Authorization
On 13 December 2019, the National Energy and Utility Regulatory Commission (“NEURC”) in accordance with the requirements of the Laws of Ukraine “On the Electricity Market” and “On Alternative Energy Sources” adopted a number of resolutions regarding the sale of electricity produced from renewable energy sources (“RES”):
We draw your attention that all RES producers operating under feed-in tariff must sign an additional agreement within 15 business days after receiving it from the SE “Guaranteed Buyer” concerning bringing previously concluded PPAs into line with the new version of PPA. In case of non-provision by the RES producer under feed-in tariff of a signed additional agreement to the SE “Guaranteed Buyer” within one month, it is considered that the RES producer under feed-in tariff has initiated termination of the PPA.
Main amendments to the Order for RES producers are the following:
1.Revised list of documents for conclusion of PPA under feed-in tariff:
a) for RES producers with approved feed-in tariff the list is supplemented with the following documents:
b) for the pre-PPA conclusion the list is supplemented with the following document:
2.Reduced period for conclusion of PPA under feed-in tariff.
The SE ”Guaranteed Buyer” must provide the candidate for RES producers under feed-in tariff with a signed PPA within 10 business days after receipt of all required documents, stipulated by the Order for RES producers. Prior to the amendments, such period was 15 business days.
3.Amended conditions concerning the right of RES producers to resolve disputes in arbitration under the Arbitration Rules of the International Chamber of Commerce (ICC) with the place of arbitration in Paris (France), and introduced contributions to cover arbitration fees of the SE “Guaranteed Buyer”.
According to the amended conditions, disputes may be referred to arbitration under the following conditions:
In case of choosing dispute resolution procedure in arbitration, RES producer shall pay contributions to cover arbitration fees of the SE “Guaranteed Buyer”. The payment of contributions is not required if the RES producer has not chosen arbitration. The Order for RES producers regulates in detail the conditions regarding payments of such contributions.
4. Main amendments to the PPA under feed-in tariff are the following:
а) The PPA under feed-in tariff is supplemented with the obligation of the RES producer under feed-in tariff to notify the SE “Guaranteed Buyer” concerning changes in documents, required for the PPA conclusion, within one day following the occurrence of such changes.
As foreseen in the previous version of PPA, the rights and obligations under the PPA may be transferred to third parties after obtaining written consent of the other party under the PPA. However, the PPA has been supplemented by the list of conditions under which, including, but not exclusively, the SE “Guaranteed Buyer” gives such consent:
It should be noted that the conditions specified in the PPA are not exclusive and therefore other conditions may also apply.
ІІ. The Resolution “On Approval of the Template Power Purchase Agreement Between SE “Guaranteed Buyer” and Legal Entity that has Obtained the Right for a State Support Through Auction (“PPA at auction price”).
In general, the PPA at auction price is identical to the main provisions of the PPA under feed-in tariff. It should be noted that the procedure of conclusion of the PPA at auction price should be regulated by the Procedure for conducting auctions on allocation of support quota that will be approved by the Cabinet of Ministers of Ukraine.
ІІІ. The Resolution “On Approval of the Order on Sale and Accounting of Electricity Produced by Consumers, as well as Settlements for it (“Order for consumers”).
Prior to approval of this Order, the procedure of the activities of consumers has not been regulated. As well as RES producers under feed-in tariff, consumers will sell electricity under feed-in tariff, however, only in volumes exceeding their monthly consumption. Another feature of consumers’ activity is that they do not need to obtain the license for electricity generation.
Public Union “Ukrainian Wind Energy Association” (UWEA) draws attention that the adoption of the above-mentioned normative acts improves the legal position of RES producers. Such improvements concern, in particular, the opportunity to transfer rights under the PPA, which is an important condition in attracting investors for realization of RES projects. Besides, the period for conclusion PPA under feed-in tariff is reduced, and the list of documents for conclusion of PPA under feed-in tariff is now regulated in detail.
The UWEA has actively participated in the preparation of proposals and comments on the above-mentioned normative acts, as well as during their public discussion, protecting the interests of RES producers.
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