Ukraine Plans RE Auctions Starting 2020

• Ukraine to move towards an auctions based renewable energy mechanism
• The first reading of the draft law 8449-D has been approved by a committee of Ukraine's Parliament
• As per the draft, auctions for renewables will start from January 1, 2020, and these will be conducted twice a year
• Solar power projects with more than 10 MW capacity will be auctioned in 2020, and in 2021 and 2022 more than 5 MW projects can enter the competitive auctions
• Winners of these auctions will sign power purchase agreements for a period of 20 years

A committee of the Ukrainian Parliament, Verkhovna Rada, has accepted the first reading of draft law 8449-D (Renewable Energy Auctions Law) under which the country wants to conduct renewable energy auctions, moving away from a feed-in-tariff (FIT) system. The main provisions of draft law in English language are available on the website of the European-Ukrainian Energy Agency (EUEA).

The draft calls for starting a pilot auction within the first 6 months of the law coming into force. Auctions will be held twice a year, on or before April 1, and October 1.

In 2020, an auction will be held for solar power projects with more than 10 MW capacity and for wind power projects with more than 20 MW capacity. In 2021 and 2022, except for wind project that will have more than 20 MW installed capacity, all other renewables projects with over 5 MW capacity will be eligible to participate in the auctions. From January 1, 2023, all renewables of more than 1 MW capacity will enrol for the auctions, but for wind projects, the capacity will be more than 3 MW.

Power purchase agreement (PPA) with the winners will be valid for a period of 20 years.

While the FIT will be available until 2030, as of 2020, solar power plants will see it decrease by 25%, with a further decrease by 2.5% annually during 3 years.

To be eligible for bidding under the new auction scheme, interested bidders need to have confirmation of right of land ownership and should have concluded grid connection agreements for the facility.

The draft also talks about accepting smaller wind and solar power projects  for FITs rather than auctions. It will now be prepared for the second reading.