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Authorization
09.06.2021

MEMORANDUM OF UNDERSTANDING:
ONE YEAR LATER

The first negotiations between the Ministry of Energy of Ukraine and the RES investors on overcoming the RES crises began three months after launching a new model of the wholesale electricity market in July 2019.  On 9 December, 2019 the European-Ukrainian Energy Agency (EUEA) and the Ukrainian Wind Energy Association (UWEA) applied to the Energy Community Secretariat’s Dispute Resolution and Negotiations Centre and initiated a mediation procedure between the above-mentioned RES associations and the Ministry of Energy of Ukraine. Later, the Ukrainian Association of Renewable Energy (UARE) joined the mediation process as well.

After eight months of hard negotiations, on 10 June, 2020, the Cabinet of Ministers of Ukraine, the Ministry of Energy of Ukraine, the NEURC, the Energy Community Secretariat’s Dispute Resolution and Negotiations Centre, the UWEA and the EUEA jointly signed a Memorandum of Understanding on the Settlement of Problematic Issues in the Renewable Energy Industry (MoU). In line with the agreements reached, Ukraine’s state authority pledged to ensure the repayment of existing debts to RES producers and to provide timely and full payments for the delivered “green” electricity. RES investors, in turn, agreed to a  voluntary reduction of “green” tariff for new and existing RES facilities in order to ease the state's financial obligations. On 21 July, 2020 the Verkhovna Rada of Ukraine adopted the Law of Ukraine No 810-IX “On Amendments to Certain Laws of Ukraine on Improving the Conditions for Promoting Electricity Generation from Alternative Energy Sources” (the Law No 810- IX) which legitimized the provisions of the Memorandum of Understanding.

On June 9, 2021, one year after the signing of the Memorandum of Understanding, the leading RES associations and investors together with People’s Deputies of Ukraine, who form the Inter-Factional Deputy Association “Clean Energy - Healthy Environment”, met at the Interfax-Ukraine news agency to summarize the implementation progress. Among the speakers of the press conference were: the direct signatories to the Memorandum of Understanding - Andriy Konechenkov, Chairman of the UWEA Board and Oleksandra Gumeniuk, Director of the EUEA; Oleksandr Kozakevich, Chairman of the UARE; Artem Semenyshyn, Executive Director of the Solar Energy Association of Ukraine; the current People’s Deputies of Ukraine - Liudmyla Buimister, Oleksiy Kucherenko and Oleksiy Honcharenko (online); and Carl Sturen, Managing Director, Vindkraft Ukraine.

Andriy Konechenkov, a moderator of the press-conference, presented comparative infographics on the status of the implementation of the agreed MoU provisions as of June 9, 2021: “We have analyzed the state of implementation of the commitments undertaken by the government bodies under the signed Memorandum of Understanding. One year later, only 4 of 14 obligations have been fulfilled, namely: the adoption of the Law of Ukraine No 810-IX and legal acts on compensation for the curtailments of RES generation, the revision of price limits of the Guaranteed Buyer on the Day-Ahead market and the allowance to Guaranteed Buyer to trade under the bilateral agreements. At the same time, the obligation to apply legislation relevant on the date of entry into force of Law No 810-IX was grossly violated when the Cabinet of Ministers registered in the Verkhovna Rada its Draft Law No 5600 on the introduction of an excise tax on RES electricity at a rate of 3.2%”.

UWEA’s infographic: https://drive.google.com/file/d/1FOnkZTHRLv-DaetU2RIAR-Wt1QZ1H4ui/view?usp=sharing

Lyudmyla Buimister: “Ukraine’s renewable energy sector has become so politicized and full of myths recently that it is difficult for our society to find out the truth. Nowadays, the environmental protection is not just a wish, but a requirement of time in both Europe and worldwide. Considering the fact, that Ukraine strives to integrate with the European energy system, such process is inevitable for our country. Only our north-eastern neighbour benefits from the pressure on the RES sector of Ukraine. Today, the Government is destroying the confidence of national and international RES investors with its own hands and is not fulfilling the obligations set forth in Law №810-IX, which, I remind you, was signed by the President of Ukraine personally

Carl Sturen: “In Ukraine the overpayment for the “green” transition is only 5%, compared to the EU countries where this figure reaches 20-30%. One of the biggest strategic and environmental challenges for Ukraine is coal-fired power plants, the average age of which is 65 years. Carbon emissions per 1 kWh of electricity generated by them in tens times exceeds generally accepted standard in the European Union, while Ukrainian tax on CO2 emissions is about 1% of the average EU tax. Thus, there is absolutely no strategic thinking and real political will in Ukraine. And instead, some officials are trying to “kill” those “green” energy achievements that society has already benefited from.  Undoubtedly, any try to manipulate public opinion regarding “green” tariffs and “green” energy as a whole is a failure.

The press conference was resulted in signing the joint letter addressed to Dmytro Razumkov, Head of the Verkhovna Rada of Ukraine, (with copies to the Minister of Finance of Ukraine, Minister of Energy of Ukraine and the Heads of the Parliament`s Committees on Finance, Taxation and Customs Policy, on Energy, Housing and Utilities Services, on Budget and on Economic Development) by all leading RES associations - the UWEA, the EUEA and the UARE. In their Letter, the associations described all risks from adopting a Draft Law №5600 on the application of excise tax on RES electricity, which was registered by the Cabinet of Ministers of Ukraine with the Verkhovna Rada on June 2, 2021.

The joint Letter: https://drive.google.com/file/d/19K6QFmrlGD4BnpiYFOIZNLqqVRf4ApUU/view?usp=sharing