EU TACIS PROJECT Support and Development of Renewable Sources of Energy (Biomass) Objective Promote the use of biomass in Ukraine Veli-Pekka Heiskanen, 27 April, 2006, Kiev Support and Development of Renewable Sources of Energy (Biomass) - Ukraine

Support and Development of Renewable Sources of Energy (Biomass) - Ukraine Resources and schedule Project budget 2 million Project budget 2 million Funded by EU TACIS program Funded by EU TACIS program State Committee for Energy Conservation as project partner State Committee for Energy Conservation as project partner Allocated work time; foreign experts 5 man years, local experts 8 man years Allocated work time; foreign experts 5 man years, local experts 8 man years Project finished by March 2007 Project finished by March 2007

Support and Development of Renewable Sources of Energy (Biomass) - Ukraine Background information Technical biomass potential over 7 Mtoe, only 0.7 Mtoe used at present Technical biomass potential over 7 Mtoe, only 0.7 Mtoe used at present Biomass energy in Ukraine could account for about 5 to 10 per cent in the primary energy consumption Biomass energy in Ukraine could account for about 5 to 10 per cent in the primary energy consumption Substantial potential in agricultural residues (80 %), wood fuel resources also significant Substantial potential in agricultural residues (80 %), wood fuel resources also significant Potential projects up to million in next 5-15 years Potential projects up to million in next 5-15 years

Support and Development of Renewable Sources of Energy (Biomass) - Ukraine Biomass utilisation potential Bioenergy used at present in small- scale, mainly in households Bioenergy used at present in small- scale, mainly in households Significant future potential at district heating plants, industry, and farms Significant future potential at district heating plants, industry, and farms Co-firing at coal plants could be of significance to some extent Co-firing at coal plants could be of significance to some extent

Support and Development of Renewable Sources of Energy (Biomass) - Ukraine Investment potential ( millions) Wood-based biomass Wood-based biomass Agricultural residues Agricultural residues (sunflower residues, straw etc.) Biogas, landfill gas Biogas, landfill gas

Support and Development of Renewable Sources of Energy (Biomass) - Ukraine Project implementation Formation of Energy Service Company (ESCO) for developing and implementing biomass projects, assisting in funding and giving technical assistance Formation of Energy Service Company (ESCO) for developing and implementing biomass projects, assisting in funding and giving technical assistance ESCO will work independently under Ukrainian management and staff after TACIS project has been finished ESCO will work independently under Ukrainian management and staff after TACIS project has been finished Create recommendations for Ukrainian biomass strategy: targets, incentives, taxation, standards, local manufacturing, biomass fuel market Create recommendations for Ukrainian biomass strategy: targets, incentives, taxation, standards, local manufacturing, biomass fuel market

Support and Development of Renewable Sources of Energy (Biomass) - Ukraine Project implementation Implementation of two biomass boiler plants Implementation of two biomass boiler plants Four more projects will be developed to pipeline stage Four more projects will be developed to pipeline stage Improvement of project financing possibly by joint implementation scheme, CO2 trading, or joint ventures with foreign companies Improvement of project financing possibly by joint implementation scheme, CO2 trading, or joint ventures with foreign companies Dissemination activities Dissemination activities

Support and Development of Renewable Sources of Energy (Biomass) - Ukraine Biomass project proposals Over 20 project proposals received so far; most of those aim to wood utilisation, only few to the use of agricultural residues given its high potential in Ukraine Over 20 project proposals received so far; most of those aim to wood utilisation, only few to the use of agricultural residues given its high potential in Ukraine Significant interest in fuel production (pellets, briquettes, biodiesel) Significant interest in fuel production (pellets, briquettes, biodiesel) Work in progress; pre-feasibility studies carried out for most proposed projects, six selected for closer studies so far Work in progress; pre-feasibility studies carried out for most proposed projects, six selected for closer studies so far

Support and Development of Renewable Sources of Energy (Biomass) - UkraineConclusion The prospects for increasing biomass utilisation in Ukraine are excellent: High existing biomass potential High existing biomass potential Significant fraction of the existing energy production capacity needs up-dating Significant fraction of the existing energy production capacity needs up-dating Possibility to utilise carbon trade for financing investments Possibility to utilise carbon trade for financing investments European biomass market growing rapidly European biomass market growing rapidly Opportunity to increase self-sufficiency in energy Opportunity to increase self-sufficiency in energy

Support and Development of Renewable Sources of Energy (Biomass) - Ukraine Thank you very much for your attention !