The Ministry of Energy Announced Planned Quota for the “Green” Auctions
Following the coordination meeting chaired by the First Deputy Minister of Energy Ms. Olha Buslavets with the participation of JSC “NEC “Ukrenergo” (TSO), State Enterprise “Guaranteed Buyer” (offtaker) and the State Agency on Energy Efficiency and Energy Saving of Ukraine, the planned “green” auction quotas and preliminary timeline for holding them in 2021 have been presented by the Ministry of Energy on 03 December 2020 to the wider audience consisting mainly of representatives of NGOs and investors in renewable energy sources (“RES”) projects.
The Draft Resolution on quotas for RES auctions should be finalized by the Ministry of Energy and submitted to the Cabinet of Ministers of Ukraine (“CMU”). To the date, it is unknown when the Draft Resolution will be submitted to the CMU and when the latter will adopt it.
According to the Law of Ukraine “On Alternative Energy Sources” the annual support quota and the schedule for conducting the auctions for the next year, as well as the indicative estimated figures of the annual support quota for the four subsequent years, shall be approved by the CMU not later than on 01 December of the preceding year.
The CMU shall also approve amendments to the Procedure for Holding Auctions on Allocation of Support Quota in line with the adopted Law on Feed-in Tariff Restructuring No. 810-IX.
Also, be kindly reminded that under the effective law the ceiling prices for electricity generated by SPPs and WPPs are set at the level of 9 eurocents per 1 kW/h for auctions taking place before 31 December 2024 and 8 eurocents per 1 kW/h for auctions taking place after 01 January 2025.
Size of the annual support quota for the next five years
At present, the following annual support quota for 2021, as well as the indicative estimated figures for 2022-2025 are proposed:
Schedule of conducting “green” auctions in 2021
** development of small distributed generation of solar power plants (SPPs). Installed capacity of SPPs up to 1 MW – 152 MW. Number of such facilities – 394. The average capacity of each facility – 0.38 MW.
*** separate auction in energy surplus regions: Zhytomyrska oblast, Poltavska oblast, Kharkivska oblast, Chernihivska oblast, Sumska oblast, Cherkaska oblast, Kirovohradska oblast, Kyivska oblast and the city of Kyiv.
**** development of biomass, biogas power plants, as well as small hydro power plants (capacity of biomass, biogas power plants is currently 194 MW, small hydro power plants – 116 MW). Lack of demand does not allow to offer a bigger quota (pre-PPAs for biomass, biogas power plants have been concluded only for 76 MW). The proposed annual quota of 60 MW constitutes one third of all installed capacity of biomass, biogas power plants for 10 years. Considering that development of biomass, biogas power plants and small hydro power plants takes time, the auction shall be postponed till autumn. Based on the results of the auctions, the annual support quota and the schedule of conducting the auctions for 2022 shall be further determined.