The Ukrainian Parliament takes the first step towards improving competitive conditions for electricity generation from renewable sources
On 21 August 2025, the Parliament of Ukraine adopted a draft law No. 13219 as a basis, which proposes to improve competitive conditions for electricity production from alternative energy sources. The document aims to reform the auction model for supporting green electricity producers, which was introduced in 2019 and will come into effect in 2024 as an alternative to the green tariff.
What does the draft law propose?
The main amendments concern:
- extending the auction model until 31 December 2034
- postponing the introduction of contracts for difference (where, if the market price exceeds the auction price, the producer returns the difference to the guaranteed buyer) until auctions held after December 31, 2029
- introducing financial security as an additional alternative to a bank guarantee for participation in auctions
- reducing the financial burden on auction participants: the amount of the bank guarantee or financial security for participation is reduced to EUR 5,000/MW, and for concluding an agreement – to EUR 10,000/MW
- introduction of a permissible deviation of the actual installed capacity of the facility within 10% of the capacity for which the auction winner has acquired the right to support
- the obligation of the auction winner to build, commission, and connect the facility or its phases to the grid within 18 months for solar power plants (36 months during martial law) and 42 months for other RES
- reduction of the term of validity of the guarantee of origin of electricity produced from renewable energy sources from 18 to 12 months
- improving the mechanism for the circulation and recognition of guarantees of origin of electricity from RES, including for mutual recognition with the EU
- ensuring the possibility of connecting energy storage facilities through the cable pooling mechanism
- reducing the minimum annual support quota to:
- no less than 5% for solar power plants
- no less than 10% for solar power plants with storage facilities (whose capacity is at least 80% of the capacity of the solar power plant, and whose capacity is no less than 2 kWh per 1 kW)
- no less than 5% for wind power plants
- no less than 5% for other sources (except wind, solar, blast furnace and coke oven gases, and for hydropower – only micro, mini, and small hydropower plants)
Noteworthy that the annual support quota is the amount of renewable energy capacity that the state plans to auction off during the year so that producers can obtain the right to state support.
Why is this important?
The draft law was developed with the aim of increasing the investment attractiveness of the industry and removing identified barriers to participation, particularly high financial requirements and insufficient flexibility of auction procedures. The adoption of the document aims to adapt the support model to the requirements of the European Commission and contribute to the achievement of Ukraine's strategic goals in the field of RES development, as set out in the National Energy and Climate Plan until 2030, in particular, the achievement of 29.4% RES in gross final electricity consumption.
We would like to remind you that since 2024, green auctions have shown low investor activity, with only one auction being successful in 2024 (0.9 MW of small hydropower plants).
In 2025, the first three auctions (for 33 MW of solar power plants, 100 MW of wind power plants, and 47 MW of other renewable energy sources) were not held due to a lack of participants. Only the last auction, with a quota of 150 MW for WPPs, was successful. According to its results, DTEK Tiligulskaya WPP LLC will acquire the right to state support for 120 MW (80% of the total quota).
What's next?
The draft law has already been adopted as a basis, and now it's time for public consultations, further consideration by the Parliament, and final approval with the President's signature. The final text may undergo amendments, but we'll keep following the legislative process.
For further information, please contact Asters' Partner Yaroslav Petrov.
