The task for Ukraine is to become a leader in green energy in the EU

On December 28, President of Ukraine Volodymyr Zelenskyi said in his Message to the Verkhovna Rada that Ukraine should become a leader in building modern green energy. The President rightly noted that it is green energy that can counteract military, political, economic or even climatic challenges and this will allow us to create a decentralized energy system that cannot be destroyed by any missile strikes. About this write EP.

In essence, this Message should be perceived as a task for the legislative branch of government from the Guarantor of the Constitution and the Supreme Commander of the country. Ukraine should become a leader in the development of green energy and help Europe get rid of its destructive dependence on fossil fuels.

And already on January 5, 2023, the Vice President of the European Commission, Frans Timmermans, actually supported the President's thesis, noting that the advantage of renewable energy is much greater decentralization of the energy system, which is important in view of the threat of Russian strikes.

"I see a great potential for deepening energy cooperation between Ukraine and the European Union, especially with regard to renewable gases, including hydrogen and biomethane," Timmermans said and emphasized that there are many areas in Ukraine where renewable energy installations can be built.

Today, it is clearly visible in the numbers and facts that Russia finances the war in the center of Europe mainly thanks to the profits from the sale of fossil fuels, which it has planted Europe on for the past decades with the intention of making it economically dependent and politically destroyed.

And she succeeded in the first part - according to official data for 2021, Europeans were 45% dependent on imported gas and 27% on oil.

However, even today the German government is proud of the fact that it receives 0% of gas, 0% of oil and 0% of coal from Russia, other European countries are on this path.

It is also clear that the centralized energy system is vulnerable, and the planning of energy infrastructure development and its management in many aspects still remains Soviet. Excessive centralization and vulnerability violates Constitutional human rights, because the right to education and health care suffer significantly due to interruptions in energy supply, because of this it is difficult to talk about guaranteeing equality in the dignity and rights of all citizens.

Renewable energy can become the basis for building the economy of the future in Ukraine — an economy that is growing and developing, and its ecological footprint is decreasing. It is also obvious that the role of fossil fuels in our energy needs to decrease.

What should the Verkhovna Rada (the legislative branch of government) and the Cabinet of Ministers (the executive branch of government), as well as all of us in the country today, do to fulfill the task of green transformation "for tomorrow"?

Where is Ukraine now?

More than 40% of the energy infrastructure was damaged by the Russians. As a result of Russian aggression, Ukraine is getting rid of its industrial and energy Soviet heritage, in particular the coal industry, which provides an opportunity to rebuild energy and industry on new "green" principles.

Hopelessly outdated, critically worn out and partially damaged by combat actions TPP power units make up about half of all electricity generating capacities of Ukraine. As of the end of 2021, renewable energy sources reached a share of 14.5% in the total installed capacity in the territories controlled at that time (excluding Crimea and Donbas).

Due to the full-scale invasion of Russia, 90% of wind and up to 50% of solar energy in Ukraine has been decommissioned, Energy Minister Herman Galushchenko said.

The pre-war strategy predicted that in 2030 the share of "green" energy in Ukraine would be at least 25%, but as a result of the war, Galushchenko predicts that ambitions can be increased.

And given the trends in the EU, we should have greater ambitions for the development of renewable energy sources (RES) in Ukraine.

According to the Institute of Renewable Energy of the National Academy of Sciences of Ukraine, the total capacity potential of renewable energy sources in Ukraine reaches 874 GW, including about 250 GW of the capacity of offshore wind farms.

RES development in EU countries

The European Union allocates 225 billion euros for the implementation of the Re-Power EU plan, which is designed to eliminate energy dependence on Russia. 80% of Europeans fully support it, despite the fact that they are faced with energy poverty.

A new report from the International Energy Agency (IEA) suggests that the world is on track to add as much renewable energy in the next 5 years as it did in the last 20 years.

Countries seek to take advantage of renewable sources to achieve energy security.

According to IEA forecasts, by the beginning of 2025, renewable energy sources will replace coal as the largest source of global electricity. And by 2027, solar photovoltaic systems will become the largest source of electricity. Fatih Birol, executive director of the International Energy Agency, also notes that the global energy crisis is dealing a heavy blow to European industry and may undermine its competitiveness.

Fortunately, the EU understands that cheap Russian gas will no longer return to the European market.

At the same time, Birol believes that the EU can claim the position of leader in the global race for RES and clean technologies, but for this a bold new industrial plan is needed.

We are talking about the EU Industrial strategy — the macro-regional strategy of the European Union. Ukraine also needs a bold new industrial plan, because our industry was also based on cheaper Russian resources.

