All details of Ukraine's brand-new feed-in tariffs for PV

Aug 6, 2020 05:03 PM ET
  • On July 21, 2020, the Law on Feed-in Tariff Restructuring was passed by the Verkhovna Rada of Ukraine.
All details of Ukraine's brand-new feed-in tariffs for PV
Image: Scatec Solar

The Law associates with the provisions of the Memorandum of Understanding joined June 10, 2020, in between the Government of Ukraine and also two associations representing the interests of investors in the field of renewable energy sources (RES): the Ukrainian Wind Energy Association and also the European-Ukrainian Energy Agency. It was signed by the President on July 31, 2020 and is expected to become part of force in the coming days.

Reduction of FIT rates

Under the Law, the FIT rates will be reduced as complies with:

Type of generation facility FIT reduction %
Solar power plants (“SPPs”) with installed capacity of 1 MW or more commissioned between July 1, 2015 and December 31, 2019 15%
SPPs with installed capacity of less than 1 MW commissioned between July 1, 2015 and December 31, 2019 7.5%
Wind power plants (“WPPs”) commissioned between July 1, 2015 and December 31, 2019 and consisting of wind turbines with a unit installed capacity of 2 MW or more 7.5%
WPPs commissioned after January 1, 2020 2.5%
SPPs with installed capacity less than 1 MW commissioned after January 1, 2020 2.5%
SPPs with installed capacity of 1 MW or more commissioned between January 1, 2020 and October 31, 2020 2.5%
SPPs with installed capacity between 1 MW and 75 MW commissioned between November 1, 2020 and March 31, 2021 30%
SPPs with installed capacity between 1 MW and 75 MW commissioned from April 1, 2021 60%
SPPs with installed capacity of 75 MW or more commissioned from November 1, 2020 60%

 

  FIT rates (eurocents/KWh)
Type of generation facility Solar (mounted
on ground, <1MW)
Solar (mounted
on ground,
1-75MW)
Solar (mounted
on ground, ≥75MW)
Wind unit (≥2MW) Wind unit (0.6-2MW)
Commissioned between
1 July 2015 and
31 December 2015
15.69 (-7.5%) 14.42 (-15%) 14.42 (-15%) 9.42 (-7.5%) 6.79
Commissioned
in 2016
14.79 (-7.5%) 13.59 (-15%) 13.59 (-15%) 9.42 (-7.5%) 6.79
Commissioned
in 2017 – 2019
13.90 (-7.5%) 12.77 (-15%) 12.77 (-15%) 9.42 (-7.5%) 6.79
Commissioned between
1 January 2020 and
31 October 2020
10.97* (-2.5%) 10.97* (-2.5%)
Commissioned between
1 November 2020 and 31 March 2021
7.88* (-30%)

(com. between
1 Nov 2020 and
31 Dec 2020)

____________

7.62* (-30%)

(com. between
1 Jan 2021 and
31 Mar 2021)

4.5* (-60%)

(com. between
1 Nov 2020 and
31 Dec 2020)

____________

4.35* (-60%)

(com. between
1 Jan 2021 and
31 Mar 2021)

Commissioned after
1 April 2021
4.35* (-60%)
Commissioned
in 2020
10.97 (-2.5%) 8.82* (-2.5%) 5.88* (-2.5%)
Commissioned
in 2021
10.61 (-2.5%) 4.35* (-60%) 8.82* (-2.5%) 5.77* (-2.5%)
Commissioned
in 2022

(only auctions available)

(only auctions available)

(only auctions available)

8.82* (-2.5%) 5.67* (-2.5%)

*-- RES facilities which will certainly be commissioned under the wrapped up pre-PPAs.

Changes pertaining to a two-year expansion of the FIT have not been upheld despite various demands by Ukrainian business and global establishments.

Application of FIT for electrical power produced from biomass and/or biogas

The FIT for producers of electrical power from biomass and/or biogas shall just put on power generated by facilities commissioned prior to January 1, 2023.

