On December 17, 2019, at 15:00, a press conference was held initiated by the European-Ukrainian Energy Agency (EUEA) regarding the Investors in the renewable energy sector appeal to the President of Ukraine for support of a compromise solution took place at the press center of the Interfax-Ukraine.
Oleksandra Gumeniuk, Director of EUEA;
Alina Sviderska, Head of GR and Business Development manager in Ukraine at Scatec Solar;
Adrien Fouchet, country manager Eurocape New Energy;
Boerge Tvorg, Vice President, Project Development in NBT AS;
Dmytro Nechyporenko, director of Voltage Group
EUEA Members – RES investors, who invested more than EUR 2.0 billion in the Ukrainian renewable projects, and have also made commitments to further investments exceeding EUR 2.0 billion over the next 3 years. Importantly, RES investors have also attracted the world’s leading international financial institutions and banks to provide financing for these projects, including the European Bank for Reconstruction and Development, US Overseas Private Investment Corporation, Denmark’s IFU, France’s Proparco, Black Sea Trade and Development Bank, Finland’s Finnfund, Sweden’s Swedfund, FMO, Nordic Environment Finance Corporation, GIEK and others.
Private investors and financial institutions have committed investment into Ukraine’s renewable energy sector based on a fair and stable regulatory framework. Any retroactive changes would have serious repercussions for continued and future financing of all infrastructure projects in Ukraine, not just in the renewable energy sector, as well as for success of renewable energy auctions that the Government plans to launch next year.
As part of the dialogue between investors and representatives of the Ministry of Energy, the idea of voluntarily feed-in tariff (FIT) restructuring was recognized as one of the instruments to reduce potential deficit of the Guaranteed Buyer. Investors are ready to consider accepting a limited reduction of the applicable FIT rate in exchange for extension of the duration of Power Purchase Agreement (PPA) as well as approval by the Parliament and Government of the package of measures aimed at de-risking of the renewable sector.
On 06 December 2019, the group of Parliament Members have registered the Draft Law No. 2543 “On introduction of changes to certain Laws of Ukraine on improvement of investment climate in the renewable energy area” that reflects above mentioned approach and suggests proper framework for FIT restructuring. While some of us have certain suggestions on its improvement that we are communicating separately to the Parliament (like terms for construction and comissioning of the facility), we believe that mentioned Draft Law represented balanced compromise between investors and the state with both sides taking a step forward to address the funding problem of the Guaranteed Buyer, while improving investment climate in the energy sector of Ukraine.
On 13 December 2019, the Draft Law No. 2543 was not supported by the Parliament Energy & Utility Services Committee, thus, postponing the resolution of the problem until undefined time.
Quick fixing of the stability of renewable PSO scheme based on the mutual compromise would restore confidence of investors and ensure ability of Ukraine to attract much needed investments not only in renewable generation, but also in other modern technologies important for the energy system such as battery storage, flexible generation, demand response systems, etc. Stable regulatory environment and compromise reached with investors working on feed-in tariff system would enhance significantly interest from investors to take part in future renewable auctions helping Ukraine to get optimal auction prices for electricity due to lower-risk environment and competition.
The largest investors on the RES market of Ukraine have sighned collective letter adressed to the President of Ukraine, the text will be officially released soon. The investors are ready for compromise but what will be the next steps of policy makers? Delay in decision making worsens the situation.
Link to the video: https://youtu.be/ODXFO8mZgv8