Market Status: Ukraine - Capacity static but basis for future growth set

UKRAINE: Ukraine could add 100MW in new wind capacity in 2010, the Ukrainian Wind Energy Association (UWEA) forecasts, after ending 2009 with the same 90MW of installed capacity with which it began the year.

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Konkord Group, a Ukrainian firm, has two wind projects on the Crimean peninsula, for 100MW and 350MW respectively. In December 2009, Konkord forecast the 100MW facility could be commissioned by the end of 2010.

UWEA president Andriy Konechenkov estimates that authorisation has been sought for around another 3GW. The growing interest in wind energy in Ukraine is partly due to a much-improved investment support scheme.

In 2008, the Ukrainian government approved a so-called green tariff for wind and other renewable energy sources. "This tariff was reinforced in April 2009 with an indexation to the euro, an automatic rise should the energy price increase and an obligation by the state to purchase all the electricity purchased from green sources until 2030," says Nathalie Green, marketing manager and head of special projects at Beten International, which is developing wind projects in the country. For wind stations over 2MW, UWEA says that tariff will be equivalent to EUR0.113/kWh.

"Interest in the renewables business has been growing rapidly since the adoption of the green tariff law," notes one wind developer active in the country. "But actual investments are still being held back because of political uncertainty and the current economic situation." Ukraine's gross domestic product fell 15% year-on-year in 2009, although it is forecast to climb about 3% this year.

Beyond the Konkord schemes, other large projects are being prepared on the Crimean peninsula by Nova-Eco, in which Portuguese energy and construction firm Martifer is the majority shareholder. Nova-Eco already received joint implementation certification for two wind projects on the peninsula with a combined capacity of 300MW. The Swedish Energy Agency has already agreed to buy carbon credits known as emission reduction units from the project, a source of income Nova-Eco has estimated could cover 5-8% of project costs. Construction is expected to begin later this year.

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