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Before joining the Gantanhao Energy Storage team, Dantes worked in Guinea, Africa, for several months. At that time, he had a deep feeling that wherever there are mines, resources, and business opportunities overseas, no matter how bad the natural conditions, business environment, or social security are, as long as there is money to be made, there will be Chinese companies.

Therefore, in the era of internal circulation, both photovoltaic and energy storage must take a different approach in market development and must not rest on their laurels. For example, who would have thought that Pakistan would become my country's second largest module export market in the first half of this year? Who would have thought that Deye, a family business that started out as a dehumidifier manufacturer, would conquer Asia, Africa and Latin America in just a few years and become a legend in the South African market?

Now, Ukraine's photovoltaic and energy storage opportunities have arrived - Ukrainian Foreign Minister Kuleba is on a four-day visit to China, one of the key tasks is to invite Chinese companies to invest in renewable energy in the country.

Source: Ministry of Foreign Affairs

According to the Ministry of Foreign Affairs of the People's Republic of China, on July 24, Wang Yi, member of the Political Bureau of the CPC Central Committee and Foreign Minister, held talks with Ukrainian Foreign Minister Kuleba in Guangzhou. It is understood that this is the first visit to China by the Ukrainian Foreign Minister since the escalation of the Ukrainian crisis in 2022.

According to the news released on the website of the Ukrainian Ministry of Foreign Affairs, Kuleba also met with Wang Weizhong, governor of Guangdong Province, in Guangzhou on July 24. Guangdong Province and Nikolaev Oblast have maintained a partnership since 1994.

During this visit to China, Kuleba extended an invitation to Chinese companies, hoping that they could participate in the investment and reconstruction work in the Nikolayev region and other regions, "especially in the construction, industrial recovery,Renewable EnergyThere is great demand in other areas, so now is a good time to deepen trade relations."

01 Huge power shortage

Photovoltaic panels on the streets of a Ukrainian city

Ukraine's energy is heavily dependent on imports from Russia and Belarus. In 2021, 81% of Ukraine's oil was imported from Russia, Belarus and EU member states. The country's natural gas pipelines are mainly used to transport natural gas from Russia and Belarus to Western and Central European countries. Ukraine's four nuclear power plants also rely mainly on nuclear fuel from Russia.

In addition, Ukraine's photovoltaic development is not bad. In 2018 alone, the country's photovoltaic installed capacity increased nearly three times, from 2.0GW to 5.9GW. By the beginning of 2022, the country's total photovoltaic installed capacity had reached 8.06GW.

Ukraine has a tradition of installing rooftop photovoltaics, and residential rooftop solar energy is popular because it saves electricity bills. In March 2019, the average power of residential solar energy in Ukraine was 21.5 kilowatts per household. A total of 8,850 households in the country had rooftop solar energy with a total capacity of 190 megawatts. The total investment was about 180 million euros. In Western European countries during the same period, the average installed capacity of residential solar energy per household was only 3-5 kilowatts.

But now, Ukraine obviously has fewer photovoltaic power plants than before the war, and it is difficult to accurately count the exact number.

In fact, Ukraine's entire energy and power system has been hit hard. Ukraine has lost the Zaporizhia Nuclear Power Plant, the largest nuclear power plant in Europe, which once provided one-fifth of the country's electricity. Since the summer of 2023, half of Ukraine's hydropower stations, including the Kakhovka Dam, have been destroyed or damaged, and nearly half of the country's nuclear reactors have been permanently shut down.

So far, at least half of Ukraine's power generation facilities have been destroyed. In recent months, Ukraine's power plants have continued to be the main targets of missile and drone attacks. As a result, Ukraine is currently experiencing rolling blackouts across the country. It's okay in the summer, but it's definitely not okay in the winter.

According to Open Source Electricity data, as of May 2024, Ukraine's power generation capacity is only 10GW, while the current peak demand in summer is about 12GW (about 16GW before 2022) and the peak demand in winter is 16GW (22GW before 2022). Without considering the recovery of electricity demand, Ukraine's power shortage in winter is as high as 6GW. If the Russian-Ukrainian conflict is temporarily suspended and electricity demand rebounds, Ukraine's power supply and demand gap in winter will be even greater.

In the face of the lack of oil, natural gas and nuclear power, photovoltaics and energy storage have become the key to Ukraine's rapid resolution of the energy crisis.

Recently, Greenpeace researchers suggested that Ukraine could very well implement a "Solar Marshall Plan."The country is on track to become the first in the world to rebuild after war using renewable energy.

This view is well-founded. Andree Böhling, energy expert at Greenpeace, said: "Solar energy is key to rebuilding Ukraine's energy supply because it is easy and cheap to deploy. Distributed solar facilities, in particular, are also less vulnerable to attack and can provide reliable energy to every community and household very quickly."

02 A rare opportunity for infrastructure maniacs

Ukraine has abundant scenic resources, which are mainly concentrated in the southern region and are suitable for development.

According to data from the Ukrainian Association of Renewable Energy (UARE), cited by TrendForce, Ukraine's annual solar radiation can reach 800-1450W/㎡, which has great development potential in the international photovoltaic market. In terms of wind resources, Ukraine is close to the Black Sea, and many experts estimate that its potential for wind power generation is also huge.

During the Russia-Ukraine conflict, Ukraine's Merefa solar power plant in the Kharkiv region was destroyed by Russia; in addition, the Tokmak solar power plant in the Zaporizhia region was also damaged.

