Ukraine is introducing the first legislative initiatives related to the energy storage systems

On 16 November 2021, the Parliament of Ukraine adopted the Bill "On Amendments to Certain Laws of Ukraine on the Development of Energy Storage Systems" №5436-d of 17 September 2021 (the "Bill") in the first reading. The Bill can enter into force at least after a second reading and signing by the President of Ukraine.

The Bill amends the Law of Ukraine "On the Electricity Market" and the Law of Ukraine "On the National Energy and Utilities Regulatory Commission" in part related to ensuring the operation of energy storage systems and storage activities.

The Bill's provisions will help to optimize the load on the electrical grid, avoid restrictions on electricity generation and ensure easier integration of "green" generation facilities into the power system of Ukraine.

Energy storage system operator

The Bill proposes the concept of "energy storage system operator", which is an entity engaged in energy storage activities for the purpose of selling electricity from the energy storage system, and / or for the purpose of providing ancillary services or providing balancing services through energy storage systems. The dispatch control of energy storage systems will be conducted by the transmission system operator (TSO, which is NPC "Ukrenergo").

Options to interconnect to power grid

The Bill provides that when developing the transmission system development plan, the TSO preliminary determines the interconnection points of energy storage systems considering the existing system constraints and optimization of electricity losses, although it does not restrict the right to interconnect at any other points. The interconnection to the power grid is to be conducted in accordance with the procedures described in the Transmission System Code and the Distribution Systems Code.

Conducting energy storage activities

In order to carry out storage activities, the applicants must obtain an appropriate license from the National Energy and Utilities Regulatory Commission (NEURC). NEURC has not yet approved the licensing conditions. The Bill foresees that  an electricity producer has the right to use the energy storage system without obtaining such storage license, if the capacity of electricity supply does not exceed the installed capacity of electrical installations of such a producer at any time. The same rule applies to electricity producers who have a "green" tariff or who have acquired the right to be supported (RES producers) as a result of the auction, and this is not a basis for revising the established "green" tariff or auction price.

The Bill provides regulatory restrictions for the RES producers, which have energy storage systems. If the RES producer has an energy storage system, the amount of electricity not released by the producer as a result of the execution of TSO load reduction commands is reduced by the amount of the energy storage system during the time of the TSO command.

The Bill prohibits transmission and distribution system operators from conducting energy storage activities with certain exceptions.

The consumers do not need to obtain a license to use the storage system as well as companies that provide services for charging electric vehicles at electric charging stations. The energy storage activities can be carried out without obtaining a license if the storage system is less than the amount that will be defined in the license conditions.

Nowadays, there are at least five bills on the electricity storage system in the last three years. The storage systems which are launched without special legislation are conducting certification to obtain the status of service provider and thus to provide capacity reserves for the system operator, which ensures their legal existence.

For more information, please contact Asters` Partner Yaroslav Petrov or Associate Olena Sichkovska-Chornobyl.

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