Today, December 17, 2020, the Director of the European-Ukrainian Energy Agency Oleksandra Gumeniuk took part in the press conference “Year of Green Energy Survival. What to expect in 2021? ” together with representatives of the Ukrainian Association of Renewable Energy, the Ukrainian Wind Energy Association, the Solar Energy Association of Ukraine and the law firm Arzinger. As Ms. Gumeniuk noted:
“As for the current payments from Guaranteed Buyer to electricity producers from RES for August-December 2020, we observe progress with increase of payments, but there is steady delay of 1-2 months, and the debt is accumulating. We estimate that at the end of 2020 this debt on current payments will be around UAH 3 billion. First of all, the Government needs to decide on the funding source of this debt.
Regarding the expectations of the Guaranteed Buyer’s payments to electricity producers from RES for the next 2021: the State Budget for 2021 was approved without 20% co-financing of the Guaranteed Buyer’s payments to RES. NEURC reduced TSO transmission tariff from the planned UAH 325 / MWh up to UAH 294 / MWh at the expense of RES compensation. As a result, existing sources are sufficient to cover about 70% of the Guaranteed Buyer’s payments to RES producers. This will result in accumulation of new debt from Guaranteed Buyer to RES around UAH 15 billion in 2021.
We welcome the Government’s decision to approve state guarantees for the TSO loans in the amount of UAH 11.3 billion and we hope that TSO will be able to raise these funds as soon as possible to meet its obligations under the signed Memorandum of Understanding on repayment of 40% of the debt by the end of December 2020. We also hope that the Government will immediately start working on securing funding via the same scheme in 2021 to cover repayment of another 60% of debt.
Significant increase of DSO electricity distribution tariffs (due to introduction of RAB tariff methodology) will require at least UAH 10 billion of extra funds from the Guaranteed Buyer in 2021. If the Government does not make decision quickly on changing the PSO for households to cover increase of DSO and TSO tariffs, then, the Guaranteed Buyer’s debt under Renewable PSO and Household PSO will jump by more than UAH 25 billion in 2021.
As for the position of international investors, they see that the Memorandum of Understanding has been violated and Law 810-IX of July 21, 2020 is not being implemented. Of course, they still hope that the Government will propose additional solutions to improve financing mechanisms and possibly find new sources of financing for the industry by the end of December 2020 and will demonstrate that it is a reliable partner for investors. However, if there is no progress in the next 2-3 weeks, in January 2021 investors most probably will consider new appeal to the Dispute Resolution Center of the Energy Community and return to the idea of arbitration, which was mostly suspended in the summer due to progress under the Memorandum of Understanding and Law 810-IX adopted on its basis”.
Video broadcast of the press conference at the link: https://www.youtube.com/watch?v=f0-Js3EBYiY