Ievgen Didichenko, a co-investor of KNESS, at Ukrainian Energy Security Dialogue conference

Resilience and Recovery were the themes of the Ukrainian Energy Security Dialogue conference, which brought Ukrainian, European, and American stakeholders together around important issues of Ukraine’s energy security. Speakers and more than 200 online and offline participants discussed priority measures and long-term goals to ensure Ukraine’s energy sustainability.

Ievgen Didichenko, a co-investor of KNESS, together with representatives of the authorities and international partners, concentrated on discussing key aspects that Ukraine should focus on during the discussion panel “Decarbonization as a tool and a challenge of sustainability: how to balance the future of the energy system.” 

“We see Ukraine as an energy-independent, carbon-neutral, energy-democratic state with a decentralized energy production system that has a high level of reliability (in the security aspect) and a competitive level of energy costs. This vision is quite feasible and achievable,”  emphasized Ievgen Didichenko.

What is required to develop the energy sector and activate the development of new energy? According to our expert, these include:

• Creating regulatory, organizational, and financial mechanisms, including state support, to promote the development of new energy.
• Access to affordable capital. Given that renewables and energy storages are capital-intensive businesses, energy cost is directly related to the length and cost of debt capital. By introducing state support in the form of annual balanced quotas for the development of renewable energy, maneuvering capacities, and energy storages, investors would have access, possibly on a competitive basis, to cheap debt capital.
• Ensuring effective mechanisms of insurance against war risks.
• Optimization of the ancillary services market, in particular:
• • introducing long-term auctions (preferably with the price pegged to the euro);
  • bringing the price of ancillary services in line with the current Methodology (currently, the price is frozen at the level of the previous year);
  • preventing non-payments in the ancillary services market;
  • increasing tertiary capacity reserves, in particular by activating the market for replacement reserves.
• Regulating various combinations of joint connection of different generation type producers and energy storage facilities to a common connection point (the so-called “cable pooling” concept), in particular through the development of a mechanism for small distribution systems.

What types of generation and how much do we need to build in Ukraine?

“Skeptics of the green transition appeal to the technical impossibility of balancing a power system built on renewables. However, according to our mathematical modeling, Ukraine’s energy system can become 86% carbon-neutral and be balanced. At the same time, the LCOE of such a power system will be at the level of 80 Euro/MWh. If the existing capacity of nuclear power plants is maintained to cover annual consumption of 140 TWh, Ukraine needs 22 GW of wind, 15 GW of solar and 4 GW of long-term storage systems. To compensate for long-term renewable energy deficits, it is enough to preserve 5 GW of thermal generation. To build such a power system, investments of 50 billion euros are needed.

Accordingly, such a model is feasible, at least technologically, and we are almost ready. What else is needed to activate the development of new energy – regulatory mechanisms and government support,” —  highlighted Ievgen Didichenko. 

Additionally:

Event organized by: DiXi Group, Oschadbank and Konrad Adenauer Stiftung Ukraine.

Held under the patronage of the Ministry of Energy of Ukraine and with the financial support of the International Renaissance Foundation.

Photo by DiXi Group.