Ukraine elaborates new stimuli for renewable energy

On 19 April 2018, Ukraine's Parliamentary Committee on Fuel and Energy Complex, Nuclear Policy and Nuclear Safety (the "Committee") held a round table to discuss its updated Concept on renewable energy sources ("RES") auctions. The initial concept was presented earlier in March (please see the link to the updated Concept).

The Committee proposes to enact the auction system as of 1 July 2019 simultaneously with the start of the new electricity market.

The updated Concept anticipates auctioning of state and special (e.g. Chornobyl project) quotas for wind and solar power. The Concept sets the ceiling price of 1 MW equivalent of the "green" tariff as stipulated by the Law of Ukraine "On Electricity Market" dated 13 April 2017 No. 2019-VIII. The winner will be determined based on the price. The auctions will be required for projects with the planned installed capacity ≥ 10 MW for solar, and ≥ 20 MW for wind power plants. The "green" tariff will be decreased for solar power plants by 30% and for wind power plant by 10% as of 1 January 2020.

The Power Purchase Agreement (the "PPA") concluded on auction terms will be valid for the term of fifteen years from the date of commissioning. Pre-PPAs executed before 1 July 2019 shall secure the "green" tariff at the level effective as at the moment of their execution.

Guaranteed Buyer shall have obligations to buy electricity from RES on the terms of auctions. Auctions shall be conducted by the Guaranteed Buyer.

To be qualified for the auction, bidders shall be required to provide a bank guarantee. The guarantee amount shall depend on the auction starting price, as well as the capacity of the project.

The updated Concept is subject to further discussion among market players and relevant stakeholders.

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

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