Experience and track record

Within the framework of the power generation project, Ukrnafta has demonstrated significant progress in the implementation of the emergency distributed energy generation project (Stage I):

• Locations have been agreed and permission has been obtained from local state administration bodies for the placement of 70 MW of installed capacity, including gas piston units, in Lviv, Poltava and Cherkasy regions;
• A loan of EUR 80 million has been secured from the EBRD for the implementation of the project. The loan agreement has been signed, and the procedure for purchasing equipment on the EBRD platform is ongoing. The state guarantee to secure the loan has been confirmed.

Project «Support for Critically Needed Distributed Generation Stage III: Capacity Expansion in Cherkasy Region (hereinafter – Project)

Rationale

The energy shortage in Ukraine due to Russian attacks has been critical, leading to significant disruptions in the country's energy sector. The attacks have led to the loss of electricity, heating and other critical services. More than 40% of Ukraine's energy infrastructure, or more than 1,000 energy facilities, has been damaged or destroyed since the beginning of the Russian invasion in February 2022, in particular as a result of missile and drone attacks targeting power plants, substations and the electricity grid. According to various estimates, this has led to the loss of about 8 GW of generating capacity. Daily power outages have affected millions of Ukrainians and businesses, with some regions experiencing power outages lasting up to 12 hours a day or even longer at times. Estimates of the cost of restoring power facilities range up to $5 billion. In response to the above challenges, supported by its own gas production capacity, Ukrnafta has decided to develop power generation capacity. The Wärtsilä gas piston plant technologies planned for this project are well suited for flexible modes with frequent starts and stops, and can therefore effectively cooperate with renewable energy installations and provide system services. Thus, gas-fired power plants can also provide so-called auxiliary services for balancing the power system, in particular during hours of no wind (for wind power plants) or lack of sunlight (for solar power plants). During the implementation of the capacity expansion project for the Support of Critically Necessary Distributed Generation Stage III in Cherkasy region, it is expected to install an additional gas-fired power plant manufactured by Wärtsilä capacity of up to 10 MW at the power plant site developed at Stage I. All necessary communications and preparatory work will be completed during the first stage, which will simplify the installation and commissioning of the additional gas-piston unit at Stage III.

Expected production volume

The implementation of the project will provide an additional 40-74 GWh annually (depending on the operating mode) for the network and 11,154-29,770 Gcal of heating for a city with a population of over 200 thousand inhabitants.

Completion level

Since the Project is an expansion stage of the «Support of critical distributed generation», the current status of the main project is as follows: Land plots with optimal conditions and access to the necessary networks have been selected and approved by local state authorities administration. Most of the technical specifications have been finalized and secured. EBRD financing has been successfully obtained. The tender process for the procurement of the main equipment and the design, installation and commissioning works of Stage I has been launched through the EBRD platform. The project “Support to Critically Needed Distributed Generation” (Stage I) is expected to be completed by Q2-Q3 2027, depending on the tender results. The implementation of the Project (Stage III) is subject to receiving support from the Finnish-Ukrainian Investment Fund (FUIF).

Technical Solution

Wärtsilä can be considered as the supplier of the main equipment - the gas piston unit - for this project. The company's track record includes 79 GW of power plant capacity in 180 countries around the world, and Wärtsilä has been the oldest original equipment manufacturer (OEM) for spark-ignition and reciprocating engine power plants since 1992. Its cogeneration plants are characterized by high efficiency, reliability and fuel flexibility, which is a decisive factor for energy projects. Wartsila technologies ensure optimal fuel use, reducing operating costs and CO₂ emissions, which meets modern environmental standards. In addition, their engines have fast start-up times, which increases the stability and flexibility of energy systems. Wartsila has extensive experience in implementing similar projects around the world, including industrial cogeneration plants and district heating solutions. Their technical support and service network help minimize operational risks and ensure stable operation of the equipment throughout its entire life cycle. All these factors made Wartsila the optimal choice for our projects.