On December 17, 2019, at 15:00, a press conference initiated by the European-Ukrainian Energy Agency (EUEA) regarding the Investors in the renewable energy sector appeal to the President of Ukraine for support of a compromise solution took place at the press center of the Interfax-Ukraine.

Speakers were:

Oleksandra Gumeniuk, Director of EUEA;

Alina Sviderska, Head of GR and Business Development manager in Ukraine at Scatec Solar;

Adrien Fouchet, country manager Eurocape New Energy;

Boerge Tvorg, Vice President, Project Development in NBT AS;

Dmytro Nechyporenko, director of Voltage Group

EUEA Members - RES investors, who invested more than EUR 2.0 billion in the Ukrainian renewable projects, and have also made commitments to further investments exceeding EUR 2.0 billion over the next 3 years. This, and the results of these investments: income from profit taxes, employment, transmission to carbon neutral energy system, reduced dependence on imported energy resources, etc., can be an important success story for the Government of Ukraine in its attempts to attract foreign direct investments.

Importantly, RES investors have also attracted the world’s leading international financial institutions and banks to provide financing for these projects, including the European Bank for Reconstruction and Development, US Overseas Private Investment Corporation, Denmark’s IFU, France’s Proparco, Black Sea Trade and Development Bank, Finland’s Finnfund, Sweden’s Swedfund, FMO, Nordic Environment Finance Corporation, GIEK and others.

Private investors and financial institutions have committed investment into Ukraine’s renewable energy sector based on a fair and stable regulatory framework. Any retroactive changes would have serious repercussions for continued and future financing of all infrastructure projects in Ukraine, not just in the renewable energy sector, as well as for success of renewable energy auctions that the Government plans to launch next year.

As part of the dialogue between investors and representatives of the Ministry of Energy, the idea of voluntarily feed-in tariff (FIT) restructuring was recognized as one of the instruments to reduce potential deficit of the Guaranteed Buyer. Investors are ready to consider accepting a limited reduction of the applicable FIT rate in exchange for extension of the duration of Power Purchase Agreement (PPA) as well as approval by the Parliament and Government of the package of measures aimed at de-risking of the renewable sector:

for SPP – FiT reduction up to 15% relative to the FiT set for solar energy for 2020-2022 and +10 years extension of supporting period (20 years from the date of commissioning of the solar power plant for commercial operation);

for WPP – FiT reduction up to 7,5% relative to the FiT set for wind energy for 2020-2022 and +5 years extension of supporting period (15 years from the date of commissioning of the wind power plant for commercial operation);

On 06 December 2019, the group of Parliament Members have registered the Draft Law No. 2543 “On introduction of changes to certain Laws of Ukraine on improvement of investment climate in the renewable energy area” that reflects above mentioned approach and suggests proper framework for FIT restructuring. While some of us have certain suggestions on its improvement that we are communicating separately to the Parliament, we believe that mentioned Draft Law represented balanced compromise between investors and the state with both sides taking a step forward to address the funding problem of the Guaranteed Buyer, while improving investment climate in the energy sector of Ukraine:

Decrease of FiT rate for operating WPPs – by 5%; For WPPs to be commissioned in 2020-2022 – by 7.5%;

For operating SPPs – by 10%; For SPPs to be commissioned in 2020 – by 15%.

On 13 December 2019, the Draft Law No. 2543 was not supported by the Parliament Energy & Utility Services Committee, thus, postponing the resolution of the problem until undefined time. Quick fixing of the stability of renewable PSO scheme based on the mutual compromise would restore confidence of investors and ensure ability of Ukraine to attract much needed investments not only in renewable generation, but also in other modern technologies important for the energy system such as battery storage, flexible generation, demand response systems, etc. Stable regulatory environment and compromise reached with investors working on feed-in tariff system would enhance significantly interest from investors to take part in future renewable auctions helping Ukraine to get optimal auction prices for electricity due to lower-risk environment and competition.

Considering the importance of renewable energy sector for the Ukrainian economy and climate change, we kindly ask for President’s support in ensuring stable regulatory environment in the sector.

The investors are ready to discuss but what will be the next Government steps?

European-Ukrainian Energy Agency, was established in 2009, unites investors from Austria, Belgium, Great Britain, Norway, Spain, Switzerland, Turkey, Ukraine, the USA and other countries that implement renewable energy projects in Ukraine using solar, wind and bio-energy (around 2 GW of operational renewable power plants, 0.5 GW under construction, 2 GW with signed pre-PPAs). http://euea-energyagency.org/.

EUEA Members: Acciona, Avenston, Celynx AG, CES, DTEK, EDS Engineering, EMSOLT, Electrum, Eurocape, GOLAW, Guris, Greenworx, Helios Strategia, iC consulenten, IMEPOWER, Indian Solar, Khmelnytsky Bio Power Plant, NBT AS, Meganom, Scatec Solar, Schletter Group, SINNALBA Group, Smart Energy, Thermosystems, TIC Energia, Ukraine Power Resources, Ukrwindinvestments, Voltage group, Volten, VR Capital, YEO  Electrical & Automation.