On 15 February 2022, the Parliament of Ukraine adopted Law "On Amendments to Certain Laws of Ukraine on the Development of Energy Storage Facilities" No. 5436-d of 17 September 2021 (the "Law").
The President of Ukraine signed the Law on 18 April 2022.
What are energy storage facilities, and what are they used for?
Energy storage facilities are electrical equipment designed to store electricity indefinitely. These facilities can allow balancing the load curve at power plants and grids, and can allow optimizing the production of electricity from alternative sources, the curve of which directly depends on weather conditions. A prerequisite for the use of energy storage facilities is the establishment of separate commercial accounting for such facilities.
How does the Law propose to regulate energy storage activities?
Energy storage activities involve the accumulation of electricity to postpone its end use for a time later than when it was produced, with its subsequent release to the transmission system, distribution system, power plant grids or consumer grids.
Users of energy storage facilities are subject to licensing, except when:
- the producer uses the storage facility for its generating units within the capacity established by its licence for the production of electricity;
- the energy storage facilities are used by the end consumer; and
- providing electric vehicles charging services.
Who is the energy storage operator?
The Law introduces a new market player – energy storage operator, which can be a legal entity, an individual, or a sole proprietor.
Such an operator provides the services of storage of electricity for sale from the storage facility and/or for the provision of ancillary or balancing services.
The storage operator is prohibited from the following:
- providing the services of transmission and distribution of electricity and services of transportation and distribution of natural gas, except as provided by the Law; and
- acting as market operator and guaranteed buyer.
At the same time, the energy storage operator will pay a fee for the electricity transmission and distribution services, a fee for services of dispatching (operational and technological) control, which is calculated as the difference between monthly usage and monthly supply of electricity by the energy storage facilities, based on the established tariffs.
For further information, please contact Partner Yaroslav Petrov or Associates Olena Sichkovska-Chornobyl and Kateryna Andarak.
