Ukraine introduces novelties to the mechanism of reimbursement to producers of energy from RES and presents options on debt solvency of the Guaranteed Buyer (“GB“).
The new regulation (the Draft*) which is now available for public discussion provides:
- the mechanism for reimbursement by Ukrenergo for curtailed electricity generated by RES producers under FiT
- the procedure for compensation by RES producers to Ukrenergo for breaching dispatching commands on curtailing.
The reimbursement is calculated based on the volume of curtailed electricity at the FiT cost.
Ways to calculate the curtailed electricity are 2 different formulas:
Reference Method: an etalon generating unit (i.e. an inverter or wind turbine) is used as a basis for the calculation of the curtailed electricity of the whole power plant
|If the Reference Method may not be used, Ukrenergo may use the Calculation Method: the amount of electricity produced during the same hours within the preceding 5 days is taken.|
The ultimate payments to RES producers are made in the form of the mutual settlements calculated as a difference of payments made by RES producers to Ukrenergo for the failure to fulfill dispatch commands and reimbursement amount for curtailed electricity paid by Ukrenergo to RES producers.
IMPORTANT: Ukrenergo must also reimburse for electricity curtailed until 1 January 2020.
|Total amount paid by GB to RES producers (as of 2 Oct. 2020)||UAH 13.85 bln which is 35.8% of the total amount due|
The total indebtedness of Ukrenergo to GB is UAH 22.4 bln
|Total amount paid by GB to RES producers (August 2020 and first 20 days of September 2020)||UAH 6.1 bln which covers 100% of the amount due for August and 27% – for 20 days of September|
The new regulation (the Draft Law**) envisages issuance of domestic government bonds in the amount of UAH 19.6 bln in order to:
- cover 40% of the debt (UAH 8.96 bln) incurred in the first half of 2020 and to be paid by the Guaranteed Buyer to RES producers in the 4Q of 2020 in accordance with the Memorandum of Understanding on Regulation of Issues in the Renewable Sector;
- ensure liquidity of the GB in order to cover the ongoing payments to RES producers in the amount of not less than 20% of the estimated annual electricity production by RES producers (as for 2020 amounts to UAH 10.64 bln).
*On 23 September 2020, the National Energy and Utilities Regulatory Commission (“Regulator“) has approved the draft of the Resolution “On Approval of Amendments to the Market Rules” (“Draft“). The first Draft was approved by the Regulator on 27 May 2020 but was subsequently re-approved due to adoption by the Parliament of the Law “On Amendments to Certain Laws of Ukraine on Improving Conditions for Supporting Renewable Energy Production”, under which RES producers must be compensated at the feed-in-tariff (“FiT“) price for the cost of electricity not delivered as a result of the dispatch orders made by the Transmission System Operator (“Ukrenergo“). The Draft is now available for public discussion.
** Draft Law “On Amendments to the Law of Ukraine “On the State Budget of Ukraine for 2020″ on Support of Electricity Production from Alternative Energy Sources” (“Draft Law“) has been registered in the Parliament on 24 September 2020.