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2024

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Reliable, consistent and digestible information for investment in clean energy projects around the world.


FEED-IN TARIFF 


Renewable energy payments in Ukraine:
Steady progress amid escalating debt  
 
SE Guaranteed Buyer paid UAH 1 billion 643 million to renewable electricity producers at the feed-in tariff for June 2024 and UAH 1 billion 59 million for July 2024. The overall level of payment for June 2024 is 59,75%. In May, Guaranteed Buyer paid renewable energy producers UAH 988 million. The overall level of payment for May 2024 reached 46.5%. 

The payment levels for previous years are as follows:
2024: 62.54%  |  2023: 89.16%  |  2022: 59.80%  |  2021: 99.20%


ELECTRICITY MARKET


New price caps on the day-ahead market, intraday market and balancing market

The National Energy and Utilities Regulatory Commission (NEURC) approved a resolution to revise the electricity market price caps and set them at UAH 5,600 - 10,000 per MWh starting from 31 May.

Day ahead market (“DAM”) and intra-day market ("IDM")
Maximum price caps per MWh by time
00:00 - 07:00
11:00 - 17:00
UAH 5,600 (EUR 133.35)
07:00 - 11:00
23:00 - 24:00 
UAH 6,900 (EUR 164.30) 

17:00 - 23:00 
UAH 9,000 (EUR 214.30)
Minimum floor price – UAH 10.00 (EUR 0.24) / MWh
Balancing market
Maximum price caps per MWh by time

00:00 - 07:00
UAH 6,600 (EUR 157.16)
07:00 - 17:00
23:00 - 24:00 
UAH 8,250 (EUR 196.45)  

17:00 - 23:00 
UAH 10,000 (EUR 238.12) 
Minimum floor price – UAH 0.01 (EUR 0.00024)

These price caps apply to all types of electricity sold on the DAM and IDM. However, these caps are not the case for renewable energy producers benefiting from the feed-in-tariff support scheme as such producers sell their entire volume of electricity to the Guaranteed Buyer at the feed-in tariff price.


CROSS-BORDER ELECTRICITY TRADE


Ukraine reduced electricity imports in July

In 2024 Russian attacks have been targeted at combined heat and power plants and hydroelectric plants. President Volodymyr Zelenskyy told a conference in Berlin on 28 May 2024 that Ukraine had lost half of its electricity generating capacity as the result of Russian attacks, with Russian strikes destroying 9 GW. As a result, Ukraine has been a net-importer of electricity for several preceding months. During June 2024 Ukraine imported 858.3 thousand MWh of electricity which marks 91% growth in comparison to volumes imported during May 2024. 

In July 2024, Ukraine reduced electricity imports by 2% compared to June 2024 – to 837.8 thousand MWh. There has been no export of electricity during June and July 2024.

Hungary provided the largest percentage of imports (45%), followed by Poland (19%) and Romania (18%). Slovakia and Moldova provided the remainder.


NEW LEGISLATION



Ukraine to introduce the capacity reservation
mechanism for renewables

On July 2 2024, bill no. 11392 "On Amendments to Certain Legislative Acts of Ukraine on Simplification of Business Environment" was registered in the Verkhovna Rada of Ukraine (Ukrainian Parliament). Among other changes, the bill suggests establishing the possibility of capacity reservation for wind power plants.


Roadmap for the development of smart grids
 
The Ministry of Energy of Ukraine has approved a Roadmap for the development of smart grids. It envisages the introduction of automation and digital solutions at all levels of the power system. This is necessary to make the system more balanced and secure and more resilient to military risks. 

According to the Roadmap, the restoration of facilities damaged by Russian attacks is planned to be carried out using smart technologies that are more resistant to military factors and natural disasters.

The introduction of smart grid technology will reduce electricity losses in the power grids by 6 billion kWh annually in Ukraine as a whole. It will also help reduce the annual SAIDI index (a measure of the duration of power outages) to about 100 minutes, which is in line with the EU average.


Simplification of the procedure for connecting generating facilities to power grids

On May 8 2024, the NEURC adopted a resolution that simplifies the process for connecting generating facilities (such as gas turbine, gas piston, and cogeneration units) to power grids. This resolution eliminates the need for payment according to existing rates.

