Biofuel contains benzene and 10-30 percent alcohol. Alcohol is known to gain moisture that’s why such biofuel cannot be stored in tanks.

However, some experts believe that such plans are just a way to get distilleries working, more than half of which are almost not functioning at the moment. In addition, there are many other options for biofuel feedstocks: corn, crops, timber.

The profitability of sugar beet as a raw material has not yet been calculated, also the mechanism of all links in the chain of production of biofuel is not elaborated.

The experts say that within 5 years the production capacity will increase by 16 times and Ukraine will surpass Europe. Meanwhile, biofuel is produced at the level of individual businesses which negotiate with gas stations and sell their products there.

There is also a network of manufacturing fuel mixtures which contain gas and about 30% of alcohol. Excise duty on such fuel is 1.5 times less than the one on conventional fuels. The average price is about 8.40 UAH/ liter.

Car owners also perceive the policy of the Ministry with doubts. First of all, many are unsure whether focused on traditional fuels automobile mechanisms can run on biofuel. Others are ready to use biofuels because they save about 1.6 UAH on every liter.

Source: Ukrainian Biofuel Portal

Developers in the former Soviet republic may add panels with 300 megawatts of capacity after last year installing about 200 megawatts, according to the Association of Alternative Fuels and Energy Market Participants, the main lobby group tracking PV installations in the nation. It had just 2.5 megawatts in 2010.

“A boom in solar is starting in the Ukraine,” Kaveh Ertefai, chief executive officer of Activ Solar GmbH, a Vienna- based developer that has installed 90 percent of Ukraine’s solar capacity. This year, he said, “there will be a lot of growth.”

President Viktor Yanukovych’s efforts to develop Ukraine’s renewable energy industry contrast with steps to rein in solar subsidies in Germany, Italy and Spain after incentives for the industry pushed installations past government targets. Manufacturers led by Sharp Corp. and Schneider Electric SA are stepping up work in Ukraine.

Yanukovych’s administration is targeting 1,000 megawatts of solar capacity by 2015, about 2 percent of the 50,200 megawatts of capacity the nation had in 2010.

Investment Doubling

Investment in the country’s renewables market including wind, biomass and biofuels may be valued at $5 billion in five years, up from $2 billion now, said Vitaly Daviy, head of the alternative fuels association that’s known as the APEU.

“There’s a lot of interest from local and international companies right now in the Ukrainian solar market,” Daviy said in a telephone interview from Kiev. The government target “will be reached for sure.”

The nation offers a feed-in tariff fixing a price of 46 euro cents ($0.61) a kilowatt-hour for utility-scale solar projects, 59 percent higher than Greece, which has the next highest rate in Europe. The rates are little changed since their introduction in April 2009 and are fixed until 2030.

In contrast, German 2013 electricity futures for 2013 cost the equivalent of about 5.2 euro cents a kilowatt-hour, according to Energy Broker prices on Bloomberg.

The subsidies, meant to compensate for the risk of doing business in Ukraine, may spur runaway growth as it did in western European nations that offered above-market rates for solar power, said Martin Simonek, an analyst at Bloomberg New Energy Finance.

Passing Targets

“The high tariffs in the Ukraine might trigger a boom in solar that beats government targets,” Simonek said, noting that subsidies delivered through feed-in tariffs for solar power have been trimmed in Germany, France, Spain, Italy and the U.K.

President Yanukovych is seeking alternatives to natural gas, the nation’s biggest source of energy and the cause of price disputes with Russia’s OAO Gazprom that cut winter supplies twice since 2006.

Ukraine gets about 40 percent of its energy from gas, 31 percent from coal and 17 percent from nuclear plants, according to statistics compiled by BP Plc. Renewables accounted for less than 1 percent.

The formula Russia uses to fix gas prices for Ukraine is “enslaving,” Yanukovych has said, adding in a speech last month that investment in energy self-sufficiency help the country “earn and save money for decades to come.”

Wind and Hydro

Ukraine had about 117 megawatts of wind farms, 104 megawatts in small hydroelectric capacity and 68 megawatts in biomass by the end of last year, according to the lobby group.

Activ finished three PV plants last year including one on Dec. 29 totaling 100 megawatts, which is the biggest in Europe. More developers and manufacturers including Sharp, Schneider Electric and Renewable Energy Corp. are moving into Ukraine, said Daviy from the renewable industry group.

