Large-scale PV comes to the Ukraine: Activ Solar's Ohotnikovo and Perovo PV plants

by Solar Server International Correspondent Christian Roselund

Activ Solar's 100 MW Perovo PV plant; source: Activ Solar
Activ Solar's 100 MW Perovo PV plant; source: Activ Solar

Quantum growth

Growth in the global solar industry has often not been linear. In the last decade, the development of individual national markets through feed-in tariffs has been exponential, with capacity expansions growing rapidly year after year, at times to crash after reaching dizzying heights.

However, in many cases the growth of this industry is neither linear nor even exponential. In various parts of the world, industries have developed and policies have been passed at unexpected times and in unexpected places. Such growth can be described as quantum growth - the rapid movement from one phase to another which characterizes the activity of subatomic particles.

This is important, as it will take more than linear growth of renewable energy technologies to meet the challenges that we face from climate change due to Global Warming.

In December of 2011, workers commissioned the final 20 MW phase of a solar photovoltaic (PV) plant, which in five phases encompasses 200 hectares and 100 MW of capacity, as the largest single-site PV plant in Europe. A few months prior, the same company had commissioned an 80 MW PV plant on the same peninsula.

These plants are not in Germany, or Italy, or even Spain. Instead, they are in a nation, which until a few months prior had commissioned only 7 MW of PV.

We present Activ Solar's 100 MW Perovo PV plant in Ukraine's sunny Crimean Peninsula, commissioned in December 2011, as Solar Server's March 2012 Solar Energy System of the Month.

 

Why Ukraine?

Ukraine may seem an unlikely location for the largest PV plant in Europe. Western Europe has dominated the global solar industry for the past decade, and with the notable exceptions of the Czech and Slovak Republics, many of its eastern neighbors have achieved little in the way of installed capacities.

In many Central and Eastern European nations carbon reduction goals take a back seat to economic development needs, which are more pressing for nations still struggling to catch up with the West. In some nations, such as Bulgaria, ambitious projects are announced, but few have made it to completion.

Ukraine's import of natural gas from Europe has led to international tensions; image source: Natural Gas Europe
Ukraine's import of natural gas from Europe has led to international tensions; image source: Natural Gas Europe

Upon closer examination Ukraine may be a very attractive location for PV. Ukraine is a net exporter of electricity, however much of its generation depends upon imported fuel, including natural gas from Russia. This import of natural gas from Russia has been highly contentious, with Russia accusing Ukrainian companies of unauthorized transfers of gas intended for the European market, leading Gazprom to temporarily suspend gas delivery through the nation in January 2006.

It is also notable that Ukraine, which relies upon an aging fleet of nuclear reactors for roughly half of its electricity generation, is the site of the world's worst civilian nuclear disaster, the 1986 Chernobyl disaster.

 

Attractive FIT rates

Due to the lack of domestic energy resources and strong dependence on import of natural resources, the appetite for renewable energy is strong among Ukraine's policy-makers. As early as 1996, the nation set a target to reach 190 MW of wind generation by 2010, and in July 2008 the nation approved feed-in tariffs for wind, biomass, hydro and solar photovoltaic (PV) technologies. These tariffs were further increased in April 2009.

The head of Activ Solar's Parks division in Ukraine, Evgeny Varyagin, primarily credits the attractiveness of PV in the nation to the feed-in tariff. The nation's feed-in tariff is joined by a host of other policies, including corporate tax exemptions, VAT exemptions of certain imports, and a 75% reduction on land taxes for renewable energy projects. These policies together led Ernst & Young to rate the nation 32nd globally in its renewable energy attractiveness index, and 23rd for solar technologies.

 

Sunny Crimea

If Ukraine has become an attractive area for PV development, the same is doubly true of the Crimean peninsula. At the Southern end of the nation, Crimea offers natural solar conditions similar to Northern Italy or Spain, with annual total surface solar radiation between 1,200 kWh/m2 and 1,400 kWh/m2.

Crimea boasts the best natural solar radiation in Ukraine; image source: NASA
Crimea boasts the best natural solar radiation in Ukraine; image source: NASA

Additionally, the need for such projects in the region is high, as Crimea is located far from much of the nation's electricity generation, and imports an estimated 90% of electricity from the mainland via two high voltage power lines. Varyagin estimates that as much as 40% of the electricity sent to Crimea is lost in transmission, and notes that due to the influx of tourists and heavy use of air conditioners the need for electricity during the summer months is high, creating ideal conditions for PV generation.

 

Development, part 1: Rodnikovoye

Both the Ohotnikovo and Perovo PV plants are built upon progress made by an initial 7.5 MW PV plant in Rodnikovoye. Activ Solar states that it built the plant with its own funds to demonstrate its ability to properly build and connect to the grid large-scale PV plants in Ukraine.

This may have been more critical in Ukraine than in other nations. Activ Solar's Varyagin notes a major difference between Ukraine's feed-in tariff and those in Western Europe, in that developers are only eligible to apply for Ukraine's feed-in tariff once the construction of the power plant is complete.