It would be great to synchronize these plans, as they do in the EU, forming production clusters and to note that the localization of the production of solar panels and other equipment for RES should take place in Ukraine, and not in China, which can use its dominance in this field for political purposes.

Ukraine is a reliable partner of the EU in the development of RES

According to the Cabinet of Ministers, Ukraine fulfilled 62% of its obligations in the field of energy (55% of the VRU and 70% of the CMU) within the framework of the Association Agreement with the EU. But there are a number of key state program documents that must be adopted and reviewed for the implementation of RES.

In particular, we do not have a long-term energy strategy of Ukraine, which formalizes Ukraine's energy security policy, which can only be guaranteed by RES, and creates conditions for the sustainable development of the energy sector and stable energy supply of the national economy and public needs, both in peacetime and in special periods

It is also important to agree on the Integrated National Energy and Climate Plan or National Energy and Climate Plan — a ten-year document that the Energy Community instructs each of its member states to draw up and implement, so that the EU can achieve its general goals for reducing greenhouse gas emissions.

In response to the letters of Razom We Stand and the international Fossil Fuel Non-Proliferation Treaty initiative, the Ministry of Energy noted that a working group has been created that works on updating the energy strategy of Ukraine until 2050, the preparation of the Integrated National Energy and Climate Plan continues to fulfill the mandate of the Energy Community, as well proposals have been submitted to the Ministry of Environment regarding the revision of the NVV2 goals of the Paris Agreement for the period up to 2030. After all, as a result of hostilities, there was a significant reduction in demand (by 30-35% compared to consumption in 2021), and the consumption profile changed significantly due to the movement of consumers to the western regions.

This will give international partners the right signals regarding the attractiveness and reliability of investments in the decarbonization of Ukraine.

It is pleasing that Herman Galushchenko and Fatih Birol signed a two-year cooperation program between the Government of Ukraine and the International Energy Agency. The joint work program focuses on Ukraine's key short- and long-term energy priorities, with an emphasis on energy security, clean energy transition and the energy sector recovery plan.

The Government also approved the Concept of implementation of "smart networks" in Ukraine by 2035.

The concept aims at a gradual reduction of electricity losses in networks, ensuring a reduction of CO2 emissions, increasing the volume of investments in the modernization of power networks, as well as ensuring an improvement in the quality and reliability of electricity supply for electricity consumers.

What else is needed to support RES in Ukraine?

It is also important to solve the old problems of the electricity market and the imbalances that significantly increased with the war, caused by the mechanism of imposing special obligations (PSO) on market participants for the supply of cheap electricity for the population.

Regulated tariffs set for all household consumers, regardless of their income levels, do not cover the cost of electricity production, nor the costs of maintaining electricity networks, they are many times lower than market prices.

After the loss of Zaporizhzhya NPP generation, Energoatom can no longer perform these special duties, according to Jan Kopach, former director of the Energy Community. Considerable funds are also needed to repair and rebuild networks damaged by missile strikes.

The current debt of "Energoatom" to the "Guaranteed Buyer" for PSO services for the supply of electricity to the population exceeds 20 billion hryvnias (about 0.5 billion euros).

And this is a hole that will have to be covered from the state budget. How to solve the problem in the future? It is obvious that the population cannot do without an increase in electricity tariffs, but this does not mean that the poorest sections of the population will pay more. If tariffs are differentiated and/or targeted subsidies are introduced, then social security will increase, as will the liquidity of the e/e market.

Ukraine has experience with targeted subsidies for heat, similar support is available in the European Union countries, but during its implementation, targeting and verification for recipients is very important.

It is also important to decide on deadlines and develop documents based on key principles and provisions under the 4th Energy Package "Clean Energy for All Europeans". This will make it possible to ensure social protection and energy security of small RES producers – citizens. small and medium business.

The introduction of direct contracts and certificates of origin of "green" electricity can also significantly contribute to the development of RES.

Thanks to the synchronization with the European energy system and the opening of the export of electricity from Ukraine to the EU, guarantees of origin will become integral to the start of concluding direct contracts for the purchase and sale of electricity, known as corporate PPAs. This will help businesses achieve their climate neutrality goals.

It took Germany a year to break its dependence on Russian fossil fuels. Although key European government officials believed that this was impossible, and leading scientists and activists, on the contrary, argued that action should be taken immediately.

We hope that Ukraine will have enough time to pass key strategic legislation on the development of RES, which will make it possible to achieve climate neutrality by 2040, as a new report by Climate Analytics in partnership with Can Europe says that this is possible.

This will make it possible to make Europe the first climate-neutral continent, decarbonize the EU economy and become a reliable exporter of green energy, and leave Russian oil and gas in the past forever.

Author Olga Yevstigneeva / Co-author Oleg Savytskyi, Razom We Stand