The Ukrainian Government approves SE Guaranteed Buyer to sell renewable energy electricity at auctions under bilateral contracts

On 28 September 2020 the Cabinet of Ministers adopted the resolution "On Amendments to Procedure for Conducting Electronic Auctions for the Sale of Electricity under Bilateral Agreements" (the "Resolution") which allowed SE Guaranteed Buyer to sell electricity received from renewable energy producers (RES producers) at special auctions under bilateral agreements.

The Resolution defines the procedure for conducting electronic auctions for the sale of electricity produced from renewable energy sources by SE Guaranteed Buyer, including the terms and volumes of electricity supply.

The key amendments implemented by the Resolution are as follows:

  • providing SE Guaranteed Buyer with the right to sell renewable energy electricity under bilateral agreements on terms that will not lead to an increase in the TSO transmission tariff;
  • reduction of electricity sale purchase volume at the "day ahead" market and stabilization of pricing in this market segment;
  • reduction of the amount of electricity that SE Guaranteed Buyer is forced to sell on the balancing market with a significant discount and several months of payment delay; and
  • improving the level of settlements with producers at the "green" tariff.

According to the Resolution, the RES electricity will be sold by SE Guaranteed Buyer within the special session. The special sessions are organized thrice per month: before 1st, 8th and 18th day of the settlement month.

The amounts of the RES electricity to be sold at the special sessions depends on the volume of electricity production from alternative sources in the settlement month approved by the Forecast balance of electricity of the Unified Energy System of Ukraine and should be no more than 90 percent of the RES electricity produced in the settlement month. Upon the special sessions results, the auction organizer issues the auction certificates based on which SE Guaranteed Buyer and buyers enter into the bilateral contracts for the purchase and sale of electricity.

To implement the Resolution, the Ministry of Energy will hold an auction committee to make appropriate changes to the regulations.

As provided by the Acting Minister of Energy of Ukraine Olha Buslavets, this is one of the non-tariff methods of resolving the crisis that has arisen in the renewable energy market. The Ministry expects that this resolution will increase the level of payments for renewable energy electricity.

At the same time on 30 September 2020 during the meeting of the Committee on Energy and Housing and Communal Services of Verkhovna Rada of Ukraine Mrs. Buslavets also noted that 11.5 billion hryvnias from the state budget are appointed proposes to provide 11.5 billion hryvnias to cover the 20% of compensation provided by a guaranteed buyer in the electricity market for the RES electricity generation of "green" energy. in the amount of 20%.

The Resolution is adopted for implementation of the Law of Ukraine on modification of some laws of Ukraine concerning improvement of conditions of support of production of electric energy from alternative energy sources No. 810-IX dated 21 July 2020.

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



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