Legislative initiatives for 15-30 November 2020 impacting RES producers

Read the legislative initiatives fro 01-15 November 2020: https://cutt.ly/jhcFfYO

The review was prepared by the EUEA Energy Advisor – IMEPOWER

Download: IMEPOWER Legal Monitoring 2020 11 15_30_eng

The Verkhovna Rada of Ukraine

Effective Laws

 The Law 1006 (former Draft Law 4119) was signed by the President on 27 Nov. It gives the right to the Cabinet of Ministers of Ukraine (CMU) to issue the state guarantees for the loans attracted by the Transmission System Operator (TSO). There is a plan that the CMU will approve such guarantees for the TSO to receive loan from one of the state-owned banks in Dec 2020 in the amount that will be sufficient to cover 40% of obligations of the Guaranteed Buyer (GB) to RES as of 1 Aug 2020 (e.g. 40% of the “old debt” being UAH 22.4 billion = UAH 9 billion).

Draft Laws to be prepared for the second reading

On 27 November, the CMU submitted to the VRU new version of the Draft Law on the State Budget for 2021 (Draft Law No. 4000). The following important amendments have been introduced:

Provision of the Law 810 on 20% state budget co-financing of the FIT payments is suspended for 2021.

Provision of the Law 810 on obligation of the CMU to prepare a draft law on issue of the state bonds to cover “old debt” towards RES is suspended for 2021.

The CMU gets the right to issue the state guarantees for the loans attracted by the TSO to support its liquidity and sustainability of operations.

Registered legislative initiatives

Registration No. 4380 dated 16 November 2020 – draft Law on administrative fee. The draft defines the criteria for paid and free of charge administrative services, the procedure for setting the specific size of the administrative fee, the payment procedure. Payment for administrative services is stipulated by laws only.

The draft Law provides for a clear amount of administrative fee for more than 170 of the most popular administrative services, including administrative services concerning land, urban planning, registration of land and real estate, of related property rights, etc.

Registration No. 4421 dated 25 November 2020  in particular, the draft Law provides for the following:

– extension of the moratorium on inspections during quarantine, in particular in-house inspections and cross-audits;

– temporary cancellation of military levy for a period of three months;

– temporary moratorium on any change in the amount of value added tax rates (for one year);

Registration No. 4423 dated 25 November 2020  according to the draft Law, in particular, the local authorities shall be entitled in 2021 to decide on the reduction of land fees and/or tax on real estate (other than land) owned by individuals or legal entities.

 The Cabinet of Ministers of Ukraine

At the meeting on 18 November 2020, the CMU approved the list of investment projects of priority for the state until 2023. The list includes 13 projects to be implemented by energy companies of the public sector of the economy. In particular, construction and reconstruction of facilities is envisaged in order to increase the flexibility of the IPS of Ukraine (the third stage of Dniester HPSP, Kaniv HPSP, installation of hybrid power generation systems at PrJSC Ukrhydroenergo, reconstruction of Unit No. 6 of Slovianska TPP).

See the full list of investment projects of priority for the state here (item 5.8 of the Agenda) – http://materialy.kmu.gov.ua/e79aad57/a7c180d6.html

National Energy and Utilities Regulatory Commission

Made decisions

At the meeting held on 18 November 2020, the NEURC approved the Plan for implementation of measures of state control of economic entities operating in the fields of energy and utilities for 2021 (NEURC Resolution No. 2134 dated 18 November 2020). The plan, in particular, contains a list of licensees subject to control in 2021, the date, deadline and scope of inspection.

Draft statutory instruments published for their further discussion

On 17 November 2020, the NEURC published on the website the draft Resolution of the NEURC “On approval of amendments to resolution of the NEURC No. 641 dated 26 April 2019”.  Amendments shall be introduced in order to implement the provisions of the Law of Ukraine No. 810-IX which entered into force on 01 August 2020 and stipulates introduction of responsibility for imbalances of RES producers of more than 1 MW (50% – from 01 January 2021 and 100% from 01 January 2022). In particular, the amendments represent the latest changes in the Law of Ukraine “On the Electricity Market” concerning the granting of the right to the Guaranteed Buyer to sell electricity from RES producers in other market segments.

Comments and proposals from market participants were accepted until 27 November 2020 inclusively.

EUEA submitted comments and proposals to the draft resolution concerning:

  • the procedure for calculating (calculation formulas) the amount of compensation to RES producers of part of the cost of GB imbalance settlement;
  • procedure for registration and terms of settlements of RES producers concerning separate transactions;
  • disagreement of RES producers with entitlement of the GB to terminate the PPA on a unilateral basis in case of reveal and confirmation of provision of unreliable information during the PPA conclusion;
  • other editorial corrections.

See the text of EUEA’s comments and proposals here https://cutt.ly/MhcHRWa

On 26 November 2020, the NEURC published on its website the draft Resolution of the NEURC “On approval of amendments to the Market Rules” for further discussion. The draft has been prepared to bring the provisions of the Market Rules (NEURC Resolution No. 307 dated 14 March 2017) in correspondence with the provisions of the Law No. 810 concerning the following:

  • procedure for compensation to RES producers for electricity not delivered due to their execution of the TSO’s command from 01 January 2021 (due to the provision of curtailment service by the RES producers);
  • methods of estimation of the volume of electricity not delivered by such producers due to execution of TSO’s commands.

Draft is published on the NEURC website: http://www.nerc.gov.ua/?news=10859.

Comments and proposals from market participants are accepted on or before 07 December 2020.