Flexibility in the Ukrainian Energy System. What is the role of the renewable energy sector?

Flexibility in the Ukrainian Energy System. What is the role of the renewable energy sector?

Results from an ESP assessment of flexibility in Ukraine’s electricity system were presented at a recent stakeholder roundtable. Presentations relating to renewable energy penetration into the system along with an analysis of ancillary services market performance and recommendations for improved system balancing and ENSO-E integration were provided by ESP sector experts.

More than 100 government and regulatory officials, energy experts, and international financial institution representatives participated in a roundtable to discuss the impact of an increased Renewable Energy Sector (RES) share in Ukraine and an assessment of electricity system flexibility. The thematic roundtable was organized by the USAID Energy Security Program (ESP) on September 24, 2020.

As the share of RES-based electricity generation increases, the key issue for the Ukrainian power system is its flexibility: the power system’s capability to efficiently control the change variability and uncertainty, and its capacity to absorb and store energy generated by renewable sources. In 2019 alone, Ukraine’s RES capacities increased by 200%. These are significant changes in the power system that require simulating various system response scenarios to changes. At the same time, Ukraine does not have a dedicated body to monitor these changes and make relevant decisions. According to Deputy Minister of Energy Yaroslav Demchenkow, this is the reason why energy sector governance reform and swift response to changes in the market are vital for Ukraine. USAID ESP supports this vision and continues working to enhance the country’s energy independence and facilitate development of the Ukrainian energy sector.

USAID ESP experts analyzed the increasing RES share and suggested various response models. Ancillary services market (ASM) development was presented by Roman Dorosh, USAID ESP Senior Electricity Expert, with recommendations for a particular focus on new incentive pricing for various types of reserves, which will ensure procurement of all reserves needed for Ukrenergo, with or without a minimum budget increase. Roundtable particpants discussed the necessity of involving more thermal power plants (TPP) or CHP, including state-owned enterprises, in the certification process, thereby enhancing competition in the ASM, and increasing profitability. Market incentives may be used to involve both the existing generation and new participants using highly flexible technologies. The topic of creating a foundation of energy storage systems in Ukraine was presented by Allen Eisendrath, USAID ESP Senior Energy Advisor. Gokhan Tosun, Head of Technology and Smart Energy Department at MRC Consulting presented the USAID ESP survey results on increasing the RES share and that effect on electricity system flexibility. Survey results showed that RES dispatching (preventive constraint) with proper compensation is currently the most cost efficient instrument to increase flexibility in the power system, which will also reduce investment in new and still quite expensive highly flexible capacities.

Among attendeees were Yaroslav Demchenkov, Deputy Minister of Energy; Olha Babiy and Dmytro Kovalenko, National Energy Utilities Regulatory Commission Commissioners; Viktoria Gryb, Member of the Verkhovna Rada Committee on Energy and Utilities; Sukru Bogut, USAID Ukraine Senior Energy Advisor; Dean S. White, USAID ESP Chief of Party; Fatih Kolmek, USAID ESP Head of Electricity Experts Group; Roman Dorosh, USAID ESP Senior Electricity Expert; Allen Eisendrath, USAID ESP Senior Energy Advisor; Gokhan Tosun, Head of Technology and Smart Energy Department, MRC Consulting; and representatives of international financial institutions.