Notes from the public dialogue “Prospects for the Development of Green Energy Communities in Ukraine” on September 14, 2023
Yevheniia Chobotova,
Representative of the Economic Section of the German Embassy in Ukraine, Kyiv.
“After the outbreak of full-scale war, it became clear that green energy is not just about sustainability, environmental protection, and resource scarcity, but simply about survival. That is why Germany is providing special support to Ukraine’s energy sector this year, with a focus on green energy.”
About Energy Communities: International Experience and Opportunities for Implementation in Ukraine
Marcelina Golembowska, independent expert on international energy markets. Republic of Poland
"There are two Ukrainian words that you need to learn and never forget: ‘hromada’ and 'spilnota.' A ‘hromada’ is a group of people united by a common goal and an administrative territory; it is ideal for devising and carrying out the right actions together. A ‘spilnota,’ on the other hand, is precisely that group of people united by a common goal. And these two words are particularly important in the context of decarbonization, the direction in which the European economy is now developing and toward which Ukraine’s economy is striving to move."
- In Europe, climate policy has long since evolved into economic policy. For the European Union, climate policy is a climate strategy that has become the core strategy for economic growth.
- The driving force behind decarbonization is the energy sector and changes within it. The focus of the energy sector is shifting downward, to the local level, toward local initiatives. This represents a shift in responsibility for energy security. The widespread use of local power generation sources is a key component of energy security.
- Energy communities in Europe have a long history. Energy cooperatives, on the other hand, are the newest development. Ukraine does not yet have such experience; civil society is only just beginning to develop here.
- Ukrainian consumers are used to the idea that if they don’t take action themselves, nothing will happen. But there is a strong desire for change and the energy of a young civil society. This is a good start for the development of energy communities and energy cooperatives.
Presentation of the Results of a Focus Group Study
“Financial, Technical, and Legislative Aspects of Establishing Energy Communities in Ukraine
Natalia Zaitseva-Chipak, Director of the research company SOCIOINFORM, Lviv
- The objective of the focus group study is to gather as many different perspectives as possible in order to understand the current state of energy community development in Ukraine and what needs to be done to promote their creation more actively
- Energy security is considered from several angles: increasing energy autonomy, reducing dependence on imported energy sources—which account for a significant portion of the trade deficit—enhancing the competitiveness of businesses by lowering electricity costs, and reducing CO2 emissions.
- Experts have identified certain risks and barriers to the energy transition. There is a view that green energy could destabilize the national energy system because it generates power during periods of lower consumption, such as in the summer and during the day. However, these risks can be avoided through sound decision-making.
- Energy communities offer a number of advantages, the main one being a guaranteed energy supply. The second factor is cost savings. Additionally, they create jobs, generate tax revenue for the community, reduce CO2 emissions, and enhance the community’s reputation.
Top 3 barriers to establishing energy communities: lack of financial resources, lack of relevant human resources in communities—such as project managers and technical specialists—and low interest among ordinary residents in creating energy communities due to: low awareness of the concept, the potential benefits of creating them, and a lack of social capital (the ability to negotiate and trust one another).
- Among the main challenges at the national level are: the lack of active government efforts to support energy communities, and legislation that is insufficiently adapted to the needs of establishing energy communities.
- Draft Law No. 9011-d is currently in the process of being implemented. It is quite progressive, but will not take effect until after 2025.
Vinnytsia’s Green Agenda
Yanna Chaikovska, Municipal Enterprise “Institute for Urban Development” of the Vinnytsia City Council, Vinnytsia
- Strategic planning is working quite well in Vinnytsia. There are two long-term strategic documents that outline, among other things, the transition to green energy and specific green practices. These are the Integrated Development Concept through 2030 and the Vinnytsia Territorial Community Strategy through 2030.
Vinnytsia is the first city in Ukraine to receive a European energy award in collaboration with the Swiss Confederation as part of a project spanning 2012–2019.
- For the European Union, the Green Deal has become a symbol of the balance between climate and the economy. Vinnytsia also approved a roadmap of measures in January 2022, prior to the start of the full-scale invasion, aimed at achieving climate neutrality. The Green Deal is viewed as the foundation for the city’s recovery.
Innovations in the government regulation of the renewable energy market
Serhiy Kravchuk, Director of KNESS Energy, Vinnytsia
- The newly adopted Law No. 3220 is quite progressive and significantly liberalizes the operation of renewable energy sources in general, and distributed generation in particular. This law improves support conditions for existing producers operating under the green tariff and provides for the possibility of selling electricity based on a market premium, the ability to sell electricity on the wholesale market, to an electricity supplier, a trader, or an end consumer within the wholesale market, and, at the same time, the receipt of a premium calculated as the difference between the green tariff and the market sales price. A clear mechanism is provided for calculating this market price.
