Due to Russia's aggression, Ukraine's industry is facing new challenges in the energy sector. Last year's blackouts, which affected producers so much, may well happen again this year. And there is also the price factor - electricity has risen significantly during the war, and there is no sign of improvement. Businesses are adapting, stocking up on alternative energy sources and purchasing powerful generators to help them operate during blackouts.
Vinnytsia has developed its own trend of achieving energy sustainability. Namely, the massive introduction of renewable energy sources (RES) in production. As a result, every tenth kilowatt consumed by the city's industry is "green" because it is produced by solar power plants.
Andrii Ocheretnyi, Deputy Mayor of Vinnytsia, told Ukrinform how this was achieved and why Vinnytsia industrialists benefit from the European Green Deal.
"GREEN" BENEFITS IN VINNYTSIA
Ocheretnyi says that in January 2022, Vinnytsia was the first local community in the country to adopt the European Green Deal. This is the main EU document that lays the foundations for Europe's enhanced transition to sustainable development and the transformation of all major sectors of the economy and governance. It also affects countries that are important strategic partners of the European Union. This includes Ukraine. It aims to turn Europe into a climate-neutral continent, improve the well-being of citizens, protect biodiversity, and green the economy.
"In particular, it is about the presence of a "green" component in the final products of enterprises. That is, if they use fuel, it should be green hydrogen, and if they use electricity, it should be generated from the sun, wind, and water. Therefore, Ukrainian companies that implement renewable energy sources will be more competitive in the European and global markets.
If we talk about Vinnytsia-based producers working in the export market, they already have a green component due to solar power plants. Over time, it will change and grow. I am convinced that all export-oriented manufacturers should be encouraged to work on implementing renewable energy sources at their enterprises," the official said.
The deputy mayor says that as part of its support for the European Green Deal, Vinnytsia has introduced its own incentives for manufacturers installing solar power plants.
"In April of this year, the city council launched a municipal compensation program for businesses for installing equipment to generate electricity from renewable sources. First, for microbusinesses, then we extended it to small businesses, and in September - to medium-sized businesses. We have allocated UAH 10 million in the city budget for its implementation.
I would like to note that Vinnytsia City Community is the only one in Ukraine to encourage business to switch to green energy in this way. For this purpose, 30% of the taxes paid by the company to the community budget are allocated, but not more than the actual costs of purchasing alternative energy sources. We have limited the upper limit of compensation to one million UAH," says Andrii Mykhailovych.
He says that seven Vinnytsia businesses have already taken advantage of this program.
"The companies have already received the funds. We expect that they will use them to reinvest in their production process. It is important that their production processes are now more sustainable, because in winter they will be able to more easily pass possible blackouts," the official hopes.
ENTERPRISES ARE SWITCHING TO "GREEN" KILOWATTS
This year, solar panels on roofs have been installed en masse by both large and small businesses. The electricity they generate can reduce consumption from centralized grids by 5-50%. For some, this fully provides power for administrative premises, while others compensate for a significant percentage of energy costs for production.
For example, a Vinnytsia dairy plant this year installed a solar power plant (SPP) with a total capacity of 588.6 kW.
"They put it into operation in May. On bright sunny days, this power plant can ensure the smooth operation of the administrative building. The total cost of the project is UAH 12 million. The second stage, with a capacity of about 250 kW, is planned to be implemented and put into operation next spring. We are grateful to such enterprises for developing the energy system on their own and setting an example for other businesses," says Andrii Ocheretnyi.
According to him, the plant processes 600 tons of milk daily and employs more than 350 people working in four shifts. In the absence of a centralized power supply, the company will be able to operate at full capacity thanks to diesel generators, which were installed last year due to the shelling of critical infrastructure. And solar power plants help reduce electricity costs.
And there are more than forty such companies in Vinnytsia that have implemented solar power plant projects this year. Thanks to this, more than 10 MW of electricity consumed by community enterprises has already been generated by renewable energy sources. This is more than 10% of what is consumed by industry.
"We can say that 2023 was a turning point in our community in terms of renewable energy sources (RES). This is due to a number of reasons. The first of them was the blackouts in October last year, the second was the rise in the cost of transportation and distribution of electricity and electricity itself. The third reason is environmental friendliness. We see this trend as a great prospect," the official said.
MONEY FOR THE SUN
After generating solar kilowatts, the next step would be to install storage facilities at enterprises. This would allow the consumption of energy generated by solar power plants to be shifted, for example, to the night shift. However, so far, only a very small share of Vinnytsia enterprises that already have their own solar power plants have installed them.
"First, it's expensive. And secondly, most companies do not yet have such powerful solar power plants that would produce more energy than they consume. Currently, we are talking about the capacity of solar power plants that cover no more than 50% of their energy needs. This is because companies are limited in space for installing solar power plants and in finances. Today, businesses mostly install solar power plants at their own expense," explains Ocheretnyi.
He notes that even relocated enterprises have started installing solar panels.
"However, they install solar power plants with grant funds. For example, like Ukrpostach and Pirena. Why are they so focused? Usually, local companies own buildings and land. And when it comes to relocated ones, they usually lease land and production facilities. That is why they seek to attract donor money. And this is the right, conscious approach. Because, among other things, they have certain problems with working capital because they are just setting up their work," the official states.
Thus, Ukrpostach took part in the program "Support for Energy Modernization and Implementation of the EU Energy Efficiency Directive in Ukraine". It is implemented by GIZ on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) and co-financed by the Swiss State Secretariat for Economic Affairs (SECO). The company was one of 25 to receive energy efficiency grants worth 10,000 euros.
And Pirena was selected for the first stage of a grant project to improve energy efficiency from the German government company Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH with the support of the Governments of Germany and Switzerland.
"We are talking about the project 'Support for Energy Modernization of Enterprises in Wartime'. Our experts from the Department of Economics and Investments recommended that the company take part in it. This is a good example of cooperation between city authorities, businesses, and international organizations that will bring fruitful results," Ocheretnyi added.
Overall, he says, about ten companies in Vinnytsia would like to install solar power plants. Some of them do not yet have the financial capacity to implement such projects. Others have to wait a long time for equipment deliveries due to problems with cargo transportation at the Ukrainian-Polish border.
WHY VINNYTSIA SUCCEEDED
The deputy mayor says that the vast majority of solar panels currently being installed by Vinnytsia enterprises are made in China, and they are chosen because of their affordable price. Therefore, logistical problems with their delivery to Ukraine are very significant. Nevertheless, the process of their mass installation in Vinnytsia has started well.
"The fact that there are many operators in the Vinnytsia market who can purchase, install and mount solar power plants plays a very important role. For example, these are the Vinnytsia-based companies Voltazh Group, Promavtomatika, and Elektromontazh-425. We also have a company of the Kness Group that produces tables for solar power plants, piles if they are ground-based, cable and wire products, etc. They work on a competitive basis, and it is beneficial for consumers of their services from the industrial sector. This is also a factor in why solar generation for the own needs of enterprises in Vinnytsia has taken off," says Ocheretnyi.
He believes that not all cities in Ukraine have a production base of this kind. In Vinnytsia, however, the groundwork is in place for the installation of solar power plants by enterprises to become widespread.
Moreover, the city's program of compensation for businesses for installing renewable energy generation equipment will continue in the first quarter of 2024. And after the adoption of the city budget for 2024, the city authorities will most likely persuade the deputies to extend it for the whole next year.
Antonina Mnich, Vinnytsia
Photos by Oleksandr Lapin