“Green” Auctions in Ukraine: the Verkhovna Rada Adopted the Relevant Law

On April 25, the Verkhovna Rada of Ukraine adopted bill № 8449-d on “green” auctions. Sergei Savchuk reported about this on his Facebook page yesterday.

251 people’s deputies of Ukraine voted for this law that marks the beginning of a new phase in the renewable energy sector’s development –  from the “green” tariffs to transparent and competitive auctions.

The “green” auctions system will allow to:

– Establish a realistic and fair market price for the “clean” electricity;

– Reduce the”green” electricity cost for its end consumers;

– Form competition among the market players;

– Regulate budget planning;

– Provide guarantees to investors and financial institutions regarding the implementation of “green” projects.

The main idea is to determine the lowest price during an auction, at which its winner will sell the “clean” electricity for 20 years.

Starting from 2020, participation in auctions shall be obligatory for the following projects:

– a solar power plant with a total capacity of more than 1 MW;

– a wind power plant with a total capacity of more than 5 MW.

The “green” auctions system involves:

– Optimization of the “green” tariffs (biomass and biogas electricity tariffs have been retained);

– Issuance of technical specs on grid-tying renewable energy facilities (for solar power facilities – 2 years, for wind power plants – 3 years);

– Retention of bonus up to 10% to tariff for the use of Ukrainian equipment;

– Need to develop a mechanism to promote the installation of storage equipment.

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