Sharp is seeing customer interest in its solar modules in Ukraine “because it has a very attractive feed-in tariff,” said Barbara Rudek, a spokeswoman for the company, which is based in Osaka, Japan. Officials at Schneider, which has its headquarters in Rueil-Malmaison, France, had no comment.

The investments reflect growing interest in renewable energy projects in Eastern Europe after Germany and Italy, the world’s two biggest solar markets, reduced incentives.

Bulgaria and Romania

Solar capacity in Bulgaria, the nearest market to Ukraine with a feed-in tariff, is adding capacity at a slower pace, while neighboring Romania has no megawatt-scale projects, data from New Energy Finance shows. Romania pays as much as 33 euro cents a megawatt-hour through a so-balled green certificate program.

Bulgaria, with an estimated 85-megawatt expansion last year to 100 megawatts, pays almost 25 euro cents a kilowatt-hour for utility-scale projects under rates fixed every July, according to New Energy Finance. Poland plans to boost solar subsidies starting in 2015.

Ukraine’s installed solar capacity may reach 800 megawatts within two years, driven by the feed-in tariff and “good” solar-radiation levels in the south, said Peter Rozenkrants, managing director of SunElectra, an Israeli developer that’s working in Ukraine.

SunElectra is developing 10 projects in the Black Sea region of Odessa with a total 30 megawatts, Rozenkrants said by e-mail.

Activ’s Plans

Activ, which owns a polysilicon factory in Ukraine and the Perovo development that was completed in December, also opened an 80-megawatt plant in Ohotnikovo in October. It expects to build at least 200 megawatts this year, according to Ertefai.

Ekotechnik Praha s.r.o. of the Czech Republic plans two 42- megawatt solar parks near Kiev and Dnepropetrovsk this year. Kiev-based Rentechno Group operates a 0.25-megawatt project and is developing more than 15 megawatts.

Checks on growth include financing constraints, a complex bureaucracy and weakening economic expansion, the European Bank for Reconstruction and Development said on its website. The bank introduced a 50 million-euro program to boost renewable-energy projects in Ukraine in 2010.

“The key challenge is project financing,” said Terje Pilskog, head of solar systems for Renewable Energy Corp. of Norway, which is selling its products in Ukraine.

IMF Bailout

Ukraine’s current-account deficit has widened on higher gas imports, according to the central bank. A 2010 bailout loan from the International Monetary Fund has been frozen since last March following the country’s failure to raise household gas tariffs. Since Ukraine isn’t part of the European Union, solar-project funding isn’t always readily available and can be costlier than within the bloc.

“It’s essential that the feed-in tariff is higher than the ones in more mature markets because of the higher risk and higher cost of debt here,” said Ertefai from Activ.

Ukraine’s premium tariff this year probably will remain little changed this year, said Daviy of the APEU, noting that European banks are showing a “big interest” in the country’s renewable-energy market.

“The stability of the feed-in tariff is directly dependent on the economic situation in Ukraine,” he said. “But so far, all is good.”

Source: Bloomberg

“We’ll officially send letters to the president, government and speaker with our conclusions and proposals. We hope that professionals from their side will assess them, and if they do not agree with something – they should release an official and scientifically grounded answer,” he said at a press conference at Interfax-Ukraine on February 10, 2012.

Todiychuk said that the introduction of the feed-in tariff for biogas is less than financial support of the state, but it is more a demonstration of respect and understanding of the sector’s development by authorities.

“This would change the investment climate in our country to a positive one at once,” the expert said, adding that the feed-in tariff for electricity generated from biogas has been introduced in 21 countries of the European Union.

He also said that the president’s vetoing of the draft law on the feed-in tariffs for electricity generated from biogas supported by the parliament is linked to a lack of unbiased information at the presidential administration.

Director of the Biomass Scientific and Engineering Center and Department Head at the Thermal Physics Institute of the National Academy of Sciences of Ukraine Dr. Heorhiy Heletukha said at the conference that biogas with time could be a real alternative to expensive imported natural gas.

“With the development of agriculture Ukraine will have more resources to generate biogas. Today the resources are enough to produce 2.6 billion cubic meters of natural gas equivalent per year. With the further development of agriculture, as experts forecast, the figure could grow to eight billion cubic meters,” he said.

He said that if the decision on the introduction of the feed-in tariff for biogas were made, at least 4,000 biogas plants could be installed in Ukraine over 5-10 years.

