INVEST Ukraine Open for U
Yuliya Kovaliv June 2016
Energy sector: Challenges Energy intensity of GDP, 2014
Extremely high energy intensity of GDP
0,40
Poor energy sources diversification
0,20
0,30
0,10
Insignificant part of renewable energy Only 60% of domestically
energy
resources
0,32 0,20 0,11
0,00
produced
Germany Romania
Inefficient consumption
Obsolete equipment and technology
Poland
China
Ukraine
Power generation structure by source 39,43%
Low level of energy efficiency
0,13
0,13
Coal & Gas
48,15%
7M2015
7M2014
45,24% 54,77%
5,66%
Hydro
Renewables
Nuclear
Market based energy tariffs Household gas tariff evolution (UAH/m3) 8 6,8
7 6 5
Increased home production will lower dependence on imported gas
3 2 1
Higher prices will allow UGV to increase CapEx in production facilities, incl. new conventional gas production and first-inUkraine fracturing operations
Diversification of gas supply
3,6
4
Increased gas production by State-owned company UGV to 20 B m3 per year by 2020
0,73
1,18
Fighting corruption
0 2010-Apr 2014
2014 - 2015
Apr 2015 May 2016
from May-16
Unification of retail commercial and household prices eliminates possibilities for corruption
Electricity market reform Privatization of regional power generation plants in 2016 (incl. Centrenergo 7,67 GWt) Investment in infrastructure
Reconstruction of Northern and Dnipro Energy transmission system (€150m KFW loan)
Construction of 6 Dnister hydropower stations with total capacity of 390 MWt
Construction of Kaniv hydropower plant
Market-based tariff schedule till 2017 adopted
New Electricity Market Law Seeking competition and diversification
Renewable Energy National Action Plan Goal:
11%
of RES in Ukrainian energy mix by 2020
Total amount of investments required – € 16 B: € 8,5 B of which should be directed to the field of electric power production; € 6,9 B – for heating and cooling; € 0.6 B – for transport.
Available investment projects on renewable energy. Implemented competitive green tariffs: Solar power stations 15,99 €ct/kWh;
Cogeneration plants on biomass and biogas 10,45 €ct/kWh;
Wind power stations 6,79 €ct/kWh;
Geothermal power stations 10,45 €ct/kWh;
Small hydro power stations 10,45 €ct/kWh;
+10%
Premium for usage of Ukrainian equipment
Energy Efficiency Improvement Public Buildings
Residential Sector
€ 35 B
Renovation consistent with EU requirements
Investments needed (including € 7,7 B Government support)
State EE Program: reimbursement of private loans for energy saving equipment and materials Reimbursed 2014-2016:
UAH
Investments needed
571 M
annual natural gas savings in 2030
public bodies’ buildings are to be renovated
700 M m
3
annual natural gas savings
111 K loans
Ukraine selected “Shared savings” ESCO agreement model
Goal of the program till 2030:
12 B m3
€ 4.4 B
100 K
Public body’s energy spending
80K 6.5M
multi-dwelling buildings individual houses
Net savings (10-20% of savings)
Net savings (≈50% of initial value)
ESCO payment (80-90% of savings)
Before ESCO
During ESCO (< 10y)
After ESCO