Yesterday, November 24, 2021, the NEURC held an open discussion on the draft resolution of the NEURC “On setting a tariff for electricity transmission services of NPC UKRENERGO for 2022”.

Spoiler: based on the results of the discussion, the Regulator decided that there are no legal grounds for including the costs for payments to RES producers in the transmission tariff of NPC “Ukrenerego”. However, if the budget of Ukraine for 2022 does not include 20% of expenditures to support the SE “Guaranteed Buyer”, it is possible that the NEURC will revise the tariff again next year.

Together with EUEA, the discussion was attended by the heads of the RES sector associations (UWEA, UARE), representatives of the IFU “Clean Energy – Healthy Environment”, investors, and others.

Representatives of the renewable energy sector held a common position, in particular, the director of EUEA Oleksandra Gumeniuk noted the following in her speech:

“EUEA believes that the transition tariff of NPC “Ukrenergo” proposed by the NEURC is insufficient to cover all costs to RES producers. Our association is always in touch with the international community and foreign partners. Currently, the investment climate in Ukraine in the RES sector is rather unpleasant, and the transition tariff for  NPC “Ukrenergo” has become a “red” beacon for investors. In 2020, the indicator of foreign direct investment in Ukraine was generally negative, especially it is interesting what this indicator is going be in 2021, given all the political risks and unpredictability of the regulatory environment. Thus, in June, the Government of Ukraine registered a draft law on excise tax on electricity generated from RES in the amount of 3.2%, which was later excluded from the draft law. Ukraine also had international success in issuing green Eurobonds by NPC “Ukrenergo” in early November, and in just a week there was terrible news about the blocking of disbursements for a special purpose and discrimination in the renewable energy market. Therefore, the issue of adequacy of the transmission tariff level of NPC “Ukrenergo”, which affects the avoidance of the new TSO debt pit, concerns not only RES producers and participants of today’s meeting, but also the prospects of integrating the Ukrainian energy system into ENTSO-E and investment attractiveness of Ukraine and our image in the international arena as well.

We also ask the NEURC to take into account the comments of our members set out in the letter of the EUEA to the NEURC dated November 22 on proposals and comments to the draft resolution of the NEURC “On setting a tariff for electricity transmission services NPC”Ukrenergo” for 2022″.

In particular, we ask the NEURC to refer to Art. 65 of the Law of Ukraine “On Electricity Market” when approving the transmission tariff, which states that the only source for the implementation of SE “Guaranteed Buyer” PSO on RES remains funds from the Transmission System Operator. Instead, the reference to the norm of Art. 8 of the Law of Ukraine “On Alternative Energy Sources”, on 20% of funding from the State Budget, is unfounded, because during 2021 the relevant funding did not take place, and the same will happen in 2022, because, already adopted in the first reading, Budget of Ukraine for 2022 ”suspends the norm on payments of 20% for RES from the state budget.

These are key points, all other comments are described in our letter to the NEURC ”.