Ukraine is talking to one of France’s largest energy companies about building a giant, billion-euro ($1.25 billion) solar park in the uninhabited radioactive zone surrounding the abandoned Chernobyl nuclear reactor.
Engie SA is beginning a pre-feasibility study funded by the French government next week with the results expected for the end of the year, Ukraine’s minister of ecology, Ostap Semerak, said in a Friday interview in London.
“France’s experience in nuclear is one of the reasons that we wanted to work with them,” Semerak said. “They approached us after we announced our intention to develop renewables in Chernobyl.”
A spokesman at Engie confirmed that the company is in discussions with the Ukrainian government but declined to comment on the project size. The utility is one of 60 companies that have expressed interest, according to Semerak.
The minister is spearheading the project to turn the 1,000-square mile radiation-polluted swathe of land that encircles the defunct reactors into a massive renewables park. It has been left wild for the past 30 years as it’s still too polluted to safely use for agriculture or forestry.
But solar panels still work even if they’re radioactive. The nuclear plant was meant to generate 4 GW of power and the transmission lines to take the electricity to households and factories are still in place.
Ukraine’s appeal as a renewable energy market also lies in its feed-in tariffs. Most other markets have switched to competitive auctions, which have proved successful at driving down the price of clean power and lessening the burden on state budgets and consumers. Ukraine’s tariff varies depending on the size of the project and the year, but the highest is 15 euro cents per kWh.
That’s 74 percent higher than the average levelized cost of solar energy in Europe, which factors in the end-to-end costs of building the plant. It’s currently at 8.6 euro cents per kWh, according to data from Bloomberg New Energy Finance.
“That’s a generous remuneration rate, but perhaps not so much if you take into account the risk profile of the country,” said Pietro Radoia, solar analyst at BNEF. “Ukraine has good solar irradiation, but a low level of confidence from investors and the consequent prohibitive cost of financing. Engie might find a way around if it uses corporate financing though.”
Chinese companies GCL System Integration Technology Co Ltd. and China National Complete Engineering Corp said last year that they also planning a 1-GW solar project on the site in several stages. They haven’t started building anything yet, but they are still interested, according to Semerak.
Most of the other companies that have put proposals forward are seeking to build projects in the range of 50-200 MW. Engie is the only one to have offered to build a solar plant with energy storage.
“The big question at this time last year was would anyone be interested, would anybody want to build renewables in a territory that’s limited, polluted?” Semerak said. “We weren’t sure. Now we at least have some of the answer.”
©2017 Bloomberg News
Lead image: The Chernobyl nuclear plant on April 26, 2017. Credit: Genya Savilov | AFP | Getty Images