Development of bioenergy in Ukraine

Georgiy Geletukha, PhD

Head of Board, Bioenergy Association of Ukraine

We are greening the energy!

Sceintific-Engineering Center “Biomass”

LLC “Teplodar PV”

LLC «Salix Energy»

LLC “Equator Sun Energy“

Agricultural company “Danosha”

LLC “Naftogazrembud-1”

NGO “Renewable Energy Agency”

LLC “Novovodolazhski teplovi merezhi”

BioGTS Ltd, Finland LLC “Kyiv Green Energy”

TTS Eko s.r.o., Czech Republic

LLC “Volyn-Kalvis”

LLC “Contemporaty Energy Technologies"

Physical persons:

Maraykin R., Petrov Ya., Pavol Norulak, Ilchuk M.

UABio members (legal persons)

2010 2011 2012 2013

Biofuels/waste in the total primary energy

supply, Mtoe

1,48 1,56 1,52 1,88

Biofuels/waste in the gross final energy

consumption, %

1,64 1,66 1,75 2,04

Share of biofuels/waste in all RES in the gross final

energy consumption, %

62,41 67,26 67,53 62,9

Dynamics of RES and biomass input to the Ukrainian energy balance

-2,6%

23,2% 5,9%

Bio

fuel

s and

was

te in

TPE

S,

Mto

e

National RES Action Plan till 2020 (approved by the CMU Decree 01.10.14 No. 902-р)

Index 2009 2014 2015 2016 2017 2018 2019 2020

RES – heating, % 3,4 6,5 7,1 8,0 8,8 9,7 10,8 12,2

including biomass, k toe 1433 2280 2700 3100 3580 4050 4525 5000

RES – power generation, % 7,1 7,6 8,3 8,7 9,4 10,2 10,9 11,5

biomass, МWе, including:

solid

biogas

0 40

28

12

250

175

75

380

260

120

520

360

160

650

455

195

780

540

240

950

660

290

RES – transport, % 1,5 4,1 5,0 6,5 7,5 8,2 9,0 10,0

including biomass, k toe 0 110 150 220 265 300 340 390

Total RES share in GFEC, % 3,8 6,1 6,8 7,5 8,2 9,0 9,9 11,0

5000 M toe = 6,25 billion m3 gas/year. 660 МWe, 90% in CHP regime, 1780 МW heat, substitution of 0,95 billion m3 gas/year. 6,25 + 0,95 – 1,93 = 5,27 billion m3 gas/year (goal for substitution till 2020 р).

Sectors 2013* 2014** 2015** 2016** 2017** 2018** 2019** 2020**

Industry 0,98 1,02 1,12 1,25 1,36 1,47 1,57 1,66

Population 0,81 1,11 1,19 1,28 1,48 1,81 1,98 2,23

Municipal and public 0,14 0,19 0,38 0,82 1,34 1,96 2,46 3,32

Total, billion m3 1,93 2,32 2,69 3,35 4,18 5,24 6,00 7,20

* Assessment according to Energy balance of Ukraine ** Forecast according to REAP and UABio assumptions

Dynamics of NG replacement by biomass, billion m3

0.98 1.02 1.12 1.25 1.36 1.47 1.57 1.66

0.81 1.11 1.19

1.28 1.48

1.81 1.98

2.23

0.14 0.19

0.38

0.82

1.34

1.96

2.46

3.32

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

2013* 2014** 2015** 2016** 2017** 2018** 2019** 2020**

bill

ion

m3 Housing-communal + budget-

financed sectors

Population

Industry

Biomass type 2013* 2014** 2015** 2016** 2017** 2018** 2019** 2020**

Firewood 0,84 1,01 1,03 1,04 1,04 1,04 1,04 1,05

Chips 0,66 0,68 0,79 0,86 0,90 0,94 0,97 1,00

Wood pellets 0,78 0,97 1,03 1,03 1,03 1,04 1,04 1,04

Straw, stems (bales) 0,05 0,10 0,21 0,65 1,36 2,34 2,98 4,06

Straw pellets 0,00 0,00 0,09 0,14 0,19 0,23 0,28 0,30

Sunflower husk 0,21 0,21 0,22 0,26 0,27 0,28 0,29 0,34

Energy crops 0,00 0,00 0,04 0,21 0,35 0,49 0,62 0,82

Total, M tce 2,54 2,98 3,41 4,17 5,14 6,35 7,23 8,60

Biofuels for heat production in Ukraine by fuel type, M tce

0.84 1.01 1.03 1.04 1.04 1.04 1.04 1.05

0.66 0.68 0.79 0.86 0.90 0.94 0.97 1.00

0.78 0.97 1.03 1.03 1.03 1.04 1.04 1.04

0.05

0.10 0.21

0.65

1.36

2.34 2.98

4.06

0.00

0.00 0.09

0.14

0.19

0.23

0.28

0.30

0.21

0.21

0.22

0.26

0.27

0.28

0.29

0.34

0.00

0.00

0.04

0.21

0.35

0.49

0.62

0.82

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

2013* 2014** 2015** 2016** 2017** 2018** 2019** 2020**

Mtc

e

Energy crops

Sunflower husk

Straw pellets

Straw, stalks (bales)

