Clean Energy Tool
Reliable, consistent and digestible information for investment in clean energy projects around the world.
Reliable, consistent and digestible information for investment in clean energy projects around the world.
Renewable energy payments in Ukraine:
Steady progress amid escalating debt
SE Guaranteed Buyer paid UAH 567.8 million to renewable electricity producers under the feed-in tariff for February 2024. The overall level of payment for February 2024 is 99.6%. In March, SE Guaranteed Buyer paid renewable energy producers UAH 372.4 million. The overall level of payment for March 2024 reached 99.49%. Also, on 15 April 2024, SE Guaranteed Buyer made a payment to renewable energy producers for the first ten days of April 2024 in the amount of UAH 481.9 million. The overall level of payment for the first ten days of April this year is 27.87%.
Corporatisation of the Guaranteed Buyer
On 2 February, the Cabinet of Ministers decided to transform the state-owned enterprise (SE) Guaranteed Buyer into a joint-stock company with 100% of the shares in the authorised capital owned by the state and not subject to privatisation. The transformation of Guaranteed Buyer into a joint-stock company will increase the transparency of the company's operations The corporatisation of the guaranteed buyer is expected to be completed by the end of July 2025.
Lifting of the limits for settlements with producers under the feed-in tariff
In the face of the russian invasion of Ukraine, the Ministry of Energy of Ukraine on 28 March 2022 released the order ‘On Settlements at the Electricity Market’ conveying the proportions of distribution of payments from the Guaranteed Buyer among producers under the feed-in tariff (for more information, please refer to our publication).
In fact, said order allowed the Guaranteed Buyer to settle only 18% of payments due to renewable energy producers for clean energy delivered to the grid, while the remaining 82% of amounts due could have been paid pro rata to funds available to the Guaranteed Buyer.
Eventually the order in question was cancelled on April 26, 2024.
Ukrenergo joins the ITS mechanism
NPC Ukrenergo has joined the multilateral agreement between power system operators comprising ENTSO-E, which enshrines the ITS mechanism - the principle of compensation for electricity transit costs.
According to the agreement, starting from 1 July, Ukrenergo will be able to receive compensation for the costs incurred during the transit of electricity from other countries through Ukrainian trunk power grids from European operators united in ENTSO-E.
Previously, such costs incurred by Ukrenergo were covered by Ukrainian electricity market participants.
Ukraine completes transition to European electricity trading rules
NPC Ukrenergo held joint auctions on its platform for access to interstate crossings with Moldova, where the right to supply electricity for an entire month was sold for the first time. Thus, Ukraine has completed its transition to European electricity trading rules.
On 27 February, the first joint monthly auction for access to interstate cross-border electricity supply for Ukraine and Moldova for March was completed. The auction in this format lasted a week.
Thus, in the direction of Ukraine-Moldova (UA-MD), the allocated capacity was 463 MW. In the direction of Moldova-Ukraine (MD-UA) - 96 MW. 100% of the available capacity in each direction was distributed among 4 participants. The total number of participants in the UA-MD direction was 8, and in the MD-UA direction - 9.
The demand for capacity at each monthly auction exceeded the capacity offered for allocation, which determined the maximum auction price for the UA-MD direction of EUR 0.05 per MW and for the MD-UA direction of EUR 0.5 per MW.
Ukraine renews electricity trade with Hungary
On 23 February 2024, Ukraine resumed electricity trade with Hungary for the first time in 2 years. The first joint daily capacity allocation auction between Ukraine and Hungary was held on the European JAO platform with the day of delivery on 23 February. The entire offered capacity was allocated for imports - 68-167 MW, depending on the time of day. Almost 12% of the proposed capacity, up to 47 MW, was allocated for export.
The maximum export limit for Ukrainian electricity has been increased
Starting from 1 March, the maximum export limit for Ukrainian electricity from Ukraine and Moldova to the EU has been increased to 550 MW per hour. Ukraine now sells electricity to all its neighbouring countries: Slovakia, Romania, Hungary, Poland and Moldova.
Resolution improving the auction model for the sale of green electricity
The Government approved Resolution No. 232, facilitating the auction model for the sale of renewable electricity under the feed-in premium mechanism, a support scheme implemented in the Ukrainian renewable energy market in July 2023. For more information about FiP, please follow the link.
The adopted resolution will facilitate the transition to a new, competitive model of renewable energy support.
Rules for functioning of the registry of guarantees of origin of electricity produced from renewable energy sources introduced in Ukraine
The Cabinet of Ministers of Ukraine has approved the Resolution, "On the Introduction of Guarantees of Origin of Electricity Generated from Renewable Energy Sources".
The resolution approves the Procedure for Issuance, Circulation and Redemption of Guarantees of Origin of Electricity Generated from Renewable Sources, as well as the Procedure for Determining the Environmental Value of Electricity. A register of guarantees of origin will also be created and administered by the NEURC. The guarantees will be generated electronically in MWh in accordance with the volumes of electricity supplied from renewable energy sources provided by the commercial metering administrator.
