11:41 19.12.2019

Energy Community to mediate in conflict between Ukrainian renewable energy market players, Energy Ministry

2 min read
Energy Community to mediate in conflict between Ukrainian renewable energy market players, Energy Ministry

The Energy Community has registered a dispute between the Ministry of Energy and the Ukrainian Wind Energy Association (UWEA) and the European-Ukrainian Energy Agency (EUEA) over upcoming changes to the existing system of guaranteed feed-in tariffs (FIT) in Ukraine, stabilization measures and possible solutions to the crisis of the Ukrainian renewable energy sector (RES).

"The Energy Community Secretariat's Dispute Resolution and Negotiation Centre has been called upon to assist authorities and stakeholders in developing an optimal solution for the RES sector," the Energy Community said on its website.

The release indicates that several bills are currently being formally and informally discussed to replace or amend existing legislation.

As reported, in November 2019, the Ministry of Energy and Environment Protection created a working group to find a solution to the problem in the renewable energy sector, including a tariff restructuring model, however, according to Interfax-Ukraine, its work has come to a standstill.

In early December, bill No. 2543 on improving the investment climate in the renewable energy sector was registered in Ukraine's parliament, which authors were Liudmyla Buimister, Dmytro Natalukha (both are from the Servant of the People parliamentary faction), Serhiy Taruta (the Batkivschyna faction), Lesia Vasylenko (the Holos faction), Maxim Efimov (independent). The bill proposes a voluntary restructuring of FIT (by a maximum of 15%) with a simultaneous extension of the terms for their payment and a reduction in the terms of preliminary power purchase agreements (pre-PPA). The proposal was supported by the industry.

However, the Ministry of Energy and Environment Protection said it categorically opposes the restructuring scenario proposed by the MPs, since, in the opinion of the ministry, it does not solve the problems with financing alternative energy and could worsen the situation.

The National Commission of Ukraine for Energy, Housing and Utilities Services Regulation (NCER) also announced the need for more stringent conditions for restructuring. The regulator also proposed to provide for the possibility of transferring renewable energy facilities into state ownership with the receipt of compensation for them, which some investors regarded as forced nationalization.

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