Experts said that the payback period of an average biogas plant worth EUR 1.3 million, with the introduction of the feed-in tariff, will reach 7-10 years and without the tariff – up to 50 years.

“We should support the sector during its spring and growth so as to attract investors,” Todiychuk said.

He said that apart from the extremely important ecological aspect and heat and power generation from agricultural waste, supporting the sector support would create a real alternative to imported natural gas in certain volumes.

As reported, in early November 2011, President Viktor Yanukovych vetoed amendments to the law on electricity, which expanded the feed-in tariff for electricity generated from biogas. The Ukrainian parliament passed the amendments on October 6, 2011: a total of 349 lawmakers supported the draft.

On November 16, 2011, the parliament decided to address to the head of state and ask for the revision of clauses in the draft law on the introduction of a feed-in tariff for electricity generated from biogas.

At a meeting of the related parliamentary committee, director of the Renewable Energy Institute of the National Academy of Science of Ukraine, Viktor Reztsov, said that the president’s arguments that had been allegedly proved by the conclusion of the Renewable Energy Institute are groundless.

On February 9, 2012, the Ukrainian parliament agreed with a proposal of the Ukrainian president and rejected a draft law on the introduction of a feed-in tariff for electricity generated from biogas.

Source: www.interfax.com.ua

Urban Infrastructure Project

Loan No. 4869-UA

Procurement of Backhoe loaders

No.: UIP-DRB-IFB-07

1.          ThisInvitation for Bids follows the General Procurement Notice for this Project that appeared in Development   Business, issue no.   710   of   September 16, 2007.

2.          Ukrainehas received a loan from the International Bank for Reconstruction and Development toward the cost of Urban Infrastructure Project,and it intends to apply part of the proceeds of this loan to payments under Contract UIP-DRB-ICB-07 for “Procurement of backhoeloaders”.

3.          CommunalEnterprise “Drohobychvodokanal” of Drohobych City Council in Lviv Region now invites sealed bids from eligible and qualifiedbidders for procurement of the following goods: two backhoe loaders with accessories.

4.          Biddingwill be conducted through the International Competitive Bidding (ICB) procedures specified in the World Bank’s Guidelines: Procurement under IBRD Loans and IDA Credits dated May 2004, as revised through May2010 Corrigenda, and is open to all bidders from Eligible Source Countries as defined in the Guidelines.

5.         Interested eligible bidders may obtain further information from Communal Enterprise “Drohobychvodokanal” of Drohobych City Council(Project Management Unit), contact person Vasyl Golovko (e-mail: drohvoda_tender@mail.lviv.ua ) and inspect the Bidding Documents at the address (1) given below from9:00 AM to 6:00 PM.

For more information: www.worldbank.org

URBAN INFRASTRUCTURE PROJECT

Water, sanitation and flood protection (Watersupply)

Supply and Installation of pumps for sewage pumping stations

Loan No.4869-UA

Project ID No.P095337

Bid No. ChWWP-ICB-07.2SI

The Government of Ukraine has received financingfrom the World Bank toward the cost of the Urban Infrastructure Project, and it intends to apply part of the proceeds towardpayments under the contract for Supply andInstallation of pumps for water pumping stations. The Communal Enterprise “Chernihivvodokanal”of Chernihiv City Council now invites sealed bids from eligible bidders for ChWWP-ICB-07.2SI”Supply and Installation of pumps forsewage pumping stations”.

The Communal Enterprise “Chernihivvodokanal” of Chernihiv CityCouncil now invites sealed bids from eligible bidders for supply and installation of pumps for sewage pumping stations. Thecompletion of the facilities shall be attained within thirty two (32) weeks from the date ofcontract signing that is expected inJune 2012.

For more information: www.worldbank.org

Installed capacity of solar energy will mainly supported by Activ Solar projects in Odessa region and continuation of capacity building in Crimea. Residential solar will add 1-3 MW.

Activ Solar confirmed plans for further development solar power plants in Ukraine.

“Activ Solar in 2011 has successfully implemented a number of projects for the construction of solar power plants in Ukraine with a total installed capacity of 185 MW. Company plans to continue further development and construction of solar parks in Ukraine. Proof of this is that the Activ Solar opened a new office in Odessa. There is a good level of solar activity in this region and a favorable geographical position, therefore, the Odessa region is promising for the construction of photovoltaic plants”, – said the CEO of Activ Solar, Dr. Johann Harter.

