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The Regulator Publishes Draft Methodology for Electricity Curtailments Compensation

On 23 September 2020 the National Energy and Utilities Regulatory Commission of Ukraine (NEURC) approved for public discussion the draft Resolution on amendments to the Market Rules (the "Draft Resolution"). The Draft Resolution is opened to comments and suggestions from individuals and legal entities, their associations and other interested parties until 12 October 2020 inclusively.

The Draft Resolution determines the methodology of compensation by the transmission system operator (TSO or Ukrenergo) for the unsold electricity that should be generated by RES producers, which sell electricity based on "green" tariff or at the auction price, in case the dispatcher curtails the generation in accordance with the Law of Ukraine "On Electricity Market".

The Draft Resolution introduces the following:

  • compensation account for unreleased electricity named A-I; 
  • calculation of compensation for the curtailed electricity generated by RES producers; and
  • calculation of the fee for electricity generation for non-execution of Ukrenergo commands.

The compensation account for unreleased electricity A-I is created by the settlement administrator, i.e. Ukrenergo for compensation of the curtailed renewable energy electricity. The income sources for this account are (i) a part of TSO tariff for the transmission services; and (ii) non-compliance fees paid by the companies failed to execute the Ukrenergo's commands on curtailment.

The Draft Resolution determines two methods for calculation of the unreleased electricity as follows.

Reference method

This method foresees isolating one or more generating units (inverters, wind turbines) as a reference for which the separate commercial accounting will be made. For the calculation of electricity of the entire station, the reference data will be applicable to all generating units.

Calculation method

The calculation method uses only the generation of the station for previous periods (in the same hours in which the curtailment applies, as the average value for 5 days before the curtailment) of generation.

The calculation method is used only in cases when it is not possible to perform the calculation by the reference method.

The non-compliance fee is the amount which should be paid by the RES producer in case the RES producer (i) does not comply with Ukrenergo's command to curtail the electricity production or (ii) complies with Ukrenergo's command not in full: the amount of the produced electricity by the RES producer is 10 per cent more than the amount calculated by Ukrenergo within its command.

The amount of fee takes into account a number of the following data:

  • coefficient of increase of payment for non-compliance with performance command manager, which is equal to 1.05;
  • estimated amount of electricity that should be produced by RES producer during the TSO command; and
  • "green" tariff or auction price applicable.

For further information, please contact Asters' partner Yaroslav Petrov and associate Olena Sichkovska.

 

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