National Association of Regulatory Utility Commissioners
Energy Regulatory Partnership Program
with
The National Commission for Energy State Regulation of Ukraine
Renewable energy sources in Ukraine
Alexey Orzhel
The National Commission for Energy State
Regulation of Ukraine
May 21, 2012 Kiev
General Survey
Ukraine:
Territory is 603 628 km² (45th in the world); 7% of water surface;
Population is 45 617 542 people (28th in the world);
Density is 75,57 persons/km²;
Currency: Ukrainian hrivna
2
General information. RES Potential in Ukraine
3
General information. RES Potential in Ukraine
4
General information. RES Potential in Ukraine
5
General information. RES Potential in Ukraine
6
RES Potential in Ukraine. Conclusion.

Total annual technically achievable energy potential of the main types of
RES in Ukraine is equivalent to 81mln tons or 70 bln m3 of natural gas,
which is about 40% of annual energy needs of Ukraine, the volume of its use
may go up to 50% in 2030. The main types of RES and the most efficient
ones at the moment and for the nearest future are:
- wind energy,
- solar energy,
- bioenergy,
- hydro energy,
- geothermal energy.
7
The role of government in providing incentive for alternative
energy

Setting transparent rules in the sphere of alternative energy

Reserve of budget funds for that achievement

Providing subsidies and loans

Tax exemption

Providing feed-in tariffs

Organizing quota for generation and consumption of energy produced from alternative
sources

Information policy in the field of alternative energy

Branding of equipment and energy, generated from alternative sources

Setting technological standards and certification
The existing National legislation in the field of alternative energy (setting
rules)

Law of Ukraine «On alternative sources of energy»

Law of Ukraine«On alternative types of fuel»

Law of Ukraine«On electricity»

Law of Ukraine«On energy saving»

Law of Ukraine«On combined generation of heat and electricity (co-generation) and use of waste
energy potential»

Other normative legal documents
State bodies of power in the field of alternative energy (setting of rules)





Cabinet of Ministers of Ukraine (CMU)
Ministry of Fuel and Energy of Ukraine (MFE)
National Electricity Regulatory Commission of Ukraine (NERC)
National Agency for Energy Efficiency (NAEE)
State Inspectorate on Power Plant and Network Operation (SIPPNO)
State Energy Strategies and Program
(setting long-term goals)
 Energy Strategy until 2030
 Program of construction of wind power plants (approved by Decree of CMU of
February 3, 1997, No. 137 “On Comprehensive Program for Construction of Wind Power Plants “)
 Energy Saving Program (approved by Decree of CMU of February 5, 1997, No. 148 “On
Comprehensive State Energy Saving Program of Ukraine”)
 Programs for Support of Development of Small Hydro and Thermal
Energy (approved by Decree of CMU of December 31, 1997,
No. 1505 “On the Program of State Support to Development of Alternative and Renewable Energy
Sources and Small Hydro and Thermal Energy”)
 National Energy Program (approved by Decree of SR of Ukraine of May 15, 1996, No.
191/ 96-ВРВР “On National Energy Program of Ukraine until 2010” )
Incentive Mechanisms Existing Today for Development of
Alternative Energy

Setting “green” (feed-in) tariff for electricity generated from alternative energy sources

Legal obligation of the WEM to buy the whole volume of electricity generated from alternative
energy sources

Formation of the state energy saving fund


Tax and customs benefits
Beneficial crediting

State subsidies
Additional factors for development of alternative energy

Possibility to sell under direct agreements (prototype of “green” certificates) with consumers or at
the WEM (obligatory purchase)

Obligation energy suppliers to connect generators of electricity from alternative energy sources to
networks (according to Decree of CMU No. 126 of February 19, 2009, on Specifics of Connecting Power Facilities
that Generate Electricity Using Alternative Sources to Power Grid ”)
Formation of information space in the field of
alternative energy

What are results of development of
non-conventional energy?
But there are also problems…

Ukraine has large potential of
renewable resources


Minimal or zero emissions of
greenhouse gases to atmosphere

Inexhaustible stock (in most cases)

Growth of energy infrastructure and
development of technologies



High cost of technologies and
construction
Constraining factors: planning of
energy infrastructure, remoteness from
networks, possible legal obstacles on
the local level and other
The need of reserves
Technological development
Formation of information space in the field of
alternative energy. What is the conclusion?
Development of non-conventional energy ensures significant preferences:
 Reduction of greenhouse gas emissions
- improvement of environment
- possibility to sell quotas for greenhouse gas emissions

