Business

Ukraine's energy tech start-ups blooming in the fields

  • 11 November 2014
  • From the section Business
Man juggling onions Image copyright Juliya Kochetova
Image caption Ukraine's rural hackathons are like music festivals for coders, developers and entrepreneurs

Ukraine's inefficient energy sector leaves it vulnerable to being stretched over a barrel - literally - by Russia.

Roman Zinchenko says the answer lies in start-ups.

"We don't believe only presidents and prime ministers can solve this. Let's treat the problem of this country as a start-up - and invite people to hack solutions for this."

He has begun a series of solar-powered "hackathons" - festivals for computer coders - in fields around Kiev, and a "Greencubator" to help energy start-ups gain funding.

"We've already had the world's largest crowdfunding project, which is Maidan [Kiev's main square that was the centre for the "Euromaidan" revolution in 2014]," says Mr Zinchenko. "And I think we can solve other challenges, too."

A wintry cold war

With a cold winter coming, Ukraine faces a gas war with Russia as punishment for moving further into the European orbit under the post-Maidan leadership of President Petro Poroshenko.

Image copyright Juliya Kochetova
Image caption Roman Zinchenko (right), believes his solar-powered "hackathons" could help shake up Ukraine's stagnant energy market

The country's $17bn (£11bn) International Monetary Fund bailout also requires market adjustments to the price of energy that successive governments after the break-up of the Soviet Union have subsidised heavily, keeping prices artificially low.

And the dominance of coal oligarchs like Rinat Akhmetov has contributed to a dysfunctional market incapable of ironing out inefficiencies in the energy sector.

Against this backdrop, a band of self-confessed energy geeks believe they have entrepreneurial answers to the problem.

"Actually, Ukrainians are quite different now than they used to be," says Mr Zinchenko, "more co-operative, more collaborative, used to solving problems together."

Solar-powered hackathons

Image copyright Mykhailo Komarov
Image caption Greencubator worker Kseniia Choni says her first hackathon was full of "energy geeks"...

He began Greencubator in 2009 after losing his job in finance during the downturn.

In his spare time he worked, using eco-friendly methods, on an unfinished country house built for people leaving the Chernobyl contamination area.

He learned first hand about the inefficiency and bribery afflicting the Ukrainian energy market and became excited about the potential for smart energy and energy efficiency.

"So I said, what can we do for our country in this crisis? Let's help green start-up companies get investors. But at this moment there were no green start-ups, so I thought, maybe that's not the best strategy."

His answer was hackathons - off-grid, solar-powered meetings of an assortment of programmers, engineers, and bloggers set "in the middle of nowhere ".

Kseniia Choni, a 23-year-old Maidan activist now working for Greencubator, describes heading out of town on a "marshrutka" - "that terrible yellow minibus". After a "swampy rollercoaster" journey "of bumps and puddles", she came across a bright, white tent in the middle of a field, with solar panels at its side.

She describes it as full of "energy geeks who hack in the middle of nowhere on high-speed internet, with a Tesla coil playing the Ukrainian anthem and Imperial March."

Image copyright Juliya Kochetova
Image caption ...but attendees are serious about transforming their country's energy ecosystem

'We learn, learn, learn'

Ivan Pasichnyk, a 27-year-old engineer, went to one of these hackathons in August 2013. He was glad he did because his start-up, Ecois.me, won the competition and went on to receive 80,000 euros (£63,000, $100,600) in venture capital funding from Deutsche Telekom.

"Actually, nobody from our team worked in the energy sector and no one knew anything about energy - we just started," he admits. "And then we learn, learn, learn."

Their app aims to help households reduce their energy consumption and works with a sensor installed in an electrical meter. It also sources data from co-operating utility providers.

From an energy company's point of view, this keeps consumers loyal and helps smooth out the peaks and troughs in electricity demand, making its job more manageable.

The app recognises each device in the home and knows when it is switched on or off and how efficient it is. If you leave the iron on, say, the app sends you an alert after 15 minutes.

Image copyright Ecois.me
Image caption Ivan Pasichnyk (back) and his Ecois.me colleagues have developed an app to help householders reduce their energy consumption

Ecois.me's system is currently being piloted with a view to being rolled out across Europe in the ten countries in which Deutsche Telekom is a utility provider.

Describing this approach to energy-saving, Mr Zinchenko says: "Should we be changing from pasta to potatoes when we are overweight? Hey, hit the gym!"

Green knowledge

Oleksandr Kryzhanivskyi first visited a hackathon in 2010 to speak about energy-efficient villages.

The next year, he cooperated with a friend, Sergii Khlivnenko, to build a small solar power plant for the hackathon, soon to become known as TeslaCamp.

They also came up with an idea to combine electric cars, a taxi service, and open energy co-operation, and formed eCoopTaxi. The idea took third place in that year's competition and went on to attract attention in Kiev.

Image copyright Paul Terrie
Image caption The hackathons are powered by solar panels

They are now importing an electric car - the Nissan Leaf 2 - and are seeking investment along a co-op model.

Another bit of green tech emerging from Greencubator is "energy torrent", a platform begun by Andrij Zinchenko, Roman's brother, to encourage open-source energy tech designs,

Roman Zinchenko says it has been easier for smaller cities, like Cherkasy, Slavutych, and Dolynato, to implement smart energy reforms than for the capital Kiev, where "stakes are higher".

So Greencubator's next project is to "retrofit" an aged building there into a showcase for all key green initiatives. He calls it an "architectural hackathon".

Case Ukraine, an NGO specialising in economic research, has developed a budget monitoring project called The Price of the State, with its own website, Costua.com. Greencubator plans to create something similar aimed at informing taxpayers about the hidden costs of energy inefficiency.

Green fashion?

Yet even given the resurgence in civil society following the 2014 Maidan revolution, crime and corruption make Ukraine a difficult place to start a business.

The country came bottom of the European tables in Transparency International's 2013 Corruption Perception Index. Mr Pasichnyk says Ecois.me will pilot not in Ukraine but in western Poland.

Image copyright Reuters
Image caption With EU supporters in western Ukraine, and pro-Russian separatist rebels in the east, the country is a difficult place to start a business

And while coal-producing oligarchs receive government subsidies there seems little incentive to invest in more efficient, lower-carbon technologies.

But Mr Zinchenko is hopeful. He points to reform initiatives in Estonia and Georgia, other former Soviet states.

"There are currently a lot of old-school Soviet paternalistic things [in Ukraine], but I truly believe we are entering an era of smarter networkers trying to build openness, transparency, and competition," he says.

Greencubator could even make changing attitudes towards energy fashionable, he believes.

A cold winter may be coming for Ukraine, and possibly a new cold war. But green start-ups are offering green shoots of hope.

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