Wood pellets

Wood chips

Firewood

* Assessment according to Energy balance of Ukraine ** Forecast according to REAP and UABio assumptions

Sectors 2013* 2014** 2015** 2016** 2017** 2018** 2019** 2020**

Industry 1314 1362 1525 1768 1952 2139 2293 2459

Population 2000 2754 2940 3155 3670 4482 4891 5500

Municipal and public 355 465 940 2035 3315 4845 6075 8195

Total, МWт 3669 4581 5405 6958 8937 11466 13259 16154

Installed capacity of bioenergy equipment in Ukraine, МWт

1,314 1,362 1,525 1,768 1,952 2,139 2,293 2,459

2,000 2,754 2,940

3,155 3,670

4,482 4,891

5,500

355

465 940

2,035

3,315

4,845

6,075

8,195

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

2013* 2014** 2015** 2016** 2017** 2018** 2019** 2020**

MW

th

Housing-communal +budget-financed sectors

Population

Industry

* Assessment according to Energy balance of Ukraine ** Forecast according to REAP and UABio assumptions

Crop culture 2013* 2014** 2015** 2016** 2017** 2018** 2019** 2020** Miscanthus 0,0 0,0 1,8 9,0 14,9 20,9 26,9 35,3

Poplar 0,0 0,0 1,4 6,9 11,6 16,2 20,8 27,3 Willow 0,0 0,0 2,8 14,1 23,5 32,9 42,4 55,5

Total, thousand ha 0,0 0,0 6,0 30,0 50,0 70,1 90,1 118,1

Area under energy crops in Ukraine, thousand ha

0.0 0.0 1.8 9.0

14.9 20.9

26.9 35.3

0.0 0.0 1.4

6.9

11.6

16.2

20.8

27.3

0.0 0.0 2.8

14.1

23.5

32.9

42.4

55.5

0.0

20.0

40.0

60.0

80.0

100.0

120.0

2013* 2014** 2015** 2016** 2017** 2018** 2019** 2020**

10

00

ha Willow

Poplar

Miscanthus

* Assessment according to Energy balance of Ukraine ** Forecast according to REAP and UABio assumptions

Sector 2013* 2014** 2015** 2016** 2017** 2018** 2019** 2020**

Industry 3156 3276 3578 3985 4303 4628 4923 5126

Population 300 460 718 1221 2474 4476 5478 6980

Municipal and public 885 1183 2033 3510 5345 7805 10040 13413

Total, units 4341 4918 6329 8716 12122 16909 20441 25518

New jobs, units

3,156 3,276 3,578 3,985 4,303 4,628 4,923 5,126 300 460 718

1,221 2,474

4,476 5,478

6,980

885 1,183 2,033

3,510

5,345

7,805

10,040

13,413

0

5000

10000

15000

20000

25000

30000

2013* 2014** 2015** 2016** 2017** 2018** 2019** 2020**

nu

mb

er o

f jo

bs

Housing-communal + budget-financed sectors

Population

Industry

* Assessment according to Energy balance of Ukraine ** Forecast according to REAP and UABio assumptions

1182 1089

1788

3645 3600

7188

0

1000

2000

3000

4000

5000

6000

7000

8000

Nat

ura

l gas

pri

ce f

or

po

pu

lati

on

(in

cl. V

AT)

, U

AH

/10

00

m3

01.05.2014 - 30.04.2015

<2500 2500-6000 >6000

Gas consumption per year, m3

Natural gas prices for population

Reduced tariff for: - Individual heating or combined consumption using NG <200 m3/month - 1 October – 30 April

Usual tariff for: - Cooking and/or water heating - Individual heating using NG >200 m3/month from 1 October to 30 April

Cooking and/or water heating

3.

