1. EU TACIS PROJECT Support and Development of Renewable Sources of Energy (Biomass) Objective Promote the use of biomass in Ukraine Veli-Pekka Heiskanen, 27 April, 2006, Kiev Support and Development of Renewable Sources of Energy (Biomass) - Ukraine

2. Support and Development of Renewable Sources of Energy (Biomass) - Ukraine Resources and schedule  Project budget € 2 million  Funded by EU TACIS program  State Committee for Energy Conservation as project partner  Allocated work time; foreign experts 5 man years, local experts 8 man years  Project finished by March 2007

3. Support and Development of Renewable Sources of Energy (Biomass) - Ukraine Background information  Technical biomass potential over 7 Mtoe, only 0.7 Mtoe used at present  Biomass energy in Ukraine could account for about 5 to 10 per cent in the primary energy consumption  Substantial potential in agricultural residues (80 %), wood fuel resources also significant  Potential projects up to € 400-800 million in next 5-15 years

4. Support and Development of Renewable Sources of Energy (Biomass) - Ukraine Biomass utilisation potential  Bioenergy used at present in small- scale, mainly in households  Significant future potential at district heating plants, industry, and farms  Co-firing at coal plants could be of significance to some extent

5. Support and Development of Renewable Sources of Energy (Biomass) - Ukraine Investment potential (€ millions)  Wood-based biomass50-100  Agricultural residues (sunflower residues, straw etc.)200-400  Biogas, landfill gas150-300

6. Support and Development of Renewable Sources of Energy (Biomass) - Ukraine Project implementation  Formation of Energy Service Company (ESCO) for developing and implementing biomass projects, assisting in funding and giving technical assistance  ESCO will work independently under Ukrainian management and staff after TACIS project has been finished  Create recommendations for Ukrainian biomass strategy: targets, incentives, taxation, standards, local manufacturing, biomass fuel market

7. Support and Development of Renewable Sources of Energy (Biomass) - Ukraine Project implementation  Implementation of two biomass boiler plants  Four more projects will be developed to “pipeline stage”  Improvement of project financing possibly by “joint implementation scheme”, CO2 trading, or joint ventures with foreign companies  Dissemination activities

8. Support and Development of Renewable Sources of Energy (Biomass) - Ukraine Biomass project proposals  Over 20 project proposals received so far; most of those aim to wood utilisation, only few to the use of agricultural residues given its high potential in Ukraine  Significant interest in fuel production (pellets, briquettes, biodiesel)  Work in progress; pre-feasibility studies carried out for most proposed projects, six selected for closer studies so far

9. Support and Development of Renewable Sources of Energy (Biomass) - UkraineConclusion The prospects for increasing biomass utilisation in Ukraine are excellent:  High existing biomass potential  Significant fraction of the existing energy production capacity needs up-dating  Possibility to utilise carbon trade for financing investments  European biomass market growing rapidly  Opportunity to increase self-sufficiency in energy

10. Support and Development of Renewable Sources of Energy (Biomass) - Ukraine Thank you very much for your attention !