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…
EBRD will provide EUR 4.2 million to Ecoprod agri company based in Donetsk region for the construction of 1.5 MW biogas facility. EBRD will provide financing of EUR 3.1 million for 7 years, while the Clean Technology Fund will provide another EUR 1.1 million for 15 years.
Ecoprod’s facility will be able to produce 5.8 million cubic meterso of biogas per year that will be used for production of electricity (that will be sold to the wholesale electricity market at the green tariff) and heat (that will be used for own needs of the company). The overall cost of the project is EUR 6 million with 5 years estimated as investment payback period.
This is the first biogas project financed under USELF program. According to EBRD, EUR 40 million from the first tranche of USELF financing were already used for financing small and medium size renewable projects in Ukraine. Remaining EUR 30 million should be spent before the end of 2013 – current plan is to finance 5-6 more projects, including biomass, biogas, small hydro and solar projects. There are plans to extend USELF program and increase its volume by another EUR 70 million coming from EBRD and the CTF in the nearest year.
Official EBRD press release – http://www.ebrd.com/pages/news/press/2013/130606a.shtml (in English) and http://www.ebrd.com/pages/news/press/2013/130606b.shtml (in Russian)
Alexey Romanov, Director of IMEPOWER, made a presentation about current status and prospects of the renewable energy sector in Ukraine at the workshop organized in the framework of EBRD’s USELF program for representatives of local banks and leasing companies.
(Please note that we will expand below analysis in the coming days to provide more information on the “fixed shares” of the “local content”)
On 20 November 2012 the Parliament of Ukraine has adopted the Law “On Introducing Changes to the Law of Ukraine “On the Electricity Sector” (regarding promotion of electricity production from renewable energy sources), registration number 10183 (hereinafter referred to as “the Law 10183”). The Law was signed by the President on 29 November 2012.
The Law 10183 provides for a number of significant changes to the incentive system for renewable power plants, including:
1) Adjustment of the green tariff values for renewable power plants commissioned in different periods (up to 2030) depending on the date of their commissioning. Respective green tariffs rates are provided in the table below. Special attention should be paid to reduction of green tariffs for solar PV facilities;
2) Differentiation of hydro power plants to micro (installed capacity not exceeding 0.2 MW), mini (installed capacity between 0.2 and 1 MW) and small (installed capacity between 1 and 10 MW);
3) Introducing green tariffs for the electricity (i) produced from biogas and (ii) produced from energy of solar irradiation by electricity facilities installed on the roofs and/or facades of private households with the capacity not exceeding 10 kW;
4) Expending the term “biomass” to the 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 green tariff (that is currently eligible only for vegetative origin wastes);
5) According to the Law 10183 the “local content” means a share of components of electricity facility (elements of the local content) of the Ukrainian origin used for construction of electricity facility and applies to electricity facilities, the construction of which has started after 01 January 2012. The Law 10183 designates “fixed share” (percentage) for specific element of the local content for wind, solar, biomass and biogas power plants. “Local content” requirement does not apply to hydro power plants and electricity facilities installed on the roofs and/or frontages of private households;
6) To be eligible for the green tariff, “local content” for electricity facilities producing electricity from the energy of wind, solar and biomass commissioned before 01 July 2013 should be no less than 15%, after 01 July 2013 – no less than 30% and after 01 July 2014 – no less than 50%. The Law 10183 has removed additional requirement for local content in the solar modules, while to some extent this was replaced by above mentioned “fixed shares”;
“Local content” for electricity facilities producing electricity from biogas and commissioned after 01 January 2014 should be no less than 30% and for the facilities commissioned after 01 January 2015 – no less than 50%;
7) Possibility to have approval of the green tariff for each “launch stage (complex)” of electricity facility if construction is performed in stages.
The Law 10183 shall enter into force starting from 01 April 2013, except for: (i) provisions on the local content requirement, which shall enter into force starting from 01 July 2013; till then for the renewable energy facilities commissioned before 01 July 2013 the “local content” should be no less than 15%; (ii) provisions introducing green tariff for electricity produced from solar energy by electricity facilities installed on the roofs and/or facades of private households that shall enter into force on 01 January 2014.
Table 1. New Green Tariff Rates Effective as of 01 April 2013
|Categories of Electricity Entitled for the Green Tariffs||Green Tariffs for the Facilities Commissioned Within the Period, EUR per MWh|
|up to and including 31 March 2013||From 01 April 2013 through 31 December 2014||From 01 January 2015 through 31 December 2019||From 01 January 2020 through 31 December 2024||From 01 January 2025 through 31 December 2029|
|Electricity produced from wind energy by electricity facilities with the installed capacity not exceeding 600 kW||64.6||–||–||–||–|
|Electricity produced from wind energy by electricity facilities with the installed capacity higher than 600 kW but not exceeding 2,000 kW||75.4||–||–||–||–|
|Electricity produced from wind energy by electricity facilities with the installed capacity exceeding 2,000 kW||113.1||–||–||–||–|
|Electricity produced from wind energy by the wind power plants consisting of the wind units with single installed capacity not exceeding 600 kW||–||64.6||58.2||51.7||45.2|
|Electricity produced from wind energy by the wind power plants consisting of the wind units with single installed capacity of more than 600 kW but not exceeding 2,000 kW||–||75.4||67.9||60.3||52.8|
|Electricity produced from wind energy by the wind power plants consisting of the wind units with single installed capacity exceeding 2,000 kW||–||113.1||101.8||90.5||79.2|
|Electricity produced from biomass||123.9||123.9||111.5||99.1||86.7|
|Electricity produced from biogas||–||123.9||111.5||99.1||86.7|
|Electricity produced from the energy of solar irradiation by ground-mounted electricity facilities||465.3||339.3||305.3||271.4||237.5|
|Electricity produced from the energy of solar irradiation by electricity facilities installed (mounted) on roofs or at facades of buildings, constructions or facilities with the installed capacity exceeding 100 kW||445.9||348.9||314.1||279.2||244.3|
|Electricity produced from the energy of solar irradiation by electricity facilities installed (mounted) on roofs or at facades of buildings, constructions or facilities with the installed capacity not exceeding 100 kW||426.5||358.6||322.8||286.9||251.0|
|Electricity produced from the energy of solar irradiation by electricity facilities installed (mounted) on roofs or at facades of private households (buildings, constructions or facilities) with the installed capacity not exceeding 10 kW||–||358.6||322.8||286.9||251.0|
|Electricity produced by micro hydro power plants||116.3||193.9||174.5||155.1||135.7|
|Electricity produced by mini hydro power plants||116.3||155.1||139.6||124.1||108.6|
|Electricity produced by small hydro power plants||116.3||116.3||104.7||93.1||81.4|