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22.02.2019

AUCTION SYSTEM FOR RENEWABLE ENERGY SUPPORT IN UKRAINE

Ukraine's transition to “green” auctions and IRENA's expert recommendations on this issue were discussed by the participants of the international conference “Auction System for Renewable Energy Support in Ukraine” held on February 21, 2019 in the Verkhovna Rada of Ukraine at the initiative of the Verkhovna Rada Committee on Fuel and Energy Complex, Nuclear Policy and Nuclear Safety of Ukraine, the State Agency on Energy Efficiency and Energy Saving of Ukraine and IRENA with the support of the United Kingdom Effective Governance Foundation.

The participants discussed issues related to implementation of the auction system in Ukraine in the course of preparing a bill “On Amendments to Certain Laws of Ukraine Regarding the Provision of Competitive Conditions for the Production of Electricity from Alternative Energy Sources” (No. 8449-d) for the second reading in the Parliament.

In her opening remarks Head of the Subcommittee on Sustainable Development, Strategy and Investments of the Verkhovna Rada Committee on Fuel and Energy Complex, Nuclear Policy and Nuclear Safety of Ukraine Natalia Katser-Buchkovska, underlined the importance of renewable energy as part of the energy security of the country, one of the largest sources of investment in the national economy, as well as part of the implementation of sustainable development goals under the Paris Climate Agreement.

Vladimir Bandurov, Head of the Subcommittee on Nuclear Energy and Nuclear Safety of the Verkhovna Rada Committee on Fuel and Energy Complex, Nuclear Policy and Nuclear Safety of Ukraine, called on participants to study very carefully the other countries' experience in conducting RE auctions: “The main thing is not to slow down the Renewable Energy growth rates we have in our country. Otherwise, we will not be able to achieve the main goal of our Energy Strategy - stable development of renewable energy and energy independence”.

“While introducing the new model, we need to consider not only investors’ interests but also those of end-users, who bear the main price burden. Therefore, in the Committee's opinion, the auction system is the most competitive, transparent and market-based model in terms of determining the fair price for electricity produced from renewable sources”, said Vladimir Bandurov.

Marcin Scigan, IRENA Secretariat, noted the Ukraine’s significant prospects for increasing solar and wind energy generations. He welcomed the introduction of auctions in the renewable energy sector in Ukraine: “I am convinced that that the introduction of such competitive, market-based RE support system is an important step for the further development of renewables in Ukraine”.

Head of the State Agency on Energy Efficiency and Energy Saving of Ukraine Serhiy Savchuk highlighted the achievements of Ukraine in replacing gas and other fossil fuels by Renewables and noted the steady growth of “green” electricity generation. He also briefly described main provisions of the draft law on auctions.

Experts from IRENA, the European Commission, EBRD and IFC also emphasized the advantages of the auction system. IRENA’s representatives shared the results of the auctions conducted in different countries around the world.

Ukrainian MPs, representatives of the Ministry of Energy and Coal Industry of Ukraine, the SAEE, Energy Community Secretariat, the Ukrainian Wind Energy Association, IRENA, EBRD, IFC, the European Commission and energy market experts from other countries discussed key aspects of implementing the RE auction system in Ukraine and its impact on the investment climate in the country.

Andriy Konechenkov, Head of the UWEA Board noted in his presentation: “Further successful development of renewable energy in Ukraine does not depend on the transition to “green” auctions, but on creating the technical conditions enabling new wind and solar capacities to be connected to the national energy system within the framework of a new electricity market which will commence functioning on 1 July 2019”.

A seminar “How to design an auction? Design elements of auction and its influence on the market price” was held within the framework of the conference “Auction system for support of renewable energy in Ukraine”.