Starting 1 January 2020, Ukraine launches a new state support mechanism for renewables. Power generating facilities seeking state support must take part in e-auctions and compete for the right to sell power to Ukraine at the lowest possible price.
In the first half of 2019 Ukraine generated 4% of its electricity from renewable sources. The Energy Strategy of Ukraine aims at achieving 25% of its overall power generation through renewable energy by 2035. Such an ambitious goal in combination with state support for renewable power generation provides unlimited market opportunities to investors.
Ukraine has been supporting the renewable energy production through the feed-in-tariff (or “green tariff”), which is currently one of the highest in Europe (e.g. for solar generation – EUR 150.2501 per 1 MW; for wind generation – EUR 101.7823 per 1 MW (indicated for wind power plants with >2MW turbines). Even though the green tariff is a very efficient instrument, it appears burdensome for the state budget. According to the Ministry of Energy and Environmental Protection of Ukraine, the annual state payments under the green tariff will amount to approximately EUR 1.8 billion over the next 10 years. Consequently, introducing new instruments to enhance development of the renewables sector has become a pressing issue.
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