Ukraine passes draft law improving its green auction mechanism
On 21 August 2025, the Ukrainian Parliament adopted, as a basis, Draft Law No. 13219 “On Amendments to Certain Laws of Ukraine Regarding the Improvement of Competitive Conditions for the Production of Electricity from Alternative Energy Sources” (Draft Law No.13219), which should significantly improve the mechanism of auctions for the allocation of Renewable Energy Sources (RES) quotas (the so-called «green auctions») and attract more foreign and domestic investors. In addition, Draft Law No.13219 amends the Guarantees of Origin (GoO) regulation and facilitates the connection of new power installations to electricity grids via existing connection points.
The development of the Draft Law No.13219 was prompted by the first green auctions, most of which were declared as such that did not occur due to a lack of participants. Analyses showed low investor interest in these auctions and highlighted the need to improve the auction-based support model. Table 2 Green Auctions in 2025 below present the main conditions of the green auctions conducted in 2025 and their results.
Draft Law No.13219 is currently undergoing preparation for the second reading, during which further clarifications and technical improvements may be introduced. (Draft Law No.13219 is available at the following link in Ukrainian: https://itd.rada.gov.ua/billinfo/Bills/Card/56245).
The following is an analysis of the main amendments outlined in the Draft Law No.13219:
- Amendments to the auction-based support scheme for RES producers;
- Changes to the GoO for generated electricity from RES facilities;
- Restrictions on cable pooling mechanism;
- Amendments to the direct line connection and related exemptions.
Amendments to the auction-based support scheme for RES producers
According to the explanatory note, the main objectives of the Draft Law No. 13219 are:
- to increase investor interest in participating in green auctions;
- to strengthen competition for support quotas awarded through green auctions;
- to contribute to the achievement of the state’s goals in developing renewable electricity generation in Ukraine.
These objectives are to be achieved through amendments to the green auction mechanism, which is the main focus of Draft Law No. 13219. Table 1 below presents a comparison of the key changes proposed under the draft law.
| No. | Aspect | Proposed amendment | Current regulation |
| 1 | Period during which the green auction mechanism applies | Until 31 December 2034 | Until 1 January 2030 |
| 2 | Period during which the Guaranteed Buyer will be obliged to purchase electricity under the feed-in premium mechanism[1] | From 4 am to 11 pm between 1 April to 31 October, and from 6 am to 9 pm between 1 November to 31 March. | N/A |
| 3 | Financial instrument for project implementation | Financial security or bank guarantee | Only bank guarantee |
| 4 | Performance guarantee | EUR 10,000 per MW | EUR 15,000 per MW |
| 5 | Allowable deviation between actual installed capacity and declared capacity | Up to 10% | N/A |
| 6 | Commissioning deadlines for new generation facilities under feed-in premium agreements concluded during martial law |
| 18 months for solar power plants |
| 36 months for other RES generation facilities | ||
| 7 | Bank guarantee/financial security for extending construction and commissioning by a period of 12 months | EUR 10,000 per MW | EUR 30,000 per MW |
| 8 | Maximum bid price for solar power plants with integrated battery energy storage system facilities | EUR 0.12 per kilowatt-hour | N/A |
| 9 |
Minimum share of electricity production under the annual support quota | Solar power plants: 5% | Solar power plants: 10 % |
| Solar power plants + battery energy storage systems: 10 % | N/A | ||
| Wind power plants: 5% | Wind power plants: 10 % | ||
| Other RES power plants: 5% | Other RES power plants: 10% | ||
| 10 | Document to be provided to the Guaranteed Buyer within 12 months of the green auction date | Capacity booking agreement or grid connection agreement | Only grid connection agreement |
The above-mentioned changes are expected to make investors more interested in green auctions and promote the development of renewable electricity under competitive market conditions.
As previously mentioned, most of the pilot green auctions in 2025 were declared as such that did not occur due to a lack of participants, which also prompted the aforementioned changes to the green auction mechanism. Table 2 Green Auctions in 2025 below outlines the main conditions of the green auctions conducted in 2025 and their results.
| No. | Period | RES facility location | Quota (330 MW in total) | Max. price, euro cents/kW | RES type | Results of the green auctions |
| I auction | March 2025 | Territory on the Left bank of Dnipro River | 33 MW | 8 | Solar power plants | Declared as such that did not occur due to lack of participants |
| II auction | April 2025 | All territory | 100 MW | 8 | Wind power plants | |
| III auction | May 2025 | All territory | 47 MW | 12 | Other RES (micro, mini and small hydro power plants) | |
| IV auction | July 2025 | All territory | 150 MW | 8 | Wind power plants | One winner who was awarded the right to support of 120 MW |
In addition to the quotas established for 2025, the Cabinet of Ministers of Ukraine approved forecast indicators for RES support quotas until 2029. Specifically, in 2026 the support quota will be 340 MW, and by 2029 it will increase to 400 MW. The Draft Law No.13219 also provides that the annual quota may be increased by a decision to establish an additional annual quota.
