Andrii Konechenkov, Chairman of the Board of the Ukrainian Wind Energy Association (UVEA), emphasized the urgent need for supportive policies to unlock the country's significant wind energy potential.
Legislative Hurdles Impeding Wind Energy Growth
In July 2024, the Ukrainian government took a positive step by abolishing customs duties and Value-Added Tax (VAT) on the import of energy equipment. However, Konechenkov pointed out that wind energy projects have not benefited equally from these measures. He highlighted that during the last session of the Verkhovna Rada, a crucial amendment to the Customs Code, which would have exempted VAT on imported wind turbine equipment, was removed. This reversal has significantly hindered the rapid deployment of wind energy infrastructure across the country.
"If we write it now, as the EU wants, it will immediately lead to the fact that we do not have drinking water, but only technical water throughout the country," said Konechenkov. "All companies today could import wind turbines faster and build them faster if there was such help from the Tax Policy Committee. But he blocked this story."
Draft Law No. 11445: Stalled Progress
Konechenkov also brought attention to Draft Law No. 11445, which was registered in the Ukrainian parliament with the intent to provide further incentives for wind energy development. Despite its registration, the bill has yet to be brought to a vote in the Council. The delay in approving this legislation is seen as a significant barrier to achieving the ambitious wind energy targets set by both investors and the government.
Financial Implications and Investor Concerns
The lack of immediate legislative support has resulted in financial uncertainties for investors. UVEA estimates that the state owes investors approximately UAH 35.8 billion. Additionally, investors have secured commitments for 4 gigawatts (GW) of wind energy projects, poised for development in the medium term. Without expedited legislative measures, these projects face potential delays, impacting Ukraine's ability to expand its renewable energy capacity swiftly.
Goals for Wind Energy Expansion
Konechenkov stressed the importance of state support in reaching Ukraine's wind energy goals. The association aims to facilitate the construction of 900 megawatts (MW) of wind power by mid-2026. Achieving this target is critical for reducing the country's reliance on fossil fuels, enhancing energy security, and meeting EU integration standards for sustainable energy.
"State support is essential for investors to build 900 MW of wind power by mid-2026. Without it, we risk falling behind in our renewable energy commitments," Konechenkov asserted.
Path Forward: Legislative Reforms and Support Mechanisms
To address these challenges, investors are advocating for the following legislative reforms:
- Reinstatement of VAT Exemptions: Reinstate VAT exemptions for the import of wind turbine equipment to lower initial costs and encourage rapid deployment.
- Approval of Draft Law No. 11445: Expedite the voting process for this draft law to provide comprehensive incentives for wind energy projects.
- Streamlined Permitting Processes: Simplify and accelerate the permitting and licensing processes for wind energy installations.
- Financial Incentives and Support: Introduce additional financial incentives, such as grants or low-interest loans, to support the construction and maintenance of wind farms.
Government and Parliamentary Response
The Ukrainian government has acknowledged the importance of renewable energy and the potential of wind power to transform the country's energy landscape. However, bureaucratic delays and shifting policy priorities have impeded progress. Konechenkov urges parliamentarians to prioritize wind energy reforms to capitalize on Ukraine's vast wind resources and attract the necessary foreign investments.
Strategic Importance of Wind Energy
Expanding wind energy is not only pivotal for Ukraine's economic recovery but also essential for its environmental sustainability and geopolitical resilience. By increasing renewable energy capacity, Ukraine can reduce its dependency on energy imports, mitigate the impacts of climate change, and strengthen its position in the European energy market.
Conclusion
Investors in Ukraine's wind energy sector are at a critical juncture, seeking legislative support to unlock the country's renewable potential. Andrii Konechenkov and the Ukrainian Wind Energy Association emphasize that timely and decisive actions by the Verkhovna Rada are essential to facilitate the construction of wind power projects, ensuring Ukraine's sustainable growth and energy independence.
As Ukraine continues its efforts to align with EU standards and rebuild its economy amidst ongoing challenges, the successful implementation of these legislative reforms will play a crucial role in shaping the nation's green energy future.
