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Bioenergy in Ukraine: Overcoming Barriers for Sustainable Development

Explore the challenges and opportunities in the bioenergy sector in Ukraine, including utilization, energy potential, market trends, and governmental strategies.

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Bioenergy in Ukraine: Overcoming Barriers for Sustainable Development

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  1. Bioenergy in Ukraine: overcoming the barriers Georgiy Geletukha, PhD, Head of department at IET of NASU, Director of SEC “Biomass” Anatoliy Dolinskiy, Academician NASU, Director IET NASU

  2. Department of bioenergy at IET of NASU / SEC “Biomass” Department of bioenergy at IET of NASU was established in 2003 SEC “Biomass”was established in 1998 Currently there are 24persons in the staff, including 7 PhDs. Major areas of Bioenergy Department / SEC “Biomass” activity Biomass combustion General Bioenergy Issues Biogas technologies Design works Energy efficiency, energy audits Kyoto Protocol mechanisms Key types of services

  3. Structure of primary energy consumption in Ukraine, % (2010) * The balance does not provide 100% due to influence of the “other” energy sources ** in electricity generation Unreasonably high share of natural gas in Ukraine’s energy balance – approximately 2 times higher than worldwide Low share of RES - 5 times lower than in the EU Источники: Renewables Information, 2011; EU Energy in Figures, 2011 EU energy and transport in figures, 2010; www.ukrstat.gov.ua, Modernized Energy Strategy of Ukraine till 2030 (draft, June 2012)

  4. Utilization of biomass as a fuel in Ukraine Rural populationcombusts about2 Mio densem3/ yearof fire-wood(500 000t c.e.) • About1000boilersfor wood combustion • Over1000boilerswere transformed from coal to wood combustion • Consumeabout 400 000 t/yearof wood waste • > 70boilers combust sunflower husk • Consume about 500 000 t /year of sunflower Over30boilers combust straw Traditional stove Boiler by company “UTEM” Boiler by company “Energomashproekt” Boiler by company “TH “Krieger”

  5. Use of biomass for energy generation in Ukraine (2010) *Our own assessment 1.3mln. of tce = 0,7%of total energy consumption of Ukraine Data by State Statistics Committee of Ukraine: biofuels and waste (1.31 Mio t c.e.) - 0,7%of total primary energy supply in 2010.

  6. Energy potential of biomass in Ukraine, 2011 24,9 mtce 13,3 mtce * On average

  7. Energy potentials of biomass in Ukraine, 1990-2011 mtce forecast Year theoretical technical economic

  8. Tendencies positive for bioenergy development (during previous year) • “Green” tariff for electricity generated from solid biomass is in force in Ukraine (12.39 Eurocents/kWh). • Continuation of natural gas price at the Ukrainian border. Forecasted price for 2012 -is the highest in Ukrainian history - 425 $/1000 m3. • Establishment of «Biomass Energy» project under National project «Energy of Nature». • Establishment of «Biogas Energy» project under National project «Energy of Nature».

  9. Tendencies negative for bioenergy development (during previous year) • President’s vetoon the Law of Ukraine, introducing “green" tarifffor electricity generated from biogas. • Negligiblysmall share of bioenergy in modernizedEnergy Strategyof Ukrainetill 2030. • Continuation ofsubsidizing domestic natural gas pricesfor population and housing-and-communal sector, which makes heat generation form biomass not feasible in these sectors. • Negative information campaigntowards bioenergy. Creation of positive image only for solar and wind energy. Example 1from the Strategy: “Wind energy will become the basis for RES development in Ukraineduring the forecasted period”. Example 2: in Jan 2012 proposals of State Agency for Energy Efficiency were published on making amendments in terms of RES in the Energy Strategy of Ukraine till 2030. Development of bioenergy is not foreseen at all.

  10. Barriers for bioenergy development in Ukraine (1) Subsidizing of domestic natural gas pricesfor population and housing sector makesbiomass not competitive in these sectors. Comparison of natural gas and solid biofuels prices

  11. Barriers for bioenergy development in Ukraine (2) In the Law “On electricity generation” green tariff is absent for electricity generated from biogas, municipal wastes, via co-combustion of biomass with traditional fuels (coal, peat, gas). Green tariff in the EU countries and Ukraine (biogas and biomass), Eurocents/kWh *Numbering in order of maximal value decrease http://www.res-legal.de/en/search-for-support-scheme.html

  12. Possibilities of the sector are basically ignored during approval of new edition of Energy Strategy of Ukraine till 2030 Barriers for bioenergy development in Ukraine(3) Place of biomass in modernized Energy Strategy of Ukraine till 2030 Results of search of key words in the document: “Biomass” – 0 “Biogas” – 0 “Biofuel” (solid) – 2 (in descriptive context, w/o numbers) «Biofuel» (liquid) – > 10

  13. Place of biomass in modernized Energy Strategy till 2030 (2) Very small share of BM in power generation from RES, TWh: Power generation from BM comprises only2,4%in power generation from RES, or0,1% in total power generation in Ukraine in 2030.

  14. Place of biomass in modernized Energy Strategy till 2030(3) Share of BM is not presented in heat generation in total energy balance. “According to different estimations, potential installed capacity in bioenergy sectormay constitute 10-15 GW of heat and 1-1.5 GW of electricity” * Estimation according data of the Strategy, it is assumed that installed thermal capacity on biomass in 2030 will comprise 12.5 GW.

