On July 29, 2022, the Verkhovna Rada of Ukraine adopted Draft Law  №7427 on the peculiarities of regulating relations in the natural gas market and in the field of heat supply during martial law and subsequent recovery.

The draft law allows RES Producers under the “green” tariff scheme to sell electricity at the Day-Ahead Market, Intra-Day Market, Bilateral Agreements market and the Balancing Market. It means that the sale of electricity is organized by the RES producer without the participation of the SE “Guaranteed Buyer”.

Also, the draft Law took the first step in the introduction of virtual/financial corporate PPAs in Ukraine. The draft law provides for the possibility of concluding contracts for the difference between RES producers and buyers of electricity from alternative energy sources

In addition, the Verkhovna Rada introduced the cash method of calculating value-added tax (VAT) for “green” energy facilities. Law No. 7428-2 on “Ensuring stable functioning of the natural gas market during martial law and subsequent recovery” provides for the corresponding amendment.

Now, along with other participants in the electricity market, “green” energy facilities are temporary, until January 1, 2026, determining the date of occurrence of tax liabilities and tax credits using the cash method.

This is reported on the VRU website:  https://www.rada.gov.ua/news/razom/226325.html

On August 18, Volodymyr Zelenskyi signed the law “On the peculiarities of the regulation of relations in the natural gas market and in the field of heat supply during martial law and subsequent recovery.” The law also regulates the revenue distribution mechanism of “NPC “Ukrenergo” from the capacity distribution of the interstate crossing.

Revenue accumulated before 31 July 2022: 10% – on the development of the interstate crossing; 45% – for debt repayment in the balancing market; 45% – for payments to the “Guaranteed Buyer” for making payments to RES producers.

Revenue obtained from 1 August 2022 to 1 January 2023: 50% – for debt repayment on the balancing market; 50% – for payments to the “Guaranteed Buyer”.