Authorization
On October 15, 2019, a round table “NEW CHALLENGES FOR UKRAINIAN RENEWABLE ENERGY IN CASE OF THE CHANGE OF TERMS OF STATE SUPPORT” was held in Kyiv, organized by the Ukrainian Renewable Energy Association. The partner of the event was the Ukrainian Wind Energy Association.
The event was aimed at experience exchange, discussions on ways of improving the long-term sustainability of the renewable energy industry and preventing a situation of crisis in the RE market of Ukraine.
International energy experts, Ukrainian MPs, representatives of Ukrainian and international banks, market stakeholders, attended the event.
Ekaterina Poseidon, Analyst from Bloomberg New Energy Finance noted: “Global experience shows a sharp decline in investor confidence in the renewable energy industry in the countries which have introduced retrospective changes in government support. Over the past 18 months, the Ukrainian renewable energy market has undergone rapid development and a transparent and stable policy will ensure the stability of this trend”.
Andriy Gerus, Chairman of the Verkhovna Rada Committee on Energy and Housing and Public Utilities, commenting on the situation assured all participants that he personally was against any retrospective reduction of “Green” tariff and that during “the next week or two no relevant draft laws will be registered with the Parliament”.
Legal conclusions related to the suspension of payments to RE investors by the state were presented at the round table by Vitaliy Radchenko, Partner (energy and projects) at CMS Cameron McKenna Nabarro Olswang: “The expected investor response to the breach of its international obligations by Ukraine is the multi-million-dollar lawsuits to international investment arbitration, including large expenses for the representation of the interests of the state in the court, compensations to investors based on the results of investment disputes and the seizure of property in jurisdictions where such state has a property”.
Olga Yeriomina, Senior Banker, EBRD, informed: “EBRD is considering providing Ukraine with a longer financing program to support the development of renewable energy within the framework of the “green” auctions planned for launch in 2020. This will be a new program and hope to allocate large volumes of funds for auctions, although it will depend on what quotas for supporting various types of renewable energy sources within the framework of the auctions will be determined by the Ukrainian side” .
Clean Energy Lab Analyst Aleksey Mykhailenko presented a financial assessment of the impact of renewable energy sources on the electricity market, highlighted the economic consequences and risks of changing conditions for supporting renewable energy sources. He noted, “a retrospective review of “green” tariffs could lead to a cascade of negative macroeconomic effects that offset any short-term savings. Reduction of electricity prices should be considered in a complex where renewable energy is part of the market and plays an important role in updating the sector. In fact, “green” tariffs are investments in increasing competition in the market. The current state aid to RE in Ukraine is not a predominant factor which impact the final price of electricity - and is unlikely to exceed 10% in subsequent years”.
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