Biogas Potential in Ukraine

Given Ukraine´s natural and climate resources, biogas represents an opportunity for improving the country´s energy supply (International Finance Corporation (IFC) 2015, p. 7). Exploiting the biogas potential may decrease Ukraine´s dependency on imported natural gas, thus making Ukraine´s energy supply more secure. As of 2015, the total renewable energy potential in Ukraine was estimated at 68.6 million tonnes of oil equivalent (Mtoe) (International Renewable Energy Agency (IRENA) 2015, p. 5; 21). This equalled to half of the country´s energy consumption in that year.

Between 2000 and 2015 over 50 scientific publications on renewable energy potential were issued in Ukraine. A review of these publications shows a wide range of calculations of this potential. Figure 2.3 illustrates the estimated potential among the major forms of renewables⁶. The black vertical lines represent the standard deviation. The ends of the black lines demonstrate the maximum and minimum values. The red line shows Ukraine´s Total Primary Energy Supply (TPES, 105.7 Mtoe in 2014 (State Statistics of Ukraine 2016, pp. 1–2)).

Figure 2.3: Estimated Ukraine´s renewable energy potential, Mtoe

(Author´s calculation based on Geletukha, G., et al.; International Renewable Energy Agency (IRENA); European Bank for Reconstruction and Development (EBRD), Geletukha, G., et al.; International Finance Corporation (IFC); Matveev; Arzinger, Biogasrat; Kudrya; Deloitte; Kudrya; Organisation for Economic Development and Cooperation (OECD); Ukraine Sustainable Renewable Energy Lending Facility (USELF); Kirchner; Kuznetsova, Kutsenko; Meissner, Ueckerdt, Geletukha, G., et al.; Kudrya (2015a; 2015; 2014; 2013; 2013e; 2013e; 2013; 2012; 2012b; 2012; 2012c; 2012; 2011b; 2010; 2010; 2010; 2006a; 2004; n.y.a)) As shown in Figure 2.3, the total renewable energy potential in Ukraine spreads from 16.2 to 87.8 Mtoe p.a., representing a range between 15 % and 84 % of the TPES respectively. If one takes an arithmetic mean of these values (52.0 Mtoe or 54.5 %), about half of Ukraine´s energy supply could be generated from renewable sources alone. This confirms the thesis of International Renewable Energy Agency (IRENA) (2015), reported above. Biomass represents up to 40.0 Mtoe or over one third of the total renewable energy potential. Considering Ukraine´s agricultural output, some experts argue that biomass represents two thirds of the country´s renewable energy potential (Organisation for Economic Development and Cooperation (OECD) 2012, p. 18). The bar representing the biogas potential is the smallest one because the estimated biogas potential includes only animal manure as substrate type. Other biomass types suitable for biogas combustion (e.g.

silage maize) are included in the overall biomass potential.

However, agricultural residues and waste (e.g. manure) account for nearly 60 % of the biomass potential (International Renewable Energy Agency (IRENA) 2015, p. 22). Thus, biogas is one of the key technologies for biomass utilization in

6 The potential of geothermic was not included in the calculation.

00 10 20 30 40 50 60 70 80 90 100 110

Biomass Biogas Wind Solar Small Hydro Total

TPES of Ukraine, 2014

Ukraine´s agricultural sector. Due to high methane yield, cattle and pig manure are efficient feedstock types for biogas combustion. Another suitable feedstock is chicken dung (Kuznetsova, Kutsenko 2010, p. 9). With regard to the economic efficiency of biogas production, manure collection is a key issue to be addressed. In Ukraine, approximately 50 % of the feedstock population is on small-scale farms and private households. Therefore, areas containing large livestock populations have a better potential as locations for biogas plants (Ukraine Sustainable Renewable Energy Lending Facility (USELF) 2011a, pp. 5–6). According to a number of estimations, from 3 %⁷ to 10 %⁸ of Ukrainian agricultural enterprises would be able to fuel biogas plants with own manure. Geletukha, G., et al. (2013d) estimated the theoretical biogas market size in Ukraine to be about 800 plants ranging between 100 KWel and 20 MWel and total installed capacity of about 700 MWel (Geletukha, G., et al. 2013d, p. 56). Conversely, Meissner, Ueckerdt (2010) saw the potential for 2,990 plants with a total capacity of 405 MWel and 731 MWth (Meissner, Ueckerdt 2010, p. 18). In this respect, the size and structure of agricultural companies are important factors for the economic performance of biogas.

