Ukrainian crisis can be solved – with an Energiewende

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protest against fossil fuels for rnewables February 2015 Kiev (photo 350.org)

protest against fossil fuels for rnewables February 2015 Kiev (photo 350.org)

A Ukrainian Energiewende could go a long way to resolving the current geopolitical crisis around the country, writes Oleg Savitsky of the National Ecological Centre of Ukraine in a new report for the Succow Stiftung. According to Savitsky, it would reduce Ukraine’s dependence on Russian gas and uranium as well as on coal from the breakaway regions, while at the same time reducing pollution, greenhouse gas emissions and the risk of a nuclear disaster. It would also help to combat corruption and usher in economic growth and a more equitable society. Savitsky calls on the EU and Germany to set up a “Marshall Plan” to bring about a Ukrainian energy transition, rather than trying to maintain Ukraine as a failed gas transit state.

Oleg Savitsky, a climate and energy campaigner, has written a devastating analysis of the current state of the Ukrainian energy system for the Succow Stiftung, a German foundation working to preserve the natural heritage in Eastern Europe (the former Soviet bloc). Currently, Ukraine’s power capacity is dominated by thermal power plants (49%) and nuclear plants (27%).

Ukraine Savitsky installed capacities 2015

A number of these nuclear plants operate well beyond their designed lifetime and represent a threat to the entire European continent, notes Savitsky. Ukraine is of course the home of Chernobyl, the scene of the worst nuclear accident ever to happen in Europe. For their operation, the Ukrainian nuclear plants also depend partially on Russian uranium.

Ukraine’s coal capacity was mostly commissioned in the 1960s and lacks even basic pollution control, writes Savitsky: “Under EU regulations, most, if not all of coal plants, would not be permitted to operate due unacceptable levels of pollution. Still, a number of them are supplying electricity for exports to the EU.”

What is more, Ukraine obtains most of its coal from the breakaway regions in the East that are now under Russian control. “While gas and nuclear dependences have been weakened thanks to reverse gas flows from Europe and new supplies of nuclear fuel from Westinghouse Corporation, coal dependence is only aggravating and needs to be addressed as soon as possible”, notes Savitsky. “Every ton of coal supplies from non-controllable territories is feeding corruption in Ukraine and handing cash to terrorist regimes in noncontrolled territories, motivating them to use forced labor in make-shift coal mines and aggravating the perilous situation with human rights in Donbass region even further.”

The electricity and gas grids need major renovations. Most of the infrastructure was built 40 to 50 years ago. In 2013 power losses accounted for 20.7 TWh or more than 50% of household consumption

Many of the nuclear and coal power plants need to be decommissioned in the coming years, or restructured at high cost: “By 2040 most of existing fossil-fuel and nuclear (even if they will be granted with life-time extensions) capacities in Ukraine will retire due to technical reasons.” The thermal power plants are so inefficient that they only produce power one third of the time. They have even lower load factors than the emerging renewable sources, which currently account for just 1.4% of capacity.

This by no means exhausts Ukraine’s energy problems. Ukraine’s economy is highly inefficient: the amount of energy spent to produce one dollar of GDP is three times higher than the EU-average. CO2 emissions per unit of GDP are the highest in Europe. Energy poverty is rampant. 70% of Ukrainian households are paying an unsustainably high share of their incomes for energy bills. Rising prices are only making matters worse. “Energy subsides, lack of incentives for energy efficiency improvements and abuse of consumer rights and liberties create a vicious circle of exacerbating socio-economic crisis.”

Then the electricity and gas grids need major renovations. Most of the infrastructure was built 40 to 50 years ago. In 2013 power losses accounted for 20.7 TWh or more than 50% of household consumption (41 TWh in 2013). Last but not least, Ukraine’s energy sector has major governance problems, characterised as it is by monopolisation and lack of transparency. The power supply is controlled by large, intransparent corporations or individual oligarchs.

Energy Community

According to Savitsky, a transition from the current dysfunctional system to one based on renewable energy would solve all of these problems at once. It would obviously reduce Ukraine’s dependence on Russian-controlled gas, coal and uranium, and thereby greatly improve the country’s security of supply.

