar energy for heat production is estimated at about 32 TWh. Climatic conditions of Ukraine allow also to use solar energy for the heating of buildings, creation of year-round centralized district heating systems with seasonal heat storage. Such technical solutions have been already realized in many countries located much more to the North than Ukraine. When using solar collectors (counting 3.9 m2/capita) and 400 kWh annual heat production by 1 m2 of solar collector, potential of solar energy for heat production is almost 75 TWh/year. The rate for the installation of solar collectors for the period till 2030 is accepted in accordance with [1] with accelerating rate in 2030-2050. It may be assumed that by 2050 solar collectors will produce about 23 TWhth/year. In Ukraine technical potential of solar energy for power production is estimated at about 16 TWh/yr that makes up in average about 3.3 m2 of PV batteries per capita with the production of about 100 kWh/m2/yr. Provided that a dwelling is equipped with modern and promising energy saving household appliances, indicated volume of power production could satisfy necessary household needs. It is assumed for year 2030 the PV-power generation makes 2 TWh/year, and that for 2050 makes 9 TWh/year.

1.3 The use of firewood and wood residues.
In Ukraine forests cover only 15.6% of the territory, at that nearly half of them have environmental value. The country lacks for merchantable wood that is why timber is imported. The main forest areas are located in the Carpathians and Polissia (Forest Land) were more than 90% of wood is harvested. Wood potentially available for energy production makes up 1.6 mill m3/yr of felling residues, 2.1 mill m3/yr of wood processing waste, 3.8 mill m3/yr of firewood that in sum is equivalent to 16 TWh/yr. In 2005 consumption of wood and wood waste for energy production amounted to about 5.8 TWh. Consumption of wood and wood waste for energy production will be about 13 TWh in 2030 and may achieve 16.3 TWh/year in 2040. Further development of energy utilization of wood can be also expected under reorganization of forestry and intensive development of forestry. At present there are workable propositions aimed to raise productivity of Ukraine's forests to the level of neighboring countries and achieve wood logging of 30 mill m3/yr and then 60 mill m3/yr without any harm to nature. So, prognosis on energy utilization of wood in 2050 may be 25 TWh/yr.

1.4 The use of agriculture residues.
Ukraine has good prospects to revive highly efficient agriculture, which is able to satisfy domestic needs in foodstuff and feedstock and also produce products for export. The big part of the territory is steppe. It is characterized by low atmospheric precipitation, frequent draughts and other unfavorable phenomena. Due to that yields of the main crops are not stable. Potential yield of straw and stems may come to 35 mill t/year. Demand of agriculture is 13 mill t of straw a year, the surplus – about 20 mill t/yr that is equivalent to 82 TWh – can be used for other purposes including energy production. In Ukraine some people have doubts as to possibility to use straw and stems for energy purposes. It can be explained by insufficient productivity of agriculture, big losses and burning of straw on fields, absence of stems storing. Projects realized in Ukraine under support of European countries demonstrated technical possibility and economic expediency of straw application for energy production. At present amount of straw used for energy production in Ukraine is equivalent only to 2 GWh/yr. In accordance with the prognosis for the development of bioenergy in Ukraine the use of straw and stems for energy purposes will be equivalent to 23 TWh in 2030. Further increase to 50 TWh/yr in 2050 may be assumed that will require up to 60% of technically available potential.

1.5 The use of biogas.
Technical potential of biogas available for energy production consists of the biogas from manure (animal husbandry and poultry farming) – 2308 mill m3, the biogas from sewage sludge – 334 mill m3, and landfill gas – 2300 mill m3. In sum it is equivalent to 28.2 TWh. Formerly in Ukraine biogas was widely produced at wastewater treatment plants, total volume of installed digesters was 162000 m3. Now biogas production in many cases is stopped because of bad technical condition of digesters, and because the state does not stimulate this activity. In 2005 the use of biogas was equivalent to 0.02 TWh. A number of biogas plants for dung and manure processing are out of operation. Now in Dnepropetrovsk oblast a modern biogas plant is under construction that is supported by Dutch government. There was realized a demonstration project on the extraction and utilization of biogas on Lugansk landfill. The use of landfill gas and biogas from sewage sludge will develop dynamically in the nearest years. After 2010 it is expected the increase in biogas production from animal husbandry waste. In 2030 total utilization of biogas will amount to 10.2 TWh, and by 2050 it will achieve 17.4 TWh/yr.

