From pv magazine 05/2022
As the Ukrainian invasion continues, governments across Europe are trying to break ties with Russia’s energy. New renewable energy capacities are needed more than ever.
According to a study conducted by Level Ten, a US renewable energy trading infrastructure provider, more than 30% of European developers have doubled their efforts in existing countries, in the light of Russia and Ukraine. Less than 9% are reducing their investment. war. However, proximity to conflict acts as a deterrent for some.
“What we see is that some developers are a little shy about investing in countries adjacent to Ukraine and Russia,” says Frederico Carita, Developer Services Manager at Level Ten. “But some developers are saying business as usual. This depends on the risk profile of the company and the country itself.” The important thing is whether the developer is unfamiliar with the region.
According to LevelTen, the war has made European PPA prices very high. The Polish market was particularly noteworthy due to the auction method that allows developers to bid in volume and be exposed to very high merchant and PPA prices. The latest auction in December was allocated 870 MW of solar, and the New Year got off to a good start.
“Currently, the Polish photovoltaic sector faces new challenges,” said Ewa Mageira, president of the Polish Photovoltaic Energy Association. “We have received signals suggesting problems with the timely implementation of the project. Many Ukrainians employed in the PV sector are returning home to pick up their weapons.”
According to Mageira, many auction winners may miss the deadline for first-generation energy from new equipment. Fortunately, amendments are being negotiated to allow an extension from 24 months to 33 months to make solar power comparable to wind power. Renewable energy will be boosted by Russian sanctions, but both Poland and Hungary are looking for ways to increase domestic coal-based electricity production.
Hungary resumes
Hungary broke its rank with the EU and refused energy sanctions on Moscow. But in March, there was good news that national energy regulators were trying to procure about 864 GWh of renewable energy.
However, according to Hungarian renewable energy specialist Ferenc Kis, with over 200 bids in 2020 and 2021 and five times the oversubscribing capacity, only 20 projects have been submitted and the response is sluggish. It was a thing. The trend of falling prices has reversed.
“There are many reasons for this, and I hesitate to relate them to the Ukrainian war,” Kis says. Instead, he points out that this is the first auction in Hungary that requires a battery storage component with a capacity of 10% of the planned power production unit. “At the same time, a more regulated and perhaps more transparent bid bond scheme has been introduced by DSO, and the first announcement of a MW-sized enterprise PPA agreement indicates that the next chapter in the solar market has begun. “
In Hungary, the first commercial plant was recently commissioned by the Netherlands-based Photon Energy. Developers are already planning new merchant projects in the major European markets of Romania, Hungary and Poland, and despite the war, the business is on the move.
“So far, we haven’t seen any direct impact on our work, but we can see that the recent rise in raw material prices is reflected in our investment costs, which was already before the war. It was observed, “says Martin Kisley, a spokesman for the company.
Romanian optimism
In Romania, the war in Ukraine seems to have had little impact on the PV sector. “On the contrary, I think investors’ confidence has increased slightly because everyone knows that Romania must invest in renewable energy as soon as possible,” said the Managing Director of the Romanian PV Industry Association. One Mihai Balan said.
Balan states that previous expectations that at least 3 GW of renewable energy will be added by 2026 and sunlight will occupy about 2 GW now seem conservative. Such optimistic reasons include the removal of the PPA ban almost 10 years later, 1: 1 quantitative compensation for prosumers with up to 200 kW of equipment, and the country’s first bid to introduce renewable energy. , A combination of recent positive developments. Capacity of 950MW.
“We believe that more than 65% of this capacity will come from solar power because of the short deployment times and the obligation to connect these projects to the grid by 2024,” says Balan.
In the meantime, nothing has changed in this area, according to Balan, and the industry plans to deliver the first 100 MW of solar power this year, the first practical scale in Romania in seven to eight years. Includes PV projects.
In early April, US power electronics maker Enphase confirmed plans to begin production of microinverters in Timisoara in the first quarter of 2023.
Supply concerns
Meanwhile, in neighboring Moldova, the desire for solar continues to grow. In early April, energy regulators launched an auction to develop a large 230 MW renewable energy project, including 70 MW of solar power.
“This time, we were particularly interested in ground-based PVs that were allocated within a few hours,” said Vitali Zveaghintev, founder of Zaw Energy Srl. However, most developers in Moldova are trying to build solar outside of the support scheme.
According to Moldova’s energy policy analyst Sergiu Tofilat, there are many entrepreneurs in the country who are willing to invest in renewable energy, but their main concern has nothing to do with the war in Ukraine.
“Developers are more worried about some of the legislative loopholes we have here. For example, our TSO has issued approvals in excess of 1GW, which exceeds the peak consumption of Moldova. Most of the approved people have no plans to build a project, but just want to resell it. ”Zveaghintev’s interest in renewable energy has increased against the backdrop of rising electricity and gas prices. I am confirming that it is. However, he also explains the problems faced by developers, such as metal support structures from Ukraine and interruptions in the supply of high voltage equipment.
“The fact that no freighter has arrived in the Black Sea is a big problem, and all deliveries received via the port of Odessa are now being trucked to Greece, the Netherlands, or Turkey. It affects not only us as EPCs, but also potential investors, “says Zveaghintev.
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