New construction of a cogeneration complex based on gas piston units with a total capacity of up to 80 MW in Mykolaiv

Sector
Energy Sector
Stream
Construction of new generating capacities
Project Status
Preliminary Investment Feasibility Study
Entry into Portfolio
State level of SPP
Investment Feasibility Study
Implementation
Completion

General information

Description of the project

The project envisages the construction of new generating facilities located on the territory of the Mykolaiv CHPP. Currently, a feasibility study of modernization options for the Mykolaiv CHPP is being carried out with donor assistance (Swedfund). One of the priority options is the installation of gas-piston units with a total capacity of up to 80 MW of electricity, operating in cogeneration mode. This will allow operation in the mode of multiple equipment starts without reducing the reliability of the equipment, choosing the most advantageous price position in the electricity market in terms of the day. The cogeneration component will compensate for part of the thermal capacity of the station with more favorable specific costs for heat generation, reducing the cost of heat production by reducing heat generation on morally and physically obsolete equipment. In addition, electricity generation can be carried out year-round.

The purpose of the project

Main goal:

Capacity building

Secondary goal:

Improving the condition of infrastructure, Introducing innovations and energy-efficient solutions, Creation of new jobs through project implementation, Improving the quality of services

Description of the purpose of the project and ways to achieve it

Increase in electricity production. Entry into the balancing market. Entry into the ancillary services market (fast reserves of ARF, RRF, reserve for replacement of RZ, black start) Possibility of generating electricity during the inter-heating period. Replacement of part of the heat of the current capacity of the station during the heating season by utilizing heat from cogeneration units.

Problems and solutions resulting from project implementation

The existing CHP equipment requires significant operating costs when adapting to changes in tariffs, load fluctuations and changes in the temperature schedule during the production of electricity and heat, which leads to a decrease in production efficiency. Currently, the existing equipment provides electricity production of a maximum of 18 MWh and is limited by the requirements of the heating mode. The operation of the current equipment does not meet the requirements for the level of electricity production and the ability to maneuver power, which are necessary in the conditions of the new electricity market of Ukraine. The implementation of the project will allow the CHP to operate in the mode of multiple equipment starts without reducing the reliability of the equipment, choosing the most efficient operating mode. The cogeneration component will compensate for part of the thermal capacity of the station with more favorable specific costs for heat generation, reducing the costs of the cost of heat production by reducing heat generation on morally and physically obsolete equipment

Socio-economic context

Indicator

Value

Number of people who will use the service

160000 human

Population in the geographical area of influence of the project

500000 human

Strategic Case

Strategic feasibility of the project

Sector

Energy Sector

Subsector

Electric power industry

Stream

Construction of new generating capacities

Strategic document

Energy Strategy of Ukraine until 2050

Task

Creation of new generating capacities to ensure the reliability of energy supply, increase energy security and sustainable development of the energy system of Ukraine

Project objectives

Indicator
Base value
Target value
Increasing the volume of electricity production and ensuring the necessary volume of thermal energy. Entry into the balancing market. Entry into the market of ancillary services (fast reserves of ARF, RRF, reserve of replacement of RZ, black start)
0 MWh
80 MWh

Project Sustainable Development Goals

Economic justification

Analysis of the project's impact on ecology and climate change

Does the planned activity have a potential positive contribution to achieving climate or environmental objectives?

Transition to a circular economy
[Response was provided in the Preliminary Investment Feasibility Study]
Climate change adaptation
[Response was provided in the Preliminary Investment Feasibility Study]
Pollution prevention and control
[Response was provided in the Preliminary Investment Feasibility Study]
Sustainable use and protection of water and marine resources
[Response was provided in the Preliminary Investment Feasibility Study]
Protecting and restoring biodiversity and ecosystems
[Response was provided in the Preliminary Investment Feasibility Study]
Climate change mitigation
[Response was provided in the Preliminary Investment Feasibility Study]

Is the proposed project expected to significantly harm any of the following climate or environmental objectives?

Protecting and restoring biodiversity and ecosystems
[Response was provided in the Preliminary Investment Feasibility Study]
Climate change adaptation
[Response was provided in the Preliminary Investment Feasibility Study]
Pollution prevention and control
[Response was provided in the Preliminary Investment Feasibility Study]
Transition to a circular economy
[Response was provided in the Preliminary Investment Feasibility Study]
Climate change mitigation
[Response was provided in the Preliminary Investment Feasibility Study]
Sustainable use and protection of water and marine resources
[Response was provided in the Preliminary Investment Feasibility Study]

Project sustainability and inclusivity

Identify potential gender risks of the project and indicate possible ways to overcome them:

The project may result in the forced displacement of women, men and other gender groups or loss of access to resources
[Response was provided in the Preliminary Investment Feasibility Study]
Not applicable to my project
[Response was provided in the Preliminary Investment Feasibility Study]
Other gender risks
[Response was provided in the Preliminary Investment Feasibility Study]
There are risks of impaired mobility or safety for women, men and other gender groups during construction/operation
[Response was provided in the Preliminary Investment Feasibility Study]
There is a risk of reduced economic opportunities for women, men and other gender groups (e.g. loss of jobs or retail outlets)
[Response was provided in the Preliminary Investment Feasibility Study]

Does the project provide for improving women's access to services?

