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Business asks not to change the existing model of the electricity market

02/ 05/ 2022
  From 2014 to the first quarter of 2020, thanks to favourable investment conditions and an attractive model of support for the renewable energy sector, more than 6.1 billion euros of investment was attracted. The total investment of international companies is estimated at 2.5 billion euros, while domestic investment is 3.6 billion euros. At the same time, the Ministry of Energy of Ukraine adopted Order №140 On settlements in the electricity market of March 2022 which led to the reduction of money inflow to RES producers (solar and wind) from SE Guaranteed Buyer by 30-40% less than expectations, namely, due to a significant amount of restrictions from PJSC NEC Ukrenergo. The European Business Association requests the Government and the Verkhovna Rada refrain from any further legislative and regulatory initiatives aimed at changing the existing electricity market model. These changes include the reduction of the green tariff, the obligation to purchase all RES electricity under the green tariff, changes to the procedure for its payment, the compensation of economically justified costs of SE Guaranteed Buyer to perform special obligations for the purchase of electricity under the green tariff. Meanwhile, the energy community proposes to amend Order №140 to provide for the establishment of a minimum amount that SE Guaranteed Buyer is obliged to pay the producers of solar and wind energy. The EBA experts calculated that the amount to be paid to the solar energy producers should be 15% of the average size of the green tariff for 2021, but not less than 458 million UAH per month. For producers of energy from the wind it is 16% of the average size of the green tariff for 2021, but not less than 236 million UAH per month. The business community is convinced that the implementation of the proposed initiative will consider the number of restrictions needed to balance the unified energy system of Ukraine in making payments and will save the solar and wind energy producers from going bankrupt. 

From 2014 to the first quarter of 2020, thanks to favourable investment conditions and an attractive model of support for the renewable energy sector, more than 6.1 billion euros of investment was attracted. The total investment of international companies is estimated at 2.5 billion euros, while domestic investment is 3.6 billion euros.

At the same time, the Ministry of Energy of Ukraine adopted Order №140 “On settlements in the electricity market” of March 2022 which led to the reduction of money inflow to RES producers (solar and wind) from SE “Guaranteed Buyer” by 30-40% less than expectations, namely, due to a significant amount of restrictions from PJSC NEC “Ukrenergo”.

The European Business Association requests the Government and the Verkhovna Rada refrain from any further legislative and regulatory initiatives aimed at changing the existing electricity market model. These changes include the reduction of the “green” tariff, the obligation to purchase all RES electricity under the “green” tariff, changes to the procedure for its payment, the compensation of economically justified costs of SE “Guaranteed Buyer” to perform special obligations for the purchase of electricity under the “green” tariff.

Meanwhile, the energy community proposes to amend Order №140 to provide for the establishment of a minimum amount that SE “Guaranteed Buyer” is obliged to pay the producers of solar and wind energy.

The EBA experts calculated that the amount to be paid to the solar energy producers should be 15% of the average size of the “green tariff for 2021, but not less than 458 million UAH per month. For producers of energy from the wind it is 16% of the average size of the “green” tariff for 2021, but not less than 236 million UAH per month.

The business community is convinced that the implementation of the proposed initiative will consider the number of restrictions needed to balance the unified energy system of Ukraine in making payments and will save the solar and wind energy producers from going bankrupt. 

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