Guarantees of origin for renewable electricity supplied by those RES producers that receive state support (in the form of a feed-in tariff or future auctions) will be held by SE Guaranteed Buyer.
The introduction of guarantees of electricity origin will significantly increase the export potential of Ukraine's energy sector, as electricity consumers will be able to confirm its origin from RES and its environmental value (the amount of CO2 emissions avoided). It will also allow industrial enterprises to prove that their goods were produced from clean energy and thus increase the competitiveness of Ukrainian goods in the European market, which is quite important considering the forthcoming CBAM regulations.
The initiative is in line with the goals of the energy strategy, which envisages a significant increase in electricity production from renewable energy sources.
National Energy and Climate Plan of Ukraine 2025-2030
The Ministry of Economy of Ukraine has drafted the National Energy and Climate Plan of Ukraine 2025-2030 (NECP), and currently, public consultations are ongoing. 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:
Ukraine to boost green hydrogen production
Ukraine is set to ramp up its renewable hydrogen production significantly, aiming to build 10 gigawatts (GW) of capacity by 2030, in line with EU directives. Currently producing around 360,000 tons annually, mainly for ammonia production, Ukraine's output is poised for expansion. The EU plans to construct up to 10 GW of electrolysis capacity in Ukraine by 2030, with 1.8 GW dedicated to the domestic market, particularly for green ammonia for agricultural use. The rest will be exported to the EU via pipeline, forming the Central European Hydrogen Corridor. This initiative is supported by the European Commission (EC) and is crucial for the EU's metallurgical industry, which requires 5 million tons of hydrogen yearly for decarbonization. Key metallurgical projects are projected to adopt hydrogen by 2026-2027.
Ukraine developing two hydrogen projects, aiming for 1,700 MW capacity
The company, Hydrogen of Ukraine, is spearheading the development of the H2U Hydrogen Valley project. This project comprises two stages: establishing a valley in the Odesa region and establishing another in Transcarpathia. These valleys have the potential to accommodate 2.5 GW of electrolysis capacity and produce 220,000 tonnes of hydrogen annually.
The initial stage in Odesa targets 100 MW of electrolysis capacity, powered by wind and thermal energy, sourcing water from the Danube. The second stage in Transcarpathia plans 1,100 MW of electrolysis capacity, potentially expanding to 1,500 MW, alongside solar and wind power. The hydrogen is intended for export to a Slovakian metallurgical plant.
Ukrainian-Polish cooperation in the energy sector
Ukrainian and Polish government representatives signed a Memorandum of Cooperation between the countries in the energy sector. The document envisages the development of joint programmes and projects of common interest aimed at restoring the energy infrastructure damaged by the war, and steps to integrate energy markets more fully. The document outlines the development of joint programmes and projects of common interest aimed at restoring the energy infrastructure damaged by the war, and steps to integrate energy markets more fully.
The Memorandum, in particular, provides for joint work in the development of climate-neutral technologies, the development of distributed generation, and the transportation of natural gas and oil products.
Particular attention was paid to the issue of energy security through market integration and the development of climate-neutral generation, the development of projects of common interest and the strengthening of interstate cooperation.
Customs clearance of biomethane
The Verkhovna Rada has approved draft law No. 9456, amending Ukraine's Customs Code to regulate the customs clearance process for biomethane. This law aligns biomethane customs procedures with those for natural gas, requiring clearance at each gas transfer point.
Temporarily, until the Ukrainian biomethane register is created and synchronised with the Union Data Base for Biofuels (the resource based on Clean Energy for all Europeans package, Article 28 (2) and (4) of the Renewable Energy Directive (RED II)) and the European Union recognises the guarantees of origin of biomethane issued in Ukraine, customs clearance will be carried out subject to submission of the following documents together with the customs declaration:
- a certificate of compliance with the biomethane sustainability criteria for the producer of the relevant amount of biomethane;
- proof of sustainability for the relevant amount of biomethane.
After its launch, exporters must register in the biomethane register and adhere to specific customs declaration requirements. Additionally, during bans on Ukrainian natural gas exports, biomethane exports are limited to volumes stored in Ukrainian gas facilities from the previous month.
Biogas electricity producers to maintain operations during martial law
The National Energy and Utilities Regulatory Commission has amended its Resolution, "On Ensuring Stable Functioning of the Electricity Market, including the Financial Condition of Electricity Market Participants for the Period of Martial Law in Ukraine" (No. 332 dated 25 February 2022) to lift the regulatory obstacles restraining producers of electricity from biomass and biogas from the provision of load-shedding capacity to NPC Ukrenergo.
In particular, for the period of martial law, producers of electricity from biomass/biogas that have received a feed-in tariff have the right to reject operational commands from the TSO dispatcher to reduce the load if:
- such producers have a heating load to ensure heating in the autumn-winter period or to ensure the production process;
- the execution of such a command may lead to damage of equipment or disruption of technological processes related to electricity production.
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