Bioenergy in Ukraine: overcoming the barriers

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
General Bioenergy Issues
Kyoto Protocol mechanisms
Energy efficiency, energy audits
Design works
Biogas technologies
Biomass combustion
Key types of services
RD Feasibility studies
Energy audits Business planning, project management
Assessment of biomass potentials Conducting core conferences, seminars and trainings
Design and engineering works Development of PINs, PDDs, JI project portfolios, and GIS projects
Consulting on biomass-to-energy technologies Management and monitoring of JI projects
3
Structure of primary energy consumption in
Ukraine, (2010)
2010 2010 2010 2010 2030 2030
Worldwide Ukraine EU-15 USA Ukraine 2030 EU in 2030
Natural gas 20,9 42,6 25,1 23 27,0 24
Oil 32,9 10,0 35,1 38,9 13,9 33
Coal 27,1 27,9 15,9 23,7 29 7
Uranium 5,8 17,9 13,5 9,3 21,7 11
RES 13,1 1,6 9,8 5,1 4,6 25
The balance does not provide 100 due to
influence of the other energy sources in
electricity generation
Unreasonably high share of natural gas in
Ukraines energy balance approximately 2 times
higher than worldwide Low share of RES - 5 times
lower than in the EU
????????? 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

• About 1000 boilers for wood combustion
• Over 1000 boilers were transformed from coal to
  wood combustion
• Consume about
• 400 000 t/year of wood waste

Rural population combusts about2 Mio dense m3/
year of fire-wood(500 000 t c.e.)
Over 30 boilers combust straw

• gt 70 boilers combust sunflower husk
• Consume about
• 500 000 t /year of sunflower

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)
Biomass type Volume consumed per year Thousand tce/year of total
Straw 50 thous. t 24 1,9
Wood wastes 957 thous. t 261 20,2
Wood (population) 1972 thous. m3 377 29,2
Sunflower husk 884 thous. t 452 35,0
Peat 339 thous. t 156 12,1
Biogas (manure) 4516 thous. m3 3 0,2
Biogas of SMW landfills 26192 thous. m3 18 1,4
TOTAL 1291 100
Our own assessment 1.3 mln. 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
Type of biomass Total volume, Mio t share in total volume Economic potential, mtce
Straw of grain crops 32 20 3,17
Straw of rape 2,9 70 0,96
Residues of production of corn for grain 34 52 8,59
Residues of sunflower production 17 67 5,55
Secondary agricultural residues 9,7 77 0,99
Wood biomass 3,9 89 1,87
Biodiesel - - 0,35
Bioethanol - - 2,36
Biogas from manure - - 0,35
Landfill gas - - 0,26
Sewage gas - - 0,09
Energy crops - poplar, miscanthus, acacia, alder, willow - rape (straw) - rape (biodiesel) - corn (biogas) 20 3,2 - - 85 70 - - 10,30 1,13 0,77 1,10
Peat - - 0,4
TOTAL - - 38,24
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)

• Presidents veto on the Law of Ukraine,
  introducing green" tariff for electricity
  generated from biogas.
• Negligibly small share of bioenergy in modernized
  Energy Strategy of Ukraine till 2030.
• Continuation of subsidizing domestic natural gas
  prices for population and housing-and-communal
  sector, which makes heat generation form biomass
  not feasible in these sectors.
• Negative information campaign towards bioenergy.
  Creation of positive image only for solar and
  wind energy.
• Example 1 from the Strategy Wind energy will
  become the basis for RES development in Ukraine
  during 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 prices for
population and housing sector makes biomass not
competitive in these sectors. Comparison of
natural gas and solid biofuels prices
Price Calorific value Cost of energy in fuel Ratio of energy price of natural gas to price of biofuel Ratio of energy price of natural gas to price of biofuel
Price Calorific value Cost of energy in fuel NG for industry and public sectors NG for housing and communal sector
UAH/t MJ/kg UAH/GJ 4687 UAH/1000 m3 133,9 UAH/GJ 1309 UAH/1000 m3 37,4 UAH/GJ
Wood fuel (chips) 400 11 36,4 3,7 1,0
Wood pellets 800 17 47,1 2,8 0,8
Wood briquettes 700 15 46,1 2,9 0,8
Straw bales 300 13 23,1 5,8 1,6
Price Calorific value Cost of energy in fuel Ratio of energy price of natural gas to price of biofuel Ratio of energy price of natural gas to price of biofuel
Price Calorific value Cost of energy in fuel NG for populationlt6000 m3/y NG for population lt2500 m3/y
UAH/t MJ/kg UAH/GJ 1098 UAH/1000 m3 31,4 UAH/GJ 725 UAH/1000 m3 20,7 UAH/GJ
Wood (with delivery) 300 11 27,3 1,2 0,8
Wood pellets 800 17 47,1 0,7 0,4
Wood briquettes 700 15 46,1 0,7 0,4
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
N Biomass power min max
1 Italy 28
2 Germany 7,79 22,67
3 Check republic 11 19
4 Spain 7,02 17,16
5 Austria 10 14,98
6 Bulgaria 9,51 13,04
7 Ukraine 12,39
8 France 4,5 11,9
Numbering in order of maximal value decrease
http//www.res-legal.de/en/search-for-support-sche
me.html
12
Barriers for bioenergy development in
Ukraine(3) Place of biomass in modernized Energy
Strategy of Ukraine till 2030

