Current State and Prospects of Bioenergy Development in Ukraine

Transcription

1 Current State and Prospects of Bioenergy Development in Ukraine Georgiy Geletukha, PhD Head of the Board, Bioenergy Association of Ukraine (UABio) We are greening the energy!

2 UABio Members Scientific-Engineering Centre Biomass LLC «Salix Energy» NGO Renewable Energy Agency LLC Kolbe Power Group LLC Volyn Kalvis» LLC Kotloturboprom LLC Teplodar PV LLC Boiler factory Kriger LLC «Kyiv Green Energy» Ukrainian heat generating company "Ukrteplo" LLC Smilaenergopromtrans DP «Siemens Ukraine» LLC ENERSTENA Ukraine Foreign Enterprise Agro-Wild Ukraine LLC Metropoliya Science and Technology Company LLC Engineering Centre EkoEnergoProekt Private Enterprise «Kramar» LLC «ACCORD-LTD» LLC Ecodevelop Institute of Engineering Thermophysics of NAS of Ukraine Energy-Industrial Group «Yugenergopromtrans» LLC NLM-GROUP LLC Ecoprod Physical persons: Maraykin R., Petrov Ya., Ilchuk M., Bereznytska M., Epshtein Yu., Galchynska Yu., Teush S., Gres O., Stupak S., Romanyuk O., Kotsar O., Moroz O.

3 Ukraine s imports in 2017, million of US dollars The structure of Ukraine import in Principal items Oil products Natural gas Coal, antracite Cars Medicines Electric telephone sets Rolled metal products Pesticides Complex fertilizers Tractors Fuel cells for nuclear reactors Isolated wires Automatic machines.. Machines for crops harvesting Coke Whole oil Lorries Million of US dollars Polymers of ethylene Parts and transport devices Rubber tires

4 RE share in final energy consumption by sectors Power Production of Renewable Energy in Ukraine according official Energy Balances ( ) Heat Energy Transport Share of RE in total final energy consumption

5 Trends of bioenergy development in Ukraine ( ) Energy Balance of Ukraine for 2016: Share of biofuels in the structure of RES production 81%

6 Structure of Total primary energy supply according New Energy Strategy of Ukraine till 2035 Type of energy source 2015 (fact) 2020 (forcast) 2025 (forcast) 2030 (forcast) 2035 (forcast) Coal 27, Natural Gas 26,1 24, Oil Products 10,5 9,5 8 7,5 7 Nuclear Energy Biomass, Biofuels and Wastes 2, Solar and Wind Energy 0, Hydro Energy 0, Thermal energy 0,5 0,5 1 1,5 2 TOTAL, mill t o.e. 90,1 82,

7 Amount of biofuels, mill. t o.e. Forecast of total amount of consumption and structure of solid biofuels in Ukraine ( ) 10,00 9,00 8,00 1,20 0,59 7,00 6,00 5,00 4,00 3,00 2,00 1,00 0,00 0,70 0,58 5,26 0,27 0,54 0,13 3,12 0,10 0,49 0,43 0,05 1,89 0,04 0,40 1,45 0,38 1,10 0,34 0,01 0,70 0,40 0,10 0,05 0,25 0,07 0,26 0,08 0,30 0,00 0,00 0,00 1,90 1,95 2,12 2,35 2,40 2,45 2,55 2,60 2,70 2,80 2, Деревна Wood biomass біомаса Солома, Straw, стебла stalks Лушпиння Sunflower соняшника husk Енергетичні Energy crops культури Type of biomass Wood fuels 1,90 1,95 2,12 2,35 2,40 2,45 2,55 2,60 2,70 2,80 2,85 Straw, stalks 0,05 0,07 0,08 0,10 0,40 0,70 1,10 1,45 1,89 3,12 5,26 Sunflower husk 0,25 0,26 0,30 0,34 0,38 0,40 0,43 0,49 0,54 0,58 0,59 Energy crops 0,00 0,00 0,00 0,01 0,04 0,05 0,10 0,13 0,27 0,70 1,20 TOTAL, mill. t o.e. 2,20 2,28 2,50 2,80 3,22 3,60 4,18 4,67 5,40 7,20 9,90

8 Forecast of Renewable Heat Production in Ukraine ( ) Mtoe Total district/public heating Total industrial heating 2,61 8 Total individual heating 1,69 6 0,91 4,29 4 0,34 0,25 3,71 2,92 2 1,30 1,91 1,25 1,34 1,50 1,83 2, % 40% 30% 20% 10% Forecast of RES share in heat production ( ), % 6,2% 12% 22% 30% 40% 0%

9 Forecast of Renewable Heat Production in Ukraine ( ) Year MW, heat MWe Mtoe NG replacement, billion m3 Share of RES CO2 reduction, MtCO2/y Total investments, million Euro Total new jobs ,8 3,5 6,2% 6, * ,6 4,4 12% 8, ,3 6,6 22% 12, ,2 8,9 30% 17, ** ,9 12,2 40% 24, * according Renewable Energy Action Plan till ** according Energy Strategy of Ukraine till 2035.

