Chinese, Germans Bidding to Turn Abandoned Nuclear Wasteland of Chernobyl into Solar Farm

For 30 years the 1,000 square miles surrounding the Chernobyl nuclear power plant in Ukraine, Belarus and Russia has lay largely inhabited and remains one of the most radioactively contaminated areas in the world.  But that’s all about to change if a group of German and Chinese investors have their way about it.  According to Ukraine’s Minister of Ecology and Natural Resources, Ostap Semerak, 39 separate entities have applied for permission to install 2 gigawatts worth solar panels on the land that would otherwise lie unutilized for centuries to come.  Per Bloomberg:

Chinese and Germans are among dozens of investors taking Ukraine up on its offer to turn the grounds of one of the world’s worst nuclear disasters into a massive solar park.

Thirteen international investors are among the 39 groups seeking Ukraine permission to install about 2 gigawatts of solar panels inside the radioactive exclusion zone surrounding the defunct Chernobyl nuclear plant, according to Minister of Ecology and Natural Resources Ostap Semerak. Two gigawatts is almost the capacity of two modern nuclear reactors, although atomic power unlike solar works day and night.

“We have received requests from businesses that are interested in renting land for building solar power stations,” Semerak said in a phone interview from Kiev. “We are not looking to profit from land use, we are looking to profit from investment.”

Of course, the effort to attract the new investors required a modest 85% rent reduction and guaranteed rates through 2030 to subsidize the solar farms which are otherwise not cost competive.

Chinese companies GCL System Integration Technology Co Ltd. and China National Complete Engineering Corp said in November that they plan to build a 1 gigawatt solar project on the site in several stages. A German renewables developer has applied to install 500 megawatts, Semerak said, declining to name the firm. The remaining project proposals are for plants that are about 20 megawatts in size.

Companies “have requested between 20 hectares and 1,000 hectares for projects,” Semerak said. In a push for foreign investment, Ukraine has lowered the rent charged for state property by 85 percent, he said.

The country set up a feed-in-tariff system running through 2030 that offers a fixed price which is reduced annually. Projects that sign on in 2017 will receive 17 euro cents (18 U.S. cents) a kilowatt.

That said, there is one minor issue which could disrupt the otherwise genius plan, if we understand it correctly, which is that the European Bank of Reconstruction and Development has waffled on providing financing and said loans will be contingent on “environmental due diligence.”  Seriously?

The lingering radiation at Chernobyl is a concern of the European Bank of Reconstruction and Development, which is considering whether to finance the solar projects. Loans will be contingent on environmental due diligence, according to spokesman Anton Usov. The projects would have to be safe to install and operate and also be commercially viable to receive funding, he said.

“For any project above 10 megawatts in size, you would need someone on-site almost every day,” said Pietro Radoia, solar analyst at Bloomberg New Energy Finance. “The bigger the project, the more daily small issues come up that have to be dealt with.”

After seeing some pretty ridiculous “environmental” concerns derail large M&A projects in the U.S., we would love to see the consulting report that approves this deal.