New green energy projects in Ukraine are at risk of stalling. What’s the reason?
14 March 11:56
Leading renewable energy associations have appealed to the parliament and the government to solve the problem of the impossibility of changing the designated purpose of land plots where green energy facilities were planned to be built. This was reported by the Ukrainian Wind Energy Association, Komersant ukrainskyi reports.
They explained that this problem can be solved in the process of finalizing the draft Law of Ukraine “On Amendments to Certain Laws of Ukraine on the Extension of the Validity of Territory Planning Documents” (No. 12283), which is currently being considered by the Verkhovna Rada of Ukraine.
What is the problem?
Until December 31, 2024, Ukraine had a mechanism for changing the designated purpose of land plots in accordance with comprehensive plans for the spatial development of communities or master plans. However, starting from January 1, 2025, the change of land designation is possible only if detailed territory plans are developed, synchronized with the planning schemes of districts and regions. However, according to representatives of renewable energy associations:
– comprehensive spatial development plans have not been developed in most territorial communities, as it requires significant time and funding;
– planning schemes for districts and regions are also absent or not updated, and their development requires even more resources.
That is, according to the authors of the statement, it is currently impossible to change the designated purpose of land plots, which, in turn, jeopardizes the development of new renewable energy projects.
As a result, this creates artificial legal uncertainty and hinders investment in new energy facilities.
What renewable energy associations offer
The problem can be solved by allowing the development of detailed territory plans taking into account planning schemes (if any), and not necessarily based on them. This can be done by amending certain provisions of the draft law, which concerns the extension of the validity of territory planning documents.
According to representatives of renewable energy associations, this will
– unlocks the possibility of changing the designated purpose of land plots and launching new renewable energy projects,
– will allow the construction of 4-6 GW of new “green” capacities in the next 3 years,
– support Ukraine’s energy security and reduce dependence on imported energy.
Renewable energy industry expects government support
The problem that most undermines investor confidence and complicates the implementation of new projects is the debt to renewable energy companies accumulated since 2022.
Despite significant progress in reforming the electricity market, investment in the renewable energy sector remains insufficient. In particular, in order to achieve the climate goals of the Paris Agreement, Ukraine needs to attract at least $5 billion annually in the development of clean energy.
Therefore, in order to support further development of renewable energy, the Energy Community believes that it is necessary to
– ensure the stability of financial mechanisms, in particular, to solve the problem of debts to renewable energy companies;
– adopt a clear regulatory framework for the integration of energy storage facilities into the grid;
– develop an effective system of support for new renewable energy projects, including mechanisms for insuring military risks;
– accelerate the reform of the electricity market to increase its transparency and competitiveness.
The industry’s development potential in Ukraine is great
Renewable energy generation in Ukraine occupies less than 10% of the land that could potentially be used for such facilities. This is the opinion of Yuriy Katsiyon, Deputy Chairman of the Board of Oschadbank in charge of corporate business, as quoted by Energoreforma.
“In Ukraine, renewable energy projects are implemented on an area that is less than 10% of what can be used for them. Accordingly, our potential is enormous, including in attracting foreign investors to implement joint projects,” Yuriy Katsiyon said in the Big Interview podcast on the Energy Club platform.
In the EU, he said, almost all the sites available for the construction of such facilities have already been used.
How is renewable energy developing in Europe?
According to the WindEurope report “Wind Power in Europe: 2024 Statistics and Forecast for 2025-2030”, 16.4 GW of new wind power capacity was commissioned in Europe in 2024, which is 2 GW less than in 2023.
“The European wind sector continues to grow, but at half the rate we need,” said Giles Dixon, CEO of WindEurope. “The market is being held back by three key issues: complex permitting procedures, slow development of grid infrastructure and insufficient electrification.”
Countries leading in wind energy development in 2024:
Germany – 4 GW of new capacity per year,
The UK – 1.9 GW and
France – 1.7 GW.
At the same time, Denmark once again holds the lead in terms of the share of wind generation in the national energy mix – 56% of the country’s electricity is generated by wind. Ireland is in second place (33%), and Sweden is in third place (31%).