This is crucial given the significant damage to the Ukrainian high-maneuver generation (mainly represented by heat-power plants and hydroelectric plants) caused by Russian missile and drone strikes, which has destabilized Ukraine's energy system.

The amendments to the NEURC Resolution are also aimed at:

  • reducing the timeframe for issuing and approving technical specifications;
  • reducing the number of documents required to obtain connection services;
  • ensuring minimum technical requirements for parallel operation of generating facilities with the power system;
  • use of existing energy infrastructure as a priority.


National Energy and Climate Plan of Ukraine 2025-2030

The Cabinet of Ministers of Ukraine has approved the National Energy and Climate Plan (NECP) for the period up to 2030. The decision was made at a session on June 25. This strategic document aims to align energy and climate policies to foster sustainable development and economic recovery in Ukraine.

The preparation of the NECP is a requirement under the Energy Community Treaty, following the guidelines of EU Regulation 2018/1999 and relevant methodological recommendations from the European Commission. Additionally, the development and approval of the NECP was a prerequisite for EU financial assistance allocation through the Ukraine Facility instrument. Ukraine has set key goals for 2030 at both the national and regional levels (within the Energy Community), including:

  • reduction of greenhouse gas emissions by 65% compared to 1990 levels
  • climate neutrality of the energy sector by 2050
  • the share of renewable energy sources in the structure of gross final energy consumption is not less than 27%
  • reduction of import dependence (gross imports in total primary energy supply) to 33%
  • deepening the diversification of energy sources and supply routes - no more than 30% from a single supplier
  • full and comprehensive integration of Ukraine's electricity and natural gas markets with the European market
  • free pricing in energy markets with mechanisms to support vulnerable consumers
  • increasing competitiveness


Introduction of special auctions for additional services

On June 26 2024, the National Energy and Utilities Regulatory Commission (the NEURC) adopted Resolution No. 1172 "On Approval of Amendments to Certain Resolutions of the NEURC", which introduced specialised auctions for ancillary services. NPC Ukrenergo plans to hold two of these auctions in August 2024 to procure various types of reserves.

In general, the new auction mechanism is intended to boost the development of a decentralized ancillary service market in Ukraine. The opportunity to enter the contract for up to 5 years with a deferred date for the start of service gives developers space for planning and attracting financing. Flexibility in the terms of ancillary services contracts could give developers sufficient time to secure financing and construct the necessary facilities, thereby reducing initial investment risks.


Development of distributed generation

On August 13 2024, the Cabinet of Ministers of Ukraine adopted three important decisions for the development of distributed generation, in particular:

  1. The National Renewable Energy Action Plan for the period up to 2030 and the action plan for its implementation were approved.

    It is planned that the percentage of renewable energy sources in gross final energy consumption in 2030 will be 27%, namely: 
    -  in heating and cooling systems – 33%
    -  in electricity production – 29%
    -  in the transport sector – 17%

  2. An additional annual quota of support for business entities that produce electricity from alternative energy sources for 2024 has been established in the amount of 110 MW – 11 MW for solar power plants, 88 MW dedicated to wind power stations and 11 MW for other types of alternative energy sources. The first auctions for the distribution of quotas are planned for October-November 2024.

  1. A special resolution approved the terms and conditions for conducting tenders for the construction of generating facilities, which will apply to the construction of facilities with the capacity of 5 MW to 80 MW each, with the total capacity of tender being 700 MW and the expected price ceiling of EUR 855 thousand per 1 MW. The relevant facilities are expected to be commissioned by the end of 2027, which makes them also eligible for the ancillary services.

REBUILDING, RESTORING AND INTERNATIONAL AID



Implementation of the Ukraine Facility programme

On May 14 2024, the Council of the European Union finally adopted the Action Plan proposed by the Government of Ukraine to implement the Ukraine Facility programme, which provides for the allocation of €50 billion in financial assistance to Ukraine over the period 2024-2027. The funds allocated under the programme will be used to finance the state budget, stimulate investment, and provide technical support for the implementation of the programme. 

In total, the Ukraine Facility Plan includes more than 150 indicators in 69 reform areas to be implemented by 2027. 