10 Potential of biomass available for energy in Ukraine (2016) Type of biomass Theoretical potential, Mt Potential available for energy Share of theoretical potential, % Straw of grain crops Straw of rape By-products of grain corn production (stalks, cobs) By-products of sunflower production (stalks, heads) Secondary agricultural residues (sunflower husk) Wood biomass (firewood, felling residues, wood processing waste) Wood biomass (dead wood, wood from shelterbelt forests, pruning) Mtoe Biodiesel (rapeseed) Bioethanol (corn and sugar beet) Biogas from waste and by-products of agricultural sector 1.6 bln m 3 СН Landfill gas 0.6 bln m 3 CH Sewage gas (industrial and municipal wastewater) 1.0 bln m 3 CH Energy crops: - willow, poplar, miscanthus (1 mln ha*) corn for biogas (1 mln ha*) 3.0 bln m 3 CH TOTAL % 35% * In case of growing on 1 mln ha of unused agricultural land.

11 Main drivers and barriers for bioenergy development Drivers: 1. Market prices on natural gas for industry and public organizations. Considerable increase of natural gas prices for population and for DH companies heating population from May 2015 (but they are ~40% less than market prices yet). 2. Improvement of tariff system for heat energy from Alternative Energy Sources (AES incl. RE): transition from self cost + 6% model to new model from April Now tariff on heat energy from AES = tariff on heat energy from natural gas - 10%. 3. Removing of discrimination of heat producers from alternative energy sources due to existence of bank accounts with a special regime of use for payments for heat energy (from March 2018). 4. First steps in monetization of subsides for population (from January 2018). Barriers: 1. Natural gas prices for population and for DH companies heating population are not market (~40% less than market prices yet). The price increasing is possible from October 2018 (IMF s request to Ukraine for next credit). 2. Lack of solid biofuels market development. Establishment of solid biofuel electronic trading system is in progress needed legislation is developed (similar to Lithuanian Biofuel Exchange Baltpool). 3. Stimulation of electricity production from biomass and biogas is insufficient. These sectors fall behind the electricity production from the sun and wind and trends of their development do not match the similar trends in EU countries. 4. Imperfect model of DH supply (monopoly position of DH companies, problems with third party access to heating networks). Improvements are developed and under discussion. The competition introduction in the DH systems is scheduled for 2020.

12 Solid biofuels electronic trading system establishment in Ukraine Solid biofuels must meet quality standards Solid biofuel are traded Operator - ensures the operation of the SBETS; - does not have the right to procure, produce, transport, supply and trade in biofuels and/or energy produced using biofuels. Solid biofuels electronic trading system (SBETS) Threshold prices for the operator's services are based on the methodology. Antimonopoly Committee of Ukraine Competition Law Controlling State Agency of Energy Efficiency and Energy Saving of Ukraine - approves prices for operator's services; - imposes administrative fines on the operator and participants of the SBETS in case of violation of their obligations.

13 Insufficient stimulation of electricity production from biomass and biogas Electricity production from RES in EU in 2015 (%) 0,7% Electricity production from RES in Ukraine in 2016 (%) 30,3% 17,9% 10,8% 8,8% 1,2% 4,5% 40,3% 85,5% Biomass SPP HPP WPP Other Biomass SPP HPP WPP Installed capacity of RES power plants in Ukraine RES Installed capacity, MW WPP 437,7 512,2 SPP 590,9 841,4 Biomass 38,7 43,8 Biogas 24 40,6 Installed capacity, MW р. Electricity production RES in the EU and Ukraine RES electricity WPP electricity from biomass electricity SPP electricity from biomass EU (2015) Ukraine (2016) Ukraine - EU 1,7 7,3 Electricity production from biomass - 4,5 times less than from WPP 0,6 3,75 Electricity production from biomass - 6,5 times less than from SPP

14 Feed-in tariffs on electricity from biogas in EU countries EU country Euro / kwh 1 Bosnia and Herzegovina 0,3637-0, Switzerland 0,234-0,190 3 Italy 0,233 0,085 4 Germany 0,2314-0, Greece 0,230-0,209 6 Luxembourg 0,191-0,152 7 Austria 0,1848-0, Serbia 0,182-0,15 9 Macedonia 0,18 10 France 0,175-0,15 11 Ireland 0,157-0, Montenegro 0,15 13 Ukraine 0,124 one of the lowest in Europe 14 Portugal 0,117-0, Slovakia 0,102 0,058