• Possibilities of the sector are basically ignored
  during approval of new edition of 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) gt 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 form RES in Ukraine, TWh 2010 2015 2020 2025 2030
Wind 0,1 0,6 1,9 3,8 7,4
Solar lt0,1 0,3 0,8 1,4 2,6
Small hydro 0,2 0,4 0,7 1,3 2,1
Biogeneration lt0,1 lt0,1 0,2 0,2 0,3
Generation from other RES lt0,1 lt0,1 lt0,1 0,1 0,2
TOTAL, power from RES in Ukraine lt0,4 lt1,4 3,6 6,8 12,6
Power generation from BM comprises only 2,4 in
power generation from RES, or 0,1 in total power
generation in Ukraine in 2030.
2010 2015 2020 2025 2030
Electricity from RES in Ukraine, from total electricity lt0,2 lt0,7 1,5 2,6 4,5
Electricity from RES in EU, from total electricity 21 27 34 50 66
Electricity from BM in Ukraine, from total electricity lt0,05 lt0,04 0,08 0,07 0,1
Electricity from BM in EU, from total electricity 3,7 5,5 7,3 7,6 8,0
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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 sector may constitute 10-15 GW of heat
and 1-1.5 GW of electricity
Year 2011 2015 2020 2025 2030
Share of BM in total energy consumption in Ukraine (Energy Strategy 2006) 1,3 - 2,6 - 3,0
Share of BM in total energy consumption in Ukraine (Energy Strategy 2012) 0,7 - - - 2,3
Share of BM in total energy consumption in Ukraine (vision of IET and SEC Biomass) 0,7 1,5 4 7 10
Share of BM in total energy consumption in EU 6,7 10 14 16 19
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
2010 2015 2020 2025 2030
Bioethanol, Mio t lt0,1 0,3 0,6 0,8 1,1
Biodiesel, Mio t 0 0 lt0,1 0,3 0,8
TOTAL, total biofuels, Mio t lt0,1 0,3 0,6 1,1 1,9
Share of biofuels in all motor fuels in Ukraine, lt1 2,5 4,5 7,2 10,9
Share of biofuels in all motor fuels in the EU, 4,4 7,0 10,0 20,0 31,0
Baseline scenario of development foresees
transfer to use of petroleum containing 10 of
bioethanol till 2020 and 15 - 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
Natural gas consumption for heat supply, bln. m3/year Natural gas consumption for heat supply, bln. m3/year Natural gas consumption for heat supply, bln. m3/year Natural gas consumption for heat supply, bln. m3/year Natural gas consumption for heat supply, bln. m3/year Natural gas consumption for heat supply, bln. m3/year Natural gas consumption for heat supply, bln. m3/year Natural gas consumption for heat supply, bln. m3/year Natural gas consumption for heat supply, bln. m3/year Natural gas consumption for heat supply, bln. m3/year Natural gas consumption for heat supply, bln. m3/year Natural gas consumption for heat supply, bln. m3/year
2010 2010 2010 2015 2015 2015 2020 2020 2020 2030 2030 2030
NG NG Savings Biomass
DH utilities 8 4,0 2,0 2,0
Population 17 4,0 6,5 6,5
State-financed institutions 1 0,4 0,3 0,3
CHPPs 1 0,6 0,2 0,2
Total 27 9 9 9

• Out of ?27 bln. m3 NG/year used for heat supply,
  till 2030
• - Substitute with biofuels ...............
  .......... 1/3 (?9 bln. m3 NG/year )
• Save via thermal insulation of buildings, energy
  saving during generation, transportation, and
  distribution of thermal energy ..... 1/3 (?9
  bln. m3 NG/year )
• - Continue using NG .. ....1/3
  (?9 bln. m3 NG/year )