An Energiewende would improve the economic situation of Ukrainian citizens: “Energy efficiency, in particular, not only helps promote domestic added value and increases capital investments, but also reduces energy poverty. Over the long run, the price of renewable energy will remain stable or even decrease, as there are no fuel costs for wind or solar, and equipment costs will continue to drop. The real cost of fossil fuels and nuclear will continue to increase, especially with introduction of carbon pricing, decommissioning and waste treatment surcharges, so the energy transition itself is a way of keeping energy prices in check and avoiding energy poverty.”

Energy efficiency and renewables would also pave the way for a “more equal and just society”, Savitsky points out. “Renewables offer an opportunity to switch to a large number of small generation capacities, and this distributed approach offers an opportunity for citizens and communities to get involved. Local ownership of renewables can provide great economic payback for the investing communities and reshape the energy market.”

Ukraine’s imperiled economy does not need patching; it needs the transition to a new conceptual basis. This basis is renewable energy, technological innovation and a self-reinforcing circle of energy saving

This is not even mentioning the contribution renewables would make to improved air quality and lower greenhouse gas emissions. The unbundling of energy production from transmission and distribution, which should be part of the transition according to Savitsky, would, together with anti-monopoly legislation, provide incentives for new investment, possibly leading to thousands of new jobs. Energy efficiency measures and building renovations will also create many jobs in the construction sector.

An additional benefit of such a transition is that it would align Ukraine with EU energy policies and rules, enabling it to integrate into the EU energy market. Ukraine is a member of the Energy Community, which prepares countries for integrating their energy systems and policies with those of the EU. It puts obligations on the member states in the form of governance reforms, energy efficiency improvements and reduction of hazardous emissions. Savitsky notes that the only way Ukraine could realistically fulfill these obligations is by phasing out its centralized power generation.

For the EU Ukraine’s progress in transition to sustainable energy economy is “vitally important” for the success of the Energy Union, the ideal of a pan-European energy market. “Integrity, security and sustainability of energy supply cannot be achieved in Europe without major improvements in the energy sector of Ukraine”, Savitsky writes.

Quite feasible

The good news is that an Energiewende in Ukraine is quite feasible. Savitsky notes that Ukraine currently needs 25 GW of peak power supply in winter time and 17 GW in the summer. This is half of the 50.9 GW in generation capacity that it has today. He expects demand growth to be limited as a result of increasing energy efficiency, the decline of obsolete energy-intensive industries and the territorial breakup of the country. In 2013 peak demand in winter time was 28 GW.

Ukraine Savitsky power output 5 Jan 2016

If centralized nuclear and coal power plants were to be shut down altogether, Ukraine would have a deficit of around 20 GW of “guaranteed” power supply, notes Savitsky, as existing large hydro and renewables combined already provide more than 5 GW. To achieve this goal, the country would need to add 1 GW of “guaranteed” supply for 20 years. This amounts to around 3 GW of renewable energy capacity, given their lower load factors.

There are several reasons why this is quite feasible, according to the author. Germany, for example, built 84 GW of renewable capacity in just 15 years. Ukraine has several advantages over Germany. It has better insolation, resulting in higher capacity factors for solar PV. It has much more space for onshore and offshore wind. It is also a major agricultural producer with the potential to become the biggest bio-energy producer in Europe. It also has significant geothermal potential.

The transition to renewable energy provides the opportunity to solve the current geopolitical crisis in Eastern Europe, avoid further armed conflicts over fossil fuel extraction and supply, and build cooperative energy security mechanisms

At present, “wind power has the biggest potential for deployment in Ukraine and soon can start replacing the retiring fleet of coal power plants. According to estimates [from researchers], by 2028 electricity output from wind power can exceed electricity production from coal. Solar energy will be able to provide more than 12% of electricity supply in summer time and up to 6% in winter time. However, with the development of storage technologies and new photovoltaic materials, role of solar energy can dramatically increase in the future and surpass current projections. Biogas plants and solid biomass for combined heat and power can provide up to 10% of electricity production.”

Ukraine Savitsky power output Jan 2028

Economic miracle

Savitsky concludes that “Ukraine’s imperiled economy does not need patching; it needs the transition to a new conceptual basis. This basis is renewable energy, technological innovation and a self-reinforcing circle of energy saving. Similarly, in late 1940s, along with technical and financial support from the US provided by the Marshall Plan, strong fiscal and anti-monopoly policies laid down the foundations for the German “Wirtschaftwunder” and economic recovery throughout Western Europe.”

