There is vast potential anywhere one looks. Ukraine is endowed with huge estimated reserves of shale gas, which could make Ukraine less dependent on the will of Russia’s Gazprom. There is plenty of space and natural conditions for wind and solar power generation. With a huge and rapidly growing agriculture sector, Ukraine has amazing possibilities for production of biogas. Electric cars, a cheaper, greener way to move around, have barely started selling here, so the market is up for grabs.
Then reality settles in when reading the complaints of industry experts and investors in these articles, their frustrations and disappointments from being unable to tap into that potential for a number of reasons. Most of them are Ukraine’s longstanding problems, such as a poor legal field, no guarantees of protection of property rights and no justice in the court system.
Admittedly, Ukraine has taken a number of pro-green steps: it adopted legislation on green tariffs, giving financial incentives for renewable energy production and enacted production sharing agreement legislation — an essential precondition for larger scale operations such as shale gas extraction.
But even those few achievements are marred and sometimes even negated by things like unrealistic local content requirements in green energy production, and political campaigns against shale gas extraction.
One contributor this week, Irina Paliashvili, on page 8 wrote that the success of the shale gas revolution in North America, which brought cheap, domestic gas onto the market, was based on three components: technology, capital and regulatory/fiscal framework.
Foreign and domestic investors here are ready to bring the first two ingredients in exchange for business opportunities. But it’s Ukraine’s government that has to provide the political will to produce a quality regulatory framework and ensure its proper implementation for such a revolution to take off. This applies to all new energy sectors, not just shale gas, and all of the political elite, not just the central government.
It is in everybody’s interest to make Ukraine a greener, more energy efficient and self-sufficient place. A healthier economy, better environment and hence higher quality of life, as well as new jobs would be just some of the benefits of a robust alternative energy sector. That’s why going green should become a part of the national philosophy, and the political elites should be the first to embrace it.
