On16 February 2023, there was a working meeting of the NEURC management and the representatives of the renewable energy industry with the participation of senior executives of NPC Ukrenergo, SE Guaranteed Buyer, leading industry associations and renewable energy companies. The participants of the meeting discussed current industry issues, in particular, the status of settlements with RES producers, determining the approach to the responsibility of RES producers for imbalance settlement.
In his speech, NEURC Chairman Kostiantyn Ushchapovskyi assured that the Regulator was making efforts to resolve the payment issue. According to him, for the first time in 2 years, the Regulator has included all RES costs in the transmission tariff of NPC Ukrenergo for 2023, meaning that 20% of the cost of RES commercial products not included in the tariff in previous years was added.
At the same time, Mykyta Vyshnevskyi, Director for Market Operations at NPC Ukrenergo, noted that there was already a risk of failure to achieve the indicators set out in the tariff, which would not allow to pay for the service to ensure an increase in the share of electricity generation from the renewable energy sources in a timely manner and in full.
In particular, in January and in the first ten-day period of February 2023, the electricity transmission was 20% less than planned, and the electricity selling price of SE Guaranteed Buyer in the market is at the lower threshold, which may prevent from achieving the set in the transmission tariff.
For their part, RES representatives emphasized that the NEURC had a tool to adjust the tariff based on the results of monitoring to avoid a deficit in the tariff. That is why, to prevent the accumulation of new debts this year, it was proposed to review the Ukrenergo’s transmission tariff monthly, rather than quarterly.
It was also announced at the meeting that the renewable energy producers, SE Guaranteed Buyer, and NPC Ukrenergo could not agree on a new formula for calculating imbalances, so the issue would be considered by the NEURC. A meeting on this issue may be held next week. At the same time, the renewable energy producers once again stressed their unchanged position that they should not be responsible for the trade imbalances of the Guaranteed Buyer.
Regarding the formula for calculating imbalances, the RES market representatives noted that the provisions of NEURC Resolution No. 46 dated 15 January 2021 in part of subpar. 8 par. 1 had been recognized by the Supreme Court as illegal and invalid. It should be noted that during validity of these provisions of the resolution, the RES producers suffered significant losses. The RES sector would like to know the Regulator’s position concerning compensation for such losses. At the suggestion of the NEURC Chairman, it was proposed to arrange a meeting of lawyers at the Guaranteed Buyer on this issue.
The RES sector hopes that the NEURC will find a fair solution concerning a new formula for calculating imbalances, considering the conclusions of the Supreme Court of Ukraine, and establish a fair approach to determining responsibility for imbalances, according to which RES producers will not be responsible for the trade imbalances of the Guaranteed Buyer. The RES sector also counts on the Regulator’s mature position concerning compensation for the losses caused by the Regulator’s decision.
It is also worth noting that Mr. Ushchapovskyi informed the RES producers that the NEURC had developed and sent to the CMU a market reform concept to improve the market liquidity. According to the NEURC Chairman, this should become an incentive, in particular, for RES producers to sell “green” electricity on the market at the market prices, which should not be lower than the feed-in tariff.
As a result of the meeting, the RES producers expressed their gratitude to the NPC Ukrenergo and the NEURC for starting to repay debts for the RES curtailment service launched in February 2023 – UAH 1.3 billion has already been paid.
In general, the meeting caused cautious optimism among representatives of the RES sector. Renewable energy producers hope that the NEURC will respond to the industry’s problems and solve them effectively and professionally. As President of Ukraine Volodymyr Zelenskyy noted: “We should become – and we will become, because there is no way out – we will become a leader in development of modern “green” energy sector.” Thus, at the highest political level of the country, renewable energy has already been recognized as a strategic direction for the development of the Ukraine’s energy sector.
“Ukrainian Wind Energy Association believes that such regular meetings only contribute to the constructive and professional recovery of the renewable energy sector from the protracted financial crisis. This improves the investment attractiveness of the renewable energy sector for the international partners,” emphasized Andriy Konechenkov, Chairman of the UWEA Board.
