Development of a distributed energy system in Ukraine

Resolution of the Cabinet of Ministers of Ukraine of August 13, 2024 No. 761-р “National Action Plan for Renewable Energy for the Period up to 2030” (hereinafter referred to as the “Plan“). The Plan defines the directions of development of the renewable energy sector up to 2030 and specific measures for their implementation.

According to official statistics provided by the Cabinet of Ministers of Ukraine, in 2022-2023, more than 650 MW of new renewable energy capacities were commissioned in Ukraine, including: 371 MW – solar power plants (including private households – 28); 227 MW – wind power plants; 50 MW – bioenergy facilities (biomass and biogas); 1 MW – small hydroelectric power plants.

The target according to the Plan is the share of renewable energy sources in the gross final energy consumption in 2030 – 27%, namely: in heat and cooling systems – 33%; in electricity production – 29%; in the transport sector – 17%.

According to the Plan the expectation for 2025 for installed capacity is (in general, taking into account the occupied territories): solar power plants – 8.1 GW, wind power plants – 2 GW, biomass and biogas – 463 MW, highly maneuverable capacities with the ability to quickly start/stop – 248 MW, energy storage facility – 46 MW.

The target for installed capacity by 2030: solar power plants – 12.2 GW, wind power plants – 6.2 GW, biomass and biogas – 876 MW, highly maneuverable capacities with the ability to quickly start/stop – 906 MW, energy storage facility  – 656 MW.

Resolution of the Cabinet of Ministers of Ukraine dated August 13, 2024 No. 757-r “Some issues of conducting pilot auctions for the distribution of support quotas in 2024” (hereinafter referred to as “Resolution No. 757-р“).

Resolution No. 757-р established:

• An additional annual support quota for business entities producing electricity from alternative energy sources for 2024. The additional annual support quota is set at 110 MW: SPP – 11 MW; WPP – 88 MW; other types of alternative sources – 11 MW.
• A schedule of auctions for the distribution of support quotas for 2024. Pilot auctions for the distribution of support quotas are scheduled for October-November of this year.
• The maximum price offer of an auction participant for 2024 for electric power facilities or construction stages (start-up complexes) of electric power facilities producing electricity from: solar radiation or wind energy – 9 eurocents per 1 kW/h; other types of alternative energy sources (except solar energy, wind energy, blast furnace and coking gases, and using hydropower – produced only by micro-, mini- and small hydroelectric power plants) – 12 eurocents per 1 kW/h.

The introduction of auctions for the distribution of support quotas is a necessary step towards the rapid construction of renewable energy sources and will be conducted on a competitive basis. Such auctions are the most common mechanism for stimulating the development of renewable energy sources around the world and have proven themselves to be a successful tool.

Resolution of the Cabinet of Ministers of Ukraine dated August 13, 2024 No. 756-r “Terms of holding a competition for the construction of generating capacity and implementation of demand management measures” (hereinafter referred to as “Resolution No. 756-р“).

Resolution No. 756-r provides for:

• The deadline for submission of tender proposals by tender participants: six months from the date of publication of the Resolution.
• The total volume of generating capacity to be built is 700 MW.
• Setting a fee for the service of ensuring the development of generating capacity. The maximum purchase price is 854977.5 euros per 1 MW, the minimum payment deadline is 10 years.
• The maximum deadline for commissioning an electric power facility is December 31, 2027.
• The minimum installed capacity of the electric power facility is 5 MW, the maximum installed capacity of the electric power facility is 80 MW.
• The minimum period of guaranteed (design) operation of the equipment is at least 20 years.
• Compliance with technical requirements, in particular: the time of commissioning (full activation) from a stopped state is no more than 15 minutes from the moment of receiving the corresponding command from the transmission system operator; control range – not less than 80% of the installed capacity; guaranteed continuous operation time – not less than 8 hours.

The above changes promote investments in distributed generation, and as we know, this is Ukraine’s energy shield in war conditions. Large power plants are systematically destroyed by Russia, so small energy sources distributed throughout the country are the best way out of the forced situation. Accordingly, the development of distributed generation provides a number of advantages: energy independence, increased security of supply, increased investment in their own communities, creation of local jobs, and a reduction in the negative impact on health. We see that the state is doing a lot to promote this issue, so we hope that the vector of movement will continue in the same spirit.

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