The President of Ukraine met with the CEO of NBT
On August 5, 2020 NBT Chief Executive Officer Joar Viken, the company is a member of EUEA, met with the President of Ukraine.
NBT plans to build 800 MW of wind power and 200 MW of electrolytic hydrogen production in the Zaporizhia region. The amount of investment involved in the construction of the wind farm will be more than EUR 1.2 billion, and for the production of hydrogen – more than EUR 300 million.
It will be recalled that NBT has been operating in Ukraine for many years and has already invested EUR 400 million. In the autumn of this year, it plans to invest EUR 1.2 billion, and will allocate $ 15 million for the next social project in Zaporizhia.
In addition, according to NBT Chief Executive Officer Joar Viken, the company plans to attract direct investment in the improvement of electrical systems of Ukraine worth more than EUR 140 million.
The company adheres to high standards of corporate and social responsibility and is intolerant to corruption.
Ministry of Energy of Ukraine
The Ministry of Energy is working on the implementation of the law on reducing “green” tariffs.
The work on the implementation of the law to improve the model for support of “green” energy producers will take place in four directions.
This was stated by Deputy Minister of Energy Yuriy Boyko at a meeting of the Working group on the law implementation “On Amendments to Certain Laws of Ukraine to Improve the Conditions for Supporting Electricity Production from Alternative Energy Sources” № 810-IX.
According to the results of the meeting, the range of the most pressing issues on the implementation of the Law of Ukraine 10810-IX and compliance with the terms of the Memorandum with investors in renewable energy was identified, and it was decided to form working subgroups in the following areas:
- preparation for auctions for the distribution of support quotas;
- development of a bill on granting the right to producers of alternative energy sources to leave the balancing group of the guaranteed buyer and sell electricity on the market, receiving compensation for the difference between the size of the “green” tariff or auction price and the weighted average market price “day ahead”;
- identification of optimal ways to balance the financial condition of market participants, which have special responsibilities to support the development of RES;
- development of a method for calculating the amount of undersupply of electricity by producers from alternative energy sources and the procedure for providing load reduction services by a producer who sells electricity at a “green” tariff or at an auction price.
Currently, the formation of personnel of working subgroups in certain areas is underway, the necessary information and analytical data are being collected and proposals on ways to implement the Law №810-IX and fulfill the terms of the Memorandum of Understanding with green energy market participants are being developed.
EUEA has joined the working group of the Ministry of Energy of Ukraine on the implementation of the terms of the Memorandum of Understanding between RES market participants.
Ukraine and Germany have reached a new level of energy partnership
On August 26, 2020, was held a meeting in Berlin of the Фcting Minister of Energy of Ukraine Olga Buslavets and Federal Minister of Economy and Energy Peter Altmaier during which a joint intergovernmental statement was signed between Ukraine and Germany on the launch of an energy partnership.
Ukraine and Germany agreed to strengthen cooperation on the integration of Ukraine’s energy markets into ENTSO-E, increasing the level of energy security, decarbonization of the economy, exchange of innovations in energy technologies and implementation of joint projects in the areas of “green” energy development, digitalization of energy infrastructure and the creation of a modern energy system.
The parties intend to promote energy transformation, exchange developments of government policy in the field of energy, improve the conditions for private sector investment in sustainable energy.
German business is interested in implementing new projects in the energy sector of Ukraine
During the meeting with representatives of major German companies, Acting Minister of Energy of Ukraine Olga Buslavets said that Ukraine plans to launch a number of projects in the near future to build PHESs, reconstruct HPPs and develop mini- and small HPPs with a capacity of 1 to 10 MW, which should become an important component of energy supply for Ukraine’s regions.
During the meeting, representatives of the German business community were presented investment projects for green energy, including hydropower, wind and solar energy, bioenergy, including the production of bioethanol with a neutral level of CO2 and green hydrogen.
German businesses were also invited to consider using the areas and infrastructure of the mines to be closed to launch new innovation and investment projects.
NEURC approved reduced “feed-in” tariffs
On August 1, 2020, a meeting of the National Commission for State Regulation of Energy and Utilities (NEURC) was held in the form of an open hearing at which it was decided to adopt a resolution of the NEURC “About establishment of “feed-in” tariffs for the electricity and surcharges to “feed-in” tariffs for compliance with the level of use of Ukrainian-made equipment for business entities“(from August 1, 2020).
The NEURC approved a reduction of the “feed-in” tariff, according to the Law signed by the President of Ukraine the day before, on July 31.
