by Aime Boscq*Download PDF
Ukraine’s electric mix is one of the most carbon intensive in Europe. The majority of the country’s electricity is produced by outdated, inefficient thermal and nuclear power plants, whose fuelling is subject to geopolitical pressure. Past and present policies have thus far favoured a status quo, inefficiently tackling the climate and political challenges plaguing the electric system. Despite a significant potential, production from renewable energy sources remains marginal and project development in this field is slowed down by unstable and ambiguous policies. Nonetheless, a clarification of Ukraine’s short and long-term energy policy coupled with a clear and efficient fight against corruption could put the country’s energy transition back on track towards the goals of the Paris Agreement, along with widespread benefits for the Ukrainian society.
In an early 2021 article, Svitlana Chekunova of the Razumkov Center, an independent Ukrainian think-tank, highlighted some of the challenges faced by the Ukrainian electric system: “the existing electricity market model is functioning with distortions in all of its segments and in the conditions of financial instability of the state-run energy generating companies, debt crisis, unfavourable investment climate, unstabilized renewables”. In addition to these significant market design flaws, the current electric mix is one of Europe’s most carbon intensive, relies on geopolitically sensible imports to fuel and maintain key assets, and suffers from a lack of political, financial and strategical stability.
Amidst these critical challenges, the Ukrainian electric mix lies at a major crossroad. The country’s contribution to the Paris Climate Agreement implies a significant shift in its production mix, phasing away fossil fuels and enhancing the role of low-carbon assets. In this regard, what role could renewable energy sources to lower the electric mix’s carbon footprint? Which political, financial and social barriers would need to be lifted for such sources to gain momentum in the mix? Which would be the required policies necessary to these evolutions? After an assessment of the challenges the Ukrainian electric mix currently faces and an analysis of their climate, political, social and economic implications, this paper will examine the electricity production potential of three renewable energy sources – solar photovoltaics, wind and biomass – in the country, as well as the technical feasibility and implications of a Ukrainian electric mix where a significant part of production would be handled by renewable sources. Preceded by an analysis of past policies directed towards the electricity sector and of their inefficiency to effectively liberalize and decarbonize Ukraine’s electric mix, the paper will be concluded by a series of policy proposals aimed at a Paris Agreement-compatible electricity mix through an increased role of renewable energy sources.
*Aimé Boscq is an EPG Fellow. The views expressed in this paper are those of the author and do not necessarily reflect the opinions of EPG.