The Solar Energy Market Players Statement

Association of Solar Energy of Ukraine (ASEU) held a press conference on the topic “Solar energy market in Ukraine. Legislative changes expected in 2020? Thoughts of market players” at the press center of the news agency Interfax-Ukraine on Tuesday, November 19.

CEO and founder of Avenston LLC Dmytro Lukomskyi, CEO of ASEU Artem Semenishin and other significant industry players made an important statement and clarified the consequences of retrospective changes in Ukrainian legislation of support alternative energy.

Participants: CEO of ASEU Artem Semenishin; CEO and founder of Avenston LLC Dmytro Lukomskyi; Senior Partner of Sokolovsky and Partners Law Firm Tatyana Lysovets; Advisor on work with foreign companies in EDS Engineering Sergey Green; Business Development Director of KNESS Group Evgeny Didichenko.

The Ukrainian Solar Energy Association warns that reckless additional reductions of the “green” tariff may lead to court trials with investors, who have already invested in the “green” generation, and stop the entire renewable energy field.

“State support for the development of solar energy around the world is a key mechanism for stimulating it. There are two ways of government support. The first is the “green” tariff; the second is support in the form of the auctions. Our task is to establish clear rules for the game for several years in the form of a specific renewable energy development strategy. The objectives of the existing energy development strategy until 2035 are not ambitious enough. This is evidenced by many experts in the energy community.”CEO of ASEU Artem Semenishin pointed.

Also, Artem Semenishin stressed that according to the IRENA report, which will be published within a few months, the Ukraine solar industry potential, which has at least 15 GW of solar power, can be realized within 10 years under conditions of high-quality state support.

“My colleagues and I have a common goal to develop green generation and shape the future for future generations. We speak on behalf of the Association of Solar Energy of Ukraine and understand that the harmonious development of renewable energy is possible with the cooperation of all its types. If you look at the forecasts of other countries, by 2050 the share of sun and wind in the energy generation market will average 50%. Such trends are inevitable. We strive for quite ambitious goals, but there are problems of a technical and economic nature. Besides, talking about retrospective changes to legislation is very painful for investors, as investors around the world are very sensitive to such news. Therefore, we support the Association’s efforts to cope with those problems.”CEO of Avenston LLC Dmytro Lukomskyi said.

The meeting resulted in a memorandum that the participants sent to the Prime Minister of Ukraine. Evgeny Didichenko, Business Development Director of KNESS Group, in his speech formulated the key provisions of this memorandum:

• Removing price restrictions – all consumers must pay the market price for electricity;
• The abandonment of the existing PSO system;
• Launch of ancillary services market;
• Increased CO2 tax;
• Market methods for determining tariffs;
• Development of a vision, strategy, and doctrine for the development of energy in Ukraine;
• Promotion of climate change issues.

“The PPA mechanism (electricity purchase and sale agreement) is now legally valid for two years. We are against the reduction of this period of validity. Since, according to our forecasts, most new investors will monitor how auctions work, but they will be built at the “green” tariff through the PPA system. From realities, the life cycle of projects preparing to attract investment is delayed for more than a year. Therefore, the two-year norm, which is laid down in the PPA, is economically justified. If it is canceled, our market will stop.”Dmytro Lukomskyi emphasized.

Sergey Green, adviser on working with foreign companies in EDS Engineering LLC, focused on how foreign investors assess potential changes in Ukrainian legislation and why precisely such changes can negatively affect market development: “Large investors have already invested about 8 billion euros in solar energy in Ukraine. Now they are “frozen” in the “standby” mode due to the likelihood that the Ukrainian government will change the “rules of the game.”

Senior Partner of Sokolovsky and Partners Law Firm Tatyana Lysovets warned of the inevitability of lawsuits between energy companies and authorities in case of a retrospective review of the green tariff.

See the full video version with interesting questions from journalists here: