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  • The development of energy storage in Ukraine can take place on a market basis – Volodymyr Kudrytskyi

    Today, the annual amount of funds in the ancillary services market is about UAH 9 billion, and this should potentially be enough for investors in energy storage to be able to return their investments. Therefore, the transmission system operator (TSO) advocates the market mechanism for the development of this technology in Ukraine.

    This position was expressed by Volodymyr Kudrytskyi, the Chairman of the Management Board of NPC Ukrenergo, at the round table “Auctions for Energy Storage Services and Resource Adequacy” organized by the USAID Energy Security Project.

    “According to our calculations, if an investor builds energy storage with an installed capacity of 1 MW and sells the TSO frequency containment reserve (FCR) or automatic frequency restoration reserve (aFRR), then for a year such an investor can receive about EUR 100 thousand of income. That is, at a cost of 1 MW of installed energy storage capacity of EUR 500-600 thousand, the payback of such a project can be 5-6 years”, said Volodymyr Kudrytskyi.

    At the same time, he emphasised that surcharges on tariffs for the services of the transmission system operator in recent years have led to financial imbalances and unprofitable activities. “Therefore, I support the position that, if necessary, we should find some other incentives for potential investors”, – emphasised Volodymyr Kudrytskyi.

    In particular, as one of the options, we may consider the exemption from payment of tariffs for transmission and dispatching services. As well as the possibility when instead of paying a separate tariff on pumping and production capacity, it would be possible to pay a tariff only on the balance between these transactions. That is, in fact, the owner of energy storage could only pay for electricity losses in the equipment, which would reduce the payment of tariffs by 9-10 times.

    The Ukrainian power system needs energy storage systems for efficient balancing, in particular, with a further increase in generation capacity from renewable energy sources (RES). Thus, this need is present regardless of the process of synchronisation with ENTSO-E or the need to go through an isolated operation mode.

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