Development and stability of the energy sector
- reduced consumption of fossil resources
- reduced import of natural gas
- development of technologies

Opportunities for business
- new jobs
- attractive conditions for investments
- formation of the new energy sub-sector
NERC Alternative Energy Regulation
The main body that exercises the state regulation in the power sector of Ukraine is NERC
Volume of authorities of NERC in the sphere of alternative energy is set by the Law of Ukraine on
Electricity, Law of Ukraine on Combined Generation of Heat and Electricity (Co-generation) and
Use of Waste Energy Potential and Decree of the President of April 21, 1998, No. 335/98 Issues of
the National Electricity Regulatory Commission of Ukraine»
On 01.04.2009 Supreme Rada of Ukraine adopted Law of Ukraine No. 1220-VI on introducing
Amendments in the Law of Ukraine on Electricity with respect to promotion of use of alternative
sources of fuel according to which a model of differentiated (feed-in) tariffs for economic entities
that generate electricity using alternative energy sources and for each power facility, they are valid
until year 2030.
Concerning implementation of the said Law of Ukraine, NERC Decree of 16.07.2009 No. 828
introduced changes in the Procedure for setting, reviewing and termination of validity of “green”
tariffs for economic entities, approved by Decree of 22.01.2009 No. 32, brining it into compliance
with the adopted Law
NERC Alternative Energy Regulation
Main authorities of NERC in the field of alternative energy are:

Approval of the “green” tariff for electricity generated from alternative energy sources

Formation and maintenance of a registry of alternative energy facilities

Annual publication of information related to cost of connecting alternative energy facilities to power
networks

Issuance of licenses for carrying out activities related to generation, transmission and supply of
electricity, on generation of electricity and heat by means of co-generation units and approval of
instructions, conditions and rules separately for each type of licensed activities in accordance with
the Law of Ukraine on Electricity

Setting tariffs for electricity and heat generated at co-generation units

Setting rules for connecting co-generation units to power networks
NERC Alternative Energy Regulation
The sequence of actions by the generator of electricity from alternative
sources if there is a wish to work according to «green» tariff:
To apply to NERC for the license
for electricity generation
To apply to NERC for setting
To become Ukrainian
WEM WEM member
«green» tariff
The main practical conditions of setting «green» tariff:

Availability in ownership or usage of electricity generating equipment that operates on alternative
sources of energy (getting license)

Availability of constructed energy generating facility connected to the network (in case of
construction of a new facility)
- evidence of compliance of the constructed energy facility that generates electricity on the basis
of alternative sources of energy to project documents, the requirements of state standards, the
construction standards and rules
NERC Alternative Energy Regulation
Fixed minimal size of the “green” tariff for economic entities is set by means of converting into Euro the
size of the “green” tariff calculated according to the Rules of the said Law, as of January 1, 2009 at the
official foreign exchange rate of the National Bank of Ukraine as of the said date (Article 17-1, Law of Ukraine

on Electricity)
The size of the "green" tariff cannot be less than the fixed minimal size of the “green” tariff, which at
each date of setting retail tariffs for consumers is converted into the national currency at the official
foreign exchange rate of the National Bank of Ukraine as of such date (Article 17-1 Law of Ukraine on Electricity

if:
if:
>1,
N
N ЕВРО. ХХ . ХХ . ХХХХ
1, ВТАРИФ . ХХ . ХХ . ХХХХ  ВТАРИФ .01.01.2009  ЕВРО. ХХ . ХХ . ХХХХ
N ЕВРО.01.01.2009
N ЕВРО
.01.01.2009 =
1,
N ЕВРО. ХХ . ХХ . ХХХ
 1,
N ЕВРО.01.01.2009
BТАРИФ. ХХ . ХХ . ХХХХ  ВТАРИФ.01.01.2009
NERC Alternative Energy Regulation

