Market Status: Ukraine - Donesk project will help to shift the doldrums

UKRAINE: Two projects in the works could boost installed capacity in Ukraine by as much as 125MW this year, making up for the fact that no new wind capacity was installed in 2010 and installed capacity actually fell from 90MW to 87.4MW, says the Ukrainian Wind Energy Association.

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In early 2011, integrated Ukrainian energy company DTEK was preparing to install the first ten 2.5MW turbines from German manufacturer Fuhrlander. These are to go on the site of an existing 21.9MW facility in Novoazovsk, in the Donetsk region, which was built more than a decade ago and comprised primarily obsolete 107.5kW machines. The initial 25MW is the first phase of a project that DTEK expects could increase to 200MW by 2014.

DTEK says it has a portfolio of up to 1GW of other wind projects in the country. Also seen adding to Ukraine's installed wind capacity figure in 2011 is the country's Konkord Group, which plans to complete the 100MW Kazantipskaya wind farm in the Leninskiy district of the autonomous republic of Crimea.

The basis for investment in Ukraine is a so-called green tariff, which sees wind projects larger than 2MW receiving EUR0.1131/kWh. Until 2030, the state is obliged to buy all the electricity generated from renewable energy sources. The green tariff, approved by the government in 2008 and strengthened further in 2009, is one reason investors have begun examining Ukraine's market. The country's strong wind resources also entice.

Yet Wolfram Rehbock, partner with the Kiev-based law firm Arzinger, warns: "There is a huge potential for wind power in Ukraine. But it is often the case in Ukraine that you have big potential and huge needs and nothing happens. The legal and political environment is not the most stable in the world."

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