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30.10.2018

FIVE LEADING PROFESSIONAL ASSOCIATIONS SUPPORT THE FUTURE CHANGES IN THE STATE AID FOR «GREEN» GENERATION IN UKRAINE

On 30 October 2018, the Ukrainian Wind Energy Association, the Ukrainian Association of Renewable Energy, Bioenergy Association of Ukrainian, Ukrainian Hydrogen Council and Association of Solar Energy signed a Memorandum to express their joint position on proposed changes in the state aid system for “green” energy sector of Ukraine.

Leaders of these associations believe that new support system through implementing auctions will create transparent conditions for further RE capacities development and growth and help to avoid additional financial burden on electricity market of Ukraine. 

Draft law No 8449 and seven alternative drafts on introduction of auctions in RE sector of Ukraine were registered in the Verkhovna  Rada of Ukraine.

Joint proposals of the RE market players on the key issues of the relevant drafts are reflected in the text of the Memorandum. Its main provisions include:

  • Auctions will be introduced beginning from 2020, and will be carried out twice a year, before May and October;
  • Auctions will be required for wind power plants with 20 MW or more, and for solar power plants with 10 MW or more, of installed capacity.
  • All the projects that have not concluded pre-PPA by the end of 2019 are obliged to participate in the auctions;
  • Cabinet of Ministers of Ukraine shall develop a procedure / order of conducting auctions; electronic public procurement system “ProZorro” will be used as a platform for running auctions;
  • Auction price for 1 kWh shall not exceed the FiT rate valid at the date of auction
  • Any Power Purchase Agreement (PPA) concluded on auction terms will be valid for a term of twenty years from the date of commissioning.
  • Planning of transparent quotas for 5 years period in line with the 10-year development plan of the electricity transmission system and taking into account the Energy Strategy of Ukraine and Ukraine's international undertakings;
  • Additional incentives for small and distributed generation;
  • No retrospective changes to support system for on-going RE projects.

The parties also expressed their readiness to discuss a possibility to reduce the "green" tariff rates from 2020.

“Any legislative changes related to the new support system for renewable energy should have a positive impact on the investment climate in Ukraine and guarantee the winners of auctions unhindered access to the national grid. The general annual state quota should be established driven by the Energy Strategy of Ukraine until 2035. Without transparent quotas, there will be no market development. It should be clearly understood by our decision-makers”, said Andriy Konechenkov, Chairman of the UWEA's Board.

Memorandum