He calls on the European Commission and the EU’s individual member states, especially Germany, to “closely cooperate with Ukraine’s civil society groups and develop an ambitious economic program based on rapid rollout of energy transition in Ukraine. A carefully elaborated and transparent plan presented in Ukraine can inspire and mobilize the public and facilitate profound economic and political changes.”

Thus, the transition to renewable energy “provides the opportunity to solve the current geopolitical crisis in Eastern Europe, avoid further armed conflicts over fossil fuel extraction and supply, and build cooperative energy security mechanisms. By harnessing local renewable energy sources, Ukraine can increase its political and energy independency. The degree of international cooperation needed for this transition can act as a catalyst for cooperation in tackling other regional challenges. Finally, phasing out nuclear power would prevent potential threats of nuclear accidents and spread of radioactive materials in the region.”

Ukraine’s energy crisis can become a huge opportunity, concludes Savitsky, with “renovation of infrastructure and large-scale deployment of renewable energy creating hundreds of thousands of green jobs and becoming a basis for new economic miracle in Eastern Europe.”

Comments

  1. says

    I can agree with the overall sentiments expressed by Mr Savitsky: renewables offer a way forward for Ukraine in terms of cleaner energy and a greater measure of energy independence.

    In the case of nuclear: the Chernobyl incident was down to 100% human failure (Dorner: The Logic of Failure). Nuclear reactors operating beyond their design lifetimes also occurs in other countries (hi France). This begs the question: do French nuclear reactors represent a threat to the entire European continent? (or Belgian ones for that matter – how are the hydrogen induced cracks in the pressure vessels developing?). With respect to the east of Ukraine (coal, corruption & terrorists), the only solution is a political solution that has to involve Russia.

    I have done some work on Ukraine and renewables. I agree with Savitsky that the country has some good wind resources, is a good location for PV and has a large number of unused small hydro systems (built in the 1950s and fallen into disuse). The overall mix lends itself to both large-scale systems (which should appeal to the large energy companies) as well as communal/community systems, which should be attractive to oblasts/local governments. Bio-mass driven CHP with district heating is a “no-brainer”. This leaves difficult to answer questions such as: who funds these things, who implements?

    If Ukraine moves forward at any scale with respect to renewables it needs to involve some of the existing mostly fossil & nuclear players – or at least provide the opportunity to such players to be involved – if they decide to stick with their smoke-stacks or atom-bangers – well that’s their problem (& ultimately their loss).

    In terms of energy efficiency, the energy rennovation of housing (both apartments and individual houses) should be done as a matter of urgency. Who funds, who implements? Talking to some of the “high net worth individuals” in Ukraine, one of the current problems with funding is the role of banks that lack the capacity, sometimes stand in the way of funding from sources such as the EBRD, or charge daft interest rates (I’m not making this up – this is first hand stuff).

    Ukraine: great possibilities but the devil is in the detail. The EC/EU can only do so much – ultimately it is down to Ukraine, political will to do something and the need to get all sections of society “buying into” the move to renewables.

  2. Bas says

    The nice ideas of Savinsky won’t happen (soon) as a German-like Energiewende doesn’t support (the power of) the ruling energy tsar’s.

    Even if government would succeed to get Energiewende like laws accepted, then the levels of (semi-)corruption in Ukraine will turn it into a failure.
    A German like Energiewende requires low levels of corruption in society & government, to prevent that it becomes a sump…

  3. Ian Hore-lacy says

    Interesting! Sounds like some good potential for wind and solar, but forget about a German Energiewende, which requires some heroic assumptions which are even being tested there.
    How would Fig 9 above for 2028 look if it was a calm day?
    The present nuclear reactor fleet is sound, providing 13 GWe net, and has been significantly upgraded since independence.

  4. says

    Much to agree with here. Energy Community should be taken more seriously. Ukraine has enormous scope for energy efficiency and renewables, as Suzanna Hinson and I argued in http://www.cer.org.uk/publications/archive/policy-brief/2015/cleaning-neighbourhood-how-eu-can-scrub-out-bad-energy-policy.
    Problem with Energiewende is that it sets wrong priorities: first shut nuclear, then coal, then gas. It should be first shut coal (at least unabated coal), then gas, then nuclear – if you want to move to 100% renewables, which we don’t think is correct end objective.

