{"id":771139,"date":"2019-05-07T15:00:45","date_gmt":"2019-05-07T12:00:45","guid":{"rendered":""},"modified":"2019-05-13T15:11:00","modified_gmt":"2019-05-13T12:11:00","slug":"ukrayina-pryjnyala-zakonodavstvo-pro-auktsiony-dlya-vidnovlyuvanoyi-energiyi-ta-novyj-ppa","status":"publish","type":"post","link":"https:\/\/new.eba.com.ua\/en\/ukrayina-pryjnyala-zakonodavstvo-pro-auktsiony-dlya-vidnovlyuvanoyi-energiyi-ta-novyj-ppa\/","title":{"rendered":"Ukraine adopts law on renewable energy auctions and new PPA"},"content":{"rendered":"<p>On 25 April 2019, the Ukrainian Parliament adopted the Law &#8220;On Amendments to Some Laws of Ukraine on Ensuring Competitive Conditions for Production of Electricity from Alternative Energy Sources&#8221; No.\u00a08449-d (the &#8220;<strong>Auction Law<\/strong>&#8220;).\u00a0The Auction Law is crucial for renewable energy sphere in Ukraine as it gradually substitutes the current &#8220;green&#8221; tariff scheme.\u00a0<\/p>\n<p>Additionally, on 26 April 2019 the National Energy and Utilities Regulatory Commission (&#8220;<strong>NEURC<\/strong>&#8220;) adopted several important regulatory acts on renewable energy, including &#8220;Procedure on Purchase of Electricity under the &#8220;Green&#8221; Tariff&#8221; (&#8220;<strong>Procedure<\/strong>&#8220;) and new model PPA on sale of electricity under the &#8220;green&#8221; tariff (&#8220;<strong>New Model PPA<\/strong>&#8220;).\u00a0<\/p>\n<p>Below we summarize the key provisions of the Auction Law, Procedure and New Model PPA.\u00a0<\/p>\n<p><strong>Auction Law<\/strong>\u00a0<\/p>\n<p>The Auction Law introduces changes to the &#8220;green&#8221; tariff regime and sets the framework for renewable energy auctions. &#8220;Green&#8221; tariff and auction regimes will work in parallel.\u00a0<\/p>\n<p><em>&#8220;Green&#8221; tariff<\/em>\u00a0<\/p>\n<p>Projects operating under the &#8220;green&#8221; tariff will continue enjoying the incentive until 2030. Projects under development, which are not commissioned before 2020 are falling under the so-called &#8220;transition period&#8221; and may be qualified for the &#8220;green&#8221; tariff provided that new pre-PPA is duly executed.<\/p>\n<ul>\n<li>The\u00a0<em>deadline<\/em>\u00a0for signing\u00a0<em>pre-PPA<\/em>\u00a0for projects to be implemented under the &#8220;green&#8221; tariff regime without auctions is 31 December 2019. Land, interconnection and construction permits should be secured before pre-PPA is signed. Solar power plants should be commissioned within two years, and other types of RES plants &#8211; within three years after signing the pre-PPA.\u00a0<\/li>\n<\/ul>\n<ul>\n<li><em><span data-mce-mark=\"1\">Reduction of the &#8220;green&#8221; tariff<\/span><\/em>\u00a0for new\u00a0<strong>solar<\/strong>\u00a0projects commissioned after 2020 &#8211; by 25%, with a further decrease for 3 years by 2.5% annually, reducing the &#8220;green&#8221; tariff for new\u00a0<strong>wind<\/strong>\u00a0power projects by 10% from 2020 without further reduction.\u00a0<\/li>\n<\/ul>\n<p><em><span data-mce-mark=\"1\">Auctions<\/span><\/em>\u00a0<\/p>\n<ul>\n<li>The new auction regime starts on 1 July 2019. The pilot auctions will be held not later than 31 December 2019. The incentive regime is effective for 20 years.\u00a0<\/li>\n<\/ul>\n<ul>\n<li>The\u00a0<em><span data-mce-mark=\"1\">auctions are mandatory<\/span><\/em>: from 2020 \u2013 (i) for wind power plants with a capacity of more than 5\u00a0MW, and (ii) for solar power plants with a capacity of more than 1\u00a0MW.<\/li>\n<\/ul>\n<ul>\n<li><em><span data-mce-mark=\"1\">Distribution of the annual auction quota<\/span><\/em>\u00a0is as follows:<\/li>\n<\/ul>\n<p>&#8211;\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 15% for solar energy;<\/p>\n<p>&#8211;\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 15% for wind energy;<\/p>\n<p>&#8211;\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 15% for other types of RES (biomass, biogas, hydro, geothermal energy); and<\/p>\n<p>&#8211;\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 55% at the discretion of the Cabinet of Ministers of Ukraine.\u00a0<\/p>\n<p>Although for 2020-2022, the annual quota will be distributed as follows:<\/p>\n<p>&#8211;\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 30% for solar energy;<\/p>\n<p>&#8211;\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 30% for wind energy;<\/p>\n<p>&#8211;\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 15% for other RES; and<\/p>\n<p>&#8211;\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 25% at the discretion of the Cabinet of Ministers of Ukraine.\u00a0<\/p>\n<ul>\n<li><em><span data-mce-mark=\"1\">Volume of the annual quota<\/span><\/em>will be determined by the Cabinet of Ministers of Ukraine for the next 5 years by 1 December 2019.