Ukrainian Parliament introduces green tariffs for electricity from alternative sources
The Parliament of Ukraine passed the law “On Amendments to Some Legislative Acts of Ukraine concerning the Introduction of a Green Tariff” (the “Green Tariff Law”). If it is signed by the President, the bill will become law from the moment of its publication in official newspapers.
The green tariff is a special price for electricity produced from alternative energy sources, which shall be set by the National Energy Regulation Commission (“NERC”). The green tariff will be set for 10 years and will be revised annually. It will amount to not less than the double average Wholesale Electricity Market (“WEM”) tariff, but it will not be more than the double average tariff for the generators selling their electricity at WEM pursuant to price proposals. Given, the current value of the average WEM tariff, one may expect that the green tariff will be fixed by NERC at least at the level of 13 US cents (9 Euro cents).
The green tariff shall be applied to electricity generated by alternative sources of energy (except for blast furnace and coke gas). Hydro power plants would qualify only if their capacity does not exceed 10MW. The following sources of energy are considered to be alternative: sun, wind, geothermal, hydro, biomass and biogas.
Moreover, the Green Tariff Law allows the alternative energy generators to sell the electricity directly to local consumers or regional distribution companies at contractual prices. WEM will be obliged to buy at the green tariff price the remaining electricity, which was not sold to consumers or regional suppliers directly at contractual prices.
The Green Tariff Law will also provide some tax benefits and privileges for the end consumers of green electricity. Each consumer will be granted a special certificate evidencing the origin of the purchased electricity from alternative energy sources for certain tax exemptions.
Introduction of the green tariff will certainly increase the financial attractiveness of alternative energy generation and facilitate project development in Ukraine.
