On September 13, 2022, the Ukrainian Wind Energy Association representatives headed by the UWEA Board Chairman Andriy Konechenkov had a fruitful discussion with the Deputy Director of the Energy Community Secretariat Dirk Buschle and Naida Taso, Electricity Market and Renewables expert, devoted to the importance of extending the pre-PPAs and technical conditions for grid connection for 2 years. The construction of wind power plants was suspended in February 2022 due to the full-scale war started by the russian federation. However, investors want to complete constructions, despite the war.
Each wind turbine installed in the coming months will definitely contribute to strengthening Ukraine’s energy security through providing additional power generating capacities and ensuring additional electricity supply especially important in the difficult winter period. The usage of wind energy reduces the need for consumption of the expensive fossil fuels such as gas, coal, or oil.
In addition, it should be noted that the price for electricity generated at new wind farms will be 88 euros/MWh, which is already comparable to market electricity prices in Ukraine. Therefore, the completion of these wind power plants at “green” tariff will not impose an additional burden on the state. Considering the fact that the market price of electricity is expected to exceed 100 euros/MWh this winter, cheap wind-generated electricity will reduce electricity prices.
According to the provisions of the pre-PPAs concluded with the State Enterprise Guaranteed Buyer (national off-taker) in 2019 and Law of Ukraine “On Alternative Energy Sources”, above-mentioned wind power facilities were to be put into operation until the end of December 2022 in order to benefit of the “green” tariff scheme of support. Without clear and stable state policy for projects under the “green” tariff, investors and creditors are not prepared to take on critical financial risks and resume the construction process. Continuity of policy is also a prerequisite for providing guarantees to wind energy equipment suppliers and installers, as they are wary of the current situation in Ukraine and prefer to suspend performance of their obligations claiming Force Majeure circumstances.
During the zoom meeting with Dirk Buschle and Naida Taso, UWEA’s representatives positively commented on the draft law developed by the Ministry of Energy of Ukraine, which provides for the possibility of completing wind farms at the “green” tariff by the end of 2024. This document, if successfully considered in the parliament, could become a lifesaver both for wind energy companies and for the energy industry of Ukraine as a whole, since the companies will be able to resume construction within the framework of a predictable and understandable legislative field. In turn, the state will have such important new energy-generating capacities, which do not use expensive fossil fuels and, in addition, contribute to the decarbonization of the country.
For their part, representatives of the Secretariat of the Energy Community expressed their understanding of the complexity of the situation for companies whose projects’ implementation were put on hold due to russian aggression, but construction of which could be resumed in the short- and medium-term perspectives.
Taking into account the arguments provided by the UWEA and the market participants’ position regarding the urgency for 2 years prolongation of validity period of already concluded pre-PPAs at “green” tariff and grid-connecting technical conditions for the RES investors to complete construction of their wind power plants in Ukraine, the Energy Community Secretariat will submit its proposals on mechanisms to further promote wind power in Ukraine to the Ministry of Energy, as well as to parliamentarians.
There is no doubt that the issue will be resolved. After all, the President of Ukraine Volodymyr Zelenskyi, the Prime Minister of Ukraine Denys Shmyhal, the Minister of Energy Herman Galushchenko have repeatedly emphasized the priority of the renewable energy industry in plans for the post-war recovery of Ukraine and called on foreign companies and investors to develop the industry.
