ASS5659-825x400The introduction of transparent auctions system in Ukraine to support renewable energy producers will help reduce the price of such electricity for the end-user, create equal rules for the game for all players and facilitate the attractions of new investors. This view was expressed by experts from the European Ukrainian Energy Agency and a representative of Scatec Solar at a press briefing at the Ukrainian Crisis Media Center.

According to the current legislation, producers of electricity from renewable sources sell it to the network at a “green tariff”, which is the same for all. In the case of introducing a system of auctions, a fixed “green tariff” will apply for enterprises with a capacity of up to 10 MW; the rest of the players will go to the auction – so that the tariff was formed in a competitive manner, and the price varied depending on the demand and load on the network, explained Olexandra Gumeniuk, Director of the European Ukrainian Energy Agency.

“We are very positive about the introduction of the auction system. This will ensure the most competitive price for the end consumer – which is important for both households and industrial consumers. We hope that the involved organizations, in particular, the Ministry of Energy and the profile committee of the Verkhovna Rada will develop legislation that will put all the players on equal conditions so that  will eliminate corruption and other bad practices in order to create a favorable environment for international investors, “said Mats Lundin , Chairman of the Council of the European-Ukrainian Energy Agency, Director of Celynx AG.

“If a transparent and understandable procedure for auctions is introduced, it will attract large players in Ukraine with more investment, more competitive capital, which will ultimately lead to a better system of auctions – to improve the situation for the end user. The most important thing is to provide equal playing rules for Ukrainian and international companies. If this is not the case, the idea will not succeed: the benefits for national companies will be reflected in end-user prices, “said Magnus Johansen, a renewable energy expert, Scatec Solar  Business Development Manager in Ukraine.

The relevant bill number 8449 is under consideration in the profile committee of the Verkhovna Rada. In addition, there are 7 alternative bills. Different players in the market have different wishes about the auction procedures – the tasks of “raising” or “lowering” the tariff and requirements and obligations for participants, the minimum capacity of the company, which can be submitted for participation in the auction. According to experts from the EUEA, the auction can allow players with a capacity of 10 megawatts for solar and from 20 megawatts for wind power plants. International players usually have a capacity of 200-400 MW.

The subject of the dispute is the amount of fine offered by the company that won the auction, but then did not implement the project: there are risks that certain companies will participate in the auction without a real intention to implement the project. The proposal for the bank guarantee amount is 50 thousand euros for 1 MW, but the Ministry of Energy and many other market participants are proposing to reduce it to 15-20 thousand euros for 1MW.