In 2012 construction of wind power plants will significant exceed solar. At the end of 2011 total capacity of wind energy was 151 MW. In this year three wind farm project plan to be commissioned, and projects started last year also possible to be completed. Total capacity of wind energy by the end of 2012 can exceed 75 MW.

20 MW will come from “Novoazovskiy” wind park LLC “Wind parks of Ukraine”. 100 MW will be commissioned by the same company at wind farm “Ochakovsky”.

Another 280 MW will completed by Concord Group in projects “Kazantipskaya” wind farm (100 MW) and “Sivashskaya” wind farm (180 MW).

Successful implementation of these projects depends largely on the ability to attract foreign investors in the Ukrainian sector of wind energy.

Projected growth figures power of wind and solar power can change dramatically. There are 25-30 companies that work closely on the European market, and they are looking for new markets. Ukraine is very attractive for them.

Source: www.energysafe.ru

The financing will enable the borrower to complete construction and commission additional 32.5 MW capacities at the existing wind farm located in Donetsk region. It will use proven technology supplied by Fuhrlander, a well known German manufacturer.

The EBRD intends to utilise Clean Technology Fund (CTF) support for this project in the form of a senior loan with possible concessional elements, depending on further financial analysis, to support the development of a market for large-scale wind technology in Ukraine.

The project total value is EUR 95.2 million. The loan makes EUR 33.3 million, supplemented by a loan of up to EUR 15.5m from the CTF.

A reminder that in March 2011 Novoazovskiy Wind Park obtained a 20-year license to produce electric power

LLC Novoazovskiy Wind Park is a special purpose Company incorporated in Ukraine.

Source: “Ukrinform”

The statement notes that a reduction in electricity production is related to the low inflow of water in the Dnieper and Dniester rivers, which influences electricity production at hydropower plants.

In 2011, Ukrhydroenergo reduced electricity production by 17.14%, to 10.303 billion kWh.

PJSC Ukrhydroenergo is Ukraine’s largest hydropower company, which consists of nine hydropower plants located on the Dnieper and Dniester rivers in Kyiv, Kaniv, Kremenchuk, Dniprodzerzhynsk, as well as Dnieper, Kakhovka HPPs, Kyiv Pumped Storage Plant (PSP), Dniester HPP and Dniester PSP, which is under construction.

Source: “Ukrinform”

The loan will support lending to small businesses across the country. Eligible small and medium-sized enterprises (SMEs) will be able to receive loans from UkrEximBank loans of up to USD 3 million to implement energy efficiency projects.

“The EBRD is concentrating its efforts on providing support to sectors of the Ukrainian economy, which are particularly affected by the adverse economic situation in the region – small businesses and energy efficiency. The former has been suffering from under-investment, linked with limited liquidity of domestic banks and various credit risks in Ukraine, for a number of years. The latter has become an issue of national importance in the context of Ukraine’s ongoing attempts to improve its energy security,” reads the statement.

The loan will be supported by the Bank’s technical assistance targeted at further improvement of UkrEximBank’s energy efficiency expertise. It will also be beneficial for eligible sub-borrowers, who will receive assistance in identification and implementation of energy efficiency investments, the EBRD noted.

Since 2007 the Bank has provided almost USD 470 million to UkrEximBank through subordinate debt and long-term debt transactions making it the EBRD’s largest financial-sector counterpart in Ukraine.

The EBRD is the largest financial investor in Ukraine. As of 31 December 2011, the Bank had committed over EUR7.5 billion (USD 9.6 billion) through 294 projects.

Source: “Ukrinform”

“I have decided to create an interagency working group lead by Finance Minister Valeriy Khoroshkovsky to develop long-term mechanisms for promoting energy efficiency, as well as to work out national and regional energy efficiency programs that should be taken into account in the budget plans for the period until 2015,” he said while opening a government meeting on Wednesday.

In addition, the prime minister suggested carrying out a comprehensive energy audit in the country.

“The country needs a comprehensive energy audit in the heat power industry, industrial production, and housing and utilities sector. The audit will produce an objective picture of energy consumption, as well as show us where to apply our limited resources,” he said.

The premier said he believes that Ukraine will succeed in using its energy resources more efficiently, as well as in the reforms in the housing and utilities sector.

Source: “Kyiv Post”