A Cloudy Future of Ukraine’s PV industry

Dmytro Lukomskyi’s CEO AVENSTON’s column on the Ukrainian business review “Economic Truth” is about solar energy industry critical questions and the market analysis from the real business sector point of view. The column content is always useful, relevant and proficient, enhanced by own experience and deep knowledge of the market, its trends and problems.

Talking points

The rapid development of RES in recent years is caused by the implementation of the special stimulation sector development program “Energy Strategy of Ukraine till 2035”, which has increased the share of RES in the energy balance of our country to 3.7%, which is in monetary terms more than 8%.

One of the highest in European Union Ukrainian green tariff (10-15 euro cents per W) and state commitments to buy all of the “green” electricity has contributed to a rapid increase in capacity of renewable energy facilities in Ukraine: a three-time higher in the first three quarters of 2019 compared to 2018.

However, such large volumes of RES generation and the lack of sufficient high maneuverability have led to a lack of power system reserves to maintain its sustainability.

This provoked changes in the rules of functioning of the RES market: the introduction of state support quotas for the generation types and other irreconcilable contradictions, worsened with the emotional statements of officials, which poisoned the industry atmosphere.

The market players are ready to react in response to possible violations of Ukraine’s international PPA commitments and have declared their readiness to defend their rights in international investment arbitration.

Despite the possibility of such changes, the market keeps moving to the “green” capacity share increase. However, it is obvious that the new RES-trends in the development of certain areas will take place. For example, the PV generation market is expected to be divided into the following four sectors:

  • high capacity projects that will be operated under the new state support system with its auctions and quotas;
  • projects of any capacity where investors have already received a preliminary contract for the purchase and sale of electricity (pre-PPA) in 2019;
  • projects up to 1 MW, where investors will be able to sell electricity at a reduced 25% FiT;
  • private domestic PV power plants up to 50 kW, which have a simplified connection procedure.

Read more in Dmytro Lukomskyi column “Cloudy Future for Solar Power Plants in Ukraine” on the business resource “Economic Truth”

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