FINANCING RENEWABLE ENERGY PROJECTS IN UKRAINE
Keywords:renewables, energy intensity, energy efficiency, “feed-in tariff”, tendering systems
Current state of Ukrainian energy industry development is characterized by a number of negative trends: the share of fossil fuels in total energy consumption is the largest; the share of renewables is rather low and remaining almost unchanged for many years; Ukraine is dependent on imported energy sources; the indicator of energy intensity of GDP is one of the highest in Europe and in the world. The Ukrainian Energy Strategy provides to reach the share of primary energy supply from renewables to increase to 25% by 2035. Accordingly, enterprises need to increase energy efficiency and implement renewable energy projects. However, most of the business entities are limited in their own sources of financing, and therefore it is necessary for them to have state financial support and additional loan funds. In order to stimulate the development of renewable energy projects in the world, a wide range of strategies are used, including regulatory and voluntary ones. Currently, only three of them are used to promote renewable energy projects in Ukraine «feed-in tariffs», tax incentives and privileged mode of connection to the electricity grid. In addition, there are several opportunities for grant and credit financing. However, at the current stage of development of renewables in Ukraine, these mechanisms of financial support are not enough, since investing in this area remains rather risky. Therefore, in order to boost investment in renewable energy projects, it is proposed to apply additional instruments of state promotion of the latest technologies in this area, improve the regulatory framework, increase awareness of enterprises about the possibility of preferential crediting and increase public activity in relation to decarbonization and environmentalization of production processes.
Riazanova, N. O. (2017). Ekonomichni mekhanizmy rozvytku vidnovliuvanoi enerhetyky [Economic mechanisms of development of renewable energy]. Ekonomika ta derzhava — Economy and state, 9, 58—61 [in Ukrainian].
Kruhliak, A. M. (2015). Problemy finansuvannia enerhozberihaiuchykh proektiv v umovakh ekonomichnoi kryzy [Problems of financing energy saving projects in the economic crisis]. Teoretychni i praktychni aspekty ekonomky ta intelektualnoi vlasnosti — Theoretical and practical aspects of economics and intellectual property, 2 (12), Vol. 1, 184—189 [in Ukrainian].
Mazzucatoa, M., & Semieniuk, G. (2018). Financing renewable energy: Who is financing what and why it matters. Technological Forecasting & Social Change, 127, 8—22.
Xu, J. (et al.). (Eds.). (2018). Energy Finance in Promoting Renewable Energy Sustainable Development in China: The Channels and Means of Financing. Proceedings of the Eleventh International Conference on Management Science and Engineering Management. Retrieved January 22, 2019, from https://link.springer.com/chapter/10.1007/978-3-319-59280-0_44.
Donastorg, A., Renukappa, S., & Suresh, S. (2017). Financing Renewable Energy Projects in Developing Countries: A Critical Review. IOP Conf. Series: Earth and Environmental Science, Vol. 83. Retrieved January 22, 2019, from https://iopscience.iop.org/article/10.1088/1755-1315/83/1/012012.
Tyl, B., & Lizarralde, I. (2017). The citizen funding: an alternative to finance renewable energy projects. Procedia CIRP,
Vol. 64, 199—204. https://doi.org/10.1016/j.procir.2017.03.030.
Derzhavna sluzhba statystyky Ukrainy. (2017). Enerhetychnyi balans Ukrainy za 2017 rik [Energy balance of Ukraine for 2017]. Retrieved January 22, 2019, from http://www.ukrstat.gov.ua/operativ/operativ2018/energ/en_bal/Bal_2017_u.xls [in Ukrainian].
Kabinet Ministriv Ukrainy. (2017). Enerhetychna stratehiia Ukrainy na period do 2035 roku «Bezpeka, enerhoefektyvnist, konkurentospromozhnist»: rozporiadzhennia vid 18 serpnia 2017 roku № 605-r [Energy Strategy of Ukraine for the period up to 2035 «Security, Energy Efficiency, Competitiveness»: order dated August 18, 2017 № 605-r]. Retrieved January 22, 2019, from https://zakon.rada.gov.ua/laws/show/605-2017-р [in Ukrainian].
Haas, R., Meyer, N. I., Held, A., Finon, D., Lorenzoni, A., Wiser, R., & Nishio, K. (2007, June 1). Promoting electricity from renewable energy sources — lessons learned from the EU, U.S. and Japan. Retrieved January 22, 2019, from https://www.osti.gov/servlets/purl/939485.
Verkhovna Rada Ukrainy. (2003). Pro alternatyvni dzherela enerhii: Zakon Ukrainy vid 20 liutoho 2003 roku № 555-IV [On alternative energy sources: Law of Ukraine of February 20, 2003 № 555-IV]. Vidomosti Verkhovnoi Rady Ukrainy — Bulletin of the Verkhovna Rada of Ukraine, 24. Retrieved January 22, 2019, from https://zakon.rada.gov.ua/laws/show/555-15 [in Ukrainian].
Verkhovna Rada Ukrainy. (2011). Podatkovyi kodeks Ukrainy: stanom na 01.01.2019 [Tax Code of Ukraine: as of January 1, 2019.]. Vidomosti Verkhovnoi Rady Ukrainy — Bulletin of the Verkhovna Rada of Ukraine, 13—14, 15—16, 17. Retrieved January 22, 2019, from https://zakon.rada.gov.ua/laws/show/2755-17 [in Ukrainian].
Ministerstvo rehionalnoho rozvytku, budivnytstva ta zhytlovo-komunalnoho hospodarstva Ukrainy. (2017, March). Rozvytok vidnovliuvanykh dzherel enerhii v Ukraini [Development of renewable energy sources in Ukraine]. Retrieved January 22, 2019, from http://abc.in.ua/wp-content/uploads/2017/03/Rozvitok-VDE-v-Ukrai-ni.pdf [in Ukrainian].
Mansour, M. (2015). Financing Energy Efficiency and Renewable Energy Projects in Egypt. Global Policy, Vol. 6, 4,
Lam, P., & Law, A. (2018). Financing for renewable energy projects: A decision guide by developmental stages with case studies. Renewable and Sustainable Energy Reviews, 90, 937—944.
Copyright (c) 2020 H. Pudycheva
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors of research articles published in the Collection agree to the following terms:
- authors reserve the right to his authorship of scientific articles and broadcast journal right of first publication of scientific articles licensed under CC Attribution (Creative Commons Attribution License), which allows others to freely distribute the published scientific article referring to the original authors of the article and the first publication of the article in Research Works’ Collection on "Finance and credit activity: problems of theory and practice";
- authors have the right to enter a separate agreement concerning additional exclusive distribution of the article in the form it was published in the journal (for example, to post the research in an electronic storage of the establishment or publish as a part of a monograph), provided that the reference to the first publication of the article in the Collection.