    • Oleg Savitsky says

      From technical point of view (not talking about short term visibility of political action on climate change) Energiewende works very well for transition of energy system to “soft energy path”. Nuclear was the wrong way to go from the very beginning, and experts like Lovins have warned about this in 1970-ies. Nuclear is central to the old “hard path” paradigm. To build effective, flexible and intelligent energy system we need to get rid of this inflexible an super-centralized power source first. Research shows that in reality countries who stick to nuclear are doing worse on climate change mitigation
      http://www.earth-policy.org/press_room/C68/market_forces_driving_great_transition_to_clean_energy_says_new_book

  5. says

    Ukraine would require extensive investments in wind and solar technologies to supplant any significant portion of current electricity supplies. The corresponding development in Germany has led to rising consumer electricity prices that presumably would be beyond the reach of most Ukrainian households. No government can long endure on a foundation of energy poverty.

    At the same time, Germany’s energy transition remains modest and – particularly with respect to nuclear substitution and CO2 reduction – behind schedule. Thus far, the cited renewable capacity of 84 GW (the oficial figure is 97.4 GW for 2015) delivers scarcely more electricity than the country’s 23 GW of lignite power generation. A high number of citizen solar projects, commercial wind farms, and grid reconfigurations will still be required to decarbonize Germany’s electricity market, a process extending over at least another two decades. Even then, the building and motor vehicle sectors as well as the chemical and steel industries will continue to rely largely on fossil fuels.

    Ukraine is more dependent than Germany on district heating networks that could not be easily converted to renewable energies. Coal is instead imported from South Africa, the United States, and Australia. Cancelling these shipments would not improve domestic economic perspectives. Otherwise, Poland and the Czech Republic would already be moving away from coal.

    An Energiewende demands reliable bookkeeping, but Germany has neglected that requirement. Meeting its 40% greenhouse gas reduction target by 2020 would amount to retiring the equivalent of two times all the lignite power plants in eastern Germany. These installations are instead being sold to the Czech EPH to sustain their operation. After nuclear phase-out schedules had been postponed in 2010 by concerns over grid supply security, Germany returned to its renouncement of nuclear power a year following the Fukushima meltdown. Such inconsistent policies cannot be recommended for emulation by Ukraine, which should instead examine its own economic prerequisites as the basis of future policy decisions.

    The Chernobyl reactor was a graphite-moderated design intended to produce plutonium for nuclear weapons. The Soviet Union may have established that operation in Ukraine rather than near its own centers of military command on the basis of greater proficiency. The continuation of nuclear power generation might now be of less concern than the declining motivation and expertise reported elsewhere. Germany has experienced numerous incidents at certain nuclear power plants, with operators attempting to maintain profitability as the final shut-down dates approached. When the log books were opened at one accident-prone Vattenfall plant, hundreds of procedural infractions had not been reported in disregard of federal safety regulations.

    Before Ukraine could reduce its dependency on conventional energy resources, it would first need to improve trade balances by developing exportable products to obtain more favorable credit terms. A 4 MW solar farm was recently announced for the Chernobyl zone, and 570 MW of national solar capacity is expected by the end of the year. Coupling particular industrial processes such as the manufacture of building insulation to hours of sunlight would yield compounded benefits of energy utilization.

    The adoption of advanced metering technologies would likewise be essential for implementing an energy transition. For years, a Kyiv university institute performed laboratory measurements of every type of power meter produced in the world. Resource conservation techniques using real-time monitoring, demand-side management, and transitional usage simulations could now be developed and marketed internationally, including to Germany.

    Ukraine has repeatedly paid for imported Russian gas with shipments of sugar. An examination of value-added prospects for alternative cropland utilization might instead contribute to international decarbonization efforts and provide negotiable greenhouse gas reductions of more significant magnitude.

    By pursuing such innovative flanking efforts, Ukraine’s Energiewende could emerge as a combination of local capabilities coupled with international market opportunities that have yet to be appreciated.

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