Today, June 2, 2022, EUEA together with UWEA, UARE, and SEAU, which together unite the majority of market participants in RES of Ukraine and represent international and Ukrainian investors, appealed to the President of Ukraine, Prime Minister of Ukraine and Minister of Energy of Ukraine.
The purpose of the appeal: the abolition of restrictions on settlements with RES electricity producers.
The letter: 02.06.2022 УВЕА_УАВЕ_ЄУЕА_АСЕУ
As of the beginning of 2022, the total capacity of “green” energy facilities has reached 9656 MW, which can be considered a significant achievement of Ukraine on the way to the implementation of the Paris Agreement, the Energy Strategy of Ukraine until 2035, the Economic Strategy of Ukraine until 2030 and a number of other important documents.
However, Russia’s invasion not only halted the development of the RES sector but also caused devastating damage to «green» electricity producers. According to various estimates, as of today, 30-40% of power plants have been affected, it’s about 1120-1500 MW of installed capacity.
As the sustainability and reliability of the energy system and the electricity market depend on the stable operation of all enterprises in the electricity sector, we insist on the review of temporary measures by the Ministry of Energy of Ukraine, in particular, Order №103 from 04.03.2022 “On Settlements in the Electricity Market», which completely stopped payments to RES producers, and Order №140 from March 28, 2022 “On Electricity Market Settlements”, which significantly reduced payments to RES producers for supplied electricity.
The current level of payments for SPPs and WPPs, according to the Order №140, is only 15% and 16% respectively, which is much less than the necessary costs to cover critical costs and ensure the sustainable operation of power plants. However, as of the end of May, SE “Guaranteed Buyer” receives such an amount of money by selling produced “electricity” on the market, that is able to provide payments to RES producers in the amount exceeding 30-35%.
In addition, SE “Guaranteed Buyer” and NPC “Ukrenergo” according to our preliminary estimates will have retained income of UAH 3.2 billion and UAH 12.7 billion, respectively, which will be enough to significantly increase the level of payments to RES producers.
Experts estimate that according to the results of the year, the electricity market is expected to have a deficit of about UAH 35 billion, a significant part of which (about UAH 16 billion), under the Order №140 of 28.03.2022, will be covered by non-payment to RES producers.
If this Order continues to operate, and RES producers continue to receive payments insufficient to ensure their financial viability, the RES sector in Ukraine and the electricity market will face a default, which will negatively affect the international image of our country.
Taking into account all the arguments set out in the letter, the Associations call on:
1. Abolish the existing restrictions on settlements with RES producers (Order of the Ministry of Energy №140 of 28.03.2022).
2. Ensure current payments to RES producers at the highest possible level at the expense of available and received funds from the trading activity of SE “Guaranteed Buyer” and the activity of NPC “Ukrenergo”.
3. Ensure legislation invariability regarding the support system for RES producers, gradual debts repayment and adherence to existing guarantees provided to investors at the legislative level.
We invite the state authorities to a joint dialogue to discuss our mutually beneficial cooperation for the benefit of our state!