"In Germany, Italy or Spain, for example, first you receive the feed-in tariff, sign a PPA and then you start construction," notes Varyagin. "In this country, it is different, because the government must be 100% sure that you will construct the park and only once you have done so, you receive the feed-in tariff.

 

Development part 2: Working with the authorities

As in any major PV development, the initial phase for the Ohotnikovo and Perovo projects was the approval by a host of government regulatory agencies. In Ukraine, this included fire protection authorities, sanitary epidemiological authorities, state architectural and construction authorities, the Ministry of Energy and Coal Industry of Ukraine, Crimea Branch, the local village council and labor safety authorities.

However, despite concerns that negotiating with a post-Soviet bureaucracy might prove challenging for a Western company, Activ Solar was able to obtain approvals for construction in far less time than in many countries such as the United States, where it can take years to navigate the permitting and approval process for plants of this size.

Activ Solar obtained the land lease for the Perovo PV plant in November 2011, well before it began the first phases of the Ohotnikovo plant. Varyagin states that securing the land is one of the major challenges in Ukraine, and requires demonstrating to the authorities the need for a specific parcel of land and the benefits of the construction of the solar park to the local community.

Following the land lease comes the application for approvals from various state agencies, and Varyagin cites a strong interest by the Ukrainian government to approve such projects.

"Today, government authorities are quite interested in approving a project like Perovo, and are cooperative," notes Varyagin.

Still, Varyagin estimates that the approval for future projects will become more efficient. " At the beginning, It took us a long time because Rodnikovoye solar park was the first of its kind in Ukraine," states Varyagin.

"I am quite sure that for all of our future projects the process will be much faster, because the government authorities already know what a solar PV power station is."

Debt financing for the power plant was provided by Sberbank of Russia and VTB Group.

 

Challenges in construction: Staffing and customs issues

In terms of challenges, in the construction phase of the plants, Varyagin notes that due to how new the solar business in Ukraine is, there is a lack of skilled employees, particularly engineers, project assistants and project managers. He also states that an on-going challenge is finding qualified staff for the company's administrative, engineering, and operations and maintenance departments.

Another challenge faced by Activ Solar was the small capacity of the Customs Office in the Crimea, through which the company brought all of its imported equipment. The total capacity of the customs terminal is roughly 50 trucks per day, but the company's delivery was often as much as 70 trucks or more per day, which was inconvenient for Activ Solar and other companies working with the same costumes office.

“This was a problem, so now we have optimized measures for the fast delivery of our equipment, to avoid affecting the costume’s office day to day operations.”

 

"On time 99% of the time"

However, Varyagin states that ultimately construction was mostly a matter of project organization. Construction on the Perovo plant began in May 2011, and Varyagin notes that the construction of the power plant did not face any big problems, estimating that "99% of the time we were on time".

The completion of the Ohotnikovo and Perovo plants came in phases starting in Summer and ending in Winter of 2011. In June, the company completed the first 20 MW-DC phase of the Ohotnikovo plant, followed by phase two in August, when it completed the first phase of the Perovo plant. Activ Solar commissioned the final 20 MW-DC phase of Ohotnikovo in October 2011, bringing the total capacity of the solar power plant to 80 MW-DC.

In November and December 2011 Activ Solar completed the next four phases of Perovo, completing all 180 MW of the two plants in a mere 9 months.

The Perovo plant is comprised of 75% polycrystalline and 25% monocrystalline PV modules; image source: Activ Solar
The Perovo plant is comprised of 75% polycrystalline and 25% monocrystalline PV modules; image source: Activ Solar

The Ohotnikovo plant is comprised of a double row-ground mounted system, while the Perovo plant is comprised of a single row ground mounted system using both polycrystalline and monocrystalline silicon PV modules. Activ Solar stated that the Perovo plant uses 25% monocrystalline modules and 75% polycrystalline modules.

The Perovo plant utilizes 120 German made inverter stations with capacities ranging from 500 kW to 1 MW. The plant also utilizes an advanced turn-key monitoring system, integrated into the inverter stations.

 

Future plans for Crimea, Odessa

Following completion of construction, Activ Solar signed contracts for the sale of electricity from the plants. The Perovo PV plant holds a contract with state-owned company Energorynok until the end of 2029, securing a feed-in tariff for the next 18 years of EUR 0.46/kWh (USD 0.60/kWh).

Output from the Perovo plant is currently being confirmed by Activ Solar's operations & maintenance team. Varyagin states that the plant is reaching its forecasted power delivery, and at times even exceeding its forecast.

"As is to be expected, there is always room for improvement. Today, we are working at a very good pace when it comes to the process of designing, constructing, commissioning etc. So the biggest task for us is to secure financing of our pipeline," notes Varyagin. 

Activ Solar has plans to develop PV plants in both the Crimea and Odessa regions in Ukraine and Varyagin believes that 2012 could be a year of big announcements, despite the current economic climate. "I think we have a good chance of surprising the solar community this year, because we have some mayor projects in the pipeline."

Aerial view of the Perovo PV plant; image source: Activ Solar
Aerial view of the Perovo PV plant; image source: Activ Solar