Amendments proposed to the legislation regulating Ukraine’s renewable energy sector

On 4 July 2012 the Parliament of Ukraine has adopted in the first reading the Draft Law “On Introducing Changes to the Law of Ukraine “On the Power Sector” (regarding promotion of electricity production from renewable energy sources), registration number 10183 (hereinafter referred to as “Draft Law”).

The Draft Law is currently preparing for the second reading with the Parliament. It is hard to predict when the Draft Law might be finally adopted, but we assume it will happen at the next Parliament’s session in the fall of 2012.

The definition of the “local content” has been introduced, which applies to the energy facilities construction of which has started after 01 January 2012. To be eligible for the green tariff, “local content” for energy facilities and their launch stages (complexes) producing electricity from the energy of wind and solar and commissioned after 01 January 2013 should be not less than 30% and for the facilities commissioned after 01 January 2014 – not less than 50%. The Draft Law does not contain an additional requirement for local content in the solar modules, as it is stated in the effective version of the Law of Ukraine “On the Power Sector”.

As well, the Draft Law changes rules regarding “local content” for energy facilities and their launch complexes producing electricity from biomass, biogas and for hydropower plants. For the mentioned above plants, which were commissioned after 01 January 2015, the “local content” should be not less than 50%. The regulator shall approve the procedure for confirmation of the local content in the energy facility.

Certain considerable amendments are proposed with regard to the green tariff for certain types of RES starting 01 January 2013 should the Draft Law be adopted by the Parliament, namely:

–        differentiation of hydropower plants to micro, mini and small with the coefficients of the green tariff being 2.0, 1.6 and 1.2 respectively;

–        establishing coefficient of the green tariff for electricity produced from biogas of plant or animal origin at the level of 2.7;

–        establishing coefficient of the green tariff for electricity produced from household wastes at the level of 3.0;

–        existing coefficients of the green tariff for electricity produced from solar energy are reduced for solar plants located on land by 27%, for solar plants installed on the roofs of buildings with capacity of more than 0.1 MW – by 22%, and for solar plants installed on the roofs of buildings with capacity of less than 0.1 MW – by 16%;

–        coefficient of the green tariff for electricity produced from solar energy by energy facilities installed on the roofs and/or frontages of private households with the capacity not more than 16 kW at the level of 4.0. Production of the electricity by the mentioned above energy facilities can be performed without a license. The regulator shall approve a procedure for purchase and sale, metering and settlement for such electricity.

It is worth mentioning that no changes have been introduced to the green tariff coefficients for electricity produced by wind power plants.

The Draft Law expends the term biomass to wastes of animal origin and organic part of industrial or municipal solid wastes, which allows for the electricity produced from those to be eligible for the 2.3 green tariff coefficient that is currently eligible only for vegetative origin wastes.

Another innovation of the Draft Law is a possibility to have approval of the green tariff for each “launch stage (complex)” of the energy facility, if construction of the energy facility is performed by stages.

If the Draft Law is approved in its current version there will be the following green tariffs in effect from 01 January 2013:

Figure 1. Possible Green Tariffs for RES Power Plants from 01/01/2013, EUR/MWh

Types of RES 

Effective Green Tariffs

New Green Tariffs

Methodology of Green Tariff Calculation

Formula for Green Tariff Calculation

Retail Tariff for the 2nd Voltage Class Consumers[1] (A)

Green Coefficient[2]

(B)

Peak Period coefficient[3]

(C)

Wind plants with installed capacity of less than 0.6MW

64.6

64.6

A x B

53.85

1.2

Not applied

Wind plants with installed capacity of more than 0.6MW but less than 2MW

75.4

75.4

A x B

53.85

1.4

Not applied

Wind plants with installed capacity of more than 2MW

113.1

113.1

A x B

53.85

2.1

Not applied

Biomass plants

123.9

123.9

A x B

53.85

2.3

Not applied

Biogas plants

145.40

A x B

53.85

2.7

Not applied

Household waste plants

161.55

A x B

53.85

3.0

Not applied

Solar plants located on land

465.3

339.26

A x B x C

53.85

3.5

1.8

Solar plants installed on the roofs of buildings with capacity of more than 0.1MW

445.9

348.95

A x B x C

53.85

3.6

1.8

Solar plants installed on the roofs of buildings with capacity of less than 0.1MW

426.5

358.64

A x B x C

53.85

3.7

1.8

Solar plants installed on the roofs and/or frontages of private households with the capacity of less than 16kW

387.72

A x B x C

53.85

4.0

1.8

Micro hydro power plant with capacity of less than 0.2MW

77.5

193.86

A x B x C

53.85

2.0

1.8

Mini hydro power plants with capacity of more than 0.2MW and less than 1MW

77.5

155.09

A x B x C

53.85

1.6

1.8

Small hydro power plants with capacity of more than 1MW and less than 10MW

77.5

116.32

A x B x C

53.85

1.2

1.8

Source: IMEPOWER


[1] Set by the NERC as of January 2009 and calculated at 10.86 UAH/EUR official exchange rate set as of January 1, 2009

[2] Set in the Draft Law

[3] Set by the NERC

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