Ukraine's National Electric Regulatory Commission still needs to hammer out the details of the incentive structure, but a standard purchase price of UAH 0.6624/kWh (EUR 0.067/kWh) has been set for 2009, double the average annual electricity price for 2008. Prices are expected to rise after 2009, says UWEA's Andriy Konechenkov. He points out that with so little wind plant installed, the 2009 price is largely irrelevant. Government support for wind power has existed in Ukraine since the 1990s, but until now it has been severely under-funded, adds Konechenkov.
With ten-year, fixed price contracts on offer, interest in developing wind plant in Ukraine has grown. Nova-Eco, in which Portuguese wind power company Martifer holds a majority share, is leading the way with plans to build two wind farms totalling 300 MW on the Crimean peninsula. The plan was first mooted some years ago (Windpower Monthly, March 2006), but until now Nova-Eco's plans have been hindered by unclear and incomplete legislation.
"Nova-Eco and Ukrainian authorities often had to work together on the best way to apply existing legislation to the needs and realities of wind power project development," says the company's Alex Fediaev. The projects -- comprising 100 MW on the eastern part of the peninsula and 200 MW on the western side -- are now in the final stage of authorisation. Construction is expected to start later this year, he says. Both will use Suzlon 2.1 MW turbines and both are likely to be commissioned in stages between 2010 and 2012. "Ukraine has considerable wind potential in several regions as well as vast unoccupied areas that can be used for construction of large industrial wind projects," says Fediaev.
The arrival of both Suzlon turbines and a private player such as Nova-Eco represents a sea change for Ukraine's wind sector. Existing wind farms are primarily equipped with late 1980s and early 1990s technology in the form of USW 56-100 turbines made in the Ukraine under licence from long defunct US Windpower, which was later publicly listed in the United States as Kenetech. The turbines are produced by Uzhnyi Machinery Plant in Dnepropetrovsk.
For the past five years, 600 kW machines from Belgian Turbowinds have also been assembled in Ukraine, with towers and blades manufactured locally.
Alongside Nova-Eco, local firm Konkord Group also has plans to help usher Ukraine into the age of megawatt-class projects. Konkord hopes to build a 100 MW wind farm in the Leninskiy district in the eastern part of Crimea, with a view to completion in 2010.
As with most young markets, Ukraine's wind sector faces a number of problems. These include a lack of reliable wind data and the need to invest in improving the country's ageing and fragile grid infrastructure. The recent devaluation of the Ukrainian currency, hryvna, along with the country's general political instability is the norm, also serves to make investors cautious. Fediaev points to a lack of local knowledge and experience in developing wind power projects to the high standards of western Europe. "At the same time, to be local is a must to succeed in development and construction," he says.