According to experts at the USAID Energy Security Project (ESP), Law No. 3220-ІХ, which came into force today, July 27, 2023, will contribute to increasing the resilience of critical infrastructure facilities during interruptions in the energy supply. Before the bill’s second reading, the USAID ESP team provided a list of important recommendations to the VRU’s regulatory act, all of which are based on best international practices.
Among other things, this law will facilitate connections between critical infrastructure facilities and 20-megawatt (MW) cogeneration units via certain grids. Therefore, the law enables the generation and supply of electricity to meet the essential infrastructure needs of Ukraine’s inhabited settlements by using independent generating capacities. These capacities will be available even when Ukraine’s Integrated Power System experiences curtailments or emergency interruptions in power supply.
Currently, heat supply companies in Ukraine operate dozens of cogenerating units (capacity from 0.2 to 1.5 MW) that simultaneously generate electricity and heat. This year, USAID ESP plans to assist counterparts in providing another 41 similar units for 19 towns in Ukraine.
“Thanks to the approved amendments to the legislation, using their cogeneration units, heat supply companies could directly power not only their own boiler houses and heat supply stations but water supply and disposal facilities as well as hospitals and other infrastructure facilities nearby. A decision on which facilities should get an additional power supply source must be agreed on with local governments,” District Heating Sector Lead at USAID’s ESP, Diana Korsakaite, said.
USAID ESP’s experts analyzed the possibility of using small and medium-capacity cogeneration units to improve the operational reliability of critical infrastructure at the local level. To inform policy decision-making, the team developed the report “Potential for Using Small and Medium Capacity Cogenerating Units (distributed generation) in Ukraine’s District Heating Systems” for the VRU, Government, and NEURC and shared it in early March 2023. The report contributed to government policymakers adopting legislation amendments that consider the potential to implement small and medium-capacity cogeneration units.
From March to June 2023, USAID ESP co-organized a roundtable with the Parliamentary Energy Committee on the long-term development of distributed cogeneration in Ukraine. In addition, team members participated in sessions of a working group of the VRU’s Energy and Utility Committee and held meetings with experts from the Ministry of Infrastructure, NEURC’s Commissioners, and experts from the Regulator’s structural units. During these meetings, representatives discussed the potential for using small and medium-capacity cogeneration in Ukraine’s heat supply systems, particularly in wartime. These fruitful and intensive collaborations resulted in the VRU approving the amendments in June 2023.
USAID ESP stressed that amendments to Law No. 3220-ІХ are not the final point in creating new opportunities for the stable operation of critical infrastructure. In compliance with the law, NEURC should develop a procedure to connect such facilities as critical infrastructure to cogeneration units and create a procedure to account for and sell the electricity generated by these units. Given that the 2023-2024 heating season is quickly approaching and this regulation is urgent, USAID ESP recommends that NEURC develop relevant regulatory bylaws promptly. These decisions are overdue and needed by many towns. For its part, USAID ESP will continue to support the Government of Ukraine and key players in the energy sector to prepare for the 2023-2024 winter season and focus on developing and improving the legislative framework.
“Out of 19 communities that asked USAID’s ESP to assist with cogeneration units, at least six plan to connect these units directly to hospitals, pump stations of water supply companies, sewage pump stations, and other critical facilities to ensure the vital function of communities. Such opportunities are available for many other towns using cogenerating units in heat supply systems,” USAID ESP noted.
The stable operation of critical infrastructure facilities is the only one of the many opportunities enabled by developing distributed cogeneration.