ANALYSIS OF ENERGY PRICES OF BIOMASS FUEL IN UKRAINE

Abstract

The purpose of this work is to analyze the energy price change for different kinds of biomass and for natural gas from 2016 to 2020 and to compare it with the relevant trends for countries with a longer experience and  more developed market of fuel biomass. The study revealed that during the significant increase of natural gas price (from June 2016 to December 2018), the energy price of biomass increased at the same or even higher rate than the energy price of natural gas. During the declining natural gas prices (December 2018 to February 2020), when its price almost returned to the situation in mid-2016, the energy price of biomass decreased slightly, but still remains too high, and to date for pellets it is practically equal to the energy price of natural gas. This kind of energy price change for biomass compared to its change for fossil fuels in Ukraine differs significantly from the trends inherent to countries with longer experience of biomass energy use and developed market mechanisms for its pricing (in particular, Austria, Lithuania, Germany, Finland, Sweden). The imperfection of market pricing mechanisms for biomass fuel in Ukraine can be evidenced by the fact that most purchases of biomass in the Prozorro system involve only one supplier. Possible ways to improve the current situation are to promote the creation of more biofuel producers and to improve the conditions for access to raw materials for them, to create a biofuel exchange based on the organizational structure of the Lithuanian biofuel exchange Baltpool, taking into account local conditions.