The state decided to turn 2,600 km² of Chornobyl Nuclear Power Plant Exclusion Zone into investment project. Will there be investors?
32 years following the accident at Chornobyl NPP the exclusion zone still remains unfit for permanent habitation. The overall ecological situation is getting better there, but some 2,600 square kilometers of its territory are still contaminated by radioactive material and other noxious substances.
In 2016 Ukraine has introduced it as a possible investment project at Canada-Ukraine Business Forum held in Toronto – transformation of depressed exclusion zone into the zone, where alternative energy sources may be developed. The French government has supported this initiative and allocated €250,000 to determine whether this is technically possible and economically feasible. Pre-feasibility study was conducted by the French company Tractebel France. Results obtained were disclosed on March 19.
The study showed that exclusion zone may be used for solar power plant construction having a peak power of 1.2 GW.
Who is showing interested in the exclusion zone
“As of today, we have over 60 declarations submitted by investors willing to come and work here. When Ukraine’s president Petro Poroshenko had a meeting with the President of France Emmanuel Macron, the latter assured that investors from France are ready to come to Ukraine and await the study outcomes to invest their money,” – Ostap Semerak, Minister of Ecology and Natural Resources of Ukraine, said to Innovation House.
It stands to reason that the French government has funded this study and has presented its results. “Not a single penny was allocated for this study from Ukraine’s budget. Legislation for this project was developed as early as in 2016,” – Minister of Ecology and Natural Resources of Ukraine said.
Isabelle Dumont, Ambassador Extraordinary and Plenipotentiary of France to Ukraine, added that economic rehabilitation in the exclusion zone is a very symbolic project for France as a part of new climate policy and Paris Agreement under the United Nations Framework Convention on Climate Change.
In addition to the French companies, the companies from China, Turkey, Bulgaria and even one Belarusian company are interested in the construction of solar power plants in the exclusion zone. However, Ostap Semerak did not tell us their names, since so far, they made no official statements. “All of them were waiting for the results of our study. After all, it would be very expensive if each of them had to conduct this study by itself. The gesture we made today is a gift to the market,” – Mr. Semerak said. Prospective investors may conduct some in-depth study to meet their needs, if needed. But it will cost less.
Major investments shall be made in solar power development project in the exclusion zone. With due regard for the market prices, project is estimated at €1 billion. “This is huge amount of investment that, apparently, cannot be done in one day, this will be done phase-by-phase,” – he said.
How much will the state make on Chornobyl’s land
The area of exclusion zone is comparable to the territory of Luxembourg, which means that every investor will find his plot there. However, the state cannot make much money from land leasing. “I don’t dare say this, but it looks that the lease price of contaminated land is low,” – admitted Ostap Semerak.
According to him, the main goal here is quite different: to return the Chornobyl zone to the national economy, to turn it from depressed to developed. “We are shutting down Chornobyl NPP and fire people, which means that new projects in the exclusion zone – is the opportunity for local power engineers to work pursuant to their specialty. New employment opportunities are being created, taxes are being paid, and we will make money on this,” – Minister of Ecology and Natural Resources said.
So far potential earnings remain undisclosed, since the cost of land will be determined on the basis of competitive bidding, this is a market mechanism. The number of workplaces and amount of taxes will depend on each particular project.
Solar energy plant in Nikopol, commissioned by TIU Canada (total investments – €10.7 million), may serve as an example of such investments and their impact on the economy. The total capacity of the plant consisting of 32,304 modules and located on 15 hectares is 10,5 Mw. 25 persons are working at the plant, revenues collected locally amount to UAH 2 million, Liga.net reports.
In mid-March it became known that the European Bank for Reconstruction and Development has allocated €25.9 million for the construction of three solar power plants in Vinnytsia. This was informed by the President of Ukraine Petro Poroshenko on his Facebook page.
The first plant is already operational
As of today, one small solar power plant is already commenced in Chornobyl exclusion zone. It was built by Solar Chernobyl company established by Rodina Energy Group and Enerparc AG. “When we granted lease of the property on which this small plant is constructed, there was a very small fee. But, nevertheless, this is still a fee. Moreover, the state collects taxes,” – Ostap Semerak explained.
Ostap Semerak said that potential projects to be implemented in the Chornobyl zone are not limited to solar power plants only. There are wind farms projects as well. Prospective investor shall first submit his application stating that he wants to lease a plot of land. The government of Ukraine shall consider this application, adopt a decision as to the lease of land plot stated by the investor. When this is done, investor may start his design and construction works. Seven months with effect from adoption of decision as to the lease are given for design works. During the design phase the issue on the access to electrical distribution networks shall be resolved.
A total of $250 million were invested in Ukrainian solar power in 2017 – this is twice as many as in the previous year. The market is soaring, and therefore the path to the country’s energy independence is getting shorter.