<\/li>\n<li><em>Financing guarantee<\/em>\u00a0\u2013 a bidder provides a refundable (after auction) irrevocable bank guarantee for participation in the auction in the amount of EUR 5,000 per MW of capacity and an auction winner provides for an irrevocable bank guarantee in the amount of EUR 15,000 per MW.\u00a0<\/li>\n<\/ul>\n<ul>\n<li><em><span data-mce-mark=\"1\">Liability for imbalances<\/span><\/em>\u00a0starts after the internal market is considered to be liquid, but not later than 2024.\u00a0<\/li>\n<\/ul>\n<ul>\n<li>Preservation of current premiums on top of the tariff for the use of\u00a0<em><span data-mce-mark=\"1\">locally produced equipment<\/span><\/em>\u00a0up to 10%.\u00a0<\/li>\n<\/ul>\n<ul>\n<li><em><span data-mce-mark=\"1\">Validity of interconnection technical conditions<\/span><\/em>: technical conditions issued before entry into force of the Auction Law will be effective for 2 years for solar projects and 3 years for wind and other renewable energy projects.\u00a0<\/li>\n<\/ul>\n<p>The Auction Law will come into force after its official publication, save for some provisions.\u00a0<\/p>\n<p><strong>Procedure and New Model PPA<\/strong><strong>\u00a0<\/strong><\/p>\n<p>The Procedure sets key terms for sale of electricity under the &#8220;green&#8221; tariff within the new electricity market model scheduled for launch starting from 1 July 2019. In particular, it provides terms for (1) signing PPAs; (2) forecasting of generated electricity; (3) forecasting by the offtaker of electricity sale volumes; (4) sale of electricity at day-ahead and intraday market; (5) functioning of balancing group; (6) settlement procedures; and (7) procedure for re-execution of existing PPAs to the New Model PPA.\u00a0<\/p>\n<p>The New Model PPA defines the framework for purchase of electricity under &#8220;green&#8221; tariff, which is valid until 2030. The PPA includes force major, arbitration, change of law provisions, terms for pre-PPA validity.\u00a0<\/p>\n<p>The Procedure and New Model PPA includes some inconsistences with the Auction Law, which should be fixed after the Auction Law becomes effective.\u00a0<\/p>\n<p>The Procedure enters into force on 1 July 2019, except procedure on signing and re-execution of PPAs, which enters into force upon official publication. The New Model PPA enters into force upon official publication.\u00a0<\/p>\n<p><em>For further information, please contact Asters&#8217; partner\u00a0<\/em><a title=\"Yaroslav Petrov\" href=\"https:\/\/www.asterslaw.com\/our_team\/petrov\/\" target=\"_blank\" rel=\"noopener\"><em>Yaroslav Petrov<\/em><\/a><em>\u00a0or senior associate\u00a0<\/em><a title=\"Marta Halabala\" href=\"mailto:Marta.Halabala@asterslaw.com\"><em>Marta Halabala<\/em><\/a><em>\u00a0or associate\u00a0<\/em><a title=\"Olena Sichkovska\" href=\"mailto:Olena.Sichkovska@asterslaw.com\"><em>Olena Sichkovska<\/em><\/a><em>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>On 25 April 2019, the Ukrainian Parliament adopted the Law &#8220;On Amendments to Some Laws of Ukraine on Ensuring Competitive Conditions for Production of Electricity from Alternative Energy Sources&#8221; No.\u00a08449-d (the &#8220;Auction Law&#8220;).\u00a0The Auction Law is crucial for renewable energy sphere in Ukraine as it gradually substitutes the current &#8220;green&#8221; tariff scheme.\u00a0 Additionally, on 26 [&hellip;]<\/p>\n","protected":false},"author":4489,"featured_media":181878,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[15576,15575],"tags":[],"class_list":["post-771139","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-articles-en","category-news-and-articles-from-companies-en","company-16360"],"_links":{"self":[{"href":"https:\/\/new.eba.com.ua\/en\/wp-json\/wp\/v2\/posts\/771139","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/new.eba.com.ua\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/new.eba.com.ua\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/new.eba.com.ua\/en\/wp-json\/wp\/v2\/users\/4489"}],"replies":[{"embeddable":true,"href":"https:\/\/new.eba.com.ua\/en\/wp-json\/wp\/v2\/comments?post=771139"}],"version-history":[{"count":0,"href":"https:\/\/new.eba.com.ua\/en\/wp-json\/wp\/v2\/posts\/771139\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/new.eba.com.ua\/en\/wp-json\/wp\/v2\/media\/181878"}],"wp:attachment":[{"href":"https:\/\/new.eba.com.ua\/en\/wp-json\/wp\/v2\/media?parent=771139"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/new.eba.com.ua\/en\/wp-json\/wp\/v2\/categories?post=771139"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/new.eba.com.ua\/en\/wp-json\/wp\/v2\/tags?post=771139"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}