On June 25, 2020, the Energy and Utilities Committee of the Verkhovna Rada of Ukraine (“Parliament”) approved the Draft Law “On Amendments to Certain Laws of Ukraine on Improving  Conditions for Supporting Renewable Energy Production” (“Draft”),  submitted by the Cabinet of Ministers of Ukraine (“Government”).

The Draft has been elaborated based on the Memorandum of Understanding on Regulation of Issues in Renewable Sector, executed on June 10, 2020, between the Government and key energy industry associations.

The Draft introduces several changes into the regulation on support quota distribution auctions (“Auction”), feed-in-tariff (“FIT”) and state guarantees regarding investment protection of producers (“Producers”) of energy from renewable energy sources (“RES”).

 

FIT RESTRUCTURING

  • Reduction of FiT (below we provide information only for RES facilities equal to or exceeding 2 MW)

 

 

REGULATION OF AUCTIONS

  • The minimum mandatory share of annual support quotas for each type of RES facilities (i.e. wind, solar, hydro, etc.) is reduced from 15% to 10%
  • The maximum share of support quotas that can be received by one beneficial owner during one calendar year is 35%
  • The maximum starting prices for bidding at Auctions has been limited as follows:

 

Type of RES facility

Date of Auctions

Eurocents/KW

Wind and solar

 

by December 31, 2024 not exceeding 9
from January 1, 2025 not exceeding 8

Other RES facilities

irrespectively of date not exceeding 12

 

BALANCING MARKET

 

 

Curtailment: full compensation to Producers for generation load curtailment outside the Balancing Market

 

Responsibility for imbalances:

► RES facilities with the installed capacity equal to or less than 1 MW shall bear liability for imbalances under the current legislation (i.e. starting from January 1, 2021, the liability will increase annually by 10% and will reach 100% from January 1, 2030).

► RES facilities with the installed capacity exceeding 1 MW shall bear liability for imbalances:

– no liability until December 31, 2020

– 50% of the price of imbalanced energy after 1 January 2021

– 100% after 1 January 2022

The tolerance margin is 5% for solar and 10% for wind.

 

STATE GUARANTEES

  • Legal regulations on FiT will apply to Producers for the whole FIT period (except for regulations on reduce of taxes or otherwise beneficial for Producers)
  • FIT will not be changed or cancelled until December 31, 2029 (including FIT coefficients)