Chernobyl Goes Solar as First Panels in Nuclear Zone Near Finish

(Bloomberg) -- The first solar project in the Chernobyl zone is expected to be commissioned next month, a step forward in the developers' plan to invest 100 million euros ($119 million) and build renewables in the radioactive exclusion zone.

The project is being developed by Ukrainian engineering firm Rodina Energy Group Ltd. and Enerparc AG, a clean-energy company based in Hamburg, Germany. It will be 1 megawatt in size and cost about 1 million euros ($1.2 million) to build, according to Evgeny Variagin, chief executive officer of Rodina.

“Bit by bit we want to optimize the Chernobyl zone,” Variagin said by phone. “It shouldn't be a black hole in the middle of Ukraine. Our project is 100 meters from the reactor.”

Ukraine's minister of ecology announced a plan in July 2016 to revitalize the 1,000-mile swath of land encircling the site of the nuclear 1986 meltdown. Long-lasting radiation makes farming and forestry too dangerous, so renewable energy is seen as something productive to do with the empty area. The zone also connected to the country's major cities with transmission lines that were originally laid to carry electrons from the destroyed nuclear plant.

In order to attract investors, the government is offering cheap land and relatively high feed-in tariffs. Rodina and Enerparc have secured a contract that will pay 15 euro cents per kilowatt-hour until 2030. That's almost 40 percent higher than the upper band of Bloomberg New Energy Finance's benchmark range for the levelized cost of solar in Europe.

“The higher price is because it's a risky market, simple as that,” said Pietro Radoia, solar analyst at BNEF. “I would guess investors are after higher returns there.”

Other energy companies have also expressed interest. France's Engie SA is conducting a pre-feasibility test with a gigawatt-sized project in mind. Chinese companies GCL System Integration Technology Co. Ltd. and China National Complete Engineering Corp. also said they are interested in building a solar park.

Rodina and Enerparc are planning to develop as much as 99 more megawatts of solar in Chernobyl. The Ukrainian company is also open to working with new partners and investors, Variagin said.

Rodina has developed solar farms in Ukraine, Belarus, Turkey, Armenia and Kazakhstan, installing about 150 megawatts in total.

To contact the reporter on this story: Anna Hirtenstein in London at ahirtenstein@bloomberg.net.

To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net, Jonathan Tirone

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