In Ukraine, preferential gas prices have hit bioenergy
15 Feb 2022

In Ukraine, preferential gas prices have hit bioenergy

In Ukraine, the establishment of preferential prices for natural gas for heat producers for the population and budgetary organizations has led to the downtime of biofuel boilers.

This was stated by Chairman of the Board of the Bioenergy Association of Ukraine Georgy Geletukha, reports Energoreforma.

"Gas prices for the two categories of heat consumers have remained subsidized, and significantly," he said.

According to Georgy Geletukha, the price of wood and wood chips increased by 350% against the background of rising natural gas prices. "At the same time, heat tariffs from biomass, as well as from other alternative sources, are set on the principle of gas heat tariffs minus 10% - this legislation has been in force since 2017," said the head of the association. - Now the tariffs for heat from biofuel boilers for the population are calculated from the preferential gas price of UAH 7.42 per cubic meter. m, but its producers buy raw materials at commercial prices.

Biofuel boilers are either at a loss or idle, says Georgy Geletukha. "Old gas boilers are being turned on to heat budget organizations," he said. "By artificially lowering the price of natural gas, the government is giving the wrong signals to the whole economy."

The Bioenergy Association of Ukraine proposes to the government, first, to equalize gas prices, and to help the population and the public sector with the payment of bills, to enable producers of heat from biofuels to buy it at special auctions at economically reasonable prices.

"Special auctions could be made for wood raw materials coming from state forestries," said the head of the association. "Currently, heat producers from biomass are in a worse situation than producers of social products, for which they have organized special auctions to buy gas."

The bioenergy sector hopes for the government's promised equalization of gas prices for all categories of consumers, which will help replace it. "Subsidizing gas prices neutralizes the desire to replace it, to carry out thermal modernization," explains Georgy Geletukha. - Instead, bioenergy has replaced about 15% of natural gas consumption, which is more than 5 billion cubic meters. m per year, which could turn into 10 billion cubic meters. m ».

At the same time, Georgy Geletukha noted that now the consumption of heat from bio raw materials is increasing by industry and commercial organizations, while in previous years, growth was also observed among budget organizations.

"Bioenergy produces heat for all categories of consumers, but the share of the population and budget organizations to which it is now forced to sell it in non-competitive conditions, is significant," said the expert.