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 gigawatts 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 kilowatt-hour.
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 kilowatt-hour, 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.”