Investments in cogeneration: opportunities and barriers discussed at the UNBA

Simultaneous production of electricity and heat could strengthen the energy resilience of communities and businesses. However, in practice, the development of such solutions is hampered not only by financing, but also by complex procedures, network restrictions, and legal uncertainty.

The development of cogeneration infrastructure, insurance of energy business risks, and the development of social infrastructure in communities were discussed by participants at a thematic roundtable held on March 4 at the initiative of the UNBA Committee on Investment and Privatization.

The moderator of the event, Committee chairman Andriy Shabelnikov drew attention to the problem of insuring energy facilities, which, according to him, is particularly relevant today. Current proposals provide for an excessively low level of insurance coverage — about 10% of the value of energy facilities, while this figure should be 50%. The current situation seems paradoxical: citizens can insure their cars or apartments, while owners of critical facilities still do not have a full opportunity to do so. According to the advocate, a separate state body is needed to regulate these issues and interact with international institutions.

At the same time, bureaucratic obstacles are one of the main problems in the electricity production industry. This aspect was highlighted by the deputy chairman of the Committee Vitaliy Zhadobin. He said that all costs due to systemic restrictions, also known as «network collapse», have to be covered by businesses, which negatively affects the development of the industry.

The roundtable participants explored options for the Ukrainian National Bar Association to participate in developing initiatives together with public organizations in order to accelerate the development of cogeneration infrastructure in the country.

After all, the legal community is the driving force behind any business project. This was emphasized by the president of the Association of Distributed and Maneuverable Generation Entities Maksym Marchenko. As an example, he noted that today it is necessary to conduct legal compliance, make a clear plan of action, take into account all deadlines, the procedure for connecting to electricity and gas networks, as well as to heat supply.

Business representatives focused on the practical aspects of project implementation. Director of an energy company Valentin Polishchuk drew attention to the issue of selecting a land plot for construction. He noted that, despite the simplified procedure provided for by CMU Resolution No. 1320, it is necessary to carefully check the availability of infrastructure for connection to networks before launching a project. Head of a heat supply company Valentin Prokaza spoke in favor of a clear distinction between investment and social projects. In his opinion, investors will not allocate funds to facilities with used equipment, as the business is primarily focused on new and insured equipment. And the head of another energy company Olena Kapustinska suggested considering the connection of cogeneration plants to networks not only as a procedure for obtaining technical documentation, but as a process of integrating a new source of generation into the energy system.

The participants paid special attention to the issue of energy independence of communities. A member of the Borshchahivka Village Council Oleksandr Demochko noted that although communities are promising customers for energy companies today, they themselves need ready-made solutions. An urgent task in the near future will be to adapt the social infrastructure to the operation of cogeneration plants.

«Our task is to ensure that standard solutions are developed by the Cabinet of Ministers or the NEURC and delivered to consumers. There are real budgets and the possibility to purchase all this even within the framework that has been announced», - concluded A. Shabelnikov.