15 Feed-in tariffs on electricity from biomass in EU countries EU country Euro / kwh 1 Switzerland 0,261-0,163 2 Bulgaria 0,248-0, Italy 0,246-0,15 4 Austria 0,22-0,105 5 Greece 0,198-0,135 6 Luxembourg 0,162-0,142 7 Bosnia and Herzegovina 0,161-0, Macedonia 0,15 9 Ireland 0,147-0, Serbia 0,1382-0, Montenegro 0,1371 0, Germany 0, Ukraine 0,124 one of the lowest in Europe 14 Portugal 0,119-0, Slovakia 0,092-0,07

16 What do we offer (1)? Different levels of the feed-in tariff for electricity produced from biogas depending on the capacity of PP Category of power facility Feed-in tariff, Euro/kWh (ex. VAT) Electricity produced from biogas at PP with capacity < 200 kw el 0,195 Electricity produced from biogas at PP with capacity from 200 kw el to 1 MW el 0,160 Electricity produced from biogas at PP with capacity from 1 MW el to 5 MW el 0,140 Electricity produced from biogas at PP with capacity > 5 MW el 0,124 Calculations: IRR - 20%. 60% of credit funds in Euro for 8 years at 8% per annum

17 Installed capacity What do we offer (2)? Increased feed-in tariff for: - CHPs - PP with medium and low capacity; - PP on agro biomass (straw, corn and sunflower stalks, energy crops). Straw, corn and sunflower stalks, energy crops Other types of biomass - TPP CHP TPP CHP < 1 MW 0,17 0,19 0,15 0, MW 0,16 0,18 0,14 0,16 > 5 MW 0,15 0,17 0,124 0,15

18 What do we offer (3)? Feed-in tariff for electricity produced from biomethane Category of power facility Electricity produced from biomethane at PP with capacity > 5 MW el and more than 60% of thermal energy utilization Electricity produced from biomethane at PP with capacity < 5 MW el and more than 60% of thermal energy utilization Feed-in tariff, Euro/kWh ,160 0,180

19 What do we offer (4)? Feed-in tariff prolongation for electricity produced from biomass, biogas and biomethane for 20 years from the PPA signing. The term of support, which is established now (until 2030), no longer provides to investors sufficient guarantees of investment return. The new auctions system, which is to be introduced after 2020, prescribes tariff setting for 20 years from the PPA signing. Accordingly, projects that do not fall under the auctions will be in a discriminatory position as they will have a feed-in tariff <10 years (until 2030).

20 Imperfect model of DH system. Negative trends in the sector * The share of DH is decreasing: in %, in %. DH of many cities completely rejected by switching to individual or autonomous heating systems (Uzhhorod, Marhanets, Nikopol, Pokrov, Zolochiv, Dolina). Poor technical conditions of the DH systems: 38% of heat networks (from km) are in an emergency situation. Average heat losses make up 19%. Economic situation of DH enterprises - the total overdue debt to Naftogaz for the natural gas is about 30.5 billion UAH, the debt for billion UAH. If these negative trends continue, Ukraine will completely lose DH systems and possibility to produce heat at competitive prices and in an environmentally safe way! DH systems should generate heat significantly cheaper (by 20-40%) than individual heat supply systems! * According draft report of USAID Municipal Energy Reform project

21 Strategic / Legislative level: ROAD MAP to improve DH systems efficiency (1) * Governmental decision The Heat Supply Strategy of Ukraine until 2035 and the Action Plan for its implementation. 1. Priority for DH systems. 2. The term Efficient district heating system introduction (according to Directive 2012/27/EC) and increasing the share of them in the DH of Ukraine. Law of Ukraine On Heat supply efficient district heating and cooling means a district heating or cooling system using at least 50% renewable energy, 50 % waste heat, 75 % cogenerated heat or 50 % of a combination of such energy and heat. 3. Heat supply development plans introduction. 4. Responsibility for the lack of heat supply schemes. 5. Non-discriminatory access to heat networks for heat energy producers. Law of Ukraine dated "On cogeneration..." 6. Zoning principle introduction. incentive measures and/or administrative obligations for the development of highefficiency cogeneration in Ukraine. * According draft report of USAID Municipal Energy Reform project

22 ROAD MAP to improve DH systems efficiency (2) * Law of Ukraine "On energy saving Law of Ukraine "On Alternative Energy Sources" 1) national targets for the transition to low-temperature heat supply systems. 2) waste heat usage stimulation. Subordinate level: Order of the Minregion Order of the Minregion NERC Resolution The Methodology for the heat supply scheme development. The Methodology for the heat supply plan development. The Procedure of connection to heat networks * According draft report of USAID Municipal Energy Reform project

23 Development diagram for District Heating (originated from Danfoss)

24 Thank you for attention! Welcome to Ukraine and to UABio! Georgiy Geletukha tel./fax: We are greening the energy!