- The only unresolved issue is the development of the regulatory framework, and it is worth noting here that the regulator, NEURC, is actively cooperating and has already proposed draft resolutions regarding the approval of licensing conditions for electricity distribution activities via a small distribution system, as well as aggregation activities.
- Aggregation is a new licensed activity in the electricity market that involves active consumers—that is, consumers with their own generation or energy storage facilities. They are engaged to provide balancing services to the transmission system operator. Thus, this generation becomes more proactive and has the opportunity to earn additional revenue by providing services to the transmission system operator.
- The law addresses a long-standing issue: the ability to feed surplus electricity into external power grids. Consumers now have the right to sell this electricity and receive payment for it.
- A major innovation will be the significant liberalization of grid connections for industrial park consumers. A substantial energy consumption hub will be created, comprising industrial park consumers and generation facilities planned to be located directly adjacent to the consumption center.
Challenges and obstacles in the development of “green” energy communities
Kostyantyn Krynytskyi, Head of the Energy Department at the NGO “Ekodia,” Kyiv
-Following the full-scale invasion, as Ukraine’s energy system is being systematically destroyed, the phrase “decentralized generation” has become a buzzword. Green energy is finally starting to be prioritized. And this is no longer just about climate change or reducing harmful emissions; it’s more about the energy security of communities. The perception of ordinary people is beginning to change. But everything remains at the slogan stage for now, because there is no real, clear strategy for the development of renewable energy at the state level.
- It is difficult to talk about the development of energy communities and renewable energy in general without addressing the issue of tariffs and bringing them in line with market pricing. This could open up many opportunities for the development of renewable energy. If done gradually and wisely, with initial steps to establish specific benefits for the general population that needs them, this will provide a strong impetus for the development of renewable energy.
- Systemic solutions are needed. One approach is to change building codes so that it is not possible to build a hospital, school, or other public facilities without installing, for example, solar panels. We need to think more broadly, at the national level. This could stimulate the emergence of new renewable energy facilities.
German Charitable Initiative to Restore Ukraine's Public Utilities Through Solar Energy
Stella Schonwiesner, a renewable energy entrepreneur and co-founder of the Repowering Ukraine initiative, Germany
- Germany has a well-developed energy system and extensive experience in the field of renewable energy. It was one of the first countries to actively utilize solar power plants. There are many solar modules with lower capacity compared to newer plants. German companies are dismantling lower-capacity stations and donating these modules, inverters, and related components to Ukrainian communities and utility companies free of charge. More than 400 inverters and solar modules have already been donated to communities in the Zhytomyr and Sumy regions.
Key Aspects of Promoting and Providing Government Incentives for the Development of “Green” Energy Communities
Mykhailo Hanchuk, CEO of Promavtomatika-Vinnytsia LLC, Vinnytsia
- Motivation is a powerful driver of the development of “green” energy communities.
What motivates the government?
The government provides incentives in the form of grants, subsidies, tax breaks, and tariffs—this is a strong motivator; we all want it.
The second form of motivation is when the government takes something away: regulations, norms, standards, quotas—this is also motivating.
The third function is providing information.
- Different countries have their own experiences with motivation. The amount and types of motivation depend on how satisfied the government is with the development of this area.
In Ukraine, the motivation is already so strong that the government won’t need to do anything further to encourage renewable energy development, because people already have plenty of reasons to build solar, wind, or hydroelectric power plants. The government’s role is to lay the groundwork. There is no need to wait for something to appear and for the government to provide funding. Taking solar power plants as an example, the main motivation for customers is energy savings, which translates to increased competitiveness for businesses and lower production costs.
A Success Story from the Severynivka Community
Oleg Levchenko, Director of Development at the “Podillia Regional Development Agency” NGO, Vinnytsia
- Social capital isn’t just about trust; it’s about successful and effective collaboration. And energy communities are about long-term cooperation. Small communities are ready to get to work. We don’t lack leaders; we lack stewards who will take responsibility for achieving lasting, successful results.
- Due to the exceptionally high number of gasified settlements, Vinnytsia Oblast has a surplus of biomass in its forests. The experience of the Severynivska community, which has transitioned to renewable energy and is completely independent of gas, shows that effective work is possible.
- Green energy is about the green economy. We must work on transforming the energy sector and the economy. We must seek solutions. One of them is cooperative green centers.
- 50% of agricultural processing is energy. Sustainability means security—both food and energy security. In Vinnytsia Oblast, we can utilize all types of energy. The biggest problem is the lack of social capital.
- We either build a green economy or merely imitate one. Small cooperatives are not profitable for the state
- First comes the community—the result—and then the energy sector.
The event program is available here.
You can watch the live stream of the event here.
