INTERVIEW - Ukraine highlighted vulnerability of centralised energy systems, says CISOLAR co-chair

Ahead of the CISOLAR 2023 conference and trade show, which seeks to explore the evolving landscape of the solar and energy storage sectors in Central and Eastern Europe, Renewables Now conducted an interview with Julia Daviy-Berezovska, co-chairwoman of CISOLAR. The event will take place on October 30th and 31st in Bucharest, Romania.

In the aftermath of the Ukraine war and the energy crisis, what are the emerging trends in Central and Eastern Europe regarding the adoption of renewable energy sources?

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The war in Ukraine became a powerful catalyst for most Central and Eastern European countries to rethink their energy paradigm. When Russian troops captured the Zaporizhzhia nuclear power plant, and nuclear reactors came under fire, Europe was horrified. The world had never been so close to a man-made catastrophe that could have far exceeded the scale of the Chernobyl disaster. Moreover, the Zaporizhzhia nuclear power plant became an instrument of nuclear blackmail at the hands of Russia, a factor that continues to tension the entirety of Europe. Most European officials realised that during any military conflict, any nuclear power plant can effectively become a nuclear bomb. The idea of peaceful nuclear energy is an illusion.

Furthermore, the war in Ukraine highlighted the vulnerability of centralised energy supply systems. Last autumn, Ukraine experienced a severe blackout due to Russian attacks on critical infrastructure targets, impacting both electrical and thermal generation. It is abundantly clear that the only way to increase the resilience of the energy system is through decentralisation and the development of infrastructure for autonomous solar power plants, as well as local energy clusters, such as solar-wind-energy storage combinations. This is the primary trend! The increase in investments in such projects is evident today in the Central and Eastern European region, especially in countries like Poland, Romania, Bulgaria and the Baltic states.

Are you observing clear signs of increased ambition in the region's transition towards renewables?

Over the last one and a half years, since the Russian invasion of Ukraine, there have been massive tectonic shifts in the European energy landscape.

For instance, Romania plans to construct more than 6 GW of new solar power capacities and over 2 GW of energy storage in the coming seven years. A significant increase in the share of renewable sources has also become the foundation of new energy strategies for other countries that were heavily dependent on Russian energy supplies. In September, Romania is set to hold an auction for 1 GW for solar stations and another 1 GW auction for wind stations.

Moldova is preparing for a solar auction of 200 MW, and Albania is soon to hold a solar auction for 300 MW. Even small Bosnia conducted a solar energy auction in May for over 100 MW.

I'd like to particularly highlight the direction of green hydrogen, which may become the primary substitute for Russian natural gas in the European energy balance.

As for Ukraine, renewable energy has become the cornerstone of the post-war economic reconstruction plan. Before the war, Ukraine's energy strategy was primarily based on nuclear and thermal (coal) energy.

How are countries in Central and Eastern Europe fostering the growth of distributed generation and storage technologies?

A primary obstacle to the development of energy storage projects in Central and Eastern Europe is legislative inadequacies. Primarily, this relates to technical requirements for connecting these storage units to the grid. Most countries operate with outdated standards that simply don't account for the integration of storage systems. However, efforts are being made to address this. For instance, this year, the Romanian government issued eagerly-awaited secondary regulations for the deployment of storage systems. Legislative alignment and the connection of energy storage have notably been simplified in Ukraine, Moldova and the Baltic countries.

In a short span, Poland has emerged as an industrial hub in the realm of energy storage. For instance, in May this year, the company Northvolt completed the construction of Europe's largest battery manufacturing facility for domestic and industrial use in Gdansk. Additionally, last November, Poland doubled its subsidies for installing domestic storage systems, from EUR 1,600 to EUR 3,200. I'm confident that this trend will be adopted by other countries in the region, as financial incentives for implementing new technologies are the most effective stimulus.

What strategies are being implemented to address challenges related to intermittency and negative energy prices?

The most effective solution for addressing the intermittent nature of renewable energy is the development of energy storage infrastructure. As I mentioned earlier, a range of European countries have either adopted or are preparing to adopt new legislative changes aimed at fostering energy storage projects. Comprehensive and accurate forecasting of renewable energy generation is also a crucial component for the stable operation of the energy system. Consequently, several companies in Poland, Lithuania, Ukraine and Romania are actively testing solutions based on the latest advancements in data analytics and artificial intelligence. I'd also like to highlight the development of hybrid renewable energy clusters, for instance, those based on biomethane and solar plants. Such projects are currently being executed in Ukraine and Poland. It's also worth promoting legislative incentives for consumers to regulate their energy use during peak and low consumption periods.

