How can Ukraine dispose of its energy dependence?

Author : Yuriy Odarchenko

Source : 112 Ukraine

Ukraine is dependent on oil and gas imports by 70%. Therefore, it is extremely important for us to develop alternative types of energy
23:21, 30 January 2018

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Ukraine is dependent on oil and gas imports by 70%. Therefore, it is extremely important for us to develop alternative types of energy. The whole world has long been implementing renewable energy sources that are not only safe for the environment but also positively influence the economic development of territorial communities. During 14 days, the sun might radiate energy, which would be enough for annual the needs of mankind. The territory of Ukraine is a zone of a medium intensity of solar radiation. However, there are more hours of sunshine per year in Ukraine than in half of the EU countries. That is why Ukraine appears to be very attractive in terms of the "green" energy investments. In addition, the development of renewable energy will give independence from the foreign supplies, but will also increase the number of jobs, develop the economy, increase the country's GDP level, and will positively influence the ecological situation in the regions.

Related: IRENA to increase investment in Ukraine's renewable energy - Savchuk

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The construction of the "Nord Stream-2" is a big risk for our state. The Nord Stream-2 project envisages construction of two gas pipeline lines with a total capacity of 55 billion cubic meters of gas per year from the coast of Russia through the Baltic Sea to Germany. The new pipeline might be built next to the already existing "Nord Stream-1" (bypassing Ukraine). Except for Ukraine, the idea of a new gas pipeline was opposed by Bulgaria, Czech Republic, Greece, Hungary, Estonia, Latvia, Lithuania, Poland, and Romania. The leaders of these countries believe that the preservation of gas transit through Ukraine is important not only from the point of view of energy security but also taking into account the stability in the Eastern European region. The governments of Germany and Austria are on the side of "Nord Stream 2" project. Both countries have economic and political interests since Gazprom's partners in this project have two largest companies: German Wintershall and Uniper and Austrian ÖMV. In addition, Dutch-British Royal Dutch Shell and the French Engie, which are among the shareholders of the Nord Stream-2 demonstrated a significant interest too. For example, the support of the Federal Republic of Germany "Nord Stream-2" can be explained by several reasons: Germany will receive gas from Russia bypassing transit routes.

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As a result, Berlin will gain control over the distribution of the Russian resource in Europe, it will become the main gas hub and transit country, so it will be able to influence prices. It is likely that the price of Russian gas for Germany will decrease. Germany will assume the role of Polish and Slovak companies and will become the seller, not the consumer. Berlin will strengthen its strategic importance in Europe as the largest economy and a powerful political center. However, for Ukraine, the construction of the North Stream-2 will drastically undermine the economy of the whole country. According to Naftogaz Ukraine estimates, the construction of bypass routes can deprive Ukraine of revenue from gas transit, which in 2017 amounted to $ 3 billion. It would also reduce the investment attractiveness of the GTS. The gas pipeline is expected to be launched in 2019. Therefore, the situation with the construction of the "Nord Stream-2" should encourage Ukraine to develop alternative energy sources, because we do not have time to wait.

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At this time, the whole world is actively moving to "green" types of energy, and this is confirmed by the figures. 144 states have declared alternative energy to be the priority of their policy. In general, about one-third of all energy in the EU comes from the renewable sources. The most powerful producers of "green" electricity are China, USA, Germany, Italy, Spain, Japan, and India. Today there are three cities in the US, which have completely switched to renewable energy (Aspen, Burlington, Vermont). According to analysts of the International Energy Agency, published in the World Energy Outlook study, until 2035, investments in alternative energy will amount to about 5.7 trillion dollars. At the same time, photovoltaic and wind energy has become the cheapest source of energy in many regions of Europe. In addition, 98 countries grant privileges to producers of "green" energy, realizing that its development meets the country's strategic goals: energy independence, cheap energy, jobs, and environmental care. It is assumed that by 2035 the total annual state support of "clean" energy will increase to 205 billion dollars and will reach 0.17% of global GDP.

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The "green" tariff, which allows you to sell produced electricity to the network at favorable discounted rates, is one of the highest in Europe. All this inspires optimism regarding the future development of alternative energy in Ukraine. But the monopoly influence of several financial and industrial groups that benefit from the current tariff setting for thermal power is preserved in the electric power industry. Even after the adoption of the laws on the national regulator and the electricity market, the monopolists, in cooperation with the authorities, continue to block the reform of the electric power industry and maintain control over the work of the Ukraine’s Energy and Utilities National Regulatory Commission (NKREC) in order to obtain high profits and minimize operating and investment costs by shifting them to the end user. And the development of alternative energy is possible only if the political situation in the country is stabilized and, as a result, the investment climate is improved, which will complement the favorable climatic characteristics of the regions.

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If our state strives for energy independence, the legislation must be changed to favorable for the development of solar energy. I am sure that Kherson region (with its favorable conditions for the development of this sector) has excellent prospects for the development of its own solar energy base. 240 clear days out of 365 make Kherson region leader in the future solar energy development. In general, the potential of solar energy in the region is estimated at 310 thousand tons of virtual fuel, which corresponds to the use of 267.24 million cubic meters of gas (half of the annual rate of its consumption). The first solar station in the region was launched in Skadovsk District in February 2013, on soils unsuitable for agricultural use, but ideal for building an industrial site. This power plant helps to reduce the annual carbon dioxide emissions by 8855 tons. Now solar power plants also operate in Kherson itself, in Bilozirka, Nova and Stara Kakhovka, Henichesk, Zelenivka, Novotroitsk, Tsyurupinsk, Velyka Blahovishchynka, Novooleksiyivka, Vysokopole, Kairka, Tryfonivka, Syvash, Malynivka, Kalanchak, Velykya Lepetyha, and Mykolayivka. The development of alternative energy sources will also contribute to the decentralization of Ukraine’s energy systems.

We must find new models, approaches, and mechanisms to stimulate the development of renewable energy, which will allow us not only to overcome the backlog of global trends but also to start distilling other countries of the world.

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