New Renewable Energy Auctions Law Submitted to the Parliament

New version of the Draft Law introducing auctions for support of renewable energy projects approved yesterday by the Parliament Fuel and Energy Sector Committee was signed today by MPs and registered on 05 December 2018 with the Parliament under number 8449-D. See below relevant summary tables in English and Ukrainian.

Draft Law 8449D Summary 2018 12 05 Eng

Draft Law 8449D Summary 2018 12 05 Ukr

Ukrainian version of the Draft Law is available here.

Summary of Alternative Draft Laws on Renewable Energy Auctions

As of 25 June 2018, seven draft laws were registered by the Verkhovna Rada of Ukraine as alternative to the draft law “On Amendments to Certain Laws of Ukraine on the Development of Competitive Electricity Production from Alternative Energy Sources” (reg. No. 8449).

Main differences of the draft law and alternative draft laws are shown in attached files (Ukrainian and English versions).

IMEPOWER Alternative Draft Laws RES Auctions Summary 2018 06 26 Ukr

IMEPOWER Alternative Draft Laws RES Auctions Summary 2018 06 26 Eng

Summary of Draft Law on Renewable Energy Auctions

Draft Law introducing new support system for renewable energy projects in Ukraine has been registered with the Parliament on 07 June 2018 under registration number 8449.

New support system based on auctions will apply to the solar power plants with installed capacity exceeding 10 MW and wind power plants with installed capacity exceeding 20 MW. First auctions will be held in 2020, the Government will approve respective technology-specific quotas and auction conditions by 01 December 2019.

Auctions will be held by the Guaranteed Buyer, state-owned entity being part of new electricity market infrastructure. The Guaranteed Buyer will buy electricity from renewable energy producers under Power Purchase Agreement (PPA) and will compensate the difference between the electricity market price and the auction price via Contract for Difference (CFD). PPA and CFD will have 20 years term. Auction price will be fixed in EUR.

If solar and wind power plants mentioned above secure land titles, grid connection, construction permit and sign pre-PPA by 01 July 2019, they will be able to stay at existing feed-in (green) tariff system that expires at the end of 2029. They will have 3 years from date of pre-PPA signing to commission power plant and receive approval of the feed-in tariff set for the year of commissioning.

Other solar and wind power plants as well as other electricity producers from RES (biomass, biogas, small hydro, etc.) are exempted from auctions and will stay at the current feed-in tariff system unless it is their wish to take part in respective auctions to get 20 years support.

Feed-in tariff for solar power plants commissioned after 01 January 2020 will go down by 30% vs. 10% currently envisaged by the law. No changes in green tariffs for other RES producers compared to effective version of the Law on Alternative Energy Sources.

Detailed summary of the Draft Law is provided below in attached files (Ukrainian and English versions).

IMEPOWER Draft Law RES Auctions Summary 2018 07 06 Ukr

IMEPOWER Draft Law RES Auctions Summary 2018 07 06 Eng

Please contact us at office@imepower.com if you have any questions.

Support scheme for renewables adjusted by the Parliament

The Parliament of Ukraine approved the Law 2010-D this week adjusting the support scheme for renewable power plants. After the President signs the Law, we will publish detailed analysis of the new legislation. The most important change, in our opinion, is abolishment of the local content requirement that used to be a major barrier for development of renewable projects in Ukraine. Below chart shows new feed-in tariffs for various types of renewables…

New Green Tariffs in Ukraine Law 2010-D

USELF program extended by the EBRD

EBRD pledges new funds to promote renewable energy projects in Ukraine

Additional €70 million support for the Ukraine Sustainable Energy Lending Facility

The European Bank for Reconstruction and Development (EBRD) has launched Phase II of the Ukraine Sustainable Energy Lending Facility(USELF) designed to promote renewable energy generation in Ukraine, which is increasingly important for the country’s energy security. Additional funds of €70 million from the EBRD and the Clean Technologies Fund (CTF) will bring total amount of the investment facility to €140 million.

Following strong market demand to the USELF funding, both the EBRD and the CTF have decided to double their original contributions of €70 million made in 2009. The Facility will continue providing loans for projects in small hydropower, wind, solar, biomass and biogas sectors to generate electricity to be sold to the national grid at the agreed “green” tariff. In addition to the financial support, the USELF will again provide free technical assistance, provided by the Swedish International Development Cooperation Agency (SIDA) towards projects’ development.

In the context of the Facility the first non-recourse finance for a small-scale renewable energy project in Ukraine took place.

The USELF has strengthened business environment for private sector renewable energy through policy dialogue, institutional capacity building, and projects preparation. As of today, eight renewable energy projects have been supported through USELF. These include biogas, biomass, small hydro, wind or solar energy projects. Three of the projects have already been commissioned.

USELF Phase II, which has a strong pipeline of projects and a life span of up to 3 years, will continue strengthening sustainability of the renewables sector in Ukraine. This is especially important due to the limited availability of funding for such projects from private banks.

The USELF replicates a well-established EBRD model, which already in place in other countries of Eastern Europe, Central Asia and the Caucasus.

USELF is implemented by Fichtner from Germany and IMEPOWER from Ukraine. Additional information on USELF can be obtained from its website: www.uself.com.ua