12:04 20.11.2019

Solar Energy Association not in favor of idea to restructure feed-in tariffs for solar power plants

3 min read

KYIV. Nov 20 (Interfax-Ukraine) – Restructuring of the feed-in tariff for electricity generated by solar power plants is inappropriate for the sector, Executive Director of the Solar Energy Association of Ukraine Artem Semenyshyn said at a press conference at Interfax-Ukraine in Kyiv on Tuesday.

"If from January 1 [2020] for the new solar energy projects, the feed-in tariff is reduced, according to the law, by 25%, then the proposal to further reduce it by another 25% (thus, by 50%) crosses the line of economic feasibility," he said.

At the same time, Semenyshyn said that such changes would cause investor concern and adversely affect the country's investment climate. In addition, market players do not currently have a clear understanding of government plans for regulating the industry, which does not allow Ukrainian or foreign companies to plan business projects.

In turn, KNESS Group Business Development Director Yevhen Didichenko said that the restructuring of the feed-in tariff, which is being discussed, as a measure to stabilize the market situation, will not produce the desired effect.

"If 50% of all plants go to reduce the tariff by 20%, this will add UAH 3 billion to the Guaranteed Buyer's balance, while at present we have a misbalance [the Guaranteed Buyer's shortage] of UAH 16 billion, and the industry operates UAH 300 billion. That is, it is such a miniscule figure and such dire consequences that it is not worth it," he said.

Didichenko also focused on the fact that the current model of the electric energy market does not comply with the principles defined by law.

"The problem should not be solved by patching holes. We need to look more broadly. The only right solution is to establish a free market," he said and recalled that in particular, it is about lifting price restrictions, entering the market by National Nuclear Generating Company Energoatom and PJSC Ukrhydroenergo.

"Preliminary calculations show that when entering the market, Energoatom will receive an additional UAH 80 billion a year. Ukrhydroenergo will receive an additional UAH 10 billion. The state could use these resources to subsidize the population and renewable energy (under the existing model for plants that have already been built.) The state would also have a resource to enhance the competitiveness of state-owned thermal power plants," Didichenko said.

Semenyshyn said that the association prepared a draft memorandum of understanding with the government. It will identify mechanisms acceptable for Ukrainian business to further stimulate the development of solar energy.

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