  15. Place of biomass in modernized Energy Strategy till 2030(4) Dynamics of production and consumption of liquid biofuels in 2010 – 2030 Baseline scenario of development foresees transfer to use of petroleum containing10%of bioethanol till 2020 and15% - till 2030. In baseline scenario spreading of biodiesel will take place after 2020, and transfer to use of diesel fuel containing 7% of biodiesel will occur till 2030.

  16. Place of biomass in modernized Energy Strategy till 2030(5) Extremely low decrease of natural gas consumption is planned for Ukraine (in general and for thermal energy generation in particular) Sectors of consumption Dynamics of natural gas consumption for major consumers, bill.m31 Industry Population Heat and electricity Technical losses and others 1 Resulting values may differ from arithmetic sum due to rounding

  17. SEC Biomass view on the reduction of natural gas consumption under heat generation in Ukraine • Out of27 bln. m3NG/yearused for heat supply, till 2030: • - Substitute with biofuels ……………………...................…......1/3 (9 bln. m3NG/year) • Save via thermal insulation of buildings, energy saving during generation, transportation, and distribution of thermal energy…..... 1/3 (9 bln. m3NG/year) • - Continue using NG ……………………..………………………… ....1/3 (9 bln. m3NG/year)

  18. Barriers for bioenergy development in Ukraine (4) Extremely strict requirements for local component of equipment, materials, and servicesin total project cost: >30% after 01.2013; >50% after 01.2014. Capital cost for construction of typical biomass-fires CHP plant Maximal practically possible share of Ukrainian components: 40% * Boiler and turbine are imported. Specific capital costs 2775 Euro/kWe

  19. Barriers for bioenergy development in Ukraine (5) Overstated environmental requirements for biomass-fired boilers established by Decree of Ministry of Environment of Ukraine #309 from 27.06.2006 «On approval of standards of marginal permissible emissions of pollutants from stationery sources» (requirements are stricter than in numerous EU countries). Marginal permissible emissions of particulate matters due to biomass combustion, mg/nm3under(О2 - 6%) DIRECTIVE 2010/75/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCILof 24 November 2010on industrial emissions (integrated pollution prevention and control) Decree #309 from 27.06.2006 «On approval of standards of marginal permissible emissions of pollutants from stationery sources»

  20. Establishment of Ukrainian Bioenergy Association (1) Mission of UABio – To create a common platform for cooperation on bioenergy market of Ukraine in order to ensure the most favorable business environment and accelerated development of bioenergy market. Priority tasks: • Increasing share of bioenergy in the energy balance of Ukraine to level of the EU. • Creation (harmonization) of favorable legislation, norms, and standards in Ukraine, according to the best international practices for bioenergy development. • Improvement of business conditions in bioenergy sector. • Efficient use of biomass, biogas, liquid and solid biofuels. • Development of the internal market of biomass as a fuel. • Development and implementation of the best international standards for design, construction, and operation of bioenergy plants. • Creation and support of projects in bioenergy field. • Establishment and maintenance of bioenergy projects database. • Analytical, statistical, and research work in the field of bioenergy.

  21. Establishment of Ukrainian Bioenergy Association (2) Constituent Assembly of UABiois to take place on25th September 2012, 16.30 – 18.00, in Small Hall, Vladimirskaya Str., 55, Kiev.

  22. Draft Law of Ukraine N 10183. Авторы: Romanyuk N.P., Liovochkina Yu.V., Miroshnichenko Yu.R.Approved in 1st reading on 3.06.2012 Proper definition of term “biomass” is applied, which corresponds to EU Directive. Share of local component for power generation objects, which generate electricity from biomass and biogas, commissioned after 1.01.2015, is established on the level not less than50%.Suspension for 1 yearcomparing to current legislation into force.

  23. Conclusions: proposals on overcoming the barriers (1) • To gradually eliminate existing scheme of natural gas cost subsidizing from State Budget of Ukraine for population and communal and housing services sector. • To establish on the state level adequate goals on bioenergy development, in particular in modernized Energy strategy of Ukraine till 2030. We recommend to include the following goals on biomass contribution into total energy consumption: • To simplify procedure of tax relief obtainment for import energy efficient equipment to Ukraine. • To establish “green” tariff for electricity, generated from biogas, MSWand via co-combustion of biomass with fossil fuels. Coefficient of «green» tariffis recommended as follows: К=3,0 – for electricity, generated from biogas, produced fromagriwaste and biomass; К=2,7 – for other types of biogas (biogas from SMW landfills, organic part of SMW, waste water and its sediments). К=3,0 – for electricity generated from SMW,К=2,1 – for electricity generated via co-combustion of biomass and fossil fuels.

  24. Conclusions: proposals on overcoming the barriers (2) • To cancel or significantly shift in terms of administration, requirement on 50% of the local component for equipment, materials and services for projects receiving GT from biomass and biogas. • To simplify the procedure of land allocation for bioenergy facilities. • To simplify the procedure for comprehensive assessment of projects for the construction of biomass-fired boiler houses and CHP, biogas units, and other biomass energy facilities. • To establish Ukrainian Bioenergy Association. • To organize at the state level, the process of bioenergy equipment purchase subsidies of 20-30% of its value (depending on the equipment).

  25. Thank you for your attention!Georgiy Geletukha, PhDtel: +380 44 332 9140geletukha@biomass.kiev.uawww.biomass.kiev.ua We are greening the future!

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