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Photovoltaic system near Chernobyl in Ukraine
Photo: STEPAN FRANKO / EPA-EFE
Ukraine earns more than one billion euros a year from the transit of Russian gas through its territory to Europe.
In future, however, the Nord Stream 2 Baltic Sea pipeline will bring gas directly from Russia to Germany.
Ukraine is not only losing revenue as a result.
The country also fears geopolitical disadvantages if Moscow no longer has to take gas transit into account.
Germany has now committed to invest around 150 million euros in a fund to promote the expansion of clean energy in Ukraine.
The payment is a concession to US President Joe Biden, who displeases Russia's gain in leverage through Nord Stream 2.
For the Ukraine, however, the money is a welcome support: it wants to become a major producer of renewable energies anyway and thereby open up new sources of income and become more independent of Vladimir Putin's gas.
Recently, however, the Ukrainian green electricity boom stalled.
Green energy producers were left with unpaid bills because the state bought wind and solar power from them, but in some cases did not pay them on time.
The country's energy ministers also changed several times.
The state-run German Energy Agency (Dena) advises the federal government within the framework of the German-Ukrainian energy partnership.
Your boss Andreas Kuhlmann says why investors should be careful in Ukraine at the moment - and why he still thinks the German financial injection is basically the right one.
SPIEGEL:
Germany has promised Ukraine support in building a greener energy sector.
Which projects should money go into?
Kuhlmann:
The potential in the field of renewable energies is immense in Ukraine.
In the south of the country there is a lot of wind and sun, plus large areas.
This also applies to bioenergy.
There is also a lot of promise in the field of hydrogen.
SPIEGEL:
And how much money is needed?
Kuhlmann:
A look at the past few years shows what sums can make a difference: Between 2014 and 2020, renewable capacities in Ukraine increased more than eightfold from just under one gigawatt to 8.5 gigawatts.
Eight billion euros have been invested in this.
But then the expansion stalled.
SPIEGEL:
There is criticism of unsound planning.
And reports that the state owes "green electricity producers" immense sums.
What is the problem in Ukraine?
Kuhlmann:
Above all, the political framework.
The management of the Ministry of Energy changed several times.
There are unanswered questions about a purchase law for renewable electricity.
One learns from all of this: Money alone will not fix it.
When we enter into partnerships with countries like Ukraine, we must also have a strong focus on regulation, market mechanisms, the integration of renewable energies and advice.
SPIEGEL:
Dena has been commissioned by the Federal Ministry of Economics to promote cooperation with Ukraine on energy issues.
How do you prevent tax money from Germany from seeping into dubious projects?
Kuhlmann:
As part of the energy partnership between Germany and Ukraine, of course, legal security and guarantees for investors are also discussed.
What we cannot afford is a situation as we currently have it: unanswered questions, unresolved accounts.
This destroys trust and is rightly criticized by foreign investors but also in Ukraine itself.
SPIEGEL:
So Ukraine has to make advance payments first?
Kuhlmann:
Ukraine has very good analyzes of what needs to be done in the energy sector.
But it has to get better in implementation.
There are many investors who are interested in the future topic of green hydrogen.
There are also pilot projects in which they could act immediately and directly.
However, hydrogen will only work if the expansion of renewables is driven forward in a targeted and structured manner.
SPIEGEL:
Why?
Kuhlmann:
We want to get climate-neutral hydrogen in the EU and in Germany.
Not hydrogen, which is produced using fossil fuels.
I hope that with the Nord Stream 2 agreement, the focus in Ukraine will once again be directed more towards climate protection and renewable energies.
This has recently been lost a little.
more on the subject
Nord Stream 2 gas pipeline: This deal is a triumph for PutinA guest contribution by Ralf Fücks
Agreement on Nord Stream 2: Merkel's triumph An analysis by Christiane Hoffmann
Nord Stream 2 gas pipeline: Biden's dangerous dealBy René Pfister, Washington
SPIEGEL:
You are alluding to the fact that Ukraine increased gas production in 2020 and invested in coal-fired power plants.
How did that happen?
Kuhlmann:
From the Ukraine's point of view, with a view to Russia, there is great interest in more independence when it comes to energy.
One can understand that.
SPIEGEL:
Wouldn't more green electricity be an opportunity?
Kuhlmann:
Yes.
Ukraine needs a much more flexible energy system and needs to focus more on a renewable energy system.
SPIEGEL:
Why does Ukraine see such great potential in green hydrogen?
Kuhlmann:
Due to the proximity to Germany and the EU, where large capacities are needed, and of course also due to their high potential for renewable energies.
Ukraine also has an existing infrastructure, the use of which can be thought about.
SPIEGEL:
You mean the gas pipelines?
Kuhlmann:
Right.
You can't let green hydrogen run through there overnight instead of natural gas.
In the medium term, however, these lines can be retrofitted for this purpose, and until then a certain proportion of hydrogen can also be added to the gas.
SPIEGEL:
Ukraine has set itself ambitious goals for renewable energies.
By 2035, they should cover around 25 percent of the total energy demand.
Is this realistic?
Kuhlmann
: The framework conditions are actually favorable.
There is a bipartisan “Clean Energy” working group in Ukraine and there are many actors who want to make a difference.
Many EU countries also want to support Ukraine.
But the regulatory uncertainties are currently standing in the way of rapid expansion.
SPIEGEL:
Would you still recommend Ukraine to private investors when it comes to renewables?
Kuhlmann:
The problems just described must of course be clarified.
But Ukraine is definitely an interesting area to invest in.
There is a very interested population, a high level of education, proximity to the EU and enormous potential.
If we do not succeed in bringing about the energy transition and climate protection in a country like Ukraine, then it will not work globally.
SPIEGEL:
Does the energy transition in Germany also depend on the Ukraine?
Kuhlmann:
I am convinced that we will not achieve the climate targets by 2045 without hydrogen.
We will need a lot of hydrogen, and a large proportion will not come from Germany and the EU.
We depend on imports from a wide variety of countries.
Ukraine would be a good partner.
SPIEGEL:
Could the Nord Stream 2 compromise even be a win for Ukraine in the end?
Kuhlmann:
The Nord Stream 2 compromise is initially a disappointment for many in Ukraine.
But it may lead to a return to the focus on renewable energies.
If that ultimately leads to a positive re-evaluation in Ukraine, I would be happy.
But it doesn't come by itself. We have a responsibility to support that.