CURRENT STATUS OF HYDROGEN PROJECTS

Ukraine has good prospects to become one of the largest exporters of green hydrogen to the European Union. As one of the largest transit countries, with a favourable geographical location, it has sufficient territory and huge potential for generating electricity from renewable sources.

The Institute of Renewable Energy of the National Academy of Sciences of Ukraine has estimated that Ukraine's hydrogen production potential is 44.96 million tonnes. Currently, Ukraine produces approximately 360,000 tonnes of hydrogen per year (only 0.5 % of worldwide hydrogen demand ), which is mainly used for ammonia production.

Since Russia’s invasion of Ukraine in 2022, no new facilities have been built. Moreover, production levels have been reduced due to the occupation of Ukrainian territories where such facilities were located. However, several projects related to hydrogen are being developed and are underway in Ukraine.

Projects such as the H2U Hydrogen Valley, implemented by Ukraine’s Hydrogen LLC as part of the international Mission Innovation initiative, aim to help Ukraine increase its capacity. According to the project, two ‘hydrogen valleys’ will be located in the Odesa (“First Valley”) and Zakarpattia regions (“Second Valley”).

The First Valley is expected to have a 100 MW electrolysis plant with the possibility of expanding to 200 MW. The ‘valley’ will be powered by renewable energy from wind turbines and solar power plants with  capacities of 120 MW and 80 MW, respectively. A dedicated pipeline is also planned.

The Second Valley is expected to cover an area of 120 hectares to accommodate a 1100 MW electrolysis plant, with the possibility of increasing capacity to 1500 MW, a solar power plant, and wind turbines. It is planned that hydrogen will be supplied to a nearby steel plant.

There are also significant opportunities for using the Ukrainian gas transmission system (“GTS”) for transporting  hydrogen to and from Ukraine. The GTS is currently used for the transportation of natural gas to Europe. However, it has already been announced that the transit contract will be terminated starting from 1 January 2025, meaning the GTS will become available for other projects.

One of the largest projects being discussed is the ‘Central European Hydrogen Corridor,’  a joint initiative by the main operators of the Ukrainian, Slovakian, Czech and German GTSs (see Picture 1: Scheme of the hydrogen corridor from Ukraine to Germany). The initiative aims to create a hydrogen ‘highway’ in Central Europe to transport hydrogen from promising supply areas in Ukraine, which has favourable conditions for green hydrogen production, through Slovakia and the Czech Republic to high-demand areas in the EU. The hydrogen corridor will also enable the transport of hydrogen from production facilities to consumers in the Czech Republic and Slovakia. 

Picture 1. Scheme of the hydrogen corridor from Ukraine to Germany  
Picture1.jpg

Picture source: https://newsukraine.rbc.ua/news/water-energy-what-green-hydrogen-is-and-how-1722242520.html

RECENT POLICY CHANGES

The regulatory framework for hydrogen in Ukraine is fragmented and there is no single legal act regulating hydrogen yet. However, existing laws on energy, transport, and gas movement apply to hydrogen projects.

In May 2024, the Ministry of Energy of Ukraine published the draft Hydrogen Strategy of Ukraine for the period up to 2050. It envisages the development of industrial hydrogen production, storage, and transportation, as well as the use of hydrogen to provide clean energy in construction, heating and cooling. The project is still pending approval, which is expected in the near future.

In addition, on 13 August 2024, the government approved a document that introduces the practice of pilot auctions for distributing  support quotas for renewable energy producers. These quotas apply to solar, wind, biogas, as well as micro and small hydropower plants. This will test the system of ‘green’ auctions in preparation for a full launch in 2025, as part of Ukraine’s Energy Strategy and its path to EU membership.

According to the Prime Minister, potential investors will have guaranteed support, which will accelerate the implementation of renewable energy projects. This, in turn, will reduce the overall capacity deficit in the power grid.

The government has also approved the National Renewable Energy Action Plan for the period up to 2030 and an action plan for its implementation. Its aim is to increase the share of renewable energy in gross final consumption to 27% by 2030.

RECENT DEVELOPMENTS

Development 1

Publication of the Hydrogen Strategy of Ukraine

In May 2024, the Ministry of Energy of Ukraine published the draft Hydrogen Strategy of Ukraine for the period up to 2050. It is pending approval and will become the primary document in Ukraine outlining the vision and rules for developing hydrogen infrastructure.

The strategy aims to achieve low-carbon hydrogen production in volumes of up to 1.3 million tonnes by 2035 and up to 3.0 million tonnes by 2050, depending on export volumes and domestic demand. 

It is envisaged that electricity from the power grid may be used for hydrogen production, subject to the conclusion of direct contracts for the sale and purchase of electricity and the use of guarantees of origin. Biomethane could also be used as a substitute for natural gas in hydrogen production via methane steam reforming and could be exported to the EU. 

The strategy considers the production of hydrogen using nuclear energy (‘pink’ hydrogen) and fossil fuels with carbon capture (‘blue’ hydrogen) as promising. 

Currently, Ukraine lacks a defined legal, economic, and organisational framework for hydrogen production, transportation, storage, and use by  sector. Moreover, there are no defined standards and regulatory requirements governing the quality, safety, and environmental aspects of hydrogen technologies. Therefore, the strategy’s initial stage focuses on creating a regulatory framework for the development of hydrogen energy.

Development 2

Start of construction of 100 MW green hydrogen production facilities

As part of the H2U Hydrogen Valley initiative, in 2024, Ukraine’s Hydrogen LLC received a grant co-funded by the British Foreign Office to develop a green hydrogen production facility.

The project involves building a hydrogen plant in Reni, in the south of the Odesa region. This location was chosen partly due to its proximity to a seaport, facilitating transport by the Black Sea and the Danube to Central European countries. The project includes constructing a 120 MW solar power plant, an 80 MW wind power plant, and a 100 MW electrolysis plant. Initially, it aims to produce 7,000-8,000 tonnes of hydrogen per year, or 400-750 tonnes per month. The production of each cubic metre of hydrogen requires 1.5-2 litres of water and 4.5 kWh of electricity.

Currently, this is the only hydrogen-related project in Ukraine and is in the early roll-out stage. A limited liability company has been registered to purchase a land plot for the hydrogen plant. Since it will be green hydrogen, a wind measurement campaign was conducted: instruments recorded wind speed and direction, air temperature, humidity, and pressure over a year. This required approvals from the Ministry of Defence and the Ukrainian State Air Traffic Services Enterprise. The relevant permits were obtained in May 2022. A comprehensive feasibility study for the plant’s construction is now underway.