Small renewable generation in Ukraine: research results
The segment of electricity producers with an installed capacity of up to 1 MW is important for Ukraine, but it has been developing at a slow pace. Unlike Germany, where the energy transition began with active participation of small market players, in Ukraine it is developing slowly. According to the authors of the research “Small participants of the renewable energy market in Ukraine. Research of the generation segment with an installed capacity of up to 1 MW”, this is due to the fact that the very design of the “green tariff” market was developed for large players who were its first participants.
The authors found several important points regarding small participants of the Ukrainian RES market:
- In total, by mid-June 2020, 1208 power plants with a total installed capacity of 7488.535 MW received a green tariff.
- The average installed capacity of RES power plants in Ukraine is 6.199 MW, and the median is 1.665MW
- Small players occupy a share within the statistical error - less than 2.5% of the installed capacity. Their total installed capacity is 184.7 MW out of 7,448 GW of capacities that received a green tariff
- Among the technologies used by small generation, the first place in terms of installed capacity is photovoltaic solar power plants, followed by hydroelectric power plants, biogas plants, wind and biomass
- 492 RES power plants with a capacity of up to 1 MW in Ukraine belong to 335 companies. The largest number of facilities owned by one company is 14
- In terms of regional distribution of capacities, more small RES generation are connected in Vinnytsia, Khmelnytsky, Ivano-Frankivsk, Kyiv and Zakarpattya regions
The trend in the development of energy systems in developed countries is not only decarbonization, but also decentralization. In particular, Bloomberg New Energy Outlook notes that by 2050 a third of the installed solar capacity will belong to the consumers and will be located "before the meter." At the same time, the EU at the level of the 4th energy package, part of the US states and Australia support the development of distributed energy sources and distributed energy resources (RER).
Also, the authors highlight several reasons why distributed generation is important and why it is supported in the developed countries:
- A fairer energy transition and diversification of ownership. Local small-scale generation makes it possible to diversify the ownership of energy assets to a greater extent. It is small renewable generation that has led to the emergence of thousands of new co-owners of energy assets in Germany. At the same time, the analytical center Agora Energiewende calls distributed energy resources "key for a successful energy transition"
- Bringing energy production closer to the consumer. Small distributed capacities make it possible to bring electricity production closer to consumers and reduce the need to transport it from distant fossil fuel power plants
- Possibility of creating horizontal (P2P) markets. As the experience of the Brooklyn Microgrid initiative and many others show, the combination of distributed energy sources with modern communication technologies creates a situation in which a significant amount of energy is supplied to the consumer by a neighbor, creating an environment where the market becomes less monopolized and more horizontal.
- Less impact on the grid. Distributed renewable energy generation has a lesser impact on the power system, since changes in the weather do not lead to a sharp decrease in generation, typical for large generation
- Possibility of increasing the reliability of power supply. The Australian regulator AEMC in its official materials indicates that distributed energy resources (including generation) allow consumers to increase the reliability of their power supply and reduce their energy costs. In combination with the energy storage and microgrids, distributed generation can greatly increase the reliability of power grids because of the occurrence of these semi autonomous units capable of fully or partially self-sufficient energy supply.
- New opportunities for communities. Distributed small generation allows communities to partially or fully meet their energy needs, creating non-monopoly energy systems. That is why the 4th European Energy Package pays significant attention to distributed generation, which is part of “community energy initiatives”.
- Along with the great opportunities that distributed small generation brings, there are new challenges - financial, technical, regulatory. Outdated grids and inflexible regulatory systems inherited from the monopoly era (designed exclusively for the monopoly model and huge players) hinder the development of small generation, but more and more approaches are being developed in the world that allow to maximize the integration of small players into energy markets and maximize this potential. This research is a step towards better unlocking this potential.
Research “Small participants of the renewable energy market in Ukraine. The study of the generation segment with an installed capacity of up to 1 MW” was carried out in June-July 2020 by Andriy Zinchenko and Anna Kunbuttaieva with the support of the Heinrich Boll Bureau Kyiv-Ukraine, Energy Transition Coalition and the Active consumers and prosumers Union
Download the full version of the study in the Ukrainian via this link.