1.6 Geothermal energy.
Ukraine has a big potential of geothermal energy. According to official data of the Ministry of Ecology and Natural Resources reserves of thermal waters are 27.3 mill m3/day. Technical potential of geothermal resources is 97.7 TWh/yr. In 2005 geothermal energy utilization amounted to 0.1 TWh. It is expected that total capacity of constructed geothermal district heating systems will be 9000 MWth and that of geothermal power plants will be 400 MWe in 2030. That will ensure production of 42 TWh, and in 2050 the production will come to 57 TWh. Such degree of geothermal energy use seems to be too optimistic. Geothermal energy is renewable only in geological scale of time. Promising under geological conditions of Ukraine geo-circulating systems will exhaust aquifer resource during 20-30 years, and their renewing will take thousands of years. It means necessity to move geothermal energy extraction to other sites every 20-30 years. It is assumed that amount of utilized geothermal energy will be 8 TWh/year in 2030 and 14 TWh/year in 2050 that is equivalent to present use of geothermal energy in the whole Europe.

1.7 Hydro energy.
Among all renewable energy sources hydro energy is known as technically proven technology for energy production. Seven large hydroelectric plants and one hydro accumulating plant of 3907 MW total capacity and 10-12 TWh average annual power generation were built on the Dnepr River. The Dniestr hydroelectric plant of 702 MW capacity with 1 TWh average annual power generation was put into operation on Dniestr river. The Dniestr hydro power cascade will include the biggest in Europe Dniestr hydro accumulating plant of 2268 MW capacity and buffer hydroelectric plant. 50 small hydroelectric plants of about 100 MW total capacity with 0.25 TWh annual power production are exploited in Ukraine. In Ukraine technically available potential of hydro energy is 81 TWh/yr. As for large hydroelectric plants and small hydro energy, total economically expedient unused potential is 17-19 TWh and up to 3.7 TWh correspondingly. Then total economically expedient potential of hydro energy amounts to about 33 TWh/year. In Ukraine's conditions the development of hydro energy is real with the construction of hydroelectric plants of relatively high capacity (20-50 MW). Among priority measures is reconstruction of the hydroelectric plants of Dnepr cascade that will give 300 MW of additional capacity and increase in power production by 290 mill kWh. Priority measure may be also the construction of hydroelectric plants on the section of the Tisa river from Burshtyn to Vilki of 220 MW total capacity. Priority measure is considered the reconstruction of operating small hydroelectric plants and restoration of existing small hydroelectric plants, which are the most suitable for further exploitation. When constructing small hydroelectric plants priority will be given to plants, which protect neighbor territories from flood. There may be considered construction of small hydroelectric plants on existing water bodies, for energy utilization in main canals, technical water supply systems and water drain. In 2030 power production by hydroelectric plants may come to 15.1 TWh/yr Further increase in power production up to 25 TWh in 2050 may be expected.

1.8 Replacement traditional and renewable energy sources
It should be marked that value of individual RES also depends on the amount of fossil fuel that can be replaced by them. Power produced by hydroelectric plants, WPPs, PV units replaces almost three times bigger amount of fossil energy necessary for the generation of the same amount of power. In 2030 replacement of fossil fuel and nuclear energy by RES may be carried to 14 mill toe/year, and in 2050 - to 30 mill toe/year.