5

7

24.5 billion UAH from the state budget 2015 are reserved for subsidies to the population to pay for utility services

01.05.2015 - 30.04.2016

Natural gas prices for DH utilities providing heat for population

1309

2994

[ЗНАЧЕНИЕ]*

[ЗНАЧЕНИЕ]*

0

1000

2000

3000

4000

5000

6000

7000

8000

9000N

atu

ral g

as p

rice

(in

cl. V

AT)

, UA

H/1

00

0 m

3

before 1.04.15

1.04.15 - March 2016

April 2016 - March 2017

after March 2017

*On the assumption that Ukraine will meet requirements of the International Monetary Fund on retail gas heating prices (https://www.imf.org/external/pubs/ft/scr/2015/cr1569.pdf, p. 99)

and the price of the imported gas will be 300 USD/1000 m3 (excl. VAT)

Urban population <100 100-600 >600 <100 >100

Rural population <150 150-600 >100 <100 >100

36.6 45.6

57

71.4

90

63

78.9

99

129

168

140.7 147.9

156 163.8

0

20

40

60

80

100

120

140

160

180

1.04.15-31.08.15 1.09.15-29.02.16 1.03.16-31.08.16 1.09.16-28.02.17 after 1.03.17

Electricity price for population

Electricity consumption, kWh/month

Ele

ctric

ity p

rice

(incl

. VAT

), U

AH

cop

./kW

h

Problematic issues needed to be regulated by Verkhovna Rada (Ukrainian Parliament)

N Problem/ Issue Possible decision (UABio view) Responsibility

1 Draft Law № 3047 from 07.09.2015 on transfer of regulation for heat from renewable energy tariffs to local authorities

Do not accept this draft law Verkhovna Rada, energy committee

2 Draft Law № 2529a from 26.08.2015 on simplification of land allocation for RE projects

To accept this draft law Verkhovna Rada, mail committee – agrarian policy and land issues

3 Development of competitive market of heat energy in district heating sector

• Juridical unbundling of existing communal DH companies between generation and transport;

• Creation of possibility for signing of direct contracts between heat generators and final heat consumers;

• Possibilities of privatization for heat generators of communal properties.

Verkhovna Rada

4 Lack of legislative basis for production and consumption of biomethane

Development of legislative basis for production and consumption of biomethane

Verkhovna Rada, energy committee

Problematic issues needed to be regulated by Government

N Problem/ Issue Possible decision (UABio view)

Responsibility

1 Setting of tariffs on heat energy from renewables in DH systems for consumption by population

Changes to Decree of Cabinet of Ministers N 293, Decree of National Regulator on Heat and Power, Decree f Cabinet of Ministers on the procedure of compensation

Cabinet of Ministers, Ministry of Construction and Communal Services (Minregionbud), National Regulator on Heat and Power (НКРЕКП)

2 Setting of tariffs on heat energy from renewables for public consumers

Setting of “average” tariff for heat from commercial gas at least once per quarter

National Regulator on Heat and Power (НКРЕКП)

3 Majority of energy crops is not yet defined as agricultures and their cultivation on agricultural lands is not allowed. The long procedure for introducing of culture to the agricultures registry (field testing for over 3 years).

Simplification of this procedure is required

Ministry of agrarian policy

4 State forestry do not have sufficient equipment and are not motivated to increase harvesting of firewood. At the same time there is a number of barriers for private companies wishing to perform wood harvesting.

There is a need to increase area of planned logging sites and removing barriers to private companies on harvesting of firewood.

Ministry of agrarian policy, National Agency on Forest Policy

Conclusions • Bioenergy sector actually replaces more than 1.93 billion m3/year of natural gas in Ukraine. About

3650 MW of thermal power on biomass is operated, including 2000 MW in household, 350 MW in public utilities sector, more than 1300 MW in the industry

• National Action Plan on renewable energy up to 2020, sets the task to replace further 5.27 billion m3/year of natural gas and solid biofuels to achieve total gas replacement in the rate of 7.2 billion m3/year in 2020.

• This requires a significant increasing of biomass usage for heat generating equipment: from 3650 MW in 2013 to 16150 MW in 2020 and will reflect an actual capacity increase in 4.4 times.

• Set objectives implementation need a rapid increase of energy consumption from agricultural waste and biofuel energy plantations. Boilers efficiency, working on agricultural wastes and energy crops will increase from more than 300 MW (10%) in 2013 up to 11000 MW (70%) in 2020.

• Law 2010-d (in force from July 2015) has removed most of problematic issues for development of RE power generating projects and settings of “green tariffs” for them.

• Market is open and possible projects are mostly feasible in the next sectors: - heat production from biomass for private individual buildings; - heat production from biomass for public, industrial and commercial consumers; - power production from biomass (CHP is more feasible option); - large scale biogas projects with existing heat consumption.

• It is needed some next steps of Verkhovna Rada and Government to regulate some issues left

problematic for bioenergy.

Georgiy Geletukha

tel./fax: 044 332 9140 E-mail: geletukha@uabio.org

www.uabio.org

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