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

Presentation on renewables at USELF workshop

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.

File with the presentation in Russian is available here. English version can be downloaded here

Amendments Adjusting Green Tariff System Approved to the Electricity Law (Law № 10183)

(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

Source: IMEPOWER