In May 2022, the Merefa solar power plant in the Kharkiv region of Ukraine was attacked by missiles. The power plant has an installed capacity of 3.9MW.

Gantanhao Energy Storage made a brief estimate that if this power station is built in Northeast my country, the total cost is less than 7 million RMB. Russia's cheapest Iskander ballistic missile costs 2 million USD per missile. Therefore, the cost of one missile is equivalent to that of two such photovoltaic power stations. Components and inverters have become cheaper in the past two years. As long as the safety of personnel is ensured, such a project can be completely handed over to Chinese companies.

Greenpeace's research shows that Ukraine has the ability to take bolder steps to restore and rebuild through solar energy. According to an analysis report by the Berlin Institute of Economics, Ukraine is expected to add 3.6GW of new capacity in the next three years. By 2030, the country's photovoltaic installed capacity will increase from the current 5.6GW to 14GW.

03Before the conflict, Chinese companies had already taken action

Climate scientist Svetlana Krakovska stands on the roof of her home in Kiev.

Before the Russia-Ukraine conflict broke out, Chinese photovoltaic and wind power companies had expanded their business to Ukraine.

According to media reports, a large-scale photovoltaic power station with an installed capacity of 200MW in Ukraine was officially connected to the grid and generated electricity in April 2019. The 750,000 solar panels used in the power station came from Trina Solar and Jiangsu Seraphim Photovoltaic Systems Co., Ltd., and the 160 photovoltaic inverters came from CSTAR.

In November 2019, a 323MW photovoltaic power station near the city of Dnipropetrovsk in south-central Ukraine was connected to the grid and generated electricity. All the photovoltaic modules of this power station came from Risen Energy.

In August 2019, China Longyuan Power acquired the Yuzhny wind power project in Ukraine, with a planned capacity of 76MW.

In September 2021, Goldwind Technology signed contracts for the Zofia 337.5MW wind power project in Ukraine and the Ochakov 288MW wind power project. The two projects are located in the Zaporizhia region in southern Ukraine and the Ochakov region in Mykolaiv Oblast, respectively.

Ukraine is currently at war and does not have the conditions to build large-scale ground power stations. The government is promoting the construction of local small-scale microgrids and the popularization of renewable energy and energy storage equipment. Household photovoltaic energy storage equipment has become a scarce material to ensure the daily power supply of the people.

The Ukrainian government has encouraged businesses and residents to solve electricity supply problems through small-scale or household photovoltaic storage in terms of taxation and finance.

On July 16, the Ukrainian parliament voted to abolish taxes and tariffs on energy equipment imports. On July 24, Nadiya Bihun, deputy minister of the Ukrainian Ministry of Economy, said that about 70,000 households in Ukraine have installed solar panels on their roofs, and the government hopes to speed up the process. Citizens can apply for 0% interest loans for the purchase of solar panels and power storage equipment. The state compensates the bank for the difference between the market interest rate and the zero interest rate. The loan period is 10 years. The current maximum amount of such loans is 480,000 hryvnias (equivalent to RMB 85,000). The largest state-owned banks and some private banks have begun to issue such loans to citizens.

With policy support, the demand for household optical storage in Ukraine has exploded rapidly. Compared with the European household storage market in 2022, the demand for household storage in Ukraine is more rigid.

Guosheng Securities predicts that the scale of new household deposits in Ukraine may be several times the level of new household deposits in Europe in 2022, with sales reaching 840,000 to 1.26 million units per year.

04Households running out of storage are rushing into Ukraine

It can be seen from the ENF business directory that the number of dealers in Ukraine is significantly higher than that in other Eastern European countries.

Among the suppliers of these distributors, we can see many familiar names of Chinese household photovoltaic and storage companies, such as Sungrow Power Supply, Growatt, Aerox, BYD, Sinovac, GoodWe, and Payne.

Customs data show that since April 2024, China's inverter exports to Ukraine have begun to grow rapidly.

Enterprises such as Ailo and Huabao reported that orders from the Ukrainian market have increased significantly. However, currently only one Chinese inverter brand, Deye Co., Ltd., is selling products on the Ukrainian online Elvis website. Most Chinese manufacturers enter Ukraine through dealer networks.

05Risks that cannot be ignored

Ukraine still faces many obstacles in realizing its solar energy potential.

Greenpeace highlighted the lack of incentives for investors, insufficient grid stability and labour shortages as the three main obstacles. The latter, in particular, is something everyone should understand.

Greenpeace hopes that relevant countries can help the country through financial aid to support cheaper loans, more skilled workers and more energy storage products.

“Increased support for sustainable, decentralized, energy-efficient, renewable energy projects will help Ukraine become the first post-war country in the world to rebuild on renewable energy, setting a global precedent for infrastructure-focused climate action,” said Svetlana Romanko, founder and director of campaign group Razom We Stand.

For Chinese companies that want to enter the Ukrainian market now, they must also consider the relevant obstacles and risks.

On the one hand, the Ukrainian Development Fund, which is responsible for the reconstruction work, is provided with consulting and program design by companies such as BlackRock and JPMorgan Chase. All large-scale investment projects are carried out within the framework defined by these American companies.

If investing in Ukraine at this time, the Ukrainian wartime government may find it difficult to provide a normal legal environment for enterprises. For example, in 2019, the acquisition of Motor Sich by a Chinese company was frozen by the Ukrainian government at the time.

On the other hand, Ukraine's basic living conditions are not guaranteed, and the course of the war is unpredictable. It may be difficult for companies to really expand their business after entering.