Energy Ministry drafts bill on introduction of Feed-in-Premium tariffs for RES generation

KYIV. Aug 27 (Interfax-Ukraine) – The Ministry of Energy of Ukraine has developed and submitted for public discussion a draft law on amendments to certain laws of Ukraine regarding stimulating production of electricity from alternative energy sources on market principles, which provides for the introduction of the Feed-in-Premium tariff system (contracts for difference) for producers of electricity from renewable energy sources (RES) instead of the current system of fixed Feed-in-Tariffs.

According to a press release from the Ministry of Energy on Thursday, Feed-in-Premium will apply to both existing "green" electricity sale-purchase contracts and future contracts that will be concluded with the winners of the auctions for the construction of new renewable facilities.

"According to this model, renewable energy producers will be able to directly act as market players, selling electricity on their own, optimizing their income from production and reducing their imbalances," First Deputy Energy Minister Yuriy Vlasenko said, whose words are quoted in the press release.

At the same time, according to him, the subjects of renewable generation will have the right to receive compensation from Guaranteed Buyer in the form of the difference between the established feed-in tariff and the market or auction price.

In addition, in accordance with the bill, "green" producers will be able to create new separate balancing groups that will manage the electricity imbalances of their own portfolio of objects in real time.

As the Ministry of Energy emphasized, this will allow renewable energy generation "to avoid imbalances, introduce new approaches and forecasting technologies, energy storage and demand management systems, and thus contributing to the balancing of the power system."

As stated in an explanatory note to the bill, the introduction of Feed-in-Premium will also improve the accuracy of forecasting RES production, reduce the amount of imbalances of "green" electricity at the state-owned enterprise Guaranteed Buyer, increase the share of environmentally friendly electricity from renewable sources, as well as provide renewable energy generation with the opportunity to receive timely payment for electricity in the market.

In accordance with conclusions of the authors of the bill, "it is proposed to further develop renewable energy in Ukraine within the framework of the auction support model, taking into account the best world practices, namely, in accordance with the CFD model and with a support period of 15 years."

By the middle of 2021, the installed capacity of renewable energy facilities in Ukraine, which operate at the feed-in tariff, reached 8 GW (excluding generating plants of consumers, private households and facilities located in the occupied territories).