The latest issue of Ukraine Renewable Energy Newsletter was published. You can download full version here. Please see below introduction and the list of content.
Expectations are set high that the NERC’s Procedure for calculation of the local content share for renewable power plants will be finally registered by the Ministry of Justice in the nearest weeks and will come in force together with other normative documents needed for its implementation in practice. Considering that starting January 2013 the local content share in the value of RES facilities reaches 30% (in order for the RES power plant to be eligible for the green tariff) according to the Electricity Law, absence of the effective Procedure makes it really hard for most of the project developers and equipment suppliers to plan their operations and move forward with concrete steps to implement projects.
We also expect that the Parliament will approve the Draft Law analysed in detail below that introduces changes to the green tariff values for certain types of RES. In general, we support the current wording of the Draft Law as it may allow achieving more balanced situation at the renewable market taking down IRRs for solar PV projects and increasing profitability for small hydro projects. Together with other proposed changes, this can potentially lead to more sustainable development of RES with attention from investors and developers spread more or less equally among different technologies since the focus has been clearly on solar PV projects during last year. Unfortunately, the Draft Law does not contain any changes to the local content requirement for wind power plants that may become the real barrier for large projects under development.
Looking at overall situation with construction of RES power plants in Ukraine, we observe steady development of large solar and wind projects by developers with the Ukrainian origin and strong political support – Activ Solar, DTEK, Wind Parks of Ukraine. Most of other large renewable projects are going forward, but at rather slow pace since a lack of clarity with the local content requirement does not allow structuring financing and placing orders for major equipment. At the same time, there is significant activity of developers related to small RES projects with installed capacity of below 10 MW – we expect more power plants of such size to be commissioned by the end of the year.
In This Issue
I. Legal and Regulatory Developments
1.1. Changes to the green tariff regulatory system approved by the Parliament in the first reading
1.2. New law related to power grid connection fees approved by the Parliament
1.3. East-Crimean WPP ownership is transferred to the Crimean Generating Systems
1.4. NERC adjusted the green tariff for renewable energy producers for September 2012
II. Investment News
2.1. Activ Solar completed the second stage of Starokozache SPP
2.2. Energoinvest launches the first phase of solar power plant
2.3. Active Energy Group made the first shipment of the Ukrainian wood fuel chips to Turkey
2.4. The second stage of Ochakiv wind power plant put into operation
2.5. Ukrainian investors acquired majority stake in Fuhrlander AG
2.6. EBRD will finance construction of bio-gas plant at Astarta
2.7. NERC issued a license and approved the green tariff for Sivash WPP
2.8. NERC approved the green tariff for Solar Energy Plus