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Ukraine's "green" energy in black light - cui bono

Author : Yulia Lystrova

10:02, 8 February 2016
Ukraine's "green" energy in black light - cui bono

Author : Yulia Lystrova

Numerous Ukrainian experts state that alternative energy resources are less safe and profitable than traditional ones

10:02, 8 February 2016

Read the original text on Economichna Pravda

indiegreen.co.uk

While world is thinking about alternative energy sources, Ukraine is trying to discredit this idea.

Authors of numerous publications demonstrate that "green" energy is too expensive, it does not solve the problem of energy dependence on imported energy and the volume of "green" energy is almost imperceptible.

Stubbornness, which experts use in order to discredit the industry, casts doubt on the findings and presented them to check the facts.

For example, a recently published article "Forest Journal" says that for eight months in 2015 the state enterprise "Energy Market" paid to owners of small hydropower plants 19 mln USD, and this amount is almost equal to the volume of payments at all in 2014.

At first glance, the numbers are impressive. In fact, anyone can visit the site of the enterprise and ensure that published information is false.

According to "Energy Market", the state allocated 18 mln USD to all small HPP for 2015, and from January to August – 13 mln USD. Data for 2014 is also wrong, were not cost 19 mln USD, but 16 mln USD.

This is not only "inaccuracy" in this article.

Based on the distorted numbers and citing the example of just one type of "green" companies, hydroelectric, author with expert-ecologist confidence "breaks the myth" that alternative energy could displace traditional one and ensure energy independence.

Their argument is that the proportion of small hydropower in the entire amount of generated energy, redeemed by "Energorynok" in 2015, is insignificant - only 0.12%. In fact, a proficient manipulation of facts creates a distorted view of the potential of alternative energy companies.

Absurd is the fact that the environmentalists are against the "green" energy, but logically, they should be in the opposite position. Separately, the authors of such material criticize the "green" tariff as inappropriate and exaggerated that guarantees profits business owners with alternative energy.

Let us look at facts and figures.

The cost of the "green" energy

Over the past 30 years 40 bln USD were allocated for renewable energy sources in the world. From the beginning of the 2000s the sector was created more than 370 thousand workplaces, and in 2015 19 bln EUR were involved into this industry, which provided a 14 bln EUR profit.

The cost of renewable energy is constantly decreasing. According to IRENA agency, the cost of 1 kWh of energy generated by land wind power, is equal to the cost of energy generated by coal-fired power plants.

Cost of 1 CGT-hour power produced by wind farms by land, is about 0.05 EUR. A similar number of "coal" energy cheaper at only 0,001 EUR, while the cost of 1 kWh of energy from gas power plants is 0,041 EUR.

Given the harmful environmental effects of traditional energy work stations, the alternative energy sources will not be more expensive, analysts stress the International Agency for Renewable Energy.

The myth of the cost of "green" energy is based particularly on the fact that Ukraine should develop this industry from scratch - to invest heavily in the construction business, purchasing equipment and "green" tariff. Is this true?

Indeed, investing in alternative energy risky due to the unstable financial and political situation in Ukraine, the fall of the hryvnia, the problems with lending. Accordingly, prospective investors should have some incentive.

"Green" tariff is the incentive. Its main principle is to help entrepreneurs in the early development of the industry. In 2009, when the program was adopted, the rate was the highest. In 2015, the first wave was over, and the rate was reduced by 10%. In 2020 it is expected to decrease by 10%.

Now the Ukrainian "green" tariff is not bigger than European one. In Austria it is up to 10.55 cents per kWh for small hydroelectric, in Belgium - to 12.14, in the Czech Republic - to 11.8, in Germany - to 12,52, in Slovakia - to 11,12, in Slovenia - to 10.54, in the UK - to 24.11, in Ukraine - from 10.45 to 17.45 cents.

Such tariffs are explained with high lending rates in Ukraine. Another reason for high tariffs is water charges, up to 11% from cost per kWh for small hydro. All these factors are quite subjective and easily eliminated with political will.

Is traditional energy cheaper?

According to the rating of the IMF, Ukraine is first among countries with the highest levels of subsidies for fossil fuels as a percentage of GDP: 49% goes to the coal industry and 8% for gas. Other places in the top ten divided Bosnia and Herzegovina, Serbia, Bulgaria, Kyrgyzstan, Uzbekistan, Iran, Zimbabwe, Turkmenistan, and Mongolia.

In 1974-1992, the country Organization for Economic Cooperation and Development invested in research and development of nuclear energy 168 bln USD, while in renewable energy sources - only 22 bln USD.

About 1 trillion USD has been spent on subsidizing nuclear energy in a variety of incentives, cheap loans, grants, tax exemptions. Subsidies for conventional energy is saved. According to IMF, support for fossil fuels can be estimated at 10 mln USD per minute or 5.3 trillion a year.

One of the hidden components of "cheap" conventional electricity, which are partly reflected in expenditure budget of Ukraine, is the cost of eliminating the negative effects of traditional energy. Experts claim that the cost required in these areas are impossibly high for Ukraine.

Yes, all consumers of Ukraine in accordance with the budget for 2014 and 2015, in addition to the fare for the used "traditional" energy, had to recover huge sums - about 448 thousand USD.  Among them were "The restructuring of coal and peat industry", "Rescue measures at coalmining enterprises", "Physical protection of nuclear facilities and materials".

By the way, Belarus is waiting for higher prices of energy. Experts predict that after the launch of the first unit of nuclear power plant in 2018 Belarusians would pay for electricity twice. This is despite the fact that the neighborhood with nuclear energy enterprise is extremely dangerous.

The price of Chernobyl

The accident at Chernobyl is not the most expensive manmade disaster in history. Losses from the first five years after the accident amounted to 100 bln USD.

Since independence, only the direct costs of the liquidation of its consequences have exceeded 25 bln USD. Indirect losses associated with the inability to use the 180 thousand hectares of arable land and 157 thousand hectares of forest estimated 30 bln USD.

The total amount spent on liquidation of consequences and support to families of victims and victims of the disaster, with international assistance, in 30 years reached far beyond 200 bln USD.

Related: €100 mln for Ukraine to complete Chernobyl sarcophagus

Ukraine continues to pay for this tragedy, 2 bln USD are spent every year. The state allocates 600 mln USD a year for Chernobyl.

Six nuclear reactors, which has been working for 30 years until 2015, need great investments and modernization. For two years, the life of another three blocks will end. Incidentally, 440 units operate in 192 nuclear power of the world, their safety equipment and systems are imperfect. Chernobyl is not the only example of how expensive can nuclear energy be. For comparison, the accident at Fukushima in 2011 brought Japanese to 150 bln USD of losses.

Trick or life

To invest in the construction of alternative energy companies that will pay off for decades or to continue to spend them on the dangerous but familiar technology is the choice each state.

"Green" enterprises have not yet gained power and cannot compete with TPP and NPP in terms of energy produced. These are company monopolists, which are not interested in developing alternative energy sources, because they do not want to share the profits.

The active support of "green" power in Ukraine began a few years ago, so it is too early to expect obtaining great amounts of energy. However, in the future, "green" energy will become cheaper than traditional one, and the point is not only its cost. The greatest benefit lies elsewhere.

Costs for the development of alternative energy sources cannot be compared with the price of the lives of miners and victims of manmade disasters, the damage of the flora and fauna that are ruthlessly destroyed as a result of traditional energy companies.

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