Ukraine is the twelfth largest power market in the world with an installed capacity of 54GW in 2009. Rapid industrialization has led to a tremendous increase in the demand from energy-intensive industries in the region. Ukraine exports its excess electricity to certain Central and Eastern European countries (CEEP), which include Russia, Slovakia, Romania, Poland, Moldova and Hungary.
Ukrainian solar PV growth to date has been driven by a green tariff system, which has emerged as being the most effective incentive to promote solar energy in the country. The green tariff system, first introduced in September 2008 and amended in April 2009, introduced fixed feed-in tariffs for electricity from renewable sources for 20 years. Solar PV projects with less than 100kW (kilowatts) of capacity currently attract a tariff of $0.323/kilowatt hour (kWh) (Ukrainian Hrvynia (UAH) 2.5722/kWh), while PV projects with over 100kW capacity are entitled to a tariff of $0.338/kWh (UAH 2.6892/kWh).
Globaldata believes "Ukraine’s solar PV market will have a bright outlook as a result of revision of the green tariff system in 2009”, reporting that it has so far been successful in garnering the interest of foreign investors in the Ukrainian PV industry. “The high annual solar radiation levels, scientific and technological expertise as well as the country’s capacity to produce over 10% of the volume of monocrystalline silicon will contribute to the future market development,” says the report.
Great future growth prospects
Despite this, the Ukrainian solar power market has developed at a very slow pace in the past due to a lack of proper government support, with only 3.2MW of PV capacity at the end of 2009. Administrative and bureaucratic barriers coupled with political unrest in the country add to the current lack of government policies and are resulting in the restricted growth of the industry.
However, Globaldata is confident that the backdrop of many planned and upcoming PV projects and optimism that the political situation in Ukraine will improve during the forecast period and therefore estimates that cumulative installed PV capacity will grow at a forecast CAGR of 91.33%, reaching 157 MW by 2015.
Declining solar PV system prices
The average solar PV system price in the Ukraine in 2009 was around $4.96/watt. The oversupply of solar PV equipment in the global market, created by the economic meltdown and the collapse of the Spanish market, has resulted in the correction of PV system prices in Ukraine. It is expected that the system price will further fall to $3.18/watt by 2015. The system price consists of modules, inverters and the balance of systems, including profit margins, but does not include installation and other service charges.
Ukraine’s renewable at a nascent stage
While PV’s future looks promising, the growth of renewables in the country has been slow due to the lack of proper policy support for renewables and the prevailing political conditions, which make the implementation of renewable projects risky. Hydro is the dominant source of renewable power in the country, accounting for a share of around 98% (made up of 95.66% large and 2.28% small and mini hydro) of the cumulative renewable power generation capacity. Wind, solar PV and biopower accounted for 1.93%, 0.07% and 0.06%, respectively, of Ukraine’s total renewable installed capacity in 2009.
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