2. Ukraine's legislation on renewable energy
Governmental organizations responsible for RE issues in Ukraine are Ministry of Fuel and Energy and State Committee for Energy Conservation. Lately profile energy committee of Ukrainian Parliament has undertaken coordination in preparation of “Energy strategy of Ukraine for the period till 2030 and future perspective” including the section on RE. A few Laws of Ukraine on renewable energy sources and co-generation have been recently developed/ accepted in Ukraine. Law of Ukraine “On power energy” with amendments envisages finance stimulus for wind power plant construction due to state budget expense. There are profitable tariffs for electricity generated at WPP. Really Ukrainian government gives such a support only for state owned wind power plants. Law of Ukraine “On corrective action to the Law of Ukraine “On power energy” has been developed and approved by the Cabinet of Ministers and has been submitted to the Verkhovna Rada. This Law was developed according the schedule of works on adaptation of Ukrainian legislation to legislation of EU. The subject of legislative regulation is improvement of relations on the power market, guaranty of power quality, in the sphere of construction of new generating capacities and free access to the power grids, stimulation of power production from renewable energy sources. According to this Law power supply companies must guarantee access to the power grids to small hydropower stations, and power stations producing power from renewable energy sources. New chapter IV “Stimulation of power production from renewable energy” is included in the Law. This stimulation includes:
- Purchase on the whole sale market of Ukraine power produced from RES;
- Guarantee access to the power grids for producers of power from RES;
- Installation of special tariff for the transportation of power from RES in the grids;
- Providing to RES power generating companies by subsidies, grants, tax, credit and other concessions.
The Law of Ukraine “On alternative sources of energy” was accepted by Verkhovna Rada in 2003. It is framework Law, which defines legislative, economic, ecological and organizational basis for the utilization of alternative sources of energy and promotion for their use in fuel-energy complex. According this Law term “alternative sources of energy” is equalized to “renewable energy sources”. This Law does not propose any financial stimuli and support mechanisms for producers and consumers of renewable energy sources. In any case this Law has progressive significance such as indicated increase of renewable energy production and utilization as a main principle of State policy in this field. The Law of Ukraine “On combined heat and power production (co-generation) and utilization of dump energy potential” was accepted “in the first reading/ or as a base” by Verkhovna Rada. This Law regulates relations between State, producers of power, which use co-generation technologies, dump energy potential of technological processes, and energy supply companies. This Law acts for qualified CHP plants, which started exploitation after 01.01.2003. It is proposed stimulation of construction and utilization of such CHP plants. National Commission on Regulation of Power Sector of Ukraine has to use profit norm of 22% for calculation and approval of sale tariffs for RES power. This figure is calculated from the condition that payback period for investments in such CHP plants will be less than 4.5 years. It is maximal payback period, which is still interesting for investors in Ukrainian conditions. The “Energy Strategy of Ukraine till 2030” is under development by a group of Ukrainian energy experts on the decree of President of Ukraine. According to draft version targeted utilization of RES is 6.6 mtoe (4.7% of Primary Energy Consumption (PEC)) in 2010 and 21.8 mtoe (17% of PEC) in 2030.

Conclusion
Will Ukraine choose the way for sustainable development in energy sector? Draft “Energy strategy of Ukraine for the period till 2030 and further prospect” is being developed with big difficulties. Proposals for this document envisaged rather moderate use of RES, but a number of leading specialists do not want to take them into account properly. Nevertheless development of RES has legislative basis in Ukraine. Enlarged use of RES would allow solving a number of existing problems connected with environmental pollution and global warming; it would also reduce danger of energy and economy crisis.

References
1. Geletukha G., Zhelyezna T., Zhovmir M., Konechenkov A., Matveev Yu. (2003) INFORSE Ukraine: outlook to 2050
2. Project «Energy strategy of Ukraine for the period till 2030 and further prospect (general provisions) / The Ministry of Fuel and Energy of Ukraine, the National Academy of Sciences of Ukraine, – (2006)