On October 31, 2024, USAID Energy Security Project (USAID ESP) presented the Green Book for the restructuring of the RES financing scheme. In order to eliminate the issues of the existing RES support scheme, it is proposed to introduce a separate RES surcharge at the legislative level.
European-Ukrainian Energy Agency (EUEA) opposes the proposed reform of the support system for renewable energy producers (RES) involving the separation of the RES surcharge from the electricity transmission tariff. We believe that such changes will not address the issues of accumulated debt in the sector and will create new risks for investors, consumers, and the state.
EUEA emphasizes that the proposed reforms contradict the state guarantees of legislative stability provided to investors in renewable energy. These guarantees, which are the foundation of trust and investment in the sector, were secured in 2020 through a memorandum signed by RES associations (EUEA and UWEA) and the government. Their fulfillment is critical for the development of the industry.
The Green Book by USAID ESP suggests three alternative models for separating the RES surcharge. However, all of them have significant shortcomings, failing to resolve issues related to debts owed to producers.
Given the experience of our participants in the Ukrainian electricity market, none of the proposed alternative schemes by itself solves the issue of ensuring full and timely payment to FiT producers. The proposed schemes provide only a change in the legal construction in part of the procedure for the administration of the RES surcharge funds, but retain almost all the shortcomings of the existing scheme for the administration of the RES surcharge as part of the transmission tariff.
Implementing these changes may lead to delays in payments, reduced payment discipline, and higher tariffs for end consumers.
EUEA believes that the reform of the RES support system should focus on improving the existing mechanism rather than creating new obligations for market participants. Instead of separating the RES surcharge, efforts should be directed at addressing urgent issues, such as ensuring timely approval of planned indicators, enhancing transparency in the use of transmission tariff funds, and accelerating the repayment of accumulated debts.
We are confident that such an approach will preserve system stability and predictability, ensure that state obligations to RES producers are met, align with EU legislative requirements, and attract new investments.
EUEA calls for an open dialogue among all market participants to develop balanced solutions that promote renewable energy development and uphold state commitments.
