Bioenergy association of Ukraine appealed to the Vice-prime minister Gennadiy Zubko concerning project of the Cabinet of Ministers of Ukraine Resolution "On Amendments to the Procedure of heat tariffs formation and delivery services of district heating and hot water", that will amend the appropriate Procedure approved by the Cabinet of Ministers of Ukraine on June 1, 2011 № 869. Generally UABio supports the expansion of the Procedure on tariffs formation for heat energy produced with alternative energy sources usage. But UABio pays attention to the following:

1. The necessity to bring into line the Project with adopted by Verkhovna Rada of Ukraine in the second reading and in the whole project Law №4334, in particular, regarding abolishment of tariff formation based on cost and profitability approach. 

2. The necessity instead of the phrase "...installation using non-traditional or renewable sources of energy" to use the phrase "the installation using alternative energy sources" as provided in the project Law number 4334.

3. The necessity to change the existing order of tariffs calculation so that the cost of the heat energy which is lost as heat networks have been included in the tariff for transportation of heat energy. The easiest approach, reflecting the required changes in the methodology is the following:

  • two tariffs are to be defined: the first tariff (T1) - according to the existing order of tariffs formation by dividing the costs of  heat energy produced into heat energy that is saled to consumers (i.e. into the difference between the heat energy produced and losses in heat networks);
  • the second tariff (Т2) is to be defined by dividing the same amount of costs into the amount of heat energy produced; 
  • the amount of heat energy produced means the amount of heat energy released to heat network;
  • the difference between these tariffs (T1-T2) should be a component of the tariff for transportation of heat energy, defined according to the existing order of tariffs formation;
  • tariff for heat production, accordingly, should be the tariff T2.
Read the UABio letter concerning amendments to Procedure of heat tariffs formation in full (in Ukrainian)