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Ukraine’s Solar Energy Sector Begins Recovery Amid Ongoing Russo-Ukrainian Conflict

published: 2023-07-03 9:30

Ukraine’s solar energy market is experiencing signs of recovery as the country strives to decrease its dependence on the central power grid. The heavy attacks on Ukraine’s energy infrastructure by Russian forces have highlighted the country’s urgent need for reliable and sustainable energy sources. With power and water supply problems impacting both citizens and industry, solar energy is now seen not only as a cost-saving measure for businesses, but also as an essential provision of power and heat during the harsh winter months.

The Russo-Ukrainian war, which has lasted over 15 months, has left an indelible mark on Ukraine’s energy landscape. Approximately 13% of solar power plants are currently located in territories occupied by Russian forces, and 8% of those plants have been damaged, according to a report cited by Oleksiy Orzhel, Chairman of the Ukrainian Association of Renewable Energy. Despite these daunting figures, Orzhel remains hopeful, emphasizing that clean energy played a crucial role in helping Ukraine endure the severe conditions of the past year’s winter.

In a hopeful turn of events, Ian Skarytovsky reports that the Ukrainian solar energy market has shown signs of recovery in the first half of 2023. This is largely thanks to several factories restarting operations and an increase in demand from industrial consumers looking to reduce their reliance on the public power grid.

Aside from constructing new power plants, some existing ones have resumed operation as territories are reclaimed. Ukraine’s largest power company, DTEK, has recently managed to restore 50% of the power supply to the Trifomovskaya power plant, a 10 MW facility located in Kherson. Full restoration, however, is yet to be achieved, largely due to substantial damage to many solar panels and the need for repairs to local power grids and substations. Consequently, only 2 MW of power can be fed into the grid until substations are fully operational.

However, not all progress has been smooth.  The war has affected both manufacturers and investors, making it difficult for factories to fully recover their capabilities. Furthermore, replacing damaged equipment has been challenging due to the impact of current laws on fixed electricity prices, which has affected creditors. At this stage, finding identical equipment to replace damaged units has proven to be a formidable task.

Demand for industrial solar energy has increased significantly over the past few months. Oleksandr Loboda, director of solar design firm Ecosphere Energy, stated that in addition to investors who have invested in power plants and sold electricity to the grid, there are also manufacturing firms hoping to reduce their electricity purchase costs. Ecosphere Energy has received as many inquiries for solar plant construction parameters in the first quarter of 2023 alone as they did for the entirety of 2022, totaling 10 requests.

Energy independence is a key concern for many, and solar power is viewed as a viable solution. Loboda explains that the installation and operation of a grid-connected solar power plant typically takes a year. However, if the goal is simply to achieve self-sufficiency in electricity, the process can be much faster and can yield substantial returns.

The average cost of electricity for Ukrainian businesses, typically around UAH 5.50 (USD 0.15)/kWh, has nearly doubled amid periods of power rationing and blackouts. Aside from the pressing need to reduce electricity costs, the main concern is to meet basic electricity requirements. As Orzhel indicates, frequent attacks on Ukraine’s energy infrastructure, coupled with a challenging winter last year, have left many companies scrambling for electricity. The inability to maintain production lines or stick to power schedules has led to long periods without power, essentially halting production processes and potentially leading to the failure of many businesses.

(Image Source: shutterstock)

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