To participate in a green auction and during the construction stage, market participants are required to provide two types of financial guarantees:
- Bid guarantee in the amount of EUR 5,000/MW; and
- Performance guarantee in the amount of EUR 15,000/MW[3].
At the same time, green auctions grant winners certain advantages, which are outlined in Picture 1 Key advantages of participation in green auctions.
| Picture 1. Key advantages of participation in green auctions |
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Changes to the GoO for generated electricity from RES facilities
Draft Law No.13219 proposes limiting the redemption period for GoO to 12 months, instead of the current 18 months.
Draft Law No.13219 also clarifies that the National Energy and Utilities Regulatory Commission of Ukraine has the right to refuse recognition of foreign guarantees of origin only if there are reasonable doubts regarding their authenticity, reliability or truthfulness.
Restrictions on cable pooling mechanism
Draft Law No.13219 introduces the possibility of connecting Battery Energy Storage Systems (BESS) facilities under the cable pooling mechanism[4], which is expected to significantly promote the development of energy storage market in Ukraine. In practice, this means that once Draft Law No. 13219 is adopted, owners of BESS will be able to connect their BESS facilities to the electricity grid either through its existing electricity networks or through the electricity networks of other electricity producers. Overall, this will provide additional options for the efficient utilisation of installations generating electricity from RES.
According to the Draft Law No.13219, however, electricity generation installations receiving state support (i.e. feed-in tariff or feed-in premium) will not be allowed to connect additional electrical installations at the same connection point if such connections lead to an increase in the installed capacity of facilities (or of their stages) or if they violate the Commercial Metering Code.
Amendments to the direct line connection and related exemptions
Article 25 of the Electricity Market Law provides that electricity producers may supply electricity for self-consumption directly to their own premises. At the same time, the legislation stipulates that RES producers may supply their own consumption installations only if the installation is either:
- Located on the same land plot as the electricity generation installation; or
- Situated on adjacent land plots that are connected through internal electricity supply networks.
Draft Law No.13219 introduces a specific exemption for biomass and biogas generation. Under this exemption, electricity generation facilities from biomass and/or biogas may be separated from consumption installations by plots owned by related parties or by land occupied by linear infrastructure (e.g. railways, roads, pipelines, telecom networks, power lines). In fact, after the adoption of Draft Law No. 13219, biomass and biogas electricity producers will be able to supply electricity to their own consumption facilities not related to electricity production, even if they are located on different land plots.
Conclusion
Draft Law No. 13219 represents a significant step towards improving Ukraine’s RES market by addressing key challenges observed during the first green auctions. The proposed amendments aim to enhance investor confidence, increase participation in competitive auctions, and promote the deployment of renewable electricity under transparent and market-oriented conditions.
Overall, after its adoption, Draft Law No. 13219 is expected to strengthen competition, attract both domestic and foreign investment, and support Ukraine’s renewable energy targets, contributing to the country’s sustainable energy transition.
To learn details Ukraine`s electricity and RES markets, see: CMS Ukraine Investing and Doing Business in Ukraine 2025 Guide, available at the following link.
For more information on Ukrainian electricity market regulation and upcoming opportunities for investors, contact your CMS client partner or reach out to the CMS experts who wrote this article: Vitaliy Radchenko, Maryna Ilchuk.
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[1] Feed-in premium is a scheme of state support for RES power plants implemented by entering the Feed-in Premium agreement under which Guaranteed Buyer pays RES producers the difference between amount of established (a) feed-in tariff; or (b) auction price, and the average value of market prices for electricity (calculated as per procedure provided by law). According to Draft Law No. 13219, bilateral contracts for difference will apply to green auctions held after 31 December 2029, under which the auction winner must pay the Guaranteed Buyer the difference between the indicative market price and the auction price. This applies if the calculated market price exceeds the auction price, taking into account the applicable premium.
[2] After the end of martial law, the commissioning period for installations (all except solar power plants) will be 36 months from the date of signing the feed-in premium agreement.
[3] Following the adoption of Draft Law No. 13219, the performance guarantee will be reduced to EUR 10,000 per MW.
[4] Cable pooling is a regulatory and technical mechanism that allows two or more RES projects, typically located in the same area, to share a single grid connection point. This approach optimises the use of existing grid infrastructure, reduces connection costs for developers, and helps system operators manage network capacity more efficiently.
