What will happen next. Opinion Of Alexander Zapishniy
Alexander ZAPISHNIY, the owner of EDS Engineering, about what will happen to the Ukrainian RES industry after the adoption of the draft law No. 3658.
I believe it is important to voice what had worried and worries the RES industry in Ukraine for nine months now. And this is far from only quarantine, which we leave behind the brackets.
Briefly about the situation we have today. A memorandum was signed between the Cabinet of Ministers and specialized associations. Draft law No. 3658, which was based on the provisions of this Memorandum, passed the first reading.
Investors' opinions are divided: there are a number of companies (by the way, there are many of them), which don’t agree to a voluntary reduction of the “green” tariff without prolonging its validity for two years and threaten with legal proceedings.
As a result, the RES industry remains, saying frankly, “slightly frozen”, since most investors don’t risk to continue the construction of alternative energy facilities under conditions of uncertainty.
This is what I think about it as an investor, as a constructor and as a responsible citizen of Ukraine.
As an investor, of course, I’m not too interested to voluntary give up the income that was guaranteed by the government in due time through the “green” tariff. As a constructor of energy facilities, I clearly understand that the tariff for new SPSs in the amount of 15 eurocents without VAT is overstated and contradicts the last few years’ tendency of decreasing the component parts cost and, as a result, reducing the payback period.
As a responsible citizen, who cares for the development of his country and investment attraction, the voluntary tariff reduction without prolonging its validity seems to me a better solution than the protracted crisis that is killing the RES industry.
Now a few thoughts about what will happen next in the field of renewable energy of Ukraine.
The first thing. I am sure that the renewable energy of Ukraine will develop in one way or another, at a slower or faster rate. This is an inevitable process since the pure electrical energy is a global trend which is enshrined in the Ukrainian legislation at the level of commitment to the EU Energy Efficiency Directive. Plus, this is a matter of ecology and sustainable development, and the energy facilities under construction – are jobs for my companies’ employees, these are taxes into the budget, this is a secured future for many, many families.
The second thing. I sincerely believe that the government in the short term after all will announce proposals for the storage of electrical energy generated from the renewable energy sources. This is an absolutely necessary solution for both solar and wind power stations, which will allow to balance them, will give the opportunity for “green” energy producers to enter the wholesale market and, in the future, sign direct contracts with the consumers.
The third thing. I continue to be an incurable optimist. An optimist to such an extent that, as a venture investor, I developed a FS and starting to design a large solar power station in the Dnipropetrovsk oblast with a capacity of 100 megawatts. The project with the working title “Bolshaya Medveditsa” (Ursa Major in English) – as a constellation – is open for co-investment and differs from many others in that we initially have the understanding of where the generated electrical energy can be supplied.
We do not strive to build a SPS where it is possible to agree upon the connection, we want to build where our electrical energy will be needed. This refers to the scarce Northern and Donbas energy systems, where there are a many industrial enterprises: this is the Kharkiv oblast, as well as parts of Donetsk and Luhansk oblasts.
Despite the fact that a number of thermal power stations operate there, most of them are involved in a daily-load pattern leveling of energy system and they can’t provide the full-fledged generation of industrial enterprises.
I always took a stand for a responsible approach in business and playing a long game, but not striving for receiving the quick profits. Whether the government and other investors are ready for this format – only time will tell.