Ukraine passes new procedure for establishing “green” tariff

Прослухати онлайн Зупинити   On 30 August 2019, the National Commission for State Regulation of Energy and Public Utilities of Ukraine adopted a resolution approving a new procedure for establishing, reviewing and terminating the “green” tariff for business and household producers of electricity, including energy cooperatives and private homes generating electricity from alternative energy sources. This Resolution will come into force the day after its official publication. At the time of this articles writing (10 September 2019), the Resolution was not published. The aim of the new Procedure is to bring Resolution No. 1421 (dated 2 November 2012) On approval of the Procedure for establishing, reviewing and terminating the “green” tariff for electricity for business entities and private households in compliance with current legislation, and in particular in line with amendments introduced by the Law of Ukraine On Introduction of Certain Changes to Laws of Ukraine regarding Ensuring Competitive Conditions for Generation of Electricity from Alternative Energy Sources, No. 2712-VIII (dated 25 April 2019). Specifically, the Procedure applies to: renewable power producers (RPP) with generating facilities commissioned before 1 January 2020; RPPs with generating facilities commissioned after 1 January 2020 who are not obliged to participate in auctions; RPPs that prior to 31 December 2019 will have executed a power-purchase agreement (Pre-PPA) with the State Enterprise Guaranteed Buyer, and commissioned the power plant or its construction phase within two years after the execution of the Pre-PPA for solar power plants and within three years for other renewable energy technology; and households-producers of electricity from renewable energy sources. Documents to submit According to the Procedure, which simplifies the process for creating the green tariff, it is no longer necessary for RPPs to include with the application a production cost calculation for electricity and an explanation of these costs. The following new documents, however, should be submitted: an overview photo of the power plant (with each phase of construction of the complex noted) in electronic form; the Pre-PPA, containing an obligation of an RPP to build and commission a power generating facility or a phase of its construction: within two years after the date of signing of the Pre-PPA for solar power plants; and within three years after the date of signing of the Pre-PPA for other types of renewable energy technology: for solar power plants commissioned after 31 December 2019 with installed capacity equal or exceeding 1 MW; and for wind power plants commissioned after 31 December 2019 with installed capacity equal to or exceeding 5 MW, or consisting of three or more wind turbines, regardless of installed capacity; and a letter from the State Inspection for Architecture and Construction of Ukraine providing the date and registration number of the respective declaration of readiness of the power generation facility (phase of construction) in each case where there is an absence of an issuance date and registration number in the declaration. Green tariff procedure The Procedure will not include public hearings for the establishment of the “green” tariff, which should sufficiently expedite its establishment. * Change of the power plant owner. Increase of the producing capacity The Procedure will introduce a new process for applying to the National Commission of State Regulation if: the power plant owner changes; the total installed capacity of the generating facility increases (necessitating a review of the amount of “green” tariff in case of reconstruction, technical re-equipment and major repair of its electricity generating facility). In this case the RPP is obliged to report to the National Commission of State Regulation of Energy and Public Utilities of Ukraine within 10 business days after the date of the declaration of readiness of the power generation facility (phase of construction) or certificate confirming that a power generating facility is in compliance with project documentation and ready for operation. Terminating the green tariff The Procedure contains two grounds for terminating the “green” tariff not previously prescribed by the legislation, which includes: failure to submit the application and documents in case of an increase in the total installed capacity of the plants generating facilities; and including false or incorrect information in the application and documents. Authors: Vitaliy Radchenko, Partner, Head of Energy & Projects, CMS Cameron McKenna Nabarro Olswang, [email protected] Maryna Ilchuk, Senior Associate, [email protected] Kateryna Korneliuk , Associate, [email protected] Anna Pogrebna, Partner, Head of Banking & Finance Practice, Kyiv CMS RRH, [email protected] Sergiy Datsiv, Associate, [email protected]