How can Central and Eastern Europe countries leverage regional energy integration to enhance energy security?

Central and Eastern European countries can enhance energy security through regional energy integration by developing interconnected grids, sharing resources, diversifying energy sources and coordinating policies to ensure a reliable and resilient energy supply across borders. The cornerstone of this strategy is accelerating the development of renewable energy. In many countries of the region, the share of green generation constitutes less than 20%, which means a significant dependency on traditional energy sources. These sources can become tools for geopolitical manipulations and military conflicts.

What are the key challenges and opportunities for cross-border infrastructure development to facilitate energy trade and grid connectivity in the region?

First of all, this is political and regulatory hurdles: differing regulations and political considerations among countries can hinder harmonisation and efficient cross-border infrastructure development. Geopolitical tensions can impact the willingness of countries to collaborate on energy infrastructure projects. Securing adequate funding for large-scale infrastructure projects can be challenging, especially in countries with limited resources or uncertain investment climates. I would like to emphasise that ensuring the compatibility of grid systems and standards across borders is vital for seamless energy trade and connectivity as well. At the same time, cross-border infrastructure development enables access to a broader range of energy sources, enhancing energy security and resilience. Integrated energy markets can lead to more competitive pricing, greater supply diversity and enhanced overall energy efficiency. It is a great economical booster for the region. And lastly, Central and Eastern European countries can tap into European Union funding and initiatives for infrastructure development.

Do you see potential in the region for innovation and new technologies such as smart grids and hydrogen?

I see no other scenario for the development of the energy sector in the region except for actively increasing the share of renewable sources in the energy balance. Russian gas cannot be replaced with solar or wind power plants because a significant part of it goes to generate thermal energy. In this context, the development of hydrogen substitution projects has significant economic and geopolitical importance. At the initial stage, hydrogen projects must receive support in the form of subsidies. This is what helped make a technological leap in the field of solar energy. As for smart grids, the development of distributed generation is another important factor in the energy security of the region and Europe as a whole.

With the European Union's relaxed state aid rules on renewables, how do you foresee their impact on the region?

Each country has its unique energy model and set of problems, so it is difficult to form a unified strategy for all countries simultaneously. Hungary's economy depends almost entirely on Russian energy carriers, while Poland is almost independent of Russian gas and oil. Europe is constantly facing new factors that often complicate life and require quick decisions. Sweden, a symbol of the green economy for a long time, had to revise its energy paradigm and return to nuclear energy due to recent events such as the war in Ukraine. There is also talk of building small nuclear reactors in Romania, such as the SMR project, with planned investments of USD 275 million from Japan, the USA and South Korea. However, wind and solar energy projects no longer require economic support, as commercial electricity tariffs in Europe significantly exceed the cost of producing green electricity. Building solar power plants is much easier and cheaper than nuclear ones. Building a nuclear power plant is a political decision, while building a solar power plant is an economically and ecologically justified decision. I am confident that renewable energy will actively develop in the region.

Could this policy favour wealthier countries and potentially create disparities in renewable energy development across the continent?

On the accounts of the world's largest financial institutions, huge resources have accumulated that are looking for decent directions and projects for investment. Renewable energy is one of the most promising industrial directions, so I am confident that, regardless of the level of development of the economy of a particular country, the industry will actively develop in the region. All that governments need to do is to form clear, transparent and stable rules for investors.

Julia Daviy-Berezovska is the co-founder of the Ib Centre and the Sustainable Innovations Council in the USA. She is globally recognised as an innovator in sustainability and a leading advocate for the advancement of clean tech in emerging markets. Julia played a crucial role in opening Ukraine's solar energy market to independent entities and private households. This transformative effort took Ukraine from an almost negligible share in renewables to becoming one of the top 10 global markets for renewable energy project development within a decade, as reported by Bloomberg in 2019.

Beyond renewable energy, Julia is a pioneering figure in the realm of sustainable 3D-printing for the fashion and consumer goods industry.