Active reforms are envisaged in the energy sector. The priorities will be energy security and the transition to low-carbon and renewable energy sources with the continuous development of energy resilience. This will increase Ukraine's export potential in European markets and expand opportunities for attracting investment.




International support for Ukraine's energy sector

A high-level meeting of the G7+ Coordination Group on Assistance to Ukraine's Energy Sector was held during the International Conference on Ukraine's Recovery in Berlin. In particular, the G7+ partners agreed to provide more than USD 1 billion in assistance to the energy sector following recent attacks, including more than EUR 100 million in new grant contributions to the Ukraine Energy Support Fund, USD 500 million in new financing from the US to support the energy sector, EUR 300 million in additional financing from the EBRD, at least USD 47 million in an additional grant from the World Bank, and humanitarian aid donations from EU member states.



German company to complete wind farm near Odesa

The German company Notus Energy is developing a 300 MW wind farm project in the Odesa region, with a first phase of 120 MW. Following the full-scale invasion, the company has continued to work on this project since spring 2022. The first phase of the wind farm will not be launched this winter, but the company is doing everything in its power to launch the project as soon as possible.


EBRD and GOLDBECK SOLAR establish joint venture to build solar power plants in Ukraine

The European Bank for Reconstruction and Development (EBRD) has partnered with GOLDBECK SOLAR Investment to create a renewable energy joint venture, aimed at developing new solar PV projects in Ukraine. This initiative is part of their efforts to strengthen the resilience of Ukraine's energy sector, which has faced significant attacks from Russia in recent months. The newly formed GOLDBECK SOLAR Investment Ukraine GmbH plans to support domestic electricity generation by developing up to 500 MWp of new renewable energy capacity. This will be the group's first investment and operation in Ukraine, marking a significant milestone for attracting foreign direct investment to the country's energy sector, with a focus on reconstruction and green transition.



New wind power plant begins operating

The first wind turbine at the Ostrovsky wind farm in Zakarpattia has already generated the first 175,000 kWh of electricity. The wind turbine is currently operating at a capacity limit of 2 MW. Over the next few days, the wind farm is expected to reach its nominal installed capacity of 4.8 MW and generate electricity for consumers without restrictions. The total installed capacity of the planned wind power plant will be 80 MW.


BIOGAS


Parliament adopts draft law on establishing register of biofuel installations
Bill No. 9597 on amendments to the Law of Ukraine "On Alternative Fuels" regarding the establishment of a register of installations using biofuels as the sole type of fuel was adopted by the Parliament in the first reading on June 18 2024. The bill is aimed at creating a register of biofuel facilities (including biogas and biomethane) to exempt them from paying carbon dioxide emissions tax. According to the draft law, the Register of Installations is to be created by the Cabinet of Ministers of Ukraine.

The enactment of the bill will lead to the creation of a special register, which will include installations that use solid, liquid and gas fuels as their sole type of fuel. Installations that have an account in the register will not pay carbon dioxide emission tax.

The owners (users) of the facilities included in the register of facilities using biofuels as the sole type of fuel will enter information for the reporting period on the volume of biofuel consumption, heat and/or electricity generated and carbon dioxide emissions into the register by the 5th day of the month following the tax reporting period.


Loan for construction of a bioethanol plant

The European Bank for Reconstruction and Development (EBRD) is providing a €60 million loan to Ukrainian private company Lan-Oil LLC to build a new private biofuel plant in Ukraine. This is the first such facility undertaken since the start of the full-scale invasion. The biofuels produced at the new plant will meet the requirements of the EU Renewable Energy Directive (RED III). 

The project is being implemented by Galnaftogaz and the OKKO Group. The loan is backed by a financial guarantee from the European Union under the investment component of the Ukraine Facility (Pillar II).


OTHER UPDATES


Ukrnafta's tenders for oil and gas field development

Ukrnafta plans to attract potential investors to jointly develop oil and gas fields under production sharing agreements. According to the tender offer, the company plans to develop 15 oil and gas fields. Ukrnafta has also announced a tender for the construction of two oil wells at Verkhnemaslovetske field in Lviv region, four wells at Anastasivske field in Sumy region and one well at Yaroshivske field in Chernihiv region on a turnkey basis.







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