The Law on restructuring of feed-in tariff is adopted
07 August 2020
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On July 21, 2020 Verkhovna Rada of Ukraine has voted for the draft Law “On amendments to certain laws of Ukraine on improvement of the conditions of support of electricity production from the renewable energy sources”, registration No. 3658 (hereinafter – the “Law”).
The Law has been adopted based on the Memorandum on FiT restructuring signed on June 10, 2020 between the European-Ukrainian Energy Agency (EUEA), the Ukrainian Wind Energy Association (UWEA) and the Government of Ukraine.
Below is a comparative table of the key provisions of the Memorandum and the Law.
| Memorandum | The Law | |
| PPA extension | No extension | No extension |
| Wind power plants FIT reduction | 7,5% for facilities with installed capacity per turbine of more than 2,000 kW, commissioned from 01.07.2015 till 31.12.2019. 2,5% for facilities commissioned from 01.01.2020. | 7,5% for facilities with installed capacity per turbine of more than 2,000 kW, commissioned from 01.07.2015 till 31.12.2019. 2,5% for facilities commissioned from 01.01.2020. |
| Solar power plants FIT reduction | 15% for facilities with installed capacity more than 1MW commissioned from 01.07.2015 till 31.12.2019. 10% for facilities with installed capacity less than 1MW commissioned from 01.07.2015 till 31.12.2019. 2,5% for facilities commissioned from 01.01.2020. Facilities, commissioned before 01.07.2015 will have a cap FIT for SPP at ground-based facilities with the installed capacity exceeding 10 MW commissioned by 31.03.2013 (inclusively), reduced by 15%. | Facilities commissioned from 01.07.2015 till 31.12.201915% for facilities with installed capacity equal to or exceeding 1 MW.7.5% for facilities with installed capacity less than 1 MW. Facilities commissioned from 01.01.2020 2,5% for facilities with installed capacity less than 1 MW. Facilities with installed capacity from 1 MW to 75 MW:2.5% for facilities commissioned from 01.01.2020 to 31.10.2020.30% for facilities commissioned from 01.11.2020 to 31.03.2021.60% for facilities commissioned from 01.04.2021. Facilities with installed capacity 75 MW and more:2.5% for facilities commissioned from 01.01.2020 to 31.10.2020.60% for facilities commissioned from 01.11.2020. Facilities, commissioned before 01.07.2015 will have a cap FIT for SPP at ground-based facilities with the installed capacity exceeding 10 MW commissioned by 31.03.2013 (inclusively), reduced by 5%. |
| Debt repayment from Guaranteed Buyer | Debt payment: 40% in 4th quarter of 2020 and 15% every quarter in 2021. | Draft law on repayment of debts within 2021-2022 shall be prepared within 3 months after the Law enters into force. |
| Payment for electricity produced from RES | The State Authorities shall ensure full and timely current payment for the electricity starting from the month following the month in which the Law comes into force. Within a month after the effective date of the Law, the NEURC shall revise the tariff of NPC Ukrenergo for the service of electricity transmission and consider the issue of utilization of other financial receipts. | The Cabinet of Ministers is entitled to envisage in the state budget the expenditures for partial (not less than 20% of the forecasted revenues of RES producers) financial support for the Guaranteed Buyer to make payments to the RES producers for electricity (in accordance with the budget request of the Ministry of Energy and calculation of the NEURC). |
| Solar pre-PPA “cut off” date | 31.07.2020 | No provision prohibiting commissioning of SPPs at FiT. However, the FiT will be significantly reduced as described above. |
| Wind pre-PPA “cut off” date | No changes prescribed | No changes prescribed |
| Curtailments compensation | Within a month after the effective date of the Law, the NEURC and other State Authorities of Ukraine will ensure drafting and adoption of the statutory instruments necessary to determine the procedure for compensation for electricity not produced and not delivered by the RES Producers as a result of fulfilling the TSO’s commands. | To draft and adopt the necessary statutory instruments within a month after the Law will take effect. |
| Liability for imbalances | 50 % from 01.01.2021100 % from 01.01.2022 | Facilities with installed capacity equal to or exceeding 1 MW:50 % from 01.01.2021100 % from 01.01.2022 Facilities with installed capacity less than 1 MW:10% from 01.01.2021 with gradual annual growth by 10% till 1 January 2030. |
| Tolerance margin | by 31.12.2029 for SPPs: 5%by 31.12.2029 for WPPs: 10% | by 31.12.2029 for SPPs: 5%by 31.12.2029 for WPPs: 10% |
| Stabilization clause | The laws effective on the date of entry into force of the Law will apply to the rights and obligations of the RES Producers and revised FiTs will not be further changed. Exception in relation to the change of legislation regarding defence, national security, taxation, public order or environment protection is prescribed. | The laws effective on the date of entry into force of the Law will apply to the rights and obligations of the RES Producers and revised FiTs will not be further changed. Exception in relation to the change of legislation regarding defence, national security, taxation, public order or environment protection is prescribed. |
| Auctions | Annual support quotas will be determined and approved within two months after the effective date of the Law.Conduction of auctions for allocation of the support quota will be ensured by the end of 2020. | The schedule of auctions shall be determined and approved by the Cabinet of Ministers of Ukraine for each particular year. |
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