Climate Change Task Force - Legislative Developments in September
The mechanism aimed to prove that the electricity is produced from renewable energy sources will be developed soon. According to the Ministry of Energy`s report, the introduction of such a mechanism will allow decreasing the amount of cross-subsidizing on the electricity market and tariff on transfer to NPC Ukrenergo.
The warranties of origin must provide Ukrainian exporters with the opportunity to buy explicitly “green energy”, which will allow avoiding taxation of CO2 emissions on the border with EU countries.
The Draft Law «On amendment of some Ukrainian laws on development of energy storage systems» is submitted to the Ukrainian Parliament
The Draft Law was prepared by two members of the Parliament Messrs. Andriy Herus and Yuriy Kamelchuck (the "Parliament Draft").
Energy storage refers to the perspective technology, which will allow increasing the flexibility of the Integrated Power System of Ukraine. Such batteries can be used for the frequency maintenance and transmission of the capacity from the surplus period to the deficit period.
The draft law provides:
1) The new participant of the electricity market is included, which is the operator of the energy storage system. The energy storage activity requires obtaining of the special license; however the Draft provides that the license conditions for the energy storage activities shall contain some thresholds below which the license is not required.
Installation and usage of the power storage facilities by the power generating facilities selling power under the feed-in-tariff or under the auction price does not require obtaining of the license for energy storage activity under the conditions that:
(a) at any point of time the capacity generating power does not exceed the installed capacity of the power generating facility as indicated in the power generating license; and
(b) the circulation of power between the power generating facility and the energy storage facility shall be metered by the separate commercial metering point.
Earlier the Ministry of Energy has published its own draft law on the establishment of electricity storage
We observe that the Parliament Draft and the draft published by the Ministry of Energy display basically the similar view of the energy storage regulation.
However, the draft published by the Ministry of Energy suggests that energy storage facilities may be developed under the competitive procedures announced by the Cabinet of Ministers of Ukraine. The draft suggests the following incentives for the development of the energy storage facilities:
- introduction of the storage facilities development tariff (in this case the purchase of the energy storage service will be performed by the Transmission System Operator (Ukrenergo) under the separate contract);
- development of the energy generation facilities under the terms of the private public partnership;
- assistance with the allocation of the land plot (including switching the land plot to utilities) for the development of the energy storage facilities;
- provision of the state aid.
The Ministry of Energy draft should be approved by the Cabinet of Ministers before it would be submitted to the Parliament, and as of the date of this Digest the Ministry of Energy draft has not been considered by the Cabinet of Ministers.
The provision on excise tax on green energy was excluded from the draft law №5600
The Parliament Committee on Energy has excluded the excise tax on green energy from the draft law №5600. The exclusion of the provision was caused by the negative response from the potential and existing investors since establishing such tax could put additional expenses on the investors.
The draft law stipulates that biomethane producers should be capable of transferring the biomethane to the gas transmission system under conditions stipulated by the applicable natural gas transportation legislation.
The draft law also suggests implementation of the warranties of the origin of the biomethane. However, it is stipulated that the specific regulation for the issuance, transfer and distribution of the warranties of the origin of the biomethane shall be developed by the Cabinet of Ministers of Ukraine.
In general, the proposed law shall allow the expansion of the capacities of the producers on the sale and export of biomethane, as well as increase the economic attractiveness of biogas projects for potential investors.
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