Not applicable to my project
[Response was provided in the Preliminary Investment Feasibility Study]
Other benefits from project implementation
[Response was provided in the Preliminary Investment Feasibility Study]
Envisaged training or advanced training for women in the private sector
[Response was provided in the Preliminary Investment Feasibility Study]
The project will improve women's access to education (primary, secondary, vocational)
[Response was provided in the Preliminary Investment Feasibility Study]
The project will create jobs available to women (temporarily or permanently)
[Response was provided in the Preliminary Investment Feasibility Study]
The project will improve women's access to safe water, food, and medical services
[Response was provided in the Preliminary Investment Feasibility Study]

Are civil society organizations representing women and vulnerable groups included in the consultation process?

No
[Response was provided in the Preliminary Investment Feasibility Study]

Alternative technical solutions

Technical Solution 1

Construction of a cogeneration complex based on gas piston plants with a total capacity of up to 80 MW

Technical Solution 2

Construction of a combined cycle plant + waste heat boiler in a configuration of 31 MW thermal / 50 MW electric

Total costs59'706'400'000 UAH3'700'000'000 UAH
  • For preparation
    • 73'200'000 UAH1'000'000'000 UAH
  • For implementation
    • 2'863'200'000 UAH2'700'000'000 UAH
  • For operation
    • 55'770'000'000 UAH0 UAH
  • For closing
    • 1'000'000'000 UAH0 UAH
    Average annual costs1'859'000'000 UAH0 UAH
    Project duration, incl.36 months48 months
  • Deadline for developing a FFS
    • 12 months12 months
  • Implementation period
    • 24 months36 months
    Service life360 months300 months
    Target indicatorsDefined Defined
    Technical Solution Status
    Active

    [The technical approach was selected for further detailed analysis or implementation.]

    Rejected

    [The technical approach was not selected for further detailed analysis or implementation.]

    Commercial Justification

    Supplier and contractor market assessment

    Is the project likely to attract a sufficient number of bidders to ensure real competition that will encourage bidders to think innovatively and maximize the quality of their proposals?
    Yes

    [Response was provided in the Preliminary Investment Feasibility Study]

    Попередній аналіз ринку

    Is the project of interest to small and medium-sized enterprises?
    No

    [Response was provided in the Preliminary Investment Feasibility Study]

    Will the project involve national or international suppliers and contractors?
    Yes, both national and international

    [Response was provided in the Preliminary Investment Feasibility Study]

    Has an analysis of available procurement options been conducted for the technical solution?
    Yes

    [Response was provided in the Preliminary Investment Feasibility Study]

    На ринку існують виробники, які здатні задовільнити вимогам проекту

    Financial justification

    Total project budget

    Total preliminary budget59'706'400'000 UAH3'700'000'000 UAH
    Capital costs59'706'400'000 UAH3'700'000'000 UAH
    Operational costs0 UAH0 UAH

    Preliminary cost breakdown

    Operating costs for implementation0 UAH0 UAH
    For preparation73'200'000 UAH1'000'000'000 UAH
    For implementation2'863'200'000 UAH2'700'000'000 UAH
    For operation55'770'000'000 UAH0 UAH
    For closing1'000'000'000 UAH0 UAH
    Were the methodological recommendations approved by the Ministry of Finance of Ukraine applied when calculating the indicative budget?
    No
    [Response was provided in the Preliminary Investment Feasibility Study]

    Average project cost per service recipient

    Service UnitПостачання теплової та електричної енергії
    Service Unit Cost18'350 UAH

    Profitability of the project

    Is the project expected to generate income?

    ResponseNoNo

    Availability of services

    Has an analysis been conducted of the accessibility of services for consumers and their financial ability to pay the established tariffs?
    No – analysis not performed

    [Response was provided in the Preliminary Investment Feasibility Study]

    Project Financing Mechanisms

    Are funding sources and mechanisms identified?

    Source and MechanismYesNo

    Public-private partnership

    Has a qualitative and quantitative assessment of the project's suitability for implementation through a PPP mechanism been conducted?
    The project does not fall under the PPP format by its nature/character

    [Response was provided in the Preliminary Investment Feasibility Study]

    Are there, after conducting an appropriate study, private investors interested in the possibility of implementing the project in the PPP format?
    No

    [Response was provided in the Preliminary Investment Feasibility Study]

    Management Rationale

    Team competencies

    Determine which competencies/expertise required for successful project preparation and implementation can be provided by the project initiator's own project team (without involving external advisors)
    Strategic justification - analysis of the strategic feasibility of the project

    [Response was provided in the Preliminary Investment Feasibility Study]

    Economic justification - economic analysis

    [Response was provided in the Preliminary Investment Feasibility Study]

    Project management - communication with stakeholders

    [Response was provided in the Preliminary Investment Feasibility Study]