Intro of sped up responsibility for electrical energy imbalances

Accelerated obligation for electricity imbalances will make an application for RES centers with a mounted capability of more than 1 MW:

Period Imbalances liability in % under the legislation (effective prior to the Law) Imbalances liability in % for RES facilities (<1MW) under the Law Imbalances liability in % for RES facilities (>1MW) under the Law
until 31 December 2020 0 0 0
from 1 January 2021 10 10 50
from 1 January 2022 20 20 100
from 1 January 2023 30 30
from 1 January 2024 40 40
from 1 January 2025 50 50
from 1 January 2026 60 60
from 1 January 2027 70 70
from 1 January 2028 80 80
from 1 January 2029 90 90
from 1 January 2030 100 100

Sped up obligation for electricity discrepancies does not relate to RES centers with a set up capability of less than 1 MW. For such centers, as in the past, the progressive introduction of an obligation for inequalities is specified from 01 January 2021: 10% with a succeeding boost of 10% every year until getting to 100% in 2030.

Decline of resistance margin

Presently, the tolerance margin (appropriate up until 31 December 2029) comprises 20% for WPPs and 10% for SPPs. The Law envisages a reduced resistance margin, which will constitute:

  • 10% for WPPs;
  • 5% for SPPs.

Unique tariff for electrical power transmission services for "green" electrometallurgy business

The Law envisages the establishment of a special tariff over transmission services of electricity purchased for the functions of steel manufacturing by the ventures of "green" electrometallurgy.

The tariff for such business will certainly be lower, considering that it will not consist of costs of the TSO for fulfilling its Public Service Obligations in making sure a boost in the share of electricity manufacturing from different power sources.

A "green" electrometallurgy enterprise is a legal entity conducting economic activity in the production of steel with direct discharges of CO2 (carbon dioxide) from steel manufacturing not surpassing 250 kg per lots of steel product and also making use of the electric arc manufacturing technique.

A special tariff for electrical power transmission services for "environment-friendly" electrometallurgy enterprises will be used within the duration of FiT legitimacy (up until the end of 2029). A special tariff shall be established simultaneously with the revision of the common tariff of NPC "Ukrenergo" for electricity transmission solutions.

The Law likewise consists of the procedure for developing of such special tariff by the NEURC. The grounds for establishing an unique tariff by the NEURC are as complies with:

  • Certification of the Ministry for Development of Economy, Trade and Agriculture of Ukraine on verification of the status of a "environment-friendly" electrometallurgy business for a certain venture;
  • Certificate of the Ministry of Environmental Protection and also Natural Resources of Ukraine verifying manufacturing of steel by the "environment-friendly" electrometallurgy enterprise through the electrical arc manufacturing method and with the direct exhausts prices of steel manufacturing of CO2 at the degree not exceeding 250 kg per lots of steel products.

Upgraded rates of a premium to FiT or auction rate

The Law imagines the complying with upgraded prices of a premium for making use of tools manufactured in Ukraine:

Premium to FIT or auction price, % Level of use of equipment manufactured in Ukraine, %
5 ≥30, but ˂50
10 ≥50, but ˂70
20 ≥70

At the same time, the optimum size of a costs to a public auction price for using devices manufactured in Ukraine upon reaching 6 years of operation of the pertinent power facility must not exceed 10%.

Ensuring payments to RES manufacturers

The Law specifies that the Cabinet of Ministers of Ukraine (CMU) shall monetarily support the Guaranteed Buyer for payments to RES producers using state spending plan expenditures. Such expenditures are formed according to budget plan requests by the Ministry of Energy on the basis of computations given by the NEURC, in the amount of not less than 20% of the forecasted marketable products of power generation from alternate energy sources for the pertinent year.

The Law additionally contains an additional momentary action to ensure repayments to RES producers. It envisages that the funds gotten by the TSO (NPC Ukrenergo) from the capacity allocation of cross-border interconnectors as of July 1, 2020 will be used for the following objectives:

  • 30%-- to assure the real accessibility of designated capability, upkeep as well as boosts of ability allotment with investment right into the power transmission system, in particular, construction of brand-new intestate electrical energy transmission lines; as well as
  • 70%-- for the settlement of the Guaranteed Buyer's financial obligations.

