On 13 March 2018 there was a round table “Introduction of Competitive Instruments for Acquisition of Green” Energy in Ukraine”. As a result of the round table a chairman of the Electricity Subcommittee of Committee of Issues of Fuel and Power Sector and Nuclear Policy and Safety Lev Pidlesetksky published the Concept of Introduction of Competitive Mechanisms of Price Formation for Electricity from RES in Form of Thesis (the “Concept”), available in Ukrainian at http://kompek.rada.gov.ua/print/73485.html. Proposals to the Concept are expected until 23 March 2018. The Concept and respective proposals shall be a ground for further discussion of respective legislative changes.
The key ideas of the Concept are as follows:
Most of changes caused negative reaction of market players and stakeholders, in particular, early decrease in “green” tariff, introduction of full liability for imbalances, too short period for implementation of projects under PrePPAs, absence of specific lots for tenders as well as too low thresholds for auctions. Thus, the Concept does not appear to be accepted by stakeholders and its implementation as is quite doubtful.
Please note that on 19 March 2018 there were discussions of auction system for RES at the Ukrainian Regulator. The Regulator’s approach is expressed at its web-site in Ukrainian at http://www.nerc.gov.ua/?news=7371. The key differences in the Regulator’s approach with the Concept are:
It appears that “one stop shopping” approach suggested by the Regulator looks better than one suggested in the Concept because investors will get ready to build or almost ready to build projects. However, it is unlikely that in the nearest future state authorities would become capable to develop high quality sites which would satisfy requirements of investors and financial institutions. Thus, the implementation of this approach will take a considerable amount of time
Market players agree that gradual transfer to auction system for RES support and reduction of “green” tariff are inevitable due to world trends. However, it should occur not earlier than 2020, thresholds for auctions shall be higher, there should be lots of ready to build sites and there should be high qualified state agency responsible for their development as well as all rights of current developers shall be protected. The Ukrainian government should abstain from any legislative changes which should negatively impact climate for RES in Ukraine, such as full implementation of liability for imbalances for RES.
By Maksym Sysoiev, Dentons