Authorization
On June 4, 2015, the Ukrainian parliament adopted Draft Law on Introduction of Changes to Certain Laws of Ukraine with respect to Securing Competitive Conditions for Production of Electricity from Alternative Energy Sources, No. 2010-d of 19.05.2015 (the “Law”). The Law, which contains various changes to the current feed-in tariff regime in Ukraine, is a milestone for a sector that has stagnated for last several years due to several legislative barriers, such as a problematic local content requirement, a restrictive definition of biomass, unbalanced tariffs for various types of renewables, etc.
On July 14, 2015 the President of Ukraine signed the law, on July 15 it was officially published and entered into force under the number of 514-VIII on the date following the date of its official publication.
The Law contains the following changes:
1. Both products and waste will be considered as biomass for the purpose of qualifying for the feed-in tariff or “green” tariff (“GT”). Currently, only waste qualifies, whereas energy crops and products of other industries do not.
2. As a general rule, GT will cover electricity produced by a power plant minus electricity consumed by a power plant for its operation while currently all output of a power plant shall be purchased at GT. For households, only the difference between electricity produced and electricity consumed by a respective household will be purchased at GT.
3. Households will be eligible for GT if the total power capacity of their installations using solar and/or wind energy do not exceed 30 kW but not more than the power capacity allowed under their power purchase agreements with grid distributors. As of today, only households with solar installations up to 10 kW may qualify for the GT.
4. Application of a peak time coefficient for GT is cancelled.
In general, rates of GT will be calculated under the following formula provided by Article 17-1 of Law of Ukraine “On Electric Power Industry”:
GTR = RP×C,
where
GTR: rate of GT depending on the alternative energy source, date the power plant was commissioned, power capacity of the power plant and other factors,
RP: retail price for electricity for 2nd class consumers as of January 2009, established in accordance with Resolution of National Energy Regulation Commission No.1440 of 23.12.2008 converted at the applicable NBU exchange rate in EUR,
C: coefficient established by Article 17-1 of Power Industry Law.
Table 1 below contains information about GT for newly installed power plants or their lines (starting with 2015) with their decrease depending on the date of power plants commissioning in a table below (in EUR per kWh). In general, the rates for solar will be decreased considerably in comparison with the effective regulation while there will be a new tariff for geothermal energy.
Table 1 Rates of GT, in EUR per kWh
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