Therefore, livestock breeding companies (dairy, chicken and pig farms), meat processing plants and sugar mills, which generate large amount of organic waste, represent a good potential for biogas production (Geletukha, G., et al. 2013d, p. 56). Economies of scale may favour high livestock numbers, resulting in better biogas profitability (Ukraine Sustainable Renewable Energy Lending Facility (USELF) 2011a, p. 6). If the feedstock and manure amount of 2016 in Ukraine were converted into oil equivalent, the potential energy output from biogas could reach 4.62 Mtoe p.a. or approximately 4 % of Ukraine´s TPES in 2014 (Figure 2.4). According to Kuznetsova, Kutsenko biogas could provide annually from 4 % to 7 % of Ukraine´s electricity consumption (Kuznetsova, Kutsenko 2010, p. 5).

Figure 2.4: Estimation of biogas potential by feedstock type

(Based on finance.ua (2016) and International Finance Corporation (IFC) (2013e, p. 16))

To estimate the biogas potential for agroholdings, it is useful to analyse their energy consumption and livestock population. Unfortunately, no official data for agroholdings´ energy consumption and for their livestock are available.

However, Kucheruk (2013) and Geletukha, G., et al. (2013) provided some estimations in this field, considering all animal farms (large and small) in Ukraine. Taking into account other suitable waste types, e.g. bagasse from sugar mills, the authors assessed the biogas potential in Ukraine´s agricultural sector and proposed the following numbers (Table 2.4).

7 3 % of agricultural companies in Ukraine would be able to run a 500 KWel and upwards biogas plant (Meissner, Ueckerdt 2010, p. 18).

8 10 % of agricultural companies in Ukraine would be able to run a 100 KWel and upwards biogas plant (Geletukha, G., et al. 2013d, p. 56).

Cattle livestock

4.3 M heads 48.7 M t manure 2.7 Mtoe

Pig livestock

7.4 M heads 12.1 M t manure 0.6 Mtoe

Poultry livestock

217.1 M heads 10.8 M t manure 1.3 Mtoe

4.62 Mtoe

= 4.4 %

of TPES

Table 2.4: Biogas potential in Ukraine´s agricultural sector

(Based on Kucheruk (2013, p. 9); Geletukha, G., et al. (2013d, p. 56))

Company type Total number of

companies Total biogas plants Installed power capacity, MWel

Units Installed

capacity, MWel

< 1.0 1.0 to

5.0 > 5.0

Cattle farms 5,079 453 97 449 4 0

Pig farms 5,634 65 15 63 2 0

Poultry farms 785 150 143 119 24 7

Sugar mills 60 50 354 0 26 24

Others (e.g.

breweries) 109 66 72 47 18 1

Total 11,667 784 681 678 74 32

As shown in Table 2.4, over 11,000 enterprises are considered in the calculation of Kucheruk and Geletukha, G., et al.

The authors saw a high potential in the sugar industry, in which over 350 MWel of biogas plants in the range of 1.0 to 20.0 MWel could be installed. During the times of the Soviet Union, the sugar production in Ukraine was increasing and, therefore, many sugar plants were built. Although they consumed large amounts of energy, in those days energy was relatively cheap. In recent years Ukraine´s sugar sector has been declining because of the low sugar prices. Obviously, the high energy consumption of these mills, which now represent a majority of the operating sugar companies in Ukraine, will not help overcome the economic crisis. Consequently, many of them have been shut down⁹. Kucheruk and Geletukha, G., et al. also saw a potential for 631 biogas plants under 1.0 MWel on animal farms, which confirms the fact, reported above, that a large part of animal livestock in Ukraine is located on small-scale farms and private households.

Despite the attractiveness of biogas utilisation for agricultural companies in Ukraine, biogas is dependent on governmental support (Masini, Menichetti 2013, p. 511). In the next section the reader will see which actions the Ukrainian government is taking to exploit Ukraine´s biogas potential and support investment in the biogas sector.

9 This information was derived from interviews with industry experts in Ukraine (see Chapter 5).

2.1.3 Policy and Legal Support of Biogas