Following the energy regulator presenting its RES auction design at the beginning of March, the parliamentary committee on the fuel and energy complex held the round table on 13 March where it presented its own concept of RES auctions for public discussion. This is based on the quota principle, unlike the one-stop-shop approach proposed by the energy regulator. For more information on the regulator's approach please click here.

The annual quotas for power production will be defined by the government upon the submission of the Ministry of energy and coal industry following consultations with the electricity transmission system operator (Ukrenergo). The role of the TSO in the support mechanism will thus be enhanced in order to better manage the already discernible constraints related to the RES integration in the power system.

The term of PPAs will be 15 years, compared 15-20 years previously proposed by the regulator.

Similarly to the regulator's concept, auctions will be required for wind power plants with over 10 MW, and for solar power plants with over 5 MW, of installed capacity. Auctions will be optional for power production plants with smaller installed capacity; these can opt for either the feed-in tariff or auctions.

An auction price should not exceed the feed-in tariff as of the auction date. Contracts for difference (CfDs) will be introduced to help producers manage market price fluctuations.

The committee has also presented other points for discussion set out below. To read all points in Ukrainian, and for contact details for the submission of comments please click here.

  • No retroactive changes in law.
  • A pre-PPA should be concluded under the laws effective as of the date of an agreement.
  • Pre-PPAs should allow certain time periods for projects to be completed in order to be eligible for the FiT: 3 years for wind power projects, and 2 years for solar power projects.
  • The regulator should not establish the feed-in tariff by a separate resolution (as is presently the case), and PPAs will just reflect the feed-in tariff as per the formula set out in the law.
  • Public hearings will not be necessary for the establishment of the feed-in tariff.
  • A bidder will be required to provide a bank guarantee for the participation in an auction (20% of the cost of the estimated average annual sale of electricity of the starting price at an auction).
  • The full responsibility for imbalances will be implemented after the introduction of the fully liquid intraday market. The intraday market will be deemed to become fully liquid one year following its launch (under the Electricity Market Law, the new electricity market design is scheduled to be launched from 1 July 2019). For its part, during the round table, Ukrenergo pledged to prepare a report on How much "green" generation may be integrated into the Ukrainian power system.
  • The feed-in tariff is to decrease by 30% for solar, and by 10% for wind, beginning from 1 January 2019.
  • The implementation date is scheduled for 1 January 2019 (while under the regulator's approach the implementation is scheduled beginning from 1 January 2020, with certain pilot projects, e.g. in Chornobyl, carried out in 2019).

Under the above concept, there will be no changes for the renewable energy sources other than solar and wind.

This is a provisional concept, and it may be changed following the public discussions. Once streamlined, it will serve as the basis for developing the relevant draft law regarding the introduction of competitive instruments in the RES sector.

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