(Bloomberg) -- Ukrainian power producer DTEK Energy BV is looking for renewable investment opportunities in the European Union as the government backtracks on support for climate-friendly projects.
The Kiev-based utility, which is looking to launch pilot solar and wind projects in the EU as early as this year, set up a hub in London to handle investments in new types of energy, including renewables and hydrogen, the chief executive officer of DTEK Renewables said in a written response to questions from Bloomberg.
“Renewables is one of the drivers for DTEK for a business expansion outside Ukraine,” DTEK Renewables CEO Maris Kunickis said. “We see great potential in renewables and it will certainly become a growth driver.”
Energy producers in eastern Europe are starting to shift focus away from oil and coal as non-renewable sources become scarce and the EU plans to slash carbon emissions in half by 2030. In Poland, the most heavily coal-reliant in the EU, PKN Orlen SA wants to spend more than 30 billion zloty ($8 billion) on “sustainable growth” by 2030, while Czech utility CEZ AS wants to expand nuclear energy generation to help cut greenhouse gases.
Polish Strategy
Poland’s government also plans to build 9 gigawatts of nuclear plants, while offshore wind farms, planned at 11 gigawatts in 2040, would require another $32 billion of investments and along with solar energy, would help replace aging coal-fired plants.
“Higher EU targets for 2030 will require rapid decarbonization of the power sector, and a major acceleration of the energy transition in some European member states that still rely heavily on coal generation,” BloombergNEF said in a Nov. 17 report.
As the green push takes hold in Europe, Ukraine, a former Soviet republic that aspires to join the EU one day, is trailing efforts elsewhere on the continent.
After moves to support green technology with financial incentives that allowed Ukraine to triple renewables capacity in 2019 to 6.4 gigawatts, the government last year slashed feed-in tariffs for solar and wind power producers.
In 2020, government only paid for 50% of produced energy to renewable producers. The retroactive cut jeopardizes Ukraine’s goal of having a 25% share of renewables in electricity production in 2035.
And although it agreed to repay accumulated debt in compensations -- in 2020, the state covered 50% of its debt to solar and wind producers -- it risks falling farther behind.
For DTEK, developing more renewable capacity in Ukraine hinges on future government decisions on support for green power, Kunickis said.
The company aims to produce 33% of its energy from renewable sources by 2030 and expects about 19% of all power generation in Ukraine to come from clean plants. It doesn’t rule out issuing more green bonds to finance projects after offering them in 2019.
“We are expecting government decisions on forms of support for green energy generation or other forms of market development.” Kunickis said. “This is going to be a signal for us to continue building new capacities, and we want to do it in Ukraine.”