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Fuel and Energy

16/ 07/ 2015
  On 14 July 2015, the President of Ukraine signed the Law of Ukraine On Amending Some Laws of Ukraine As to Providing Competitive Conditions for Producing Electricity from Alternative Energy Sources. It happened also thanks to the efforts of the EBA Fuel and Energy Committee. The new law introduces a  mechanism for stimulating alternative energy production in Ukraine. Namely, it cancels the rule of local content. The local content rule was one of the key concepts in the Ukrainian alternative energy sector until recently. It means that a share of equipment or mechanisms of Ukrainian originareused in theconstruction of wind, solar, biogas or other renewable energy power plants. Earlier it was necessary to achieve at least 30% and 50% of local content in alternative energy production. It was a condition for receiving preferential tariff and  selling the produced electricity. However, equipment of national origin could not always satisfy the needs of the market - whether involume or quality. This situation had a tremendously negative influence on the development of alternative energy in Ukraine andtheinvestment attractiveness of the sector. Additionally, it should be noted that the “local content” requirement ran contrarytosome provisions of European Union legislation and international treaties ratified by Ukraine. The Association repeatedly addressed the public authorities regarding a reduction in “local content” or its cancellation in general. A similar position was voiced by experts of the EBA Fuel and Energy Committee during official meetings with other stakeholders. The Association welcomes such changes as they are designed to improve the investment attractiveness of the alternative energy sector in Ukraine in the eyes of existing and potential investors. We would like to thank all member-companies of the Association who contributed to and supported our lobbying efforts and the state authorities for their effective cooperation! Background Law of Ukraine “On Electricity” №575/97-ВР set a minimum local content requirement at 30% for power generating facilities (wind, solar, biomass) commissioned after 1 July 2013, and at 50% for facilities commissioned after 1 July 2014.

On 14 July 2015, the President of Ukraine signed the Law of Ukraine “On Amending Some Laws of Ukraine As to Providing Competitive Conditions for Producing Electricity from Alternative Energy Sources”. It happened also thanks to the efforts of the EBA Fuel and Energy Committee. The new law introduces a  mechanism for stimulating alternative energy production in Ukraine. Namely, it cancels the rule of “local content”.

The local content rule was one of the key concepts in the Ukrainian alternative energy sector until recently. It means that a share of equipment or mechanisms of Ukrainian originareused in theconstruction of wind, solar, biogas or other renewable energy power plants.

Earlier it was necessary to achieve at least 30% and 50% of local content in alternative energy production. It was a condition for receiving preferential tariff and  selling the produced electricity. However, equipment of national origin could not always satisfy the needs of the market – whether involume or quality. This situation had a tremendously negative influence on the development of alternative energy in Ukraine andtheinvestment attractiveness of the sector.

Additionally, it should be noted that the “local content” requirement ran contrarytosome provisions of European Union legislation and international treaties ratified by Ukraine.

The Association repeatedly addressed the public authorities regarding a reduction in “local content” or its cancellation in general. A similar position was voiced by experts of the EBA Fuel and Energy Committee during official meetings with other stakeholders.

The Association welcomes such changes as they are designed to improve the investment attractiveness of the alternative energy sector in Ukraine in the eyes of existing and potential investors.

We would like to thank all member-companies of the Association who contributed to and supported our lobbying efforts and the state authorities for their effective cooperation!

Background

Law of Ukraine “On Electricity” №575/97-ВР set a minimum local content requirement at 30% for power generating facilities (wind, solar, biomass) commissioned after 1 July 2013, and at 50% for facilities commissioned after 1 July 2014.

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