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Barriers for bioenergy development in Ukraine (4)
Extremely strict requirements for local component
of equipment, materials, and services in total
project cost gt30 after 01.2013 gt50 after
01.2014.
Capital cost for construction of typical
biomass-fires CHP plant
  EUR/kWe Total cost Ukr.production, total cost
1. Construction works 215-320 10-8 8 
- Fuel storage facility 35-50 2-1 1 
- Building of CHP plant 100-150 4  4
- Others 80-120 4-3  3
2. Technological equipment 1060-1845 46  8
- Fuel storage 30-45 1  1
- Boilers 350-650 15-16 -
- Ash removal and scrubbing 80-200 4-5  3
- Steam turbine with equipment 500-800 22-20 -
- Assembly of equipment 100-150 4 4 
3. Boiler house equipment 400-650 18-16 10 
- Equipment 250-400 11-10  4
- Assembly of equipment 150-250 7-6  6
4. Electric equipment of 0,4kV and 10 ?V, automatic control systems 400-750 18-19 7 
5. Adjustment, testing, training 80-200 4-5 3
6. Design works, expertise 120-180 5 5
TOTAL 2275-3945 - 41
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/nm3 under
(?2 - 6)
Capacity Ukraine Denmark Austria Germany
0,1-0,7 150 300 150 150
1,0-50 50 40 150-100 100
50-100 50 50 (30, 20) 50 (30, 20) 50 (30, 20)
100-300 50 30 (20) 30 (20) 30 (20)
gt300 50 30 (20) 30 (20) 30 (20)
after 2013 after 2016
DIRECTIVE 2010/75/EU OF THE EUROPEAN PARLIAMENT
AND OF THE COUNCIL of 24 November 2010 on
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
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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.

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Establishment of Ukrainian Bioenergy Association
(2)
? Name Position Corresponding sector in the UBA
1 Chairman of the Board Geletukha G.G. . Director of Scientific-Engineering Centre Biomass Ltd., PhD General coordination, foreign relations, legislation
2 Board Members Maraykin R.V. Director of SE GreenEnergo, manager of national project Energy from biomass, manager of national project Energy from biogas Planning of the Associations work, control of plans implementation, biomass-fired CHP
3 Daviy V.A. Director of Renewable Energy Center Ltd. Market of solid and liquid biofuels
4 Matveev Yu.B. Deputy head of public organization Renewable Energy Agency, PhD Market of biogas
5 Oliynyk ?.M. Head of heat and power division in SEC Biomass Ltd. Market of heat and power generation from biomass
Constituent Assembly of UABio is to take place on
25th September 2012, 16.30 18.00, in Small
Hall, Vladimirskaya Str., 55, Kiev.
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Draft Law of Ukraine N 10183. ?????? Romanyuk
N.P., Liovochkina Yu.V., Miroshnichenko Yu.R.
Approved in 1st reading on 3.06.2012
Categories of objects to which green tariff is applied Coefficient of GT for commissioned objects Coefficient of GT for commissioned objects GT, UAH/ kWh, w/o VAT GT, Eurocents/ kWh, w/o VAT
Categories of objects to which green tariff is applied till 01.01.2013 after 01.01.2013 GT, UAH/ kWh, w/o VAT GT, Eurocents/ kWh, w/o VAT
For electricity generated from biomass 2,3 2,3 1,34 12,39
For electricity generated from biogas of vegetable or animal origin - 2,7 1,58 14,54
For electricity generated from municipal wastes - 3,0 1,75 16,16
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 than 50.
Suspension for 1 year comparing 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, MSW and via co-combustion
  of biomass with fossil fuels. Coefficient of
  green tariff is recommended as follows ?3,0
  for electricity, generated from biogas, produced
  from agriwaste and biomass ?2,7 for other
  types of biogas (biogas from SMW landfills,
  organic part of SMW, waste water and its
  sediments). ?3,0 for electricity generated
  from SMW, ?2,1 for electricity generated via
  co-combustion of biomass and fossil fuels.

Year 2011 2015 2020 2025 2030
Biomass share in total energy consumption of Ukraine 0,7 1,5 4 7 10
Biomass share in total energy consumption of EU 6,7 10 14 16 19
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_at_biomass.kiev.ua www.biomass.kiev.u
a

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