NEC Ukrenergo’s tariff for electricity transmission has increased since August 1, 2020
From 01.08.2020 the tariff for electricity transmission services is UAH 240,23/MWh; the tariff for dispatching (operational and technological) management services is UAH 24.75 / MWh (excluding value added tax).
This tariff was approved taking into account the comments of industrial consumers and with the expectation that in the near future the Cabinet of Ministers and the Verkhovna Rada will take a number of measures to reduce the burden on the tariff.
The calculation of the tariff for electricity transmission services took into account the implementation of measures set out in the Memorandum of Understanding on the settlement of problematic issues in the field of renewable energy in Ukraine, as well as measures of the Anti-Crisis Energy Headquarters.
This level of tariff for electricity transmission services was adopted to ensure integrated, balanced operation of NEC “Ukrenergo”, SE “Guaranteed Buyer”, “NNEGCU “Energoatom”, PJSC Ukrhydroenergo and in order to resolve problematic issues in the electricity sector as soon as possible.
In the first half of the year, the share of RES in the generation structure increased more than 2 times compared to 2019.
In the structure of electricity production in the first half of 2020, the share of renewable energy sources (RES) increased 2.3 times compared to 2019. This is due to the intensive introduction of new RES capacities during the last and in the first half of this year and the decline in consumption. As a result, the installed RES capacity has doubled (from 2.9 GW in June 2019 to 5.8 in June 2020). This growth is explained by the legally established economic incentives for the construction of RES, in particular, the “feed-in” tariff and the guaranteed purchase by the state of electricity produced from RES.
At the same time, the share of thermal power plant heat in the production structure decreased by 5%, while the share of nuclear power plant and other types of generation did not change.
Statistics of the installed capacity of solar power plants, wind power plants, small hydropower plants and biopower plants for June 2019, follow the link: https://cutt.ly/UflLAmT
Sale of electricity from RES at auctions and impact on the industry
The SE “Guaranteed Buyer” soon will sell electricity from renewable energy sources (RES) under direct contracts. Bidding will take place on the Ukrainian Energy Exchange TV channel through electronic auctions. The pilot auction will take place after the government’s decision to amend the Procedure for Conducting Electronic Auctions for the Sale of Electricity under Bilateral Agreements.
The introduction of such a mechanism is a step forward in improving the mechanism for supporting “green” energy in Ukraine. Its implementation will allow: to balance the ratio of supply and demand in the market; effectively develop the market for bilateral agreements; reduce government spending on compensation for the “green” tariff.
These factors should stabilize the work of the enterprise, increase the level of its predictability and contribute to the normalization of the pricing mechanism.
The advantages of auctions for the sale of electricity from RES for market participants are as follows:
- available mechanism for buying “green” electricity;
- buying from a stable and reliable seller;
- development of the image of a socially responsible company;
- transparent mechanisms of interaction under the concluded agreement;
- the ability to use renewable electricity in their work without the need to purchase appropriate equipment.
The Guaranteed Buyer expects that the improvement of the support system for electricity producers from renewable sources will contribute to the further development of the national energy market.
The Guaranteed Buyer makes payments to electricity producers
On August 25, 2020, the SE “Guaranteed Buyer” made the second advance payment for electricity from renewable sources (RES), produced in August. The term of payment meets the requirements of the Procedure for the purchase of electricity guaranteed by the buyer from alternative energy sources.
Producers with RES were paid UAH 1.11 billion. The level of payment for 20 days of August amounted to 68.5% of the total value of marketable products.
The National Bank of Ukraine
The National Bank of Ukraine on July 18, 2020 adopted the Resolution “On Peculiarities of Fulfillment of Requirements of Certain Legislative Acts of the National Bank of Ukraine on Issues of Evaluation of Credit Risks”.
In accordance with the Resolution banks will be entitled to evaluate credit risk of borrowers (and will not have to recognize that the event of default of the borrower occurred due to restructuring the debt) if all following conditions are satisfied:
- agreements or amendments to already executed agreements related to restructuring the debt are linked to restructuring under the Law of Ukraine No. 810-IX dated 21 July 2020 “On Introduction of Amendments to Certain Laws of Ukraine as to Improvement of Conditions of Support for Production of Electricity from Alternative Energy Sources”;
- agreements or amendments already executed agreements related to restructuring the debt are entered into by 28 February 2021;
- amendments to already executed agreements, including conditions related to restructuring does not decrease NPV of the project more than 10%.
The most acceptable instruments to settle the indebtedness are determined by the bank regardless of the status of the borrower.
The Resolution came into force on 19 August 2020, and will probably be able to simplify the restructuring of loans for RES producers.