Within the framework of the implementation of the distributed electricity generation development program of JSC «Ukrnafta», significant progress has been made in implementing the emergency distributed electricity generation project (Stage I).

In particular, the company has agreed on the placement and received permits from local governments to install gas-fired power plants with a total capacity of about 70 MW at production sites in Lviv, Poltava and Cherkasy regions.

To implement this program, financing from the European Bank for Reconstruction and Development (EBRD) in the amount of 80 million euros has been attracted. The loan agreement has been signed, and the equipment is being purchased in accordance with EBRD procedures through the bank's electronic procurement system. A state guarantee of Ukraine has been provided to secure the loan.

Within the framework of the expansion of the distributed generation program, it is planned to implement Project III – installation of a gas-fired power plant with a capacity of up to 20 MW in Ivano-Frankivsk region (hereinafter - Project)

Justification of the need for the implementation of the project

After the start of the full-scale invasion of the Russian Federation in 2022, Ukraine's energy infrastructure suffered extensive destruction. Massive missile and drone attacks were directed at power plants, substations and power grid infrastructure facilities.

According to estimates by state authorities and international partners, more than 1,000 energy infrastructure facilities were damaged or destroyed, which led to the loss of more than 40% of the country's generating capacity, or about 8 GW of installed capacity.

This resulted in significant power supply disruptions for the population and industry. In many regions of Ukraine, planned and emergency power outages lasting up to 10-12 hours per day have been used for a long time.

The restoration of damaged energy facilities requires significant investments, which, according to various estimates, may exceed 5 billion US dollars.

Taking into account the above challenges, as well as the availability of its own natural gas resource base, JSC "Ukrnafta" made a strategic decision to develop the direction of electricity production by creating distributed generating capacities at its own production sites.

The essence of the project

The project involves the installation of a gas-fired power plant with a capacity of up to 20 MW at one of the production sites of JSC "Ukrnafta" in Ivano-Frankivsk region.

The project plans to install a gas-piston plant manufactured by Wärtsilä (Finland). The equipment will operate on natural gas, in particular gas produced by the company itself. The power plant will provide:

• electricity generation to cover the company's own needs;
• electricity sales on the "day-ahead" market (RDN);
• participation in the mechanisms of balancing the power system and providing auxiliary services to NPC «Ukrenergo».

Thanks to the high maneuverability of gas-piston units, the station will be able to operate effectively in variable load modes and quickly respond to fluctuations in demand in the power system.

Expected results

The implementation of the project will ensure additional electricity production in the amount of 110-140 GWh per year, depending on the operating mode of the power plant.

The commissioning of the station will contribute to:

• increasing the energy stability of the Unified Power System of Ukraine;
• increasing the volume of distributed generation;
• reducing electricity shortage during peak consumption periods;
• increasing energy security of industrial enterprises.

Current implementation status

The project is part of the next stage of the program "Support for critically needed distributed generation".