The Guaranteed Buyer will move the received funds in the following way:

  • 50%-- to SE Energoatom; as well as
  • 50%-- to pay RES manufacturers for generated electricity.

Furthermore, in order to repay the financial debts of the Guaranteed Buyer to RES manufacturers current as of August 1, 2020, the CMU shall, within 3 months from the enactment of the Law, submit to the Parliament the draft legislations on repayment of such financial debts within 2021-2022 by providing domestic federal government finance bonds with a maturity of 5 years.

Negotiation of the issue of settlement to RES manufacturers for curtailments

The Law specifies the TSO (NPC Ukrenergo) as the entity responsible for payment to RES producers for curtailments. RES manufacturers will function as vendors of stabilizing services, but outside of the balancing power market. The expense of tons decrease services will certainly be made up to RES producers under the awarded feed-in tariff or at the public auction price. The computation of the quantity of non-delivered electrical energy must be accomplished according to the technique, which will be an annex to the Market Rules. The treatment for giving solutions to lower the lots by RES producers will certainly be defined by the Market Rules. The equivalent draft amendments to the marketplace Rules were published on the NEURC's website on June 11, 2020.

Stabilization provision

The Law stipulates that through from January 1, 2020 till December 31, 2029 FITs will certainly not be modified or terminated for RES producers for whom they have actually already been developed or are meant to be established, as well as decrease coefficients will not be transformed or applied in differently that may bring about losses and/or damages and/or non-receipt of legitimately anticipated profits by such RES manufacturers.

It likewise envisages a fixation in the Law of Ukraine "On the Regime of Foreign Investment" of state assurances for the security of international financial investments related to the application of the FIT for the whole period of the FIT. The legal rights and also commitments of RES producers under the PPA should be governed by the regulation reliable as of the day of implementation of the Law.

These assurances do not apply to changes in regulation relating to the issues of protection, national security, tax obligation regulations, ensuring public order, environmental protection.

Clarification of price caps at public auctions

The rate offers of SPPs and WPPs can not go beyond 9 euro cents per 1 kWh for public auctions before December 31, 2024, and can not go beyond 8 euro cents per 1 kWh for public auctions from January 1, 2025.

The rate offers of producers from other RES (biomass, biogas, along with mini, mini as well as small hydroelectric nuclear power plant) can not surpass 12 euro cents per 1 kWh.

Decrease of the minimal share of compulsory appropriation of annual assistance allocations by different modern technologies

The annual support allocation shall be separated into shares by the different innovations of RES. The Law decreases the minimum share of the compulsory allocation of annual assistance allocations by separate technologies (solar, wind, various other types of RES) from 15% to 10%.

Various other modifications to the treatment for the organization and holding of public auctions

The Law clarifies that the CMU may, by a submission from the Ministry of Energy within the yearly or additional assistance allocation:

  • Specify particular locations (regions) for the building and construction of RES centers;
  • Define the maximum degrees of capacity of an RES center for which the RES producer can get the right for assistance at the appropriate auction;
  • Suggest land plots for the building and construction of RES facilities with defined technological parameters and also technical conditions for connection to the power grid; and also
  • Suggest rooftops and/or facades of structures and also various other capital centers leased for the building and construction of SPPs with defined technical criteria and also technological conditions for link to the power grid.

The features of revealing and also carrying out such public auctions are defined by the Procedure for carrying out auctions on the appropriation of the support quota.

The Law imagines that public auctions will be kept in accordance with the timetable of auctions for the pertinent year. The optimal share of the annual support quota that best advantageous proprietor can obtain in one fiscal year shall continue to be at the level of 25%.

Please note that small adjustments might still be made, because the Law has actually not been formally published yet.

Legislation: Law of Ukraine "On Amendments to Certain Laws of Ukraine on the Improvement of Conditions of Support for the Production of Electricity from Alternative Energy Sources" of July 21, 2020.



SOLAR DIRECTORY
Solar Installers, Manufacturers