Decree of NERC of 23.07.2009 No. 857, the Commission set fixed minimal sizes of
the “green” tariff (equivalents in the national currency):
Fixed minimal size of the “green” tariff, kop./kWh
For electricity generated from wind energy
The size of installed capacity under
600 kW
The size of installed capacity from
600 kW to 2000 kW
The size of installed capacity more
than 2000 kW
70,15
81,84
122,77
For electricity generated from biomass
134,46
For electricity generated from solar energy
By ground facilities
By units installed on roofs with
capacity more than 100 kW
By units installed on roofs with
capacity under 100 kW
505,09
484,05
463,00
For electricity generated by small hydro power plants
84,18
NERC Alternative Energy Regulation. Results of
operation.
By 21.05.2012 the following applied to NERC and received «green tariff
Type of alternative source
Number of economic agentselectricity generators
* - electricity sector facilities
Solar
Wind
Hydro
Biomass
18(19)*
8
34(88)*
2
In the register of electricity facilities operating on alternative sources there are
enterprises, among them:
- 10 facilities using wind energy
- 19 facilities using solar energy
- 3 facilities using biomass
- 2 facilities using waste potential of technological processes
- 43 facilities using energy of small rivers
- 1 facility using mining gas
- 6 facilities using biogass
NERC Alternative Energy Regulation. Results of operation.
On output of 2012 actual data from the beginning of the year
20
NERC Alternative Energy Regulation. Results of operation.
21
NERC Alternative Energy Regulation. Results of operation.
22
NERC Alternative Energy Regulation. Results of operation.
23
NERC Alternative Energy Regulation
Problematic issues of the Law of Ukraine “On electricity” related to
promotion of alternative energy
«Renewable sources of energy that include solar, wind, geothermal, waves and tides
energy, hydro energy, biomass, organic waste gas, waste water gas, biogas and
secondary energy resources, which include furnace and coking gases, methane gas
from coal mines, transformation of waste energy potential of technological processes»
(Law of Ukraine «On alternative energy sources»)
but…
«green» tariff, set by the Law on Electricity is applied only to certain categoties of
facilities on alternative sources, that is: generators of electricity from wind energy,
biomass, solar and small hydro
НКРЭ в регулировании сферы альтернативной
энергетики
Problematic issues of the Law of Ukraine on electricity related to promotion of
alternative energy
«In this Law biomass are the products, that consist completely or partially of
substances of plant origin, that could be used as fuel for transformation of energy
contained in these» (Law of Ukraine «On electricity»)
«Biomass – biologically renewable substance of organic origin undergoing biological
decomposition (agricultural waste (of plant growing and animal breeding), forestry and
technologically connected with this spheres of industry and also organic part of
industrial and household waste» (Law of Ukraine «On alternative types of fuel»)
«Alternative energy facilities – energy generation and other equipment generating
electricity using alternative sources of energy, the share should be not less than 50%
of installed capacity of all sources of energy used at the facility» (Law of Ukraine «On alternative
sources of energy»)
НКРЭ в регулировании сферы альтернативной
энергетики
Problematic issues of the Law of Ukraine “On electricity” related to promotion of
alternative energy

For the facilities the construction of which started after January 1, 2012 and put into operation
before January 1, 2013 incentive with “green” tariff is applied on condition that the share of raw
material, main assets, works and services of Ukrainian origin in the cost of construction of the
corresponding facility generating electricity from alternative sources is not less than 15%, for the
facilities the construction of which started after January 1, 2012 and put into operation after
January 1, 2013 - not less than 30 %, for the facilities construction of which started after January
1, 2012 and put into operation after January 1, 2014 –not less than 50%

Starting from January 1 2013 at solar facilities the share of materials and raw materials of
Ukrainian origin in the cost of solar modules should be not less than 30%
At present the order of defining the share of raw materials, other materials,
main assets, works and services of Ukrainian origin in the cost of
construction of generation facility and its components is developed but not
agreed and not approved
NERC Alternative Energy Regulation
Problematic issues of the Law of Ukraine “On electricity” related to
promotion of alternative energy

In the law substantially modernized facilities, that generate electricity using alternative
sources are the facilities the cost of modernization of energy equipment of which is
more than 50% of the primary cost of such equipment
 Primary cost of equipment - ?

How to define the primary cost of equipment of the facilities built at the time of the
USSR (30s of 20th century)?
NERC Alternative Energy Regulation

In case of using in the structure of fuel part of renewable (alternative) types
of fuel
Is the “green” tariff set for that part, for the whole volume
or it is not set at all?
At the moment the order is not covering economic agents that are involved in
generation of electricity at facilities using alternative and traditional types of
energy at the same time (NERC Statement of 22.01.2009 # 32 «On the order of setting, revising and
cancelling the use of “green” tariff for economic agents»)
Thank you for attention
29