    Project management - risk management

    [Response was provided in the Preliminary Investment Feasibility Study]

    Economic justification - social and gender analysis

    [Response was provided in the Preliminary Investment Feasibility Study]

    Project management - public consultations

    [Response was provided in the Preliminary Investment Feasibility Study]

    Economic feasibility study - technical expertise

    [Response was provided in the Preliminary Investment Feasibility Study]

    Business case - analysis of available procurement options

    [Response was provided in the Preliminary Investment Feasibility Study]

    Project management - legal support

    [Response was provided in the Preliminary Investment Feasibility Study]

    Strategic rationale - SDG compliance analysis

    [Response was provided in the Preliminary Investment Feasibility Study]

    Project management - working with international financial organizations (IFOs)

    [Response was provided in the Preliminary Investment Feasibility Study]

    Financial analysis - financial analysis

    [Response was provided in the Preliminary Investment Feasibility Study]

    Strategic rationale - demand analysis

    [Response was provided in the Preliminary Investment Feasibility Study]

    Economic justification - environmental expertise

    [Response was provided in the Preliminary Investment Feasibility Study]

    Business case - analysis of the market environment

    [Response was provided in the Preliminary Investment Feasibility Study]

    Does the team have experience implementing similar projects?
    Partially, we have limited experience

    [Response was provided in the Preliminary Investment Feasibility Study]

    Identify which competencies/expertise required for successful project preparation and implementation need to be strengthened by engaging independent experts or consultants
    Economic feasibility study - technical expertise

    [Response was provided in the Preliminary Investment Feasibility Study]

    Economic justification - social and gender analysis

    [Response was provided in the Preliminary Investment Feasibility Study]

    Strategic justification - forming a justification for the problem and need

    [Response was provided in the Preliminary Investment Feasibility Study]

    Management rationale - public consultation

    [Response was provided in the Preliminary Investment Feasibility Study]

    Business case - analysis of the market environment

    [Response was provided in the Preliminary Investment Feasibility Study]

    Economic justification - environmental expertise

    [Response was provided in the Preliminary Investment Feasibility Study]

    Management rationale - project management

    [Response was provided in the Preliminary Investment Feasibility Study]

    Strategic rationale - SDG compliance analysis

    [Response was provided in the Preliminary Investment Feasibility Study]

    Management rationale - communication with stakeholders

    [Response was provided in the Preliminary Investment Feasibility Study]

    Business case - analysis of available procurement options

    [Response was provided in the Preliminary Investment Feasibility Study]

    Economic justification - economic analysis

    [Response was provided in the Preliminary Investment Feasibility Study]

    Management justification - other

    [Response was provided in the Preliminary Investment Feasibility Study]

    Financial analysis - financial analysis

    [Response was provided in the Preliminary Investment Feasibility Study]

    Management rationale - risk management

    [Response was provided in the Preliminary Investment Feasibility Study]

    Strategic justification - analysis of the strategic feasibility of the project

    [Response was provided in the Preliminary Investment Feasibility Study]

    Strategic rationale - demand analysis

    [Response was provided in the Preliminary Investment Feasibility Study]

    Management rationale - working with international financial organizations (IFOs)

    [Response was provided in the Preliminary Investment Feasibility Study]

    Management justification - legal support

    [Response was provided in the Preliminary Investment Feasibility Study]

    Is there an understanding of where to find relevant experts and consultants?
    No, I need help.

    [Response was provided in the Preliminary Investment Feasibility Study]

    Risk assessment

    Financial riskDefinedUndefined
    Economic riskDefinedUndefined
    Political riskDefinedUndefined
    Operational riskDefinedUndefined
    Market riskDefinedUndefined
    Environmental riskDefinedUndefined
    Other riskDefinedUndefined
    Results of the feasibility analysis
    Project Preparation Program Engagement and Funding Needs

    Is there ongoing cooperation or support within the framework of international technical assistance (ITA) or from other donor or government agencies?

    No
    [Response was provided in the Preliminary Investment Feasibility Study]

    Does the project require preparation assistance from Project Preparation Programs (PPF)?

    Development of a full feasibility study;
    [Response was provided in the Preliminary Investment Feasibility Study]
    Finalization of existing documentation for the preparation of a preliminary feasibility study
    [Response was provided in the Preliminary Investment Feasibility Study]
    Development of design and estimate documentation (DED);
    [Response was provided in the Preliminary Investment Feasibility Study]
    Updating existing documentation regarding the preparation of design and estimate documentation (DED)
    [Response was provided in the Preliminary Investment Feasibility Study]
    Updating existing documentation regarding the preparation of the feasibility study
    [Response was provided in the Preliminary Investment Feasibility Study]
    Other
    [Response was provided in the Preliminary Investment Feasibility Study]
    Need for financing

    Does the project require additional funding for preparation?

    Yes
    [Response was provided in the Preliminary Investment Feasibility Study]

    Amount of additional